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Rate on 30-year mortgage falls to record low

By tovarichpeter   Follow   Thu, 21 Jun 2012, 2:21pm   4,557 views   54 comments
In South San Francisco CA 94080   Watch (0)   Share   Quote   Permalink   Like   Dislike  

http://www.usatoday.com/money/economy/housing/story/2012-06-21/mortgage-rates/55732928/1

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1. Call it Crazy Follow Befriend 229 threads 2,790 comments

   15   2:13pm Sun 24 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   tatupu70 says In the past, rates went up when the economy was very strong and incomes were rising. Which caused house prices to rise as well, even with intrest rates increasing. Wrong again.... Firstly, incomes and interest rates have NO connection.. Secondly, interest rates have been high in the past when we were in recessions, not strong economies.... When we had a strong economy in the middle of the last decade, rates were affordable, in the 5-6% range... yet back in the 1980's we had rates up in the mid teens (13 - 15%) during a recession... The only main reason for house prices to rise is either loosening of qualifying requirements (free money) or lower interest rates (more house for the payment).

2. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

   16   5:36pm Sun 24 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike (1)   Never buy when there is no YOY apprecation. Declining value RE? absolutely not.

3. tatupu70 Follow Befriend (3) 15 threads 5,653 comments

   17   8:03pm Sun 24 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike (2)   CL says Thanks! (Maybe on a new thread?) Sorry, I posted a chart and a link but I guess it got too many dislikes and is gone. Patrick--you need to reconsider the like/dislike functions. They are being abused now.

4. inflection point Follow Befriend 4 threads 266 comments Fremont, CA

   18   8:11pm Sun 24 Jun 2012   Share   Quote   Permalink   Like   Dislike   We have record low interest rates and yet all that has been accomplished is to delay the final decline of the home prices.

5. errc Follow Befriend (7) 30 threads 1,222 comments 31 male Premium

   19   8:17pm Sun 24 Jun 2012   Share   Quote   Permalink   Like   Dislike   tatupu70 says CL says Thanks! (Maybe on a new thread?) Sorry, I posted a chart and a link but I guess it got too many dislikes and is gone. Patrick--you need to reconsider the like/dislike functions. They are being abused now. Yea I've noticed that some posters seem to get blanketed with dislikes on all of their posts,,,,and it would seem that the feature is being abused Although I think I saw the graph you posted, which I think showed incomes rising steadily over the last 30 years, which I don't think is factual, so maybe the dislike function can come in handy Interest rates have been trending downward for 30 years, which allows for underlying asset prices that come from leverage, to rise while maintaining similar service payments.

6. inflection point Follow Befriend 4 threads 266 comments Fremont, CA

   20   8:22pm Sun 24 Jun 2012   Share   Quote   Permalink   Like   Dislike   Wages have declined and interest rates have declined to allow individuals to leverage themselves so they can make up the difference.

7. CalifGal Follow Befriend 10 comments

   21   8:23pm Sun 24 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   tatupu70 says CL says Thanks! (Maybe on a new thread?) Sorry, I posted a chart and a link but I guess it got too many dislikes and is gone. Patrick--you need to reconsider the like/dislike functions. They are being abused now. And you and your realtor friends continue to spam pat.net with your constant stream of misinformation.

8. inflection point Follow Befriend 4 threads 266 comments Fremont, CA

   22   8:35pm Sun 24 Jun 2012   Share   Quote   Permalink   Like   Dislike   I think its important to have different views. At least it gives something to laugh at.

9. Call it Crazy Follow Befriend 229 threads 2,790 comments

   23   9:01pm Sun 24 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   errc says Although I think I saw the graph you posted, which I think showed incomes rising steadily over the last 30 years, which I don't think is factual, so maybe the dislike function can come in handy I found a chart that he might have been referencing. Although it shows a "rise" in real median income of about $9k over more than 40 years, that ain't much. Then factor in inflation, and you're in the negatives... Now, make sure you look at the trend at the end of the line, it's heading back down.... not good for housing market going forward...

10. Call it Crazy Follow Befriend 229 threads 2,790 comments

    24   9:03pm Sun 24 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   inflection point says I think its important to have different views. At least it gives something to laugh at. Based on the direction of the housing market, we need something else to laugh at...

11. tatupu70 Follow Befriend (3) 15 threads 5,653 comments

    25   4:29am Mon 25 Jun 2012   Share   Quote   Permalink   Like   Dislike   Call it Crazy says I found a chart that he might have been referencing. Although it shows a "rise" in real median income of about $9k over more than 40 years, that ain't much. Then factor in inflation, and you're in the negatives... No I posted the nominal wage gain over time. You posted the real income gain. As I told you on another thread, real means inflation adjusted. So incomes have gain $9K over inflation. Which makes sense because productivity has increased over that time period. Call it Crazy says Now, make sure you look at the trend at the end of the line, it's heading back down.... not good for housing market going forward... Incomes always decrease during a recession.

12. tatupu70 Follow Befriend (3) 15 threads 5,653 comments

    26   5:13am Mon 25 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   errc says Although I think I saw the graph you posted, which I think showed incomes rising steadily over the last 30 years, which I don't think is factual, so maybe the dislike function can come in handy It's definitely accurate. Nominal income has certainly risen steadily over the last 30 years. Please, at least take the time to research a question before deciding to dislike someone's post because you "think" it's wrong.

13. CL Follow Befriend (12) 140 threads 1,355 comments Emeryville, CA

    27   4:11pm Mon 25 Jun 2012   Share   Quote   Permalink   Like   Dislike   tatupu70 says CL says Thanks! (Maybe on a new thread?) Sorry, I posted a chart and a link but I guess it got too many dislikes and is gone. Patrick--you need to reconsider the like/dislike functions. They are being abused now. Thanks for trying. We'll get to the bottom of this.

14. robertoaribas Follow Befriend (23) 55 threads 3,836 comments Scottsdale, AZ robertoaribas's website

    28   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (5)   Call it Crazy says Wait, didn't you tell me on the other thread that according to your sources at NAR, median prices are up 7.9%?? So which is correct? lets see: interest rates drop from 5% to 4%... prices up 7.9%, probably is cheaper to buy today...

15. tatupu70 Follow Befriend (3) 15 threads 5,653 comments

    29   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (5)   Call it Crazy says Wait, didn't you tell me on the other thread that according to your sources at NAR, median prices are up 7.9%?? So which is correct? Those statements are not contradictory. They are both correct.

16. E-man Follow Befriend (31) 34 threads 2,554 comments San Jose, CA Premium

    30   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (6)   Musica2 says Yes, and when interest rates rise, home prices will go down.... at least that's what has happened in the past. This is amazing. The fallacy is alive and well on Patnet.... Yep. The best time to buy is when interest rate at 10%; 15% is even better; 20% is fantastic; 25% is golden. The higher interest rate, the better time to buy. Interest rate will sky rocket in the near future. Time is on your side. ;)

17. E-man Follow Befriend (31) 34 threads 2,554 comments San Jose, CA Premium

    31   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (5)   KILLERJANE says Stop saying "buy". It's not buying really when you get a loan to agree to pay twice the price for ever and ever. Thinking saying and doing need to line up. I guess you're right. I should use the word "own" rather than "buy" on properties that are free and clear. On properties that is financed, I should use words like leverage, or borrow OPM to make money. Even better how about have OPM works for you. Isn't that what it is? :) On the contrary, the word "renting" sounds so temporary. Well, at least I don't have to live under other people's house rules. God bless America. The land of opportunity for immigrants. :o)

18. E-man Follow Befriend (31) 34 threads 2,554 comments San Jose, CA Premium

    32   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (5)   Call it Crazy says E-man says I guess you're right. I should use the word "own" rather than "buy" on properties that are free and clear. Are EVER free and clear??? Since I didn't create the land, I'm more than have to pay property tax. In CA, homeowners are being protected by Prop. 13 while renters are exposed to the ravage of rent inflation year after year, decade after decade. At least I don't have to live by someone else's house rules. :o)

19. tatupu70 Follow Befriend (3) 15 threads 5,653 comments

    33   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (3)   Musica2 says Yes, and when interest rates rise, home prices will go down.... at least that's what has happened in the past. Ya never know tho... Actually, that's not what happened in the past...

20. tatupu70 Follow Befriend (3) 15 threads 5,653 comments

    34   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (4)   CL says Hey Tatupu, I'm sure you've provided it before, but do you have a graph showing that it's not true? It would SEEM true, since higher interest would cut into your monthly nut. But I don't trust things just because they seem true. Thanks I'm on the road, but I will post a graph of prices vs interest rates when I am back

21. tatupu70 Follow Befriend (3) 15 threads 5,653 comments

    35   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (4)   Call it Crazy says If the interest rate goes up, you can afford less on your payment/house choice, so you have to look for a cheaper house. Yes, but you also need to remember that interest rates don't go up for no reason. In the past, rates went up when the economy was very strong and incomes were rising. Which caused house prices to rise as well, even with intrest rates increasing. Note: Incomes just have to match inflation--there don't have to be any real gains. Houses will still rise in nominal terms...

22. tatupu70 Follow Befriend (3) 15 threads 5,653 comments

    36   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (3)   Call it Crazy says Wrong again.... Firstly, incomes and interest rates have NO connection.. Secondly, interest rates have been high in the past when we were in recessions, not strong economies.... You are completely clueless. The Fed uses its power to influence interest rates to try to encourage investment. It raises them to reduce investment and lowers them to increase investment. Call it Crazy says back in the 1980's we had rates up in the mid teens (13 - 15%) during a recession... Yes, that's because inflation was high in the late seventies and the Fed drove up rates to cool the economy. It worked and led to the recession in the 80s. You have the cause and effect backwards. Call it Crazy says The only main reason for house prices to rise is either loosening of qualifying requirements (free money) or lower interest rates (more house for the payment). Home prices are most closely correlated with incomes. Although you are correct that the loosening of loan standards can have a big effect. That's a one-off occurance though.

23. tatupu70 Follow Befriend (3) 15 threads 5,653 comments

    37   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (3)   Here's a chart and an article: http://www.businessweek.com/lifestyle/content/dec2009/bw20091229_199828.htm I think the author sums it up better than I could. When looking at housing price charts vs. interest rates, you have to be careful to know whether you are looking at inflation adjusted charts or nominal charts...

24. iwog Follow Befriend (48) 274 threads 12,577 comments 47 male Lafayette, CA Premium

    38   7:40am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (3)   I didn't realize there were posts being deleted due to 3 dislikes. This is a horrible idea, especially where real estate and politics are involved. The most effective and well informed arguments are often the same ones that make the opposing side the most angry and frustrated. The most unreasonable and abusive trolls on the board are the same people who will simply flag anything they disagree with. This will trash the quality of the board in a big hurry if it continues. This thread is a perfect example. Tatupu is almost completely censored while the twit who was taunting him remains.

25. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

    39   7:44am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   iwog says I didn't realize there were posts being deleted due to 3 dislikes. This is a horrible idea, especially where real estate and politics are involved. The most effective and well informed arguments are often the same ones that make the opposing side the most angry and frustrated. The most unreasonable and abusive trolls on the board are the same people who will simply flag anything they disagree with. This will trash the quality of the board in a big hurry if it continues. This thread is a perfect example. Tatupu is almost completely censored while the twit who was taunting him remains. I am sorry but I have to say,this is what happens when you are too bold to call the bottom too early!

26. errc Follow Befriend (7) 30 threads 1,222 comments 31 male Premium

    40   8:03am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   What will be the catalyst that breaks this 30+ year trend of falling interest rates? Up until 2007, rates moved lower while prices moved higher. Then the bubble peaked, and prices began moving lower while rates continued to decline. So how in bizzaro world do you see a change in the winds that will bring both rising rates AND rising house prices? I predict that rates will continue lower in order to satisfy those who buy a house on monthly payment metrics, while prices continue to be 'flat' which in reality will be slightly lower when factoring in 'inflation' or currency devaluation, whatever you want to call it. Thanks for fixing that patrick, I enjoy the sharing of information and differing view points. Always figured that was the point of the discussion on the forum. Not to sit around in a giant circle jerk patting one another on the back for being agreeable, reinforcing beliefs that one already holds. There's always at least two sides to every trade, best to know all the angles well to fully understand the trade offs

27. iwog Follow Befriend (48) 274 threads 12,577 comments 47 male Lafayette, CA Premium

    41   9:49am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   bubblesitter says I am sorry but I have to say,this is what happens when you are too bold to call the bottom too early! I called the bottom for 2009. (in 2008) 2009 wasn't technically the bottom, but it is still holding up to be a few percentage points from the bottom and prices are headed up again in 2012. No one can tell the future, we just take our best shot at it.

28. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

    42   10:02am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   iwog says No one can tell the future Until then pretend,extend and ignore. :)

29. iwog Follow Befriend (48) 274 threads 12,577 comments 47 male Lafayette, CA Premium

    43   10:33am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   bubblesitter says Until then pretend,extend and ignore. :) Do what now? The market is exploding now and has pretty much chased me out of buying new properties. The only thing holding back a full scale bull market blowout is low appraisals. Do you think the following graph is fake, based on nothing, and simply NAR propaganda?

30. CrazyMan Follow Befriend 449 comments Boulder Creek, CA

    44   10:38am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   Sold $ is still below 2010. It'll be lower again next year.

31. iwog Follow Befriend (48) 274 threads 12,577 comments 47 male Lafayette, CA Premium

    45   10:43am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   CrazyMan says Sold $ is still below 2010. It'll be lower again next year. Barely, but again I'll remind you that the listing price is the leading indicator. You're not going to see the sold prices heading lower until months after the asking prices head lower.

32. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

    46   11:05am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   iwog says The market is exploding now and has pretty much chased me out of buying new properties. Now try giving some examples out of the redfin data - properties sold at your 2009 phantom bottom and sold back in 2012 at the price more then 2009 sold price, will you? I need to see that trend on recorded sale data.

33. iwog Follow Befriend (48) 274 threads 12,577 comments 47 male Lafayette, CA Premium

    47   11:39am Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   bubblesitter says Now try giving some examples out of the redfin data - properties sold at your 2009 phantom bottom and sold back in 2012 at the price more then 2009 sold price, will you? I need to see that trend on recorded sale data. Why? Redfin is a measure of $ per sq. ft., not same property sales. Besides why would you even question it? It matches all of the reports in the media, the latest report from CS, and the reports from people posting on this board who are actually buying homes. Maybe it would be more productive for you to post something.......anything......contradicting the current market as anything other than red hot?

34. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

    48   12:20pm Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   iwog says Why? Redfin is a measure of $ per sq. ft., not same property sales. That is the response I was expecting. Keep quacking.

35. DukeLaw Follow Befriend 3 threads 73 comments

    49   2:04pm Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   Hi bubblesitter, I give it a shot though you'll be typically dismissive. Look at this place. New development in the Mission back in 2009. Sold for 499k. Sold for 639k a few months ago. I was pretty shocked but the Mission real estate is crazy right now. That's one example. http://www.redfin.com/CA/San-Francisco/601-Alabama-St-94110/unit-306/home/18906059

36. DukeLaw Follow Befriend 3 threads 73 comments

    50   2:08pm Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   Heck, here's another 770k in 2009, 880k in 2012 http://www.redfin.com/CA/San-Francisco/2501-Harrison-St-94110/unit-8/home/1913444

37. PockyClipsNow Follow Befriend 19 threads 1,534 comments Los Angeles, CA

    51   2:21pm Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   all this run up is due to super duper low int rates. since rates can go to zero - there is a A LOT OF ROOM for house prices to go up up up up. I know you would think that with double digit default rates on mortgages that a 3% mortgage is a disaster for the bank since one bad loan makes the whole pool a loss BUT remember they are just printing up money from thin air for years now. Fed Reserve is buying what 60% of the US bonds with printed from air money. That money is covering the losses. Not sure how this game ends but it might take 50 years.

38. New Renter Follow Befriend (3) 13 threads 2,227 comments San Jose, CA Premium

    52   11:41pm Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   PockyClipsNow says since rates can go to zero - there is a A LOT OF ROOM for house prices to go up up up up. How can interest rates go to zero? Will the government then be paying banks via negative interest for the banks to then give home buyers free loans?

39. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

    53   6:40am Wed 27 Jun 2012   Share   Quote   Permalink   Like   Dislike   New renter says PockyClipsNow says since rates can go to zero - there is a A LOT OF ROOM for house prices to go up up up up. How can interest rates go to zero? Will the government then be paying banks via negative interest for the banks to then give home buyers free loans? Sure. All the burden can be on taxpayers.

40. housingcasino4865 Follow Befriend 1 threads 55 comments

    54   11:19pm Wed 27 Jun 2012   Share   Quote   Permalink   Like   Dislike   It's not the interest rate. It's affordability, which is determined by total household income (or whoever is paying the mortgage). And you must inflation adjust all variables. You can make a case for any outcome (house prices up or down) if you only pick one variable. Example: inflation -3%, total household income +5%, interest rates +2%. Then you can say, Golly Gee! See, aw told you, houses prices go up when interest rates go up!!! Hardy harrr. Reverse example: inflation -3%, household incomes -15% (layoffs, depression, etc), interest rates at -3% = house prices go down! A more realistic example: inflation +7%, household incomes +5%, interest rates +3%: house prices go up. Obviously they'll go up because affordability goes up. On the other hand, this what a lot of people believe today: inflation +%6, household incomes +1%, interest rates +2% = houses prices go down.

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