Mortgage rates hit their highest level since August. Demand went up. This is the financial equivalent of a restaurant raising prices and watching the line get longer.
The logic appears to be that more supply justifies buying at worse rates. Like showing up to a fire sale after someone cranked up the price of fire. The house costs more to borrow against. More houses exist to choose from. Buyers saw this math and thought, "Perfect, let me lock in my 7% rate before things really get good."
Rates climb. Supply increases. Demand increases. Every economics professor who ever drew a supply and demand curve on a chalkboard just felt a disturbance in the force. They can't explain it. They won't try. They'll just adjust their models and pretend this makes sense in some universe where people read footnotes.
The advantage buyers are seeing is the same advantage a man sees when he realizes the bar has more stools available right as drinks get more expensive. Technically true. Wildly irrelevant. He's still paying $18 for a vodka soda.
Homebuyers watched rates spike and supply tick up and decided the second thing cancels out the first thing. It does not. You're not getting a deal because the store has more inventory. You're getting a worse loan because money costs more. The house you're bidding on isn't suddenly affordable because three other houses are also available. It's just expensive with company.
This is what happens when an entire generation confuses options with value. More choices don't mean better choices. They just mean more ways to f*ck up at a higher interest rate.
Photo by Jakub Żerdzicki on Unsplash
Leave a Comment