irvinehomeowner
Well-known member
It's win-win... higher rates mean less people able to buy.... population stagnation means less people.
How high will mortgage rates climb in the next 36 months?
- Thread starter OCtoSV
- Start date
NEW -> Contingent Buyer Assistance Program
It's been hotter for sure but June was relatively (for here) cooler which caused a problem going forward which is very very weak monsoon season (bad for drought and temperatures). But what's the different between 110 and 115? LOL! Actually it's the night time temps that is the issue. When it's cooler, the houses cool down. Still our electricity per kwh much lower than California so my a/c with two 5 ton units, no window coverings other than a couple sheets was $167 for July and I ran both units 24/7 (about 2800 sq foot single story house with 10 foot ceilings and some large windwos). But keep in mind I made sure to get my house direction so very few windows face the heat of the day, extra insulation and 4 car tandem garage sheilds part of the house too. You'd think the a/c would always be on but it's not and I'm not hot....... then again I don't go for walks in the afternoon. LOL!
So I got to thinking...... I think the new home builders are going to cause themselves their next problem. They've had practically a monopoly among themselves for the last year or so (in areas that have plenty of land to build..... not really the OC) because they have been offering below market financing..... in the 5% area + or -. They can throw in over priced upgrades if something doesn't sell with the starter home market being king.
IOW they are selling at over market prices, imo. No way can a reseller compete with 2% buydowns. It would probably cost 11-12% to buy down the buyers mortgage + other selling costs including commission (based on 1 point = 1/4%............ 2% would be 8 points! Maybe they can get a better deal but still a lot of $$$). Of course if they keep selling, the appraisals come in fine. The bond yields cannot seem to ramp thru resistance and it continues to work for them to offer these rates.
The builder confidence is at 13 months high (where the market topped out) and most likely looking to build more because trees really do grow to the sky even though home ownership is already where it's peaked out several times in the past (except 2006). And each builder thinks the same thing of course.
First time buyers are already stretching themselves as they always do, thinking rates will come down cuz they always have for almost everyone who has bought a house until the last year so why not buy now?
So if rates come down, there is a whole lot of people who would probably like to move up (more supply which will probably limit price increases). Meanwhile, those who buy new homes now are overpaying for their houses (imo of course) and like a car that depreciates off the lot, they will be surprised to find they can't sell for breakevern (because they are probably overpaying by 5-10% right now, plus upgrades and landscaping).
So about the builders.......... by the time rates come down, they will have saturated the starter home market and they need those homeowners to sell to fuel the moveup market but............ now there are too many starter homes available and prices can't go up.
…and 8% rears its ugly head…
Mortgage rates could hit 8%, economists say, citing a worrying sign not seen since the Great Recession
The 30-year rate is ‘at a critical stage,’ Lawrence Yun, chief economist at the National Association of Realtors, told MarketWatch
The 30-year is “at a critical stage,” Lawrence Yun, chief economist at the National Association of Realtors, told MarketWatch.
“If the 30-year-fixed mortgage rate can hold at a high mark of 7.2% — and the 10-year yield holds at 4.2% — then this would be the high for mortgage rates before retreating,” Yun said. “If it breaks this line and easily goes above 7.2%, then the mortgage rate reaches 8%.”
As of Tuesday afternoon, the 10-year Treasury note BX:TMUBMUSD10Y was above 4.2%.
“Mortgage rates could rise significantly if global investors demand higher yields for fixed-income assets,” Cris deRitis, deputy chief economist at Moody’s Analytics, told MarketWatch.
https://www.marketwatch.com/story/m...n-not-seen-since-the-great-recession-edf2b4a4
P.S. Mortgage rates have already adjusted up since my last post this morning and currently sit at 7.37% which is equal to the cyclical high achieved last November. Will we hit a new high tomorrow???
But for every incremental increase in rates, the number of qualified buyers shrinks just a little bit, while the number of people refusing to sell based on having a sub-3% rate is a slowly shrinking pool. Demand is going to tank further, while supply will remain low only if everybody can "hold the line" and refuse to sell. That gets harder and harder the longer rates stay high, as the economy comes under pressure and life events force people's hands.
And for those of us that will be taking mortgages for 20-30% of the purchase price these rates don’t have a material impact as the mortgage is small.
Diversification is important. And holding on to properties not just for locked-in low rate is the sole reason. Tax, particularly property tax at a low base is a good reason to hold on to your property. Oh, and when you sell, look to give up an additional 10 % off of the total price for closing cost.
Holding on to your real estate property has an immense benefits, just don't make it the only asset class that you hold on to.
People like to trade up and move up LOVES those property tax at the end of the year every year. Just ask. That is the primary reason why you have as of late a frozen property market. The same reason you want to buy at a low price when the market crash, make people would not want to sell, because they are smarter than what you think.
Hugo Township
Active member
Vital interest rate bragging tips for your next BBQ or cocktail party
www.nytimes.com
Feeling Mortgage-Rate Envy? You’re Not Alone.
With interest rates climbing, a new form of one-upmanship is making the rounds: the mortgage-rate humble brag.
Liar Loan
Well-known member
Led by jumbo mortgages...
Its monthly index measuring credit availability dropped in July to the lowest level since 2013, indicating that lending standards are tightening even further.
While availability for all loan types dropped, the component of the index for jumbo loans fell the most, as banks face increasing liquidity issues.
www.cnbc.com
Mortgage credit availability sinks to decade low
As if higher mortgage rates weren’t enough, it was harder even to qualify for a mortgage in July than it has been in a decade, according to the Mortgage Bankers Association.Its monthly index measuring credit availability dropped in July to the lowest level since 2013, indicating that lending standards are tightening even further.
While availability for all loan types dropped, the component of the index for jumbo loans fell the most, as banks face increasing liquidity issues.
Mortgage credit availability sinks to decade low
The MBA's monthly index measuring credit availability dropped in July to the lowest level since 2013, indicating lending standards are tightening even further.
Ready2Downsize
Well-known member
Hahahaha! Should have waited for eggs to drop further...... 99 cents for 18 packs cage free eggs...... limit 5 which works out to 66 cents per dozen.
It's been hotter for sure but June was relatively (for here) cooler which caused a problem going forward which is very very weak monsoon season (bad for drought and temperatures). But what's the different between 110 and 115? LOL! Actually it's the night time temps that is the issue. When it's cooler, the houses cool down. Still our electricity per kwh much lower than California so my a/c with two 5 ton units, no window coverings other than a couple sheets was $167 for July and I ran both units 24/7 (about 2800 sq foot single story house with 10 foot ceilings and some large windwos). But keep in mind I made sure to get my house direction so very few windows face the heat of the day, extra insulation and 4 car tandem garage sheilds part of the house too. You'd think the a/c would always be on but it's not and I'm not hot....... then again I don't go for walks in the afternoon. LOL!
So I got to thinking...... I think the new home builders are going to cause themselves their next problem. They've had practically a monopoly among themselves for the last year or so (in areas that have plenty of land to build..... not really the OC) because they have been offering below market financing..... in the 5% area + or -. They can throw in over priced upgrades if something doesn't sell with the starter home market being king.
IOW they are selling at over market prices, imo. No way can a reseller compete with 2% buydowns. It would probably cost 11-12% to buy down the buyers mortgage + other selling costs including commission (based on 1 point = 1/4%............ 2% would be 8 points! Maybe they can get a better deal but still a lot of $$$). Of course if they keep selling, the appraisals come in fine. The bond yields cannot seem to ramp thru resistance and it continues to work for them to offer these rates.
The builder confidence is at 13 months high (where the market topped out) and most likely looking to build more because trees really do grow to the sky even though home ownership is already where it's peaked out several times in the past (except 2006). And each builder thinks the same thing of course.
First time buyers are already stretching themselves as they always do, thinking rates will come down cuz they always have for almost everyone who has bought a house until the last year so why not buy now?
So if rates come down, there is a whole lot of people who would probably like to move up (more supply which will probably limit price increases). Meanwhile, those who buy new homes now are overpaying for their houses (imo of course) and like a car that depreciates off the lot, they will be surprised to find they can't sell for breakevern (because they are probably overpaying by 5-10% right now, plus upgrades and landscaping).
So about the builders.......... by the time rates come down, they will have saturated the starter home market and they need those homeowners to sell to fuel the moveup market but............ now there are too many starter homes available and prices can't go up.
irvinehomeowner
Well-known member
Wait... why are eggs so cheap in AZ? At one point they were $8 in Irvine.
Large chicken population? Low omelet demand?
Maybe ice is cheaper in Cali because it's not as hot as AZ?
Large chicken population? Low omelet demand?
Maybe ice is cheaper in Cali because it's not as hot as AZ?
someguy
Active member
As with most questions of why is X so much cheaper in [Not California], because of CA regulations on X. Not gonna google for you this time.Wait... why are eggs so cheap in AZ? At one point they were $8 in Irvine.
Large chicken population? Low omelet demand?
Maybe ice is cheaper in Cali because it's not as hot as AZ?
morekaos
Well-known member
Ouch, now I’m really glad I re-fied at 3% in February. Didn’t someone here say they didn’t think this was going to get over 7%?
Compare current mortgage interest rates | Wells Fargo
View daily mortgage and refinance interest rates for a variety of mortgage products, and learn how we can help you reach your home financing goals.www.wellsfargo.com
…and 8% rears its ugly head…
Mortgage rates could hit 8%, economists say, citing a worrying sign not seen since the Great Recession
The 30-year rate is ‘at a critical stage,’ Lawrence Yun, chief economist at the National Association of Realtors, told MarketWatch
The 30-year is “at a critical stage,” Lawrence Yun, chief economist at the National Association of Realtors, told MarketWatch.
“If the 30-year-fixed mortgage rate can hold at a high mark of 7.2% — and the 10-year yield holds at 4.2% — then this would be the high for mortgage rates before retreating,” Yun said. “If it breaks this line and easily goes above 7.2%, then the mortgage rate reaches 8%.”
As of Tuesday afternoon, the 10-year Treasury note BX:TMUBMUSD10Y was above 4.2%.
“Mortgage rates could rise significantly if global investors demand higher yields for fixed-income assets,” Cris deRitis, deputy chief economist at Moody’s Analytics, told MarketWatch.
https://www.marketwatch.com/story/m...n-not-seen-since-the-great-recession-edf2b4a4
Liar Loan
Well-known member
The funny thing is that mortgage rates were already higher than 7.2% and the 10 yr was already higher than 4.2% by the time this article went to print. I love it when rates move faster than the media talking heads can react!…and 8% rears its ugly head…
Mortgage rates could hit 8%, economists say, citing a worrying sign not seen since the Great Recession
The 30-year rate is ‘at a critical stage,’ Lawrence Yun, chief economist at the National Association of Realtors, told MarketWatch
The 30-year is “at a critical stage,” Lawrence Yun, chief economist at the National Association of Realtors, told MarketWatch.
“If the 30-year-fixed mortgage rate can hold at a high mark of 7.2% — and the 10-year yield holds at 4.2% — then this would be the high for mortgage rates before retreating,” Yun said. “If it breaks this line and easily goes above 7.2%, then the mortgage rate reaches 8%.”
As of Tuesday afternoon, the 10-year Treasury note BX:TMUBMUSD10Y was above 4.2%.
“Mortgage rates could rise significantly if global investors demand higher yields for fixed-income assets,” Cris deRitis, deputy chief economist at Moody’s Analytics, told MarketWatch.
https://www.marketwatch.com/story/m...n-not-seen-since-the-great-recession-edf2b4a4
P.S. Mortgage rates have already adjusted up since my last post this morning and currently sit at 7.37% which is equal to the cyclical high achieved last November. Will we hit a new high tomorrow???
irvinebullhousing
Well-known member
HIGHER FOR LONGER,,,,let’s goooo!!!!!
This is how you strangle, reigning in your opponents.
This is how you strangle, reigning in your opponents.
Liar Loan
Well-known member
And honestly you wouldn't have sold no matter what happened to rates, so it's a non-factor.
But for every incremental increase in rates, the number of qualified buyers shrinks just a little bit, while the number of people refusing to sell based on having a sub-3% rate is a slowly shrinking pool. Demand is going to tank further, while supply will remain low only if everybody can "hold the line" and refuse to sell. That gets harder and harder the longer rates stay high, as the economy comes under pressure and life events force people's hands.
Only the ignorant - why would I want to leave 7 figures of equity on the table and realize a 3% cap rate from rent when I can get 6-7% on the gain in IG bonds? So many people have become single asset believers after 20 years of a good run in real estate they have no clue what a screaming buy many bonds are right now.
And for those of us that will be taking mortgages for 20-30% of the purchase price these rates don’t have a material impact as the mortgage is small.
irvinebullhousing
Well-known member
The ignorant here is your assumption. How do you know if those who's owned properties are also invested in other asset classes beside residential rentals? REIT, precious metal, collectable stamps, fine arts and equities, international EM beside bonds. And CASH. Forget crypto, bitcoin, this is not proven. Those equity are good when you can tap it and pay no tax on it. Of course you have to pay interest on that borrow money, but you can write some of that off and use that money for good cause. When I say good cause, it mean that it must make money for you. Don't blow it on coke and hookers.
Diversification is important. And holding on to properties not just for locked-in low rate is the sole reason. Tax, particularly property tax at a low base is a good reason to hold on to your property. Oh, and when you sell, look to give up an additional 10 % off of the total price for closing cost.
Holding on to your real estate property has an immense benefits, just don't make it the only asset class that you hold on to.
People like to trade up and move up LOVES those property tax at the end of the year every year. Just ask. That is the primary reason why you have as of late a frozen property market. The same reason you want to buy at a low price when the market crash, make people would not want to sell, because they are smarter than what you think.
qwerty
Well-known member
This is the worst advice I’ve read on the internet today. You can’t take your money with you - you only live once!!!!
I called it right - jumbos now come with higher rates than conforming, spreads are 300 bps from the 10 yr and rates are approaching 8%. The only thing I got wrong was the decline in prices. I might have been a little early on that, but hopefully just wrong and instead homes will now only be affordable to the absolutely most pristine buyers willing to pay as much as they can to buy a house, and I'll be able to offload my little slice of SV heaven to a GF in 3 years.
sleepy5136
Well-known member
I think you said rates were going to 10% too?