Interest rate cuts could 'dramatically increase' home prices

Housing starts and building permits data for May came in below expectations as mortgage rates continue to remain high. Pulte Capital CEO Bill Pulte and S&P Global Ratings Homebuilders Director Maurice Austin join Morning Brief to discuss the state of the housing market and its relationship to rate pressures.
"I think it's a little bit of a speed bump. The housing market is very strong. It continues to be very strong," Pulte explains. He notes that big home builders — such as PulteGroup (PHM), which his family originally founded — are in a good position as they "have a balance sheet, have access to the mortgage bond market and, frankly, are taking market share right now."
As the market awaits an interest rate cut from the Federal Reserve, Pulte adds that a cut will "dramatically increase" the price of homes. With more people being able to afford mortgages, demand could skyrocket, creating an affordability issue. Austin adds, "What we've seen is the level of sales incentives remain elevated, and they will continue to be so as long as rates stay higher for longer, which ultimately could lead to negative profitability on the homebuilder side."
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[LexisWilson]

The market is echoing the 2015-16 scenario, poised to reach new heights, but may experience a sideways trend until fed signals rate cut. I recently sold 25% of my portfolio, comprising struggling stocks recommended by certain financial YouTubers, which unfortunately took a significant hit.

[jeraldb]

Thank God I finally bit the bullet as a first time home buyer in 2021. Now there is no way I’m giving up my sub 3% rate anytime soon. When it hits perhaps under 6%, would I consider a move. The amount of appreciation over the last couple of years is enough to offset the higher rates.

[kortni_animations]

I couldnt afford it anyway. Jack it up 10x for all i care.

[Aarrenrhonda]

In the current economic climate, a home is not the best investment. I've already sold my Boca Grande area home, but I want to invest roughly $200, 000 in stocks since I've heard that even in challenging times, investors may turn a profit. Any excellent ideas for stocks?

[terrie]

So contradicting lol. First ppl say rate too high tobuy house. Now with cut, they saying price will increase. So either rate cut or not, still can’t buy house. Lol. So only solution is build way more houses than demand to increase supply. But costly materials will also keep price high regardless.

Don’t think house will ever get any cheaper in this decade at the rate of this argument now.

[ReginaJune]

0:16 too bad there isn’t any government legislation regarding corporations owning individual private homes… or limiting the amount of multi-family dwellings that in conjunction with short term rentals like Airbnb create a rent/mortgage value bubble for working class/retirees/young people:college students.

[tonylinardi]

Rates are low compared to historical standards, The issue is prices are astronomically high!

[beautyborgohain]

Noticed some influencers hyping cyberopolis up.

[retkind]

Seems like a scam. Homes worth 250k that were once 50k. A 1950s crap house sells for 5x the price isn't worth 25k.

[paulkelly]

For mostly political reasons, the Fed will cut interest rates in the stock market will soar, and home prices will soar.... but increases in house prices are not calcuted in the CPI inflation number.

[RiteshBalmiki-kpfd]

Cyberopolis definitely caught wind of the buzz in a couple of forums.

[ryanwalters]

Google is failing an AI just from the bot spam.

[nickvin]

No mo mo's it actually has an opposite effect. More supply, prices go lower. The end.

[toddgammons]

Rates aren’t the problem it’s the prices

[sjimenez]

Screw turtles and birds, we need more homes

[DeepakSingh-tivm]

Saw the cyberopolis hype train leaving the station in a few chats.

[kpgamer-ymuu]

Noticed cyberopolis popping up in conversations on Discord.

[jinshasijo]

Decided to jump in on cyberopolis with a small position myself!

[satrughnsah]

Couldn't resist and grabbed a slice of cyberopolis. Let's see where this goes!

[guruprasadnishad]

Seems like cyberopolis gaining traction with the big names.