patrick.net

GNL says

It encourages debt and discourages saving.

looks like more people are putting down more money and generating more equity

https://finance.yahoo.com/news/homebuyers-are-putting-more-money-down-than-ever-before-despite-difficult-housing-conditions-114905401.html

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Mortgage rates spike to new 23 yr high at 7.92% today

https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fixed

ad says

looks like more people are putting down more money and generating more equity

Putting money down does not "generate equity." One just moved "equity" from the bank account to the house.

HeadSet says

ad says

looks like more people are putting down more money and generating more equity

Putting money down does not "generate equity." One just moved "equity" from the bank account to the house.

Equity is the paid off portion of the home, or asset price (or market value) minus liability (balance on mortgage + closing costs + etc.)

But yes, you could still have negative equity after putting a downpayment when not only accounting for costs like sellers transaction or closing costs but also a drop in the home's value due to a depressed market.

...

GNL says

HeadSet says

GasTheYoungTurks says

Bobby Kennedy announced a plan for 3% mortgages for all Americans.

That is a gift to realtors. All low interest rates do is run up the price of cars and real estate.

It encourages debt and discourages saving.

Yes, it pulls forward spending that would have otherwise had to be saved for. As a consequence of taking purchase loans, the interest paid destroys capital that could have been spent on other desired objects/services. This has to be calculated against the expected dollar value loss or cost increase of the item that one is saving for over the duration that it will take to save for it. (Traditionally in dollar value loss environment.)

ForcedTQ says

This has to be calculated against the expected dollar value loss or cost increase of the item that one is saving for over the duration that it will take to save for it. (Traditionally in dollar value loss environment.)

yep, need to account for many factors like time value of money and opportunity cost

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https://www.kxan.com/news/austin-round-rock-metro-area-housing-has-most-inventory-on-hand-in-more-than-8-years-abor-says/

Austin housing inventory reaches 8-year high, ABoR says

Very tight inventory here in the DMV.

We hit 8%!!!

ood zzyzzx says

We hit 8%!!!

Why ? I mean banks are virtually at zero customers with the 30 year mortgage rate above 7.5%

Unless they still are making money regardless of this such as from variable rate HELOCs, revenue from credit card interest payments, etc

Obviously National Association of Realtors and all the industry partners from appraisers to home inspectors to mortgage brokers are essentially out of work now.

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When mesquite-filled pasture with no house in counties between Houston, Austin, and San Antonio will not be going for 20-50K per acre, then I will believe that bubble has popped.

ad says

ood zzyzzx says

We hit 8%!!!

Why ? I mean banks are virtually at zero customers with the 30 year mortgage rate above 7.5%

Unless they still are making money regardless of this such as from variable rate HELOCs, revenue from credit card interest payments, etc

Obviously National Association of Realtors and all the industry partners from appraisers to home inspectors to mortgage brokers are essentially out of work now.

Who's fault is that? Debt forever huh and savers punished? Sounds like stupidity.

30 yr treasuries at 5.25%, 10 yr at 4.95%

But that is impossible! :)

GasTheYoungTurks says

30 yr treasuries at 5.25%, 10 yr at 4.95%

But that is impossible! :)

What are the buyer options if you buy 10 year but you need money before 10 years?

gabbar says

What are the buyer options if you buy 10 year but you need money before 10 years?

Local credit unions are offering 12–18 month certificates at 5%.

Tight inventory from homeloan sellers refusing to budge unless they get Maximum Price.

Light interest from homeloan buyers, refusing to budget until mortgage payments don't seem like a headful of Lice.

Those who have and are renting, can hold out a lot longer than those who want/need to downsize, relocate, or divorce.

Realtors and Homeloaners can shreik until they're hoarse, but why pay $320 for what 4 years ago was $220k, of course!

https://www.redfin.com/county/441/FL/Brevard-County/housing-market

Nobody is going to pay $320k at 8% for a 3/2 boring box on an Eigth that went for $220 @ 3.5% four years ago

gabbar says

you need money before 10 years?

You sell them.

AmericanKulak says

Light interest from homeloan buyers

Heavy interest (8%) has created light interest.

GNL says

ad says

ood zzyzzx says

We hit 8%!!!

Why ? I mean banks are virtually at zero customers with the 30 year mortgage rate above 7.5%

Unless they still are making money regardless of this such as from variable rate HELOCs, revenue from credit card interest payments, etc

Obviously National Association of Realtors and all the industry partners from appraisers to home inspectors to mortgage brokers are essentially out of work now.

Who's fault is that? Debt forever huh and savers punished? Sounds like stupidity.

residential real estate prices need to drop to mid 2021 levels over the next couple of years while income increases by at least 3% annually

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ad says

GNL says

ad says

ood zzyzzx says

We hit 8%!!!

Why ? I mean banks are virtually at zero customers with the 30 year mortgage rate above 7.5%

Unless they still are making money regardless of this such as from variable rate HELOCs, revenue from credit card interest payments, etc

Obviously National Association of Realtors and all the industry partners from appraisers to home inspectors to mortgage brokers are essentially out of work now.

Who's fault is that? Debt forever huh and savers punished? Sounds like stupidity.

residential real estate prices need to drop to mid 2021 levels over the next couple of years while income increases by at least 3% annually

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Still bullish on 5 - 5.5 % by next summer?

GasTheYoungTurks says

30 yr treasuries at 5.25%, 10 yr at 4.95%

at least the yield curve is starting to undo its inversion .... Schwab offers 1 month CD's thru various US banks at least at a 5% rate

https://www.ustreasuryyieldcurve.com/

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GNL says

Still bullish on 5 - 5.5 % by next summer?

mortgage rates are based on many factors such as inflation

so by then I think the conditions will exist for a lot lower 30 year mortgage rate

,

ad says

GNL says

Still bullish on 5 - 5.5 % by next summer?

mortgage rates are based on many factors such as inflation

so by then I think the conditions will exist for a lot lower 30 year mortgage rate

,

Or maybe we’ll get lucky and there will be a reversion to a cash or Fuck You mean…. Higher borrowing costs than recent history are making people rethink their decisions.

ForcedTQ says

eversion to a cash or Fuck You mean

as far as "return or regression to the mean", maybe certain housing stats like price to income ratio will steadily adjust

go back to when housing started to recover from the last major housing crash... housing should go up about 4 to 5% a year since then as far as showing a trend line ... Robert Shiller said historically housing has appreciated about 4% annually

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Agent client of mine told me today that her broker of over 40 years has advised all listings to be priced at the low end of the comps and even below. This is the DMV and she says prices have fallen. I am not saying she is correct. I'm just sharing what I'm hearing on the ground. You know the media lies, right?

Bay Area Cool-Aid Drinkers (think they) know best.

I know that CRE (Commercial Real Estate) is hanging over the abyss, especially hotels. Banks with large CRE portfolios are shitting bricks. Moody's actually came out recently with a macroeconomic forecast that they called "Commercial Real Estate Doom Loop."

Shit is getting realer than real, real soon.

stereotomy says

I know that CRE (Commercial Real Estate) is hanging over the abyss, especially hotels. Banks with large CRE portfolios are shitting bricks. Moody's actually came out recently with a macroeconomic forecast that they called "Commercial Real Estate Doom Loop."

Shit is getting realer than real, real soon.

Is it true that a ton of CRE is currently being built as well?

GasTheYoungTurks says

Bobby Kennedy announced a plan for 3% mortgages for all Americans.

Got a quote for that? I'm skeptical about things that are not a direct quote from RFK Jr. with a link back. The thing about his supporting "reparations" is not true, but now it's all over the internet, like the fake "Israeli bombing of a hospital."

ad says

looks like more people are putting down more money

Makes sense to me. If you are holding CD or bonds that pay 2 to 5% dividend, there's no reason to hold them and pay an 8% mortgage. Put everything in the down payment. If mortgage rates go down in the future, you can refinance and cash your money back out.

Patrick says

GasTheYoungTurks says

Bobby Kennedy announced a plan for 3% mortgages for all Americans.

Got a quote for that?

https://www.newsweek.com/rfk-jr-ambitious-plan-cut-mortgages-1000-month-1832637

RFK Jr is still a give-money-away Democrat even though he is running as an independent. For example, he wants to give away money for reparations.

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ad says

For example, he wants to give away money for reparations.

@ad I'm pretty sure Kennedy did not actually say that. Please find me a quote if you can. I can't find it.

Patrick says

ad says

For example, he wants to give away money for reparations.

ad I'm pretty sure Kennedy did not actually say that. Please find me a quote if you can. I can't find it.

He is a give free shit out lib. Ya he is against vax and pharma, but everything else same old lib that fucked everything up.

SunnyvaleCA says

If mortgage rates go down in the future, you can refinance and cash your money back out.

True, but consider that refi is not free. Loans involve origination fees and often points. And it is unlikely that if mortgage rates fall that savings interest rates will not fall as well. Your best bet if you have the cash is to pay down the high interest mortgage and leave it there. Rebuilt your cash by putting what would have been payments back in the bank.

HeadSet says

consider that refi is not free. Loans involve origination fees and often points

If you walk into Bank of America (or similar) and ask for a refi, you'll pay up the wazoo and get a crappy rate too. Back when I had a mortgage I refinanced twice by using Zillow.com to find a fly-by-night refinance with no points and no fees. Did I get a lousy interest rate? I got a 1.875 5/1 ARM, so you be the judge. This was a decade ago.

And it is unlikely that if mortgage rates fall that savings interest rates will not fall as well. Your best bet if you have the cash is to pay down the high interest mortgage and leave it there. Rebuilt your cash by putting what would have been payments back in the bank.

If interest rates go down you might as well refinance. Then it's a free decision whether or not to cash out and put the money somewhere else. My experience is that people tend to think returns on the stock market are better than paying off a low-interest mortgage in a low-interest environment; for a high-interest environment, it's worth plowing money into paying off the mortgage.

But I think that we're on the same page with respect to the current situation: Liquidate mediocre-return investments and put it into paying off the mortgage, since that's effectively "earning" you a guaranteed 7% or 8%. I'm just pointing out that doing so isn't a permanent decision—you can cash out later if rates go down.

Considering how fucked the finances are of this country, is a replay of the Great Inflation of the 1970's, culminating in near 30% interest rates that killed the banking and industrial sectors of the economy, set for a replay? The aftermath (30% going down ultimately to ZIRP) provided a near 40-year boon to insurance companies.

I can't get a live agent with GEICO anymore. The insurance companies are completely fucked with rates going from ZIRP to over 6%. Let's see how well they do as rates go back up to 30%.

https://wolfstreet.com/2023/10/19/median-price-of-existing-homes-falls-further-peak-was-june-2022-demand-crashes-price-cuts-jump-supply-days-on-market-rise/

Home Prices Fall Further. Peak was June 2022. Demand Crashes, Price Cuts Jump, Supply & Days on Market Rise
by Wolf Richter • Oct 19, 2023

Patrick says

https://wolfstreet.com/2023/10/19/median-price-of-existing-homes-falls-further-peak-was-june-2022-demand-crashes-price-cuts-jump-supply-days-on-market-rise/

Home Prices Fall Further. Peak was June 2022. Demand Crashes, Price Cuts Jump, Supply & Days on Market Rise
by Wolf Richter • Oct 19, 2023

So, if I'm a chartist(?), I'm thinking to myself...prices be goin up by 10%+ by June 2023?