Ready2Downsize
Well-known member
Cares said:
If the fed overdoes it like Volker did (on purpose to control inflation), then a recession happens and people lose their jobs, move in with other people etc and demand for rentals drops.
How low can we go? 30 yr fixed at 3.75% with no fees...
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If the fed overdoes it like Volker did (on purpose to control inflation), then a recession happens and people lose their jobs, move in with other people etc and demand for rentals drops.
Much of what the FED do is psychology, They can say alot but do little. I would not be suprise if the market spook on the first rate hike and crater the entire everything bubbles. So when this happen they will react. The FED is a reactive entity. They never preemptive anything. Of course market will react to this quickly and raise rate much higher when FED funds rate will sit at 1%. When that happen it would be further buying opportunity. Keeping my powder dry.
inventory is super low, mortgage rate is jumping, poor buyers in today's market...
Not gonna happen. We might top out around 4% +/- a bit before heading back down.
Did the interest rate increases happen in anticipation of the Fed rate hike?
It's like asking someone to predict the stock market...Fed has signaled rate hikes due to inflation. Rates also go up with a "booming" economy because investors rather invest in stocks than bonds. So if there's a good jobs report then typically mortgage bonds go down and interest rates go up. There are so many levers which affect a bond market and everyone has theories but I don't think any 1 person has the full picture.
If the fed overdoes it like Volker did (on purpose to control inflation), then a recession happens and people lose their jobs, move in with other people etc and demand for rentals drops.
irvinebullhousing
Well-known member
Ready2Downsize said:
Much of what the FED do is psychology, They can say alot but do little. I would not be suprise if the market spook on the first rate hike and crater the entire everything bubbles. So when this happen they will react. The FED is a reactive entity. They never preemptive anything. Of course market will react to this quickly and raise rate much higher when FED funds rate will sit at 1%. When that happen it would be further buying opportunity. Keeping my powder dry.
irvinebullhousing
Well-known member
I am not worry about renter pool. We are severly under supply for avaialable units for rental. Rising rate will pull things back in term of cost for building and cost of replacement hopefully comes down, over time. The renters will have a tough few years with rising rate and rising rental costs.
Rent control expanding further in many places.
Rent control expanding further in many places.
irvinebullhousing
Well-known member
Ha ha, the freaking going to start soon enough.
Those that plan for this downturn will be handsomely rewarded.
Make sure to pack enough for rough water ahead.
Those that plan for this downturn will be handsomely rewarded.
Make sure to pack enough for rough water ahead.
The Motor Court Company
Well-known member
Cares said:
inventory is super low, mortgage rate is jumping, poor buyers in today's market...
irvinehomeowner
Well-known member
Isn't this where people say that home prices are going to go down?
usctrojancpa
Well-known member
lnc said:
Not gonna happen. We might top out around 4% +/- a bit before heading back down.
sgip
Well-known member
Agreed.
The Fed controls the direction of rates they can manipulate, but not all interest rates. ARM indexes will rise as they are more closely tied to Fed Funds, etc. Loan rates have been kept low not solely due to Feds pushing some rates lower, but their purchasing of an ocean of Agency mortgage paper. That ocean is going to shrink a bit, but it's not going to dry up. A "mid 4" 30 year fixed rate would be problematic and we live in a "problem free" environment. Contravening intervention by the Fed would occur - a restart of significant MBS buys - at a 4.25% or higher consumer rate.
The Fed controls the direction of rates they can manipulate, but not all interest rates. ARM indexes will rise as they are more closely tied to Fed Funds, etc. Loan rates have been kept low not solely due to Feds pushing some rates lower, but their purchasing of an ocean of Agency mortgage paper. That ocean is going to shrink a bit, but it's not going to dry up. A "mid 4" 30 year fixed rate would be problematic and we live in a "problem free" environment. Contravening intervention by the Fed would occur - a restart of significant MBS buys - at a 4.25% or higher consumer rate.
CalBears96
Well-known member
Cares said:
Did the interest rate increases happen in anticipation of the Fed rate hike?
irvinebullhousing
Well-known member
To really test the FED rate hike policy. The stock market will need to correct 20 % or more. Then we will see IF our FED stick to their words.
CalBears96 said:
It's like asking someone to predict the stock market...Fed has signaled rate hikes due to inflation. Rates also go up with a "booming" economy because investors rather invest in stocks than bonds. So if there's a good jobs report then typically mortgage bonds go down and interest rates go up. There are so many levers which affect a bond market and everyone has theories but I don't think any 1 person has the full picture.
sgip
Well-known member
Yes, rates and stocks will change. That's the only thing you can count on. Will the changes be up or down? That's a pseudoscientific question only the gods can answer with any degree of certainty.
The Fed slowed their MBS purchases in November 2021 to present, a significant driving influence of higher mortgage rates. If we get a 15+ correction in stonks that looks like it will drift towards 20-25%, expect to read how the Fed plans a bump back to $40b per month of MBS purchases as a way to push rates back down.
My .02c
The Fed slowed their MBS purchases in November 2021 to present, a significant driving influence of higher mortgage rates. If we get a 15+ correction in stonks that looks like it will drift towards 20-25%, expect to read how the Fed plans a bump back to $40b per month of MBS purchases as a way to push rates back down.
My .02c
Another day of red for mortgage bonds. Fell below the support level of 102.344 and continued to slide downwards towards the next support level of 102.198. 10 year treasuries moved upwards and broke 1.71% towards the next ceiling at 1.82%.
3% coupon ended the day at 102.22 and the 10 year ended at 1.79%. These are both strong indicators that rates are just going to go up up up!
Some purchase loans for primary homes are the same as what people were getting for investment properties just 6 months ago now. I have seen so many re-pricing and lock alerts as of late that it is almost expected on a daily basis now.
3% coupon ended the day at 102.22 and the 10 year ended at 1.79%. These are both strong indicators that rates are just going to go up up up!
Some purchase loans for primary homes are the same as what people were getting for investment properties just 6 months ago now. I have seen so many re-pricing and lock alerts as of late that it is almost expected on a daily basis now.
irvinebullhousing
Well-known member
These moves, psychologically fanning urgency for buyers to move all the quicker, to buy now more than ever.
Of course we are talking about buyers that qualified and ready to buy.
On the sell side, builders this go round would not reduce price when rates goes higher because their cost of labors and raw materials substantially higher tomorrow than today.
Resale, homeowners are not motivated to reduce price, because tomorrow price will goes higher than today.
#TOUGHTIME
Of course we are talking about buyers that qualified and ready to buy.
On the sell side, builders this go round would not reduce price when rates goes higher because their cost of labors and raw materials substantially higher tomorrow than today.
Resale, homeowners are not motivated to reduce price, because tomorrow price will goes higher than today.
#TOUGHTIME