Elon Musk warns house price declines will accelerate as higher interest rates squeeze buyers
LUDOVIC MARIN/POOL/AFP via Getty Images
- Elon Musk warned US house-price declines will accelerate as higher interest rates price out homebuyers.
- "This will accelerate, as high interest rates make homes less affordable," he said, referring to falling home prices.
- The billionaire hasn't shied away from dire forecasts about the US real-estate market in recent weeks.
Elon Musk is back at it with his latest bleak warning about the US real-estate market.
In a tweet on Monday, the Tesla and SpaceX chief said house-price declines will accelerate as increasing borrowing costs price homebuyers out of the market.
"This will accelerate, as high interest rates make homes less affordable," Musk said in response to a chart showing falling global house prices.
In a separate tweet, Musk used a single exclamation mark to underscore his concern about rising borrowing costs. He was responding to a Twitter user who pointed out that the average rate on a new car loan is 8.98%.
Several market experts have been ringing the alarm on US house prices, given the Federal Reserve has hiked interest rates by 500 basis point since early 2022 in a bid to cool high inflation.
Higher rates typically drag on home prices as they inflate mortgage payments and financing costs. That in effect reduces demand for houses, putting downward pressure on prices.
Average 30-year mortgage rates in the US have jumped to about 6.8% from 3.1% at the end of 2021.
This is not the first time the billionaire has made grim warnings about the US housing market. He recently said home values are set to plunge while the commercial property market is in meltdown.
from Business Insider https://ift.tt/ocrKPhC
via IFTTT
Comments
Post a Comment