Will rising wages offset the impact of rising mortgage rates?

[Crewleader]

Last edited Mon Aug 11, 2014, 01:43 PM - Edit history (1)

August 11, 2014

Irvine Renter 6 Astute Observations

As mortgage interest rates go up, affordability declines. Only rising wages can offset the effect of rising mortgage rates. Will it be enough?



When mortgage interest rates finally begin to rise up to historic norms, a move anticipated by nearly everyone, home affordability will suffer because borrowers will need to spend more money to pay their mortgages. Since most borrowers maximize their loan amounts, the only way to overcome the problem of rising mortgage rates is for borrowers to make more money. With high unemployment and low labor participation rates, employers don’t need to increase pay to fill new jobs, and employees lack the leverage to force employers to pay more.

Source: http://ochousingnews.com/blog/will-rising-wages-offset-impact-rising-mortgage-rates/#ixzz3A63ukFy0

[upaloopa]

1. People should not get into ARMs if they don't expect

their incomes to rise.
A fixed rate is better. Taxes can go up but the principal and interest rate stays the same.

[Demeter]

2. Not in this lifetime

It's gonna take a while...at least 20, maybe 50 years, for things to get back to bearable and sustainable.

The piggy bankers gobbled up 3 generations' worth of capital from the 99%.