Don’t be surprised if home prices begin to appreciate rapidly. Why? The ratio of home ownership costs to income is at an all-time low, and people are not going to continue renting homes at a monthly cost that exceeds a mortgage payment.
In fact, home prices need to rise 38%, or mortgage rates need to rise to 7.9%, for us to get back to the normal ratio of home ownership costs to income. It doesn’t matter how you define home ownership costs. As long as you use a consistent definition, home ownership is cheap!