sleepy5136
Well-known member
If you don’t need to pay your mortgage it does not impact the landlord financially in the event of a tenant not paying their rent.
I will put money that mortgage forbearance 2.0 will happen when unemployment is high.
How high will mortgage rates climb in the next 36 months?
- Thread starter OCtoSV
- Start date
NEW -> Contingent Buyer Assistance Program
I will put money that mortgage forbearance 2.0 will happen when unemployment is high.
https://www.macrotrends.net/2501/crude-oil-vs-gasoline-prices-chart
Keep in mind a barrel of crude oil is just the starting point for gasoline.
https://www.eia.gov/energyexplained...s/refining-crude-oil-the-refining-process.php
I have a question for you. Why is the average price of regular gasoline $4.916 in CA and $3.016 in MS right now?
https://gasprices.aaa.com/state-gas-price-averages/
Average gas price in CA has always been A LOT higher than in MS, so I don't know what you mean with "right now".
A year ago: CA $5.74, MS $4.00.
I suppose that, if we go by the ratio a year ago, average price in CA should be around $4.50 instead of $4.92 right now. And if we combine that with supposed to be lower national average, CA average should be around $4.30 rather than $4.92.
In December, gas price was $3.89. When I pumped up gas in January, it was $4.05. Today, it's $4.69.
Oil prices have been fluctuating between $75 and $80 during those 4 months, with today being lower than $75. What changed at the refineries such that gas prices had been steadily rising since December?
Cali oil companies and refineries made over double their profits in the last year than previous... that's where most of the higher cost is from.
Like I said before, mortgage rates are not going to 10%. It was a matter of time before the Fed broke something and now we know what they broke. Either they will pause interest rate hikes or do one last 1/4% and now the market is pricing in 100bps of rate cuts before year end after this hike.
It looks more and more likely that the Fed will not raise interest in March. This is a 180 turn in a hurry from "changing 0.25% to 0.50% in March".
Goldman Sachs analyst is predicting that Fed will pause in March, but will do 0.25% raises in May, June, AND July. I think May is likely, depending on inflation numbers, but I'm not sure about June and July.
Inflation is measured on a year-over-year basis. As long as rents go up 2% or less in the next 6-12 months inflation rate will be below 3%. I have no problem with the Fed going a little higher on their rates because I want them to squash inflation because that is the bigger evil between that and a mild recession. That being said, longer term rates are pricing in a lower longer term inflation environment so mortgage rates are not going to 10%. We'll see 3s again before we see 10s.
I will put money that mortgage forbearance 2.0 will happen when unemployment is high.
Does anyone here still think mortgage rate will hit 10% after SVB implosion?
www.cnbc.com
Mortgage rates tumble in the wake of bank failures
The average rate on the popular 30-year fixed mortgage dropped to 6.57% Monday, according to Mortgage News Daily.
www.cnbc.com
sgip
Well-known member
SVB is showing once again we're in a "zero consequence world", worse of all watching the government bailing out uninsured campaign donors ahem... account holders who should be wiped out. This whole banking implosion thingy might still spin completely out of control, which does not mean mortgage rates will fall. Gas is back above $5.00 in Cali. Food inflation peaks, falls, and can peak again (beef prices for example). Anyone really giving a meaningful reduction their new tenants rent compared to the past tenants rent? (A big reason why inflation may stay above 6%) Sky high Agency LLPA's are kicking in April 1 which will push every lenders conforming products up. Finally, stubborn, persistent global inflation - something the Fed cannot control - may still keep all rates artificially high. "May" is not "Will", but bear in mind how important it is to keep an eye on the entire picture here.
CalBears96
Well-known member
The only reason gas is back above $5 is oil company greed. Oil price is at $75 and it only went above $80 briefly, which is very low compared to > $100 when gas was above $5 before. There is absolutely no reason whatsoever for gas to be above $5.
someguy
Active member
Gas is right about where it should be in relation to the price of oil.
https://www.macrotrends.net/2501/crude-oil-vs-gasoline-prices-chart
Keep in mind a barrel of crude oil is just the starting point for gasoline.
https://www.eia.gov/energyexplained...s/refining-crude-oil-the-refining-process.php
I have a question for you. Why is the average price of regular gasoline $4.916 in CA and $3.016 in MS right now?
https://gasprices.aaa.com/state-gas-price-averages/
Last edited:
CalBears96
Well-known member
National average should be at least 30-40 cents lower though. In fact, if we look back in December, 2022 when oil price was $80.51, national average was $3.09. Feb, 2023 it was $77.03 and national average is $3.34. Today's oil price is $74.69 and national average is $3.47. I understand that oil price fluctuates daily and gas price won't track that. But compare gas price at $3.47 ($74.69 oil price) to $3.09 ($80.51 oil price). Oil price dropped, but gas price went up.
Average gas price in CA has always been A LOT higher than in MS, so I don't know what you mean with "right now".
A year ago: CA $5.74, MS $4.00.
I suppose that, if we go by the ratio a year ago, average price in CA should be around $4.50 instead of $4.92 right now. And if we combine that with supposed to be lower national average, CA average should be around $4.30 rather than $4.92.
qwerty
Well-known member
When I was trying to understand the higher cost of gas in CA vs nationally I came across this article, which seemed to reasonably explain the reasons. It’s about one year old but probably still applies today.
amp.sacbee.com
Why are Californians paying more for gasoline than anyone else?
Why are California’s gasoline prices the highest in the nation?
amp.sacbee.com
CalBears96
Well-known member
Some more data points from my experience at Spectrum Costco.
In December, gas price was $3.89. When I pumped up gas in January, it was $4.05. Today, it's $4.69.
Oil prices have been fluctuating between $75 and $80 during those 4 months, with today being lower than $75. What changed at the refineries such that gas prices had been steadily rising since December?
irvinehomeowner
Well-known member
This is doohickey.When I was trying to understand the higher cost of gas in CA vs nationally I came across this article, which seemed to reasonably explain the reasons. It’s about one year old but probably still applies today.
Why are Californians paying more for gasoline than anyone else?
Why are California’s gasoline prices the highest in the nation?
Cali oil companies and refineries made over double their profits in the last year than previous... that's where most of the higher cost is from.
usctrojancpa
Well-known member
Does anyone here still think mortgage rate will hit 10% after SVB implosion?
Mortgage rates tumble in the wake of bank failures
The average rate on the popular 30-year fixed mortgage dropped to 6.57% Monday, according to Mortgage News Daily.
Like I said before, mortgage rates are not going to 10%. It was a matter of time before the Fed broke something and now we know what they broke. Either they will pause interest rate hikes or do one last 1/4% and now the market is pricing in 100bps of rate cuts before year end after this hike.
qwerty
Well-known member
I dont think there are any publicly traded oil companies with just operations in California. Where are you getting your info from? I can’t imagine the likes of Exxon, chevron, etc reporting California only profitability. I know a lot of oil companies had record profits in 2022 but most of not all are global companies. So they are profiting from everyone - including the other 47 states with sun $4/gallon gas.
sleepy5136
Well-known member
rates can go to 20% and it wouldn’t even matter when everyone that wants a has gotten one in the past 2-3 years. Unemployment is low as well. No one will sell at this point unless they have to
CalBears96
Well-known member
I said the same, but OCtoSV kept insisting that mortgage rates are going to 10% AND that Fed would NOT cut rates in our life time. He just wouldn't admit he's wrong.
It looks more and more likely that the Fed will not raise interest in March. This is a 180 turn in a hurry from "changing 0.25% to 0.50% in March".
Goldman Sachs analyst is predicting that Fed will pause in March, but will do 0.25% raises in May, June, AND July. I think May is likely, depending on inflation numbers, but I'm not sure about June and July.
sleepy5136
Well-known member
This is the opportunity for the Fed to really show if they are serious in fighting inflation or not. Keep raising rates, who cares. Expose the companies that are not responsible of their finances. Wash out the weak hands and give me another March 2020- April 2020 drop! Consumer is way too strong and if they continue to be strong, inflation will not stop.
Let me be clear - I do not WANT mortgage rates to go to 10% but I see the Fed's inflation mission predicated on crushing housing prices to deflate future rents. There is no other path to reduce inflation given the weight of housing cost in PCE. I have never been more hopeful of being wrong but i've built my net worth and career by keeping my eyes and mind open to all information
irvinehomeowner
Well-known member
@qwerty:
Sorry... I mean the Cali refineries (and the oil companies that own them). We got this explanation that it's more expensive to refine oil in Cali due to the seasonal blends, refinery maintenance etc but there was a report detailing record profits for these refineries despite these "issues". That's why there is legislation being pushed in Cali to cap profits (which I don't necessarily agree with).
Sorry... I mean the Cali refineries (and the oil companies that own them). We got this explanation that it's more expensive to refine oil in Cali due to the seasonal blends, refinery maintenance etc but there was a report detailing record profits for these refineries despite these "issues". That's why there is legislation being pushed in Cali to cap profits (which I don't necessarily agree with).
I think no pipelines into CA requiring train/truck transport is also a big factor. As CA makes refining less and less attractive our gas prices will continue to increase.
usctrojancpa
Well-known member
Inflation is measured on a year-over-year basis. As long as rents go up 2% or less in the next 6-12 months inflation rate will be below 3%. I have no problem with the Fed going a little higher on their rates because I want them to squash inflation because that is the bigger evil between that and a mild recession. That being said, longer term rates are pricing in a lower longer term inflation environment so mortgage rates are not going to 10%. We'll see 3s again before we see 10s.
Ready2Downsize
Well-known member
Not happening.
irvinebullhousing
Well-known member
When you have over 2 decades of easy credit and prolong period of zero interest rates, it will take just as long to right the ship.
If we don't right the ship and reverse or change course, on a couple of bumps on the road, then we are dooom as a country, as a leader of
capitalism. These next few years will be extreme, cross currents from many sides of status-quo, and keeping things the way they are to benefit a few
at very top. I hope JPowell, stay the course,, we can not afford zero interest rate. As far as housing, it has been in reccession since June 2022. There
places fare better than other. Everything will get reprice, My optic for housing in Irvine, so far is that it still has too many people that prefer to live
here than rushing to the exit. Housing is a big part of the CPI. Let's not forget, the landlords suffer the same inflation, labors, material, and taxes
has risen substantially,, many did not even able to collect rents during the rent moratorium and not getting paid.
If we don't right the ship and reverse or change course, on a couple of bumps on the road, then we are dooom as a country, as a leader of
capitalism. These next few years will be extreme, cross currents from many sides of status-quo, and keeping things the way they are to benefit a few
at very top. I hope JPowell, stay the course,, we can not afford zero interest rate. As far as housing, it has been in reccession since June 2022. There
places fare better than other. Everything will get reprice, My optic for housing in Irvine, so far is that it still has too many people that prefer to live
here than rushing to the exit. Housing is a big part of the CPI. Let's not forget, the landlords suffer the same inflation, labors, material, and taxes
has risen substantially,, many did not even able to collect rents during the rent moratorium and not getting paid.