How high will mortgage rates climb in the next 36 months?
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Join me on TalkRanchoCucamonga.com to talk smack.
Those cocky Rancho Cucamongans think their city is the best.
I like to spew out fake line graphs to knock them down a peg.
I?m on post 5,263 even though I?ve never been there.
This is totally normal behavior
I have a house in Chino that we refi'd after purchase years ago, the value of the home dropped by $20,000 and we had to pay $12k to avoid PMI. Because the refi was for 15 year fixed and it put the rental property at cashflow negative, the lender was being strict.
We should also keep in mind that market averages do not necessarily reflect local conditions, or specific types of real estate.
For example, I bought my first condo in Irvine in late 1999 for about $180/sq ft. During previous bubble era it peaked at $490-$500/sq ft (2007?), then dropped to about $290 at bottom (2012?). Hope my math is correct here.
So for the small condo it dropped ~40% in value from peak to bottom in previous cycle. But for larger and nicer SFR's in the same master association, they did not drop this much.
Similarly, a nice cul-de-sac 4 bed SFR at Legends Golf Course in Temeku Hills (Temecula) will not drop nearly as much in RE downturn as an old, small 2 bed SFR with termite infested carport elsewhere in the city. But it will drop a lot more than a comparable SFR in Irvine.
p.s. For anyone who is curious, I sold my first Irvine condo just before the pandemic for a bit below $500/sq ft. It's currently valued at $620/sq ft and dropping.
To be fair... this should also be directed at those people who trigger these exchanges. While they may be acting innocuous, their posts are not just fact/fiction but actual insults to other members about their home buying decisions which makes it very personal.
While I may not agree with the color of some posts... sometime those things need to be said because the culmination of lies and misinformation is often times even more insulting than certain words.
And yes, while we do want to keep out negativity... conflict is not the same thing. It's our differences that spurs conversation and keeps interest in topics. You can't have a good forum if everyone agrees with each other.
Yeah, I remembered 1999, was a great time for Irvine real estate. All of my friends and their moms stacked their cash at the internet stocks and cash out of their homes to buy even more equities shares.
A great memory. Needless to say, hard assets was proven to be resilient when compare to others. The important lesson for me is which will do best when everything else goes goes south. If you put a gun to my head and have to put my money even now, I would put my money in good real estate any day.
. Getting internet dunk is like watching a free comedy club without admission ticket.
TestingIrvine
Active member
CalBears96 said:
Join me on TalkRanchoCucamonga.com to talk smack.
Those cocky Rancho Cucamongans think their city is the best.
I like to spew out fake line graphs to knock them down a peg.
I?m on post 5,263 even though I?ve never been there.
This is totally normal behavior
momopi
Well-known member
CalBears96 said:
I have a house in Chino that we refi'd after purchase years ago, the value of the home dropped by $20,000 and we had to pay $12k to avoid PMI. Because the refi was for 15 year fixed and it put the rental property at cashflow negative, the lender was being strict.
momopi
Well-known member
The California Court Company said:
We should also keep in mind that market averages do not necessarily reflect local conditions, or specific types of real estate.
For example, I bought my first condo in Irvine in late 1999 for about $180/sq ft. During previous bubble era it peaked at $490-$500/sq ft (2007?), then dropped to about $290 at bottom (2012?). Hope my math is correct here.
So for the small condo it dropped ~40% in value from peak to bottom in previous cycle. But for larger and nicer SFR's in the same master association, they did not drop this much.
Similarly, a nice cul-de-sac 4 bed SFR at Legends Golf Course in Temeku Hills (Temecula) will not drop nearly as much in RE downturn as an old, small 2 bed SFR with termite infested carport elsewhere in the city. But it will drop a lot more than a comparable SFR in Irvine.
p.s. For anyone who is curious, I sold my first Irvine condo just before the pandemic for a bit below $500/sq ft. It's currently valued at $620/sq ft and dropping.
irvinehomeowner
Well-known member
someguy said:
To be fair... this should also be directed at those people who trigger these exchanges. While they may be acting innocuous, their posts are not just fact/fiction but actual insults to other members about their home buying decisions which makes it very personal.
While I may not agree with the color of some posts... sometime those things need to be said because the culmination of lies and misinformation is often times even more insulting than certain words.
And yes, while we do want to keep out negativity... conflict is not the same thing. It's our differences that spurs conversation and keeps interest in topics. You can't have a good forum if everyone agrees with each other.
irvinebullhousing
Well-known member
momopi said:
Yeah, I remembered 1999, was a great time for Irvine real estate. All of my friends and their moms stacked their cash at the internet stocks and cash out of their homes to buy even more equities shares.
A great memory. Needless to say, hard assets was proven to be resilient when compare to others. The important lesson for me is which will do best when everything else goes goes south. If you put a gun to my head and have to put my money even now, I would put my money in good real estate any day.
momopi
Well-known member
I had to sell what little stocks I had in 1999 for down payment on the Irvine condo. The 5% down payment was less than $10K but closing cost and other expenses added thousands. The monthly cost with PMI and 2 HOA's was also hundreds above the loan payment. When I bought my second condo in 2002 I rented the first out, it was cashflow negative.
What the condo did give me was an enjoyable time, and equity that I was able to tap later to buy more properties. Back when it was new construction, everyone was moving in for the first time and very friendly. I also had couple other friends who bought in Irvine and we swapped pool keys and went swimming in each other's pools. When my friend needed to do laundry, she brought her college dorm mates over and my neighbor was eyeing me sideways with 3 girls in the jacuzzi. @_@
Being my first condo I hold a lot of sentimental value, but it was a small condo not suitable for family. Over the years the new neighbors also changed from friendly to grunts when you greet them. After reviewing the options we decided to keep a Chino rental house with 15 year loan and sell other income properties. The Chino house is larger with 3 bed 2 bath and we're on track to paying it off in ~6 years.
...and after we liquidated our other investment properties in 2018-2019, the pandemic hit, property/rental prices went through the roof and we missed out on hundreds of thousands of dollars in additional equity gains. ~$_$~
What the condo did give me was an enjoyable time, and equity that I was able to tap later to buy more properties. Back when it was new construction, everyone was moving in for the first time and very friendly. I also had couple other friends who bought in Irvine and we swapped pool keys and went swimming in each other's pools. When my friend needed to do laundry, she brought her college dorm mates over and my neighbor was eyeing me sideways with 3 girls in the jacuzzi. @_@
Being my first condo I hold a lot of sentimental value, but it was a small condo not suitable for family. Over the years the new neighbors also changed from friendly to grunts when you greet them. After reviewing the options we decided to keep a Chino rental house with 15 year loan and sell other income properties. The Chino house is larger with 3 bed 2 bath and we're on track to paying it off in ~6 years.
...and after we liquidated our other investment properties in 2018-2019, the pandemic hit, property/rental prices went through the roof and we missed out on hundreds of thousands of dollars in additional equity gains. ~$_$~
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%?
www.wellsfargo.com
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.
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Yes you are., and yes they did. Look at MBS pricing and tell me with a straight face rates aren't going to 9%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.
?
Liar Loan
Well-known member
I remember when SGIP first predicted 7% rates it seemed kind of shocking, but at this point the increases are the fastest in history, so I wouldn't rule out 9% or higher. The daily average reached another new cyclical high today of 7.22%.
It seems surreal to have a mortgage that is almost 5 full percentage points below the current market rate.
It seems surreal to have a mortgage that is almost 5 full percentage points below the current market rate.
sgip
Well-known member
Remember as well that most refinanced in the 2's and 3's with zero cost. These purchase loans are costing .50 point in fee or higher just to get that 7x handle rate. Mortgages in the 9's with fees would mean a complete shut down of the resale and new home build housing market - which is perhaps going to happen on the way to 9 if that's in our future. My better guess is that if (big IF) the R's get both the House and the Senate, there will be a big relief rally in stocks. That won't move rates down, but that relief rally will stall as Q4 profit results come in. Upward Fed rate trajectories will end in early Q1 2023 because the big pushes for higher inflation in the measuring tools (energy and rents) will likely show a lower trend which then means the Fed will stop - as will have everything else by then. Rents peaked already. Once these newer numbers get baked into the CPI, you'll hear how these rate moves have slayed the inflation dragon.
As I'm fond of repeating these days when it comes to MSM news and Federal press releases - "Don't believe everything your told".
My .02c
As I'm fond of repeating these days when it comes to MSM news and Federal press releases - "Don't believe everything your told".
My .02c
The Motor Court Company
Well-known member
another new 20 year high; 7.37% now. 8 handle here we come.
Still believe that?
ThirtySomethingWEquity
Active member
Maybe it's good I didn't take out a HELOC. I guess I'll just be paying cash to redo my backyard now?
as you should be
ThirtySomethingWEquity
Active member
I mean, maybe? If I can get Treasury bonds for 4% and a loan for 4.5% then I should probably not pay cash?
Personal preference - I've never been comfortable with leverage beyond a mortgage and even then I refi'd into a 15/1.99 as soon as I felt comfortable with the larger payment
Liar Loan
Well-known member
It's nice to see my old co-worker Christopher Whalen in the news again -- and with an ultra bearish call to boot!! I can't remember ever seeing a mainstream banking analyst make such a bearish prognostication!
That’s because the Fed’s torrid pace of rate increases in 2022 takes time to seep back into mortgage rates, especially with the fed-funds rate already jumping to a 3%-3.25% range in late September, from almost zero a year before.
“There is a lag effect in mortgages,” Whalen said, adding that even if central bankers decided to hit pause on additional rate increases after their December meeting, the 30-year mortgage rate still would “easily touch 10% by February.”
Importantly, Whalen also sees potential for home prices to give back all of their pandemic gains if rates stay high for all of 2023.
That’s a bigger call than estimates for a 10%-15% correction in home prices from prices that surged 45% nationally during the pandemic.
Why the housing market should brace for double-digit mortgage rates in 2023
Even if Federal Reserve Chairman Jerome Powell and his cohorts stopped hiking policy rates soon, the 30-year fixed mortgage rate still would climb to 10%, according to Christopher Whalen, chairman of Whalen Global Advisors.That’s because the Fed’s torrid pace of rate increases in 2022 takes time to seep back into mortgage rates, especially with the fed-funds rate already jumping to a 3%-3.25% range in late September, from almost zero a year before.
“There is a lag effect in mortgages,” Whalen said, adding that even if central bankers decided to hit pause on additional rate increases after their December meeting, the 30-year mortgage rate still would “easily touch 10% by February.”
Importantly, Whalen also sees potential for home prices to give back all of their pandemic gains if rates stay high for all of 2023.
That’s a bigger call than estimates for a 10%-15% correction in home prices from prices that surged 45% nationally during the pandemic.