If Mortgage Rates Hit THIS Level, The Entire Housing Market Will Unravel!

in money •  8 years ago 

The housing market in Canada, Australia, New Zealand, and a few others, barely took a dip during the housing crisis. It was a breather and escalated way beyond that. Home prices in the U.S. came down significantly and allowed the restoration of sanity to temporarily resume. Since the Financial Crisis, we have witnessed historically low interest rates which will absolutely keep this bubble going. But what happens when rates go up?


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In This Episode:
The housing market in Canada, Australia, New Zealand, and a few others, barely took a dip during the housing crisis. It was a breather and escalated way beyond that. Home prices in the U.S. came down significantly and allowed the restoration of sanity to temporarily resume. Since the Financial Crisis, we have witnessed historically low interest rates which will absolutely keep this bubble going. But what happens when rates go up?

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Mortgage rate hike looms as Canadians continue to deal with near-record debt | Financial Post
http://business.financialpost.com/personal-finance/mortgages-real-estate/mortgage-rate-hike-looms-as-canadians-continue-to-deal-with-near-record-debt-levels/wcm/e5818bca-ddbc-45cf-8e89-a89463ba7729
Royal Bank hikes mortgage rates - Business - CBC News
http://www.cbc.ca/news/business/royal-bank-mortgage-rates-1.3851423
BMO, CIBC latest lenders to increase some mortgage rates - Business - CBC News
http://www.cbc.ca/news/business/bmo-cibc-mortgage-rates-1.4196312
Six stunning numbers about Toronto real estate and your personal finances - The Globe and Mail
https://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/the-great-toronto-disconnect-house-prices-and-incomes/article34623683/
A 10% hike to mortgage payments would sink almost 3 quarters of homeowners, Manulife says - Business - CBC News
http://www.cbc.ca/news/business/manulife-housing-debt-1.4127243
cp-mortgage-debt-survey.png (960×806)

Uninsured mortgages pose increasing risk, Bank of Canada says - The Globe and Mail
https://www.theglobeandmail.com/report-on-business/economy/uninsured-mortgages-pose-increasing-risk-bank-of-canada-says/article35249339/

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Do you know people who are buying into the real estate euphoria at this time?

What do you think of investing in real estate, ie buying and renting. I have the cash to buy a few homes. I can wait if prices drop, to regain my investments. With low rates, that i can lock in, i like using other people's money.

I've heard many people in NZ state that house prices in Auckland will continue to go up - also interesting to note the household debt to income ratio in NZ is 177%, which is the highest ever.

I wouldn't buy a home with the Bank's money right now, so I definitely wouldn't with my own. Can't imagine how this can continue with little or no wage growth.