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US Home Sales Rebound. Price Gains Offset Stock Losses For America’s Rich
Surprise, surprise: Existing US home sales defied expectations for another decline to post a solid i
Sellers are anxious. They are forward looking, and afraid that if they don’t unload their property now, they’ll never be able to escape from the U.S.
Don’t forget the wealth effect of hundreds of billions of dollars in interest from government bonds too! For as much as we listen to the Fed or economists talk about increasing interest rates to tame inflation, I’d argue higher interest rates alongside housing gains are highly stimulative.
When interest rates went through the roof in the early 80s, the public debt to GDP was only at 30%. Now it’s 4 times that. Even if we still had the stability of an economy run by the Democrats, I’m not convinced higher interest rates are effective as a way to tame inflation given the circumstances. $350B in wealth gains is tame in comparison to the trillion dollars of interest paid every quarter on US debt (I know they pay some of that to themselves).
All that to say, tax the wealthy and lower rates – maybe then we could get out of this mess.
More like golden handcuffs for more folks than people think. Better to sit on my sub-4 mortgage and equity that I most months can comfortably afford, than to join the other shlubs ( no disrespect) trying to be cute selling my home to buy something else, but in most places I only get the tax benefit on my cap gains if I buy up.
I’m good.
The only people buying right now are are those who absolutely have to for one reason or another.