patrick.net

Assuming people don't die, lose jobs, and assuming builders don't find cheaper profitable ways to build homes.

bgamall4 says

jvolstad says

Let em' rise. I'm tired only getting 1% or so on my CD's.

You think they want to give you much more than that? Don't hold your breath.

+1. The gap between rate they pay you and rate they charge for a loan will be wide for foreseeable future.

The overall unemployment rate for college graduates, according to Georgetown's annual study, is 7.9%. Unemployment for recent (within a few years of graduation) Comp Sci majors is about 9% contrasted with Education at about 5.7%. If you want a job, choose Education over Comp Sci. Especially if you value steady employment.
http://www.usatoday.com/story/money/personalfinance/2013/07/30/tech-job-unemployment/2595669/

From the Georgetown Study:

And not confined to the US - Comp Sci has the highest unemployment rate in the UK among recent graduates, too:
http://www.theguardian.com/higher-education-network/blog/2013/sep/16/computer-science-graduates-unemployment-bme

"Also, what would you do if you were in charge?"

Default.

If I'm in charge, I've got the world's largest military. Bring it on.

Hi hrhjuliet,
I have an idea, please read and consider.
ES is Edward Snowden.
ES-related content/actions get the attention of many!
USAgov is USA federal government.

my IDEA is
We electronically communicate to ES, suggesting that he propose to USAgov a two part deal (in any order).
(1) USAgov grants ES amnesty.
(2) ES does his best efforts for eight hours to helpfully inform the deceived USA people of the content here:
"The Public Be Suckered (that's you)", at
http://patrick.net/?p=1230886

We will need electronic address(es) for ES. We will seek high online visibility options copying our communication to ES.

What think you?
RW&B,
ttsmyf

E-man says

If interest rates were to rise, this is fantastic for homeowners and real estate investors, who locked in 30-year fixed at historical low interest rates.

I'm not so convinced. When those people try to sell their houses, they will find a softer market. You can't fully assume that pricing is completely independent of interest rates. Most organic home owners (as opposed to investors spending other people's money) are dependent on mortgages, and the monthly payment matters. It's easy to note that 4% of 800,000 is the same as 8% of 400,000.

$400K at 8% = $2935 monthly with $31,879 interest paid in the first year
$800K at 4% = $3819 monthly with $31,744 interest paid in the first year
Note that an equivalent monthly of $400K at 8% with a 4% interest rate gives you a mortgage of $614782.

Now, I'm not saying that if interest rates suddenly shoot up to 8% that a formerly $615K house at 4% will instantly only be worth $400K, but it is guaranteed that higher interest rates will put pressure on prices because it is so monthly payment sensitive. Housing markets are fairly illiquid, so this happens somewhat gradually.

I would rather pay $400K at 8% than $615K at 4% because at 8%, there's a good chance that one day I will be able to refinance to lower my payment, and it will be much easier for me to make extra payments to pay down principal quickly vs. $615K. At 4%, it's unlikely I'll be able to refi too much in the future, and I'll be pretty much stuck with that payment forever, and I have a much higher principal to pay down.