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Yun back with his BS

By ¥   Follow   Thu, 30 Dec 2010, 10:50am   1,883 views   24 comments
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"The initial phase of an interest rate increase generally does not hurt markets," said Lawrence Yun, chief economist for the National Association of Realtors. "In fact, it can help."

http://money.cnn.com/2010/12/30/real_estate/mortgage_rate_spurt/

but what's the deal with McBride:

"You can kiss those record lows goodbye," said Greg McBride, chief economist for Bankrate.com.

. . .

"The increase will push mortgage payments higher for homebuyers. When rates rise from 4.25% to 5% it takes away about 9% of buying power, according to McBride."

Call me crazy, but homebuyers will generally take out the highest mortgage payments they can afford, so a decrease in buying power means PRICES will come down, not payments going up, at least in segments not dominated by cash buyers.

Granted, if we get a bona-fide recovery next year then rates going over 5% will be a wash, but so far we're looking at my armageddon scenario -- higher rates without a recovery. I didn't think that was really possible, I thought lower rates were baked into the cake, like Japan.

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1. Trivial Follow Befriend 3 threads 41 comments

   1   11:01am Thu 30 Dec 2010   Share   Quote   Permalink   Like (1)   Dislike   the sky is falling

2. pkowen Follow Befriend 30 threads 555 comments San Carlos, CA

   2   11:13am Thu 30 Dec 2010   Share   Quote   Permalink   Like   Dislike   In a normal market - say anywhere but the worst bubble zones, mortgage rates aren't that big a deal especially at recent levels. Nice to get a low rate but as has been repeated on Patrick.net, many of us would rather have a lower price with a higher rate than vice versa. In fact, the mortgage on my first house was I think 8% (this was around 1990), and that helped make itemizing deductions worthwhile. I got the lowest rate I could find at the time but really didn't care that much. The house cost $73,400. In the SF bay area, people are so stretched to buy an overpriced house that a small change in rate can push them off the cliff from being able to buy, to not being able to buy. Don't even think about doing away with the mortgage interest deduction; people here would default in droves. In other words, for most of America a change from 4.25% to 5% is NO issue. Not that I think Yun is right about anything.

3. Mark_LA Follow Befriend 10 threads 213 comments Pasadena, CA

   3   11:22am Thu 30 Dec 2010   Share   Quote   Permalink   Like   Dislike   He's paid to put a positive spin on housing statistics, just like David Lereah, who held his post at the NAR prior to him and is listed by Time Magazine as one of the "25 People to Blame for the Financial Crisis": http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877336,00.html

4. ¥ Follow Befriend 35 threads 5,700 comments Bellingham, WA

   4   11:28am Thu 30 Dec 2010   Share   Quote   Permalink   Like   Dislike (1)   pkowen says for most of America a change from 4.25% to 5% is NO issue It turns the payment on a $400,000 house from ~$2350 to $2450. Or what $2350/mo can buy from $400,000 to $382,500, which is how I prefer to look at it.

5. ¥ Follow Befriend 35 threads 5,700 comments Bellingham, WA

   5   12:57pm Thu 30 Dec 2010   Share   Quote   Permalink   Like   Dislike   shrekgrinch says ou’re crazy…according to Iwog & Co., that is. their thesis correlates rising interest rates with the Fed's attempt at beating back wage inflation. So, historically -- eg. in the late 70s, late 80s, and the late 90s -- they are correct about rising interest rates not depressing home prices. But here we don't have rising interest rates attempting to combat wage inflation. Not with U-6 at 15M+.

6. Fast Eddie Follow Befriend 2 threads 21 comments Clifton, NJ

   6   1:18pm Thu 30 Dec 2010   Share   Quote   Permalink   Like   Dislike   Lawrence Yun is a f*cking sock puppet. He's got one of those pull strings on his back that spits out the same four bullsh1t talking points over and over again. He's Rain Man. "Buy now... yep... gotta buy now... yep.... priced out forever.... priced out forever."

7. FortWayne Follow Befriend (13) 103 threads 3,768 comments

   7   3:26pm Thu 30 Dec 2010   Share   Quote   Permalink   Like   Dislike   You are right. Interest rate going up means prices going down. It has always been that way, a simple supply/demand curve of economics. There are still plenty of real estate junkies who were making millions by being middle men in all deals that wish for this crony market to come back and do anything to pump it up. It isn't going to stay around, especially with republicans in Congress.

8. American in Japan Follow Befriend (28) 149 threads 1,398 comments

   8   5:48am Wed 12 Jan 2011   Share   Quote   Permalink   Like   Dislike (1)   Yun should be a candidate for Liar of the year in 2010... Do many Americans still believe him??

9. FortWayne Follow Befriend (13) 103 threads 3,768 comments

   9   7:42am Wed 12 Jan 2011   Share   Quote   Permalink   Like   Dislike (1)   Yun is just another salesman. Their job is to sell, profit puts money in their pockets. Bottom line, most of the people who sell products aren't going to tell you that it's a bad time to buy their junk. Even if they know that it is. I would never expect a Realtor to tell me its a bad time to buy either, for them it's always a good time to buy because it is their commission at stake. If you get screwed in the process, its your problem not theirs.

10. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

    10   9:37am Wed 12 Jan 2011   Share   Quote   Permalink   Like   Dislike   From wiki... Absolute Political Corruption The NAR wields substantial power as a lobbying organization on behalf of agents and brokers; in 2005, NAR had the largest Political Action Committee in the United States. According to the Center for Responsive Politics, the association is the United States' third-largest donor to political campaigns, having given since 1990 more than US$30 million. Of this sum, an average of 47% has gone to Democrats and 53% to Republicans.[17] Key political issues for the group revolve around federal regulation of the financial services industry.

11. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

    11   9:45am Wed 12 Jan 2011   Share   Quote   Permalink   Like   Dislike   pkowen says In the SF bay area, people are so stretched to buy an overpriced house that a small change in rate can push them off the cliff from being able to buy, to not being able to buy. Don’t even think about doing away with the mortgage interest deduction; people here would default in droves. That is why ARM loans began to rise in 2000 after prices doubled from 1998. Even today buyers are too focused on payment and not enough on actual value price on the home in question.

12. pkowen Follow Befriend 30 threads 555 comments San Carlos, CA

    12   12:03pm Wed 12 Jan 2011   Share   Quote   Permalink   Like   Dislike (1)   thomas.wong1986 says pkowen says In the SF bay area, people are so stretched to buy an overpriced house that a small change in rate can push them off the cliff from being able to buy, to not being able to buy. Don’t even think about doing away with the mortgage interest deduction; people here would default in droves. That is why ARM loans began to rise in 2000 after prices doubled from 1998. Even today buyers are too focused on payment and not enough on actual value price on the home in question. Hmm.. which was the cause and which the effect?

13. ¥ Follow Befriend 35 threads 5,700 comments Bellingham, WA

    13   1:10pm Wed 12 Jan 2011   Share   Quote   Permalink   Like   Dislike   pkowen says Hmm.. which was the cause and which the effect? The monthly payment, actually, IS the value of the home to the first approximation. If interest rates were 0% home prices would go to infinity as buyers took out increasingly longer-term loans. $10M is well under $3000/mo over 300 years, so if this loan was available, nearly every house in the Bay Area would be in the multi-millions. Beats renting! The only problem with all the ARM, teaser-rate, negative-am, and liar's loans was that people couldn't actually carry the loan without continued appreciation. This made the 00s boom quite the ponzi bubble. ARMs themselves were not the problem as rates haven't actually gone up to push ARM borrowers payments past the amounts they were originally paying. Teaser-rate and negative-am recasts are another story, and these loan productions have in fact been outlawed as they are loan instruments of mass destruction.

14. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

    14   9:42pm Wed 12 Jan 2011   Share   Quote   Permalink   Like   Dislike   Troy says $10M is well under $3000/mo over 300 years, so if this loan was available, nearly every house in the Bay Area would be in the multi-millions. Beats renting! LOL! the kick is sure dont look like a $10M home. Crazy to see something like an Eichler selling for over a $1m even though it sold for around $200K a few years before.

15. MarkInSF Follow Befriend 14 threads 1,118 comments

    15   12:47am Thu 13 Jan 2011   Share   Quote   Permalink   Like   Dislike (1)   Yun is simply irrelevant. I wish I had handy a link to his previous predictions, and the comedic, completely predictable, failures thereafter. Corollary to this is that any article that quotes Yun is irrelevant. I'd even go so far at to say any "journalist" that quotes Yun is likely irrelevant.

16. MarkInSF Follow Befriend 14 threads 1,118 comments

    16   12:58am Thu 13 Jan 2011   Share   Quote   Permalink   Like   Dislike (1)   "...higher rates without a recovery. I didn’t think that was really possible, " Um.... so rates are back to where they were last April? That's "higher"? So what if they had just stayed flat since April? No dip down then up. Would you still be expressing the same opinion? It looks a lot to me like markets trying to play the Fed. Buy the rumor sell the news. Fed stops buying mortgage bonds in April, and mortgage rates start heading.... down? Weird. Fed start buying long treasuries, and long interest rates start heading.... up? Weird. Think hard and you'll see it's not weird at all.

17. gameisrigged Follow Befriend 3 threads 617 comments

    17   2:23am Thu 13 Jan 2011   Share   Quote   Permalink   Like   Dislike   How do you know when Lawrence Yun is lying? His lips are moving.

18. klarek Follow Befriend (7) 1 threads 1,217 comments

    18   5:08am Thu 13 Jan 2011   Share   Quote   Permalink   Like   Dislike   thomas.wong1986 says From wiki… Absolute Political Corruption The NAR wields substantial power as a lobbying organization on behalf of agents and brokers; in 2005, NAR had the largest Political Action Committee in the United States. According to the Center for Responsive Politics, the association is the United States’ third-largest donor to political campaigns, having given since 1990 more than US$30 million. Of this sum, an average of 47% has gone to Democrats and 53% to Republicans.[17] Key political issues for the group revolve around federal regulation of the financial services industry. It's really scary, and there's nothing you or I can do about it. Although I did tell a volunteer for my local congressman that I wouldn't vote for him because he's endorsed by NAR. The volunteers seemed confused.

19. joshuatrio Follow Befriend 41 threads 703 comments Monterey, CA

    19   8:56am Thu 13 Jan 2011   Share   Quote   Permalink   Like (1)   Dislike   MarkInSF says Yun is simply irrelevant. Well said.

20. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

    20   9:35am Thu 13 Jan 2011   Share   Quote   Permalink   Like (1)   Dislike   MarkInSF says Yun is simply irrelevant. I wish I had handy a link to his previous predictions, and the comedic, completely predictable, failures thereafter. Corollary to this is that any article that quotes Yun is irrelevant. I’d even go so far at to say any “journalist” that quotes Yun is likely irrelevant. People didnt think David Lereah was irrelavant. From from it... they challenged his and the NAR assertions regarding the housing bubble, which resulted having Lereah being discredited and leaving the NAR. You dont ignore ... you challenge them at every moment. Needless to say, you also challenge the journalist.

21. klarek Follow Befriend (7) 1 threads 1,217 comments

    21   9:50am Thu 13 Jan 2011   Share   Quote   Permalink   Like (2)   Dislike (1)   MarkInSF says Yun is simply irrelevant. I wish I had handy a link to his previous predictions, and the comedic, completely predictable, failures thereafter. Corollary to this is that any article that quotes Yun is irrelevant. I’d even go so far at to say any “journalist” that quotes Yun is likely irrelevant. Until the media stops quoting NAR and having their puppets opine against opposing views (economists, people that actually understand the market and aren't trying to sucker people), what they say does matter unfortunately. The bullshit spewed by these malcontents is repeated by the hundreds of thousands of imbecilic realtards working on the ground, poisoning the ears and minds of everyone they speak to.

22. HousingWatcher Follow Befriend 285 threads 1,760 comments

    22   9:10pm Thu 13 Jan 2011   Share   Quote   Permalink   Like   Dislike   Since when is 5% interest considered a lot? Everyone I know who bought in the late 90s got 7% + interest. I pay more than 5% for goodness sake. The problem with rates goign down to such low levels like 4.2% is that it spoils people and they think that rates are sky high even though they are historically low.

23. SubOink Follow Befriend (3) 9 threads 704 comments Los Angeles, CA

    23   11:32pm Thu 13 Jan 2011   Share   Quote   Permalink   Like   Dislike   good point!

24. American in Japan Follow Befriend (28) 149 threads 1,398 comments

    24   8:25pm Fri 21 Jan 2011   Share   Quote   Permalink   Like   Dislike   >The only problem with all the ARM, teaser-rate, negative-am, and liar’s loans was that people couldn’t actually carry the loan without continued appreciation. >This made the 00s boom quite the ponzi bubble. ARMs themselves were not the problem as rates haven’t actually gone up to push ARM borrowers payments >past the amounts they were originally paying. >Teaser-rate and negative-am recasts are another story, and these loan productions have in fact been outlawed as they are loan instruments of mass destruction. Well said, Troy. I concur.