Simpletons

In the days when I got paid to do econ for a living, the issue of home buying came up, generally during times of shifting interest rates. There were/are some in the field who still insist that mortgage rate and house price are not correlated. Such morons do piss me off. One buys a house on the basis of the monthly nut: the maximum nut varies from time to time and lender to lender, but hovers aroung 30% of gross income.

Luckily, today brings a report on the issue. Thankfully, it makes the case.

If you're old enough, you might remember the 70s with double digit mortgage rates. House prices crashed as a result, but the boomers who bought their Cape Cods found the prices adjusted nicely over the next decade or two. Windfall capital gains with no effort. The American way.