Don’t be surprised if home prices begin to appreciate rapidly. Why? The ratio of homeownership costs to income is at an all-time low, and people are not going to continue renting homes at a monthly cost that exceeds a mortgage payment.
In fact, home prices need to rise 38%, or mortgage rates need to rise to 7.9%, for us to get back to the normal ratio of homeownership costs to income. It doesn’t matter how you define homeownership costs. As long as you use a consistent definition, homeownership is cheap!
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