How high will mortgage rates climb in the next 36 months?

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Yeah... not sure how "huge" a loss they were taking. People were still driving, trucks were still rolling etc etc.

What they made the last year more than made up for whatever down months they had during 2020.
 
CalBears96 said:
CPI is coming down, although not as fast as expected. That is due to, somewhat, like IHO said, greed. Remember that shit the gas stations/refineries pulled back in October? And just in case you didn't hear, oil companies reported RECORD profits for 2022. 100% greed.

However, I can say that it was supply chain constraints even in 2022. I ordered my Sub-Zero fridge in Jan 2022 and was supposed to get it in June 2022, thanks to supply constraints. But guess what? I didn't get it until December 2022.

So the question to you: What do YOU think?
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I'd be careful about saying CPI is coming down. That is not the case. Yes inflation is cooling off, but CPI is still rising. Remember inflation is measured by the year-over-year change in CPI. Inflation is coming down because the year-over-year growth is shrinking. But nobody expects that growth to turn negative. Even the Fed wants inflation, with their target at 2%. So current CPI levels are the new norm and what we should expect from now on. And those will continue to rise meaning things aren't going to get cheaper.
 
ChiKid24 said:
I'd be careful about saying CPI is coming down. That is not the case. Yes inflation is cooling off, but CPI is still rising. Remember inflation is measured by the year-over-year change in CPI. Inflation is coming down because the year-over-year growth is shrinking. But nobody expects that growth to turn negative. Even the Fed wants inflation, with their target at 2%. So current CPI levels are the new norm and what we should expect from now on. And those will continue to rise meaning things aren't going to get cheaper.
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I meant the rate of CPI rising is coming down.

And I don't know what you mean by "current CPI levels are the new norm" when you stated that the Fed's target is 2% when the current level is 6.5%. The norm is about 2% and that won't change.
 
I was referring to current nominal CPI levels as the new norm. So we should expect price level readings to continue to rise from today's nominal level of about 300. All of this is to say that nominal prices aren't going to come down so nobody should expect things to get cheaper. The goal is for them to rise less quickly from today's new norm prices.
 
ChiKid24 said:
I was referring to current nominal CPI levels as the new norm. So we should expect price level readings to continue to rise from today's nominal level of about 300. All of this is to say that nominal prices aren't going to come down so nobody should expect things to get cheaper. The goal is for them to rise less quickly from today's new norm prices.
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Well, that's always the case anyway. Prices almost never come down. Perhaps if we're hit hard by a recession, prices might come down a bit. Otherwise, the current price will be the bottom for the future.
 
CalBears96 said:
Well, that's always the case anyway. Prices almost never come down. Perhaps if we're hit hard by a recession, prices might come down a bit. Otherwise, the current price will be the bottom for the future.
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For sure. That's why I thought it was important to point out that CPI is not coming down.
 
I still stand by my peak of 8%. We have more to go this cycle. The only reason it’s not 9% is fed will stop with higher inflation to bail out small businesses with bank lines of credit. They will be absolutely crushed by 2024 if we get recession at these rates
 
Mawesome Sauce said:
I still stand by my peak of 8%. We have more to go this cycle. The only reason it’s not 9% is fed will stop with higher inflation to bail out small businesses with bank lines of credit. They will be absolutely crushed by 2024 if we get recession at these rates
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Conforming rates may or may not get to 8% but the issue is not what will bring prices down materially, it'll be more inventory.
 
Mawesome Sauce said:
And to get inventory up, you need investors to liquidate real estate. To do that you need higher rates so they sell the homes for bonds.
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Not if they have big tax bills from gains to pay. Why would an investment sell to get a big tax bill for gains, those folks do 1031 exchanges. Higher rates will result in less inventory on the market because less potential move-up buyers will look to sell and buy bigger. Lower rates will actually bring more inventory to the market.
 
usctrojancpa said:
Not if they have big tax bills from gains to pay. Why would an investment sell to get a big tax bill for gains, those folks do 1031 exchanges. Higher rates will result in less inventory on the market because less potential move-up buyers will look to sell and buy bigger. Lower rates will actually bring more inventory to the market.
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They can’t do the exchange if the market free falls. You need to force a liquidation in the market with the high rates, where one seller forces another to sell just so they aren’t the last one. You can only do that if a panic happens and we didn’t get that on the last high. That means we need another new high… and another and another until people actually panic sell. It’s the same thing every time for every investment
 
Better is offering a 1-day loan commitment: https://better.com/b/one-day-mortgage

I know there are some mortgage brokers that can secure conditional approval in 24-48 hours...but it's pretty cool that Better is doing this on their all-digital / self-service platform. 2 years ago, I did a refi through Ally Bank (leveraging Better's platform), which was an excellent experience.
 
Mawesome Sauce said:
They can’t do the exchange if the market free falls. You need to force a liquidation in the market with the high rates, where one seller forces another to sell just so they aren’t the last one. You can only do that if a panic happens and we didn’t get that on the last high. That means we need another new high… and another and another until people actually panic sell. It’s the same thing every time for every investment
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The problem is why would anyone sell? It all goes back to unemployment. That’s the only way more inventory is coming to the market irrespective of rates. Right now you can have higher rates but that doesn’t impact people locked in for 30 years… this includes investors and primary homeowners…
 
sleepy5136 said:
The problem is why would anyone sell? It all goes back to unemployment. That’s the only way more inventory is coming to the market irrespective of rates. Right now you can have higher rates but that doesn’t impact people locked in for 30 years… this includes investors and primary homeowners…
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Investors would sell because the price of the home is falling while there are better options out there. My scenario allows homeowners to stay there so long as they can make payments, but investors leave for better opportunities
 
Mawesome Sauce said:
Investors would sell because the price of the home is falling while there are better options out there. My scenario allows homeowners to stay there so long as they can make payments, but investors leave for better opportunities
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It's a chicken and an egg problem. You need more inventory to come first for prices to materially fall, prices don't fall materially if you have a lack of inventory.
 
Mawesome Sauce said:
Investors would sell because the price of the home is falling while there are better options out there. My scenario allows homeowners to stay there so long as they can make payments, but investors leave for better opportunities
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Right now if you're locked in < 4% in a 30 yr fixed, it doesn't even make sense to sell unless it's an emergency. Inflation is 6%+ and it's looking to stay with us for the foreseeable future. If inflation goes up, it only makes your mortgage cheaper. Banks are literally paying people with mortgages < 4% to have their mortgage w/inflation.
 
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