Mortgage Spreads Are Getting Very Tight [View article]
So what happens when the economy recovers and inflation surges? Won’t interest rates rise to keep inflation in check? With higher mortgage rates, won’t real estate prices fall?
The only way inflation raises housing prices is through rising wages. This may take a long time to materialize and will likely be offset by higher interest rates to combat inflation.
It's just shocking to me that a fellow economist would base his conclusions on just these 2 sets of data. There's probably at least a dozen other economic data sets more highly correlated to housing prices that would be more suitable to draw conclusions.
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