There have been very few points of financial solace in the past few years apart from rising financial markets. Part of that has been an incredible increase in home valuations. This comes from inflation, yes, but also from shifts in supply and demand for home purchases. Demand is as it always was but realizing it is another matter.
The problem is on the supply side. In most places around the country, homes are not going on the market at the same and predictable pace they once were. This is for reasons of soaring costs of new mortgages. Many homeowners purchased back when interest rates were absurdly low and negative in real terms, perhaps 2 or 3 percent.
Selling now means paying huge capital gains taxes and then applying for a new mortgage at 7.5 percent. The implications of that seemingly small change are actually gigantic, and making it work without paying drastically more in monthly bills means moving to a cheaper area of the country or downsizing the quality and size of the home.
Rather than make that choice, many homeowners are stuck living right where they are even if they would prefer some other job or home elsewhere. They are frozen in place but, hey, at least these people have homes that they own, right?
Not only that but the valuation that you see on Zillow is going up and up. Yay!
Hellbound and Down 