Wait until they see 2026. 10-14% mortgage (my prediction)

For anyone relatively young seeing this range and thinking "ridiculous!", it's not.

Growing up my parents rate was 12% and in the early 80s rates got up to over 17% [0].

It is very possible for the era of cheap money to end across the board.

0. https://www.freddiemac.com/pmms/pmms30

House prices were also much lower in your parents time.

Right, and this is a hard point to overstate. The average home price was around $80,000 in the early 80s, whereas it's currently $525,000. If we see home prices drop by 85% we won't be buying homes with US dollars any more.

That $80,000 isn't inflation adjusted. Drop would be more like 40%, not 85%.

But current home prices don't need to drop. The average price needs to drop. That means more housing. Likely ends up meaning some drop or stagnation in current prices, but you don't need to shift down 40% to reach the goal.

Housing in my area is only a little above the 80s price after adjusting for inflation. Of course, the 80s price is nationwide average, while my given price is only the local average.

High interest rates on their way up drop the price of homes.

I recall my parents being very proud of securing a 7% rate in the 90s when they bought our first home. That said, it was a very very inexpensive house compared to today's prices.

I'm betting the rates will be back to 2% by 2026 as global growth collapses due to a combination of high interest rates, deleveraging of over-leveraged organizations and geopolitical strife causing further de-globalization.

rates have nearly tripled in the last year

no need to go that far out

a new category of barely relevant XKCD

the only similarity would be the 1 year aspect matching the sample size of 1 in that comic, but the driving forces are the quantitative tightening which are a greater sample size, and the velocity is important

there's better jokes

if mortgage rates want to stay 100% over Fed Funds rate, or 100% over 30yr treasuries, we'll have 8-9% by end of year, with many borrowers already being offered or experiencing 10%+ by then

That at least keeps up with current inflation. We'll see what inflation looks like in 2 years.

You think that we are going to have continued high inflation through 2026? Based on what?

If so, renting will also be much more expensive

Where does the cycle end?