When are we going to see mortgages rates going up to 8-10%

NEW -> Contingent Buyer Assistance Program
[quote author="JLegend" date=1231563969][quote author="awgee" date=1231561351]





But, truly, it pisses me off that you just disregard all the information that some really intelligent and knowledgeable folks like ...no vas...,and so many are providing you with for free. Obviously AI will never get it. He/she doesn't have the wherewithal, but you have no excuse.

</blockquote>


I thought No Vas just provided snarky comments and posted pics of bong hits? That's the jist of his posts I get, anyway.</blockquote>


I stand corrected.
 
[quote author="awgee" date=1231561351]



No, (<em>Your point is home price - 40K - X = rental parity = buy</em>), that is not my point. Once again, you are putting words in my mouth. My point is that there are many factors which enter into the home buying decision making process. If there wasn't, you would buy the first home you can afford.

And my last point is that you are too smart to just consider interest rate trends, market trends, or other impersonal factors as being too complicated or over thinking.

I am not telling you when it is right for you to buy. If you read my posts over the years, you would see that I would never think that I would have a clue when it is right for you to buy.



But, truly, it pisses me off that you just disregard all the information that some really intelligent and knowledgeable folks like Ipop, troj, IR, IR2, bk, graph, Eva, bix, no vas, skek, equitym, zov, Panda, Sarge, bv, and so many are providing you with for free. Obviously AI will never get it. He/she doesn't have the wherewithal, but you have no excuse.



The posters in here have helped me to understand market factors which I did not know existed, and did not think I could understand when they first mentioned them. I encourage you to read their posts with an open mind. Sure, some ideas will be tossed, but saying that one can't predict the future so it is useless to analyze is beneath you.</blockquote>


Yes, their data and analyses have been considered. The data from IPOP on sales in IRVINE I consider the most valuable. Everything else was subjective!



We do not live in a vacuum. For the past year, we've seen governments across the world get involved in the financial crisis. Dont you think they would have more to say about this than the market factors you're using in your calculations right now? I know you guys talk about delaying the inevitable but the reality is they're willing to do whatever it takes to "fix" this situation. And I would not bet against the United States government.



The only thing I can see that can dip home prices significantly from NOW is if the interest rates went up to 9-10%. Not REO's, not anything else. Only interest rates. It aint gonna happen in the next 2 years. So therefore, I do not think there will be that kind of a dip you're hoping for.
 
[quote author="rickhunter" date=1231567034][quote author="awgee" date=1231561351]



No, (<em>Your point is home price - 40K - X = rental parity = buy</em>), that is not my point. Once again, you are putting words in my mouth. My point is that there are many factors which enter into the home buying decision making process. If there wasn't, you would buy the first home you can afford.

And my last point is that you are too smart to just consider interest rate trends, market trends, or other impersonal factors as being too complicated or over thinking.

I am not telling you when it is right for you to buy. If you read my posts over the years, you would see that I would never think that I would have a clue when it is right for you to buy.



But, truly, it pisses me off that you just disregard all the information that some really intelligent and knowledgeable folks like Ipop, troj, IR, IR2, bk, graph, Eva, bix, no vas, skek, equitym, zov, Panda, Sarge, bv, and so many are providing you with for free. Obviously AI will never get it. He/she doesn't have the wherewithal, but you have no excuse.



The posters in here have helped me to understand market factors which I did not know existed, and did not think I could understand when they first mentioned them. I encourage you to read their posts with an open mind. Sure, some ideas will be tossed, but saying that one can't predict the future so it is useless to analyze is beneath you.</blockquote>


Yes, their data and analyses have been considered. The data from IPOP on sales in IRVINE I consider the most valuable. Everything else was subjective!



We do not live in a vacuum. For the past year, we've seen governments across the world get involved in the financial crisis. Dont you think they would have more to say about this than the market factors you're using in your calculations right now? I know you guys talk about delaying the inevitable but the reality is they're willing to do whatever it takes to "fix" this situation. And I would not bet against the United States government.



The only thing I can see that can dip home prices significantly from NOW is if the interest rates went up to 9-10%. Not REO's, not anything else. Only interest rates. It aint gonna happen in the next 2 years. So therefore, I do not think there will be that kind of a dip you're hoping for.</blockquote>
Let us be clear. I am not hoping. Hope is not part of my strategy.

The government has been and will continue to be more wrong than anybody else, excluding Ben Stein.

Good luck.
 
I will agree with rick that the gov is going to bend over backwards to fix the economy. But... that doesn't necessarily mean to keep house prices artificially high. Realistic house prices is good way to strengthen economy as people can actually afford their housing costs.



What do you think is better? High house prices and low interest rates or low house prices and high interest rates?
 
the gov is goign to bend over backwards to fix the economy, no doubt about that. but that is very diff than saying the govt WILL fix the economy, which is awgee's point. to hope for a very specific outcome like the govt putting a stop to bleeding housing prices is just completely wishful thinking.



TARP has not helped a single homeowner, nor has it loosened the credit mkts which was its intended purpose.

Housing and Economic Recovery Act of 2008 (hope for homeowners) passed in july flopped. does anybody even remember this? the program authorized $300 billion for the FHA to provide new loans to underwater homeowners. by the end of the year, they received a whopping 312 applications -- not one loan has been reworked as a result of the program.



since the subprime/credit mkt problems began in aug 07, there has been a mortgage relief act, a hope for homeowners, TARP, dozens of other individual co bailouts, an economic stimulus pkg, interest rates lowered to nothing, etc... and its arguable that none of those interventions have resulted in keeping home prices from falling further or helping a single person refi a loan.



if you are relying on govt intervention to minimize the potential losses and risks involved, that sounds like a dangerous rationale for making one of the biggest investments of your life.
 
Looks like rates will be going up sooner rather than later.





<a href="http://www.msnbc.msn.com/id/28583580/">http://www.msnbc.msn.com/id/28583580/</a>





<blockquote>A government law retroactively changing lending terms could certainly make lenders less willing to extend credit in the future, Ely said.



?In many ways it?s an anti-homeownership provision,? Ely said. While reducing homeownership levels makes sense, this law may not be the best way to do it, he added.



Some lawmakers agree. Last year, Durbin failed to win Senate passage of a similar measure. Opponents, including Republicans, some Democrats and banking and housing industry lobbyists, said the proposal would raise costs for future homeowners.



Democratic senators said on Thursday they hope to attach the bill to a broad economic stimulus package that is expected to move its way through Congress in the coming weeks.

</blockquote>
 
[quote author="BLUE FIRE" date=1231548522]For those who need a visual representation of Awgee's (*cough* correct) argument, I suggest you spend some time plugging values into the NY Times "Is it Better to Buy or Rent" calculator:



<a href="http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html#">http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html#</a></blockquote>


these calculators are usless. they only show the numbers you want to see. change a few percentage points here and there. and the numbers can change from 5 to 15 years or 25 years...



the truth is this claculator is using a lot of factors... no one will know what their yearly investment return will be, or their rent, or their housing costs, maintance costs etc...



so if you want to believe that renting is better than owning, but in low rent (and increase) and high invesment returns, high property maitance costs etc... or if you want to believe that owning is beter than renting do it the other way around... either way is speculationtion and trying to predict what the future will hold. we can only guess and hope...



yes some have been right about the dropping housing market, but this is not 06/07 it's 09... i wanted to buy in 07 because i got killed with taxes but i said these prices are crazy...
 
[quote author="rickhunter" date=1231567034]



The only thing I can see that can dip home prices significantly from NOW is if the interest rates went up to 9-10%. Not REO's, not anything else. Only interest rates. <strong>It aint gonna happen in the next 2 years.</strong> So therefore, I do not think there will be that kind of a dip you're hoping for.</blockquote>


Who can tell me whats wrong with the bolded statement?



I'll tell you, it's the fact that rickhunter is predicting that rates aren't going to go up after he said that nobody can predict things and predicting things are pointless. Not only is he predicting, he is predicting with a specifc time period.



Here is his previous statement from page one...



<em>"I think what?s stupid is people sitting around trying to ask/predict/answer the following?like they know it to be true.



1. Mortgage Rates going up in 2011?

2. Market bottoming in 2011?

3. When?s the best time to buy?



The overthinking part implies that one should not try to PREDICT the future!"</em>



It's really no big deal, I just thought it was commical...carry on. Rd 3.
 
which gets me to my next point...



i bought a home jan 08. i'm not gonna say where, what builder etc...

i paid $575k, i put down $160k

my mortgage is $2200k fixed 30 years

my maintance, hoa, mello roos is about $600 a month

i'm not inlcuding property tax since i save at least that amount in taxes



so i'm paying $2800 a month for "rent" of a 3bed, aprox 2000sft house that i love, enjoy the neighbour hood and like. no street noise, no neighbours a floor above me etc... i really like this place and will stay here for quite a while...



----------------------------now i am simplifying the math but it works for me...



i could have stayed in that piece of shit rental apartment with my girlfriend, pay $2200 a month, here the street, people trying to accelarate from 0to50 from one stop sign to the next, hear the neighbours kids above doing dance exercises and playing the piano, have a fridge that rattles randomly at night and the IC refuse to fix, i could have an AC that makes a ton of noise wheneve it drains water, look for uncovered parking every night... but i'd be saving about $600 a month.



so this year i saved $7200 you say... well not really, because i would have put the down payment money in the stock market, to simplify it i am picking one mutual fund and one stock i own. i do not have time to trade and pay attention to the market so i am somewhat forced to buy and hold...



so here are the numbers...



the same floorplan is selling right now for about $560

so i lost $7200 + $15000=$22200.- because i bought a year ago, but if i would have not bought the home i would have done this



put $80k into apple stock price 1/1/08 was around $180 but to be fair it was at $145 three weeks later so let's say i bought it at $145, that gives me about 550 shares

put $80k into a vanguard wellington fund for $31/share so that gives me about 2580 shares



1/1/08 these shares were worth $160k (my downpayment) , taking prices from jan 09 these shares are

apple at $95 = 52250 "lost" $27750

wellington at $24.67 = 63650 "lost" $16350



so i lost $22k because i bought a house, but i would have lost $44k if i would have waited a year



bring it on guys !
 
[quote author="flmgrip" date=1231581853]which gets me to my next point...



i bought a home jan 08. i'm not gonna say where, what builder etc...

i paid $575k, i put down $160k

my mortgage is $2200k fixed 30 years

my maintance, hoa, mello roos is about $600 a month

i'm not inlcuding property tax since i save at least that amount in taxes



so i'm paying $2800 a month for "rent" of a 3bed, aprox 2000sft house that i love, enjoy the neighbour hood and like. no street noise, no neighbours a floor above me etc... i really like this place and will stay here for quite a while...



----------------------------now i am simplifying the math but it works for me...



i could have stayed in that piece of shit rental apartment with my girlfriend, pay $2200 a month, here the street, people trying to accelarate from 0to50 from one stop sign to the next, hear the neighbours kids above doing dance exercises and playing the piano, have a fridge that rattles randomly at night and the IC refuse to fix, i could have an AC that makes a ton of noise wheneve it drains water, look for uncovered parking every night... but i'd be saving about $600 a month.



so this year i saved $7200 you say... well not really, because i would have put the down payment money in the stock market, to simplify it i am picking one mutual fund and one stock i own. i do not have time to trade and pay attention to the market so i am somewhat forced to buy and hold...



so here are the numbers...



the same floorplan is selling right now for about $560

so i lost $7200 + $15000=$22200.- because i bought a year ago, but if i would have not bought the home i would have done this



put $80k into apple stock price 1/1/08 was around $180 but to be fair it was at $145 three weeks later so let's say i bought it at $145, that gives me about 550 shares

put $80k into a vanguard wellington fund for $31/share so that gives me about 2580 shares



1/1/08 these shares were worth $160k (my downpayment) , taking prices from jan 09 these shares are

apple at $95 = 52250 "lost" $27750

wellington at $24.67 = 63650 "lost" $16350



so i lost $22k because i bought a house, but i would have lost $44k if i would have waited a year



bring it on guys !</blockquote>


Your calculations and theory on finance is one of the most appauling ones I've seen. I lost a handful of my financial brain-cells just reading this.



The fact that you said "bring it on guys!" tells me that you are pretty proud of yourself for calculating rent/buy scenario for the first time in your life. You gave it a good attempt, but there are just a few little things you should probably clear up.



First, whet generous lender in Jan 08 did give you an interest rate below 5%. Because according to some quick calcs, a 415K loan doesn't yield a 2200 monthly payment, unless you really did get a rate slightly below 5%.

Second, you admitted that you know jack about the stock market, so why invest in aaple and wellington? First they are horrible choices for stocks if you did pick them, but its not your area man...just slap your 160K in CD and you would have earned a few grand instead losing over 40K. Or better yet, you could have given me 160K, and based on what I returned in 08 (by far my best year ever) I would have given you a lump sum of about 350K. Of course you'd have to be a good boy and pay taxes on that, but still be better off than losing 40K on your own.



I wont do the math, but its easy to see how your example of stocks is one of the stupidest things I've seen. It's like me taking 800K to Las Vegas and losing all of it when I could have bought a home in 2006 for 800K and today it would be worth about 500K. Damn...should have bought the home. Come on man. Are you really that stupid? I hope your post was a sarcastic joke...please tell me it is.



Its like you try to paint yourself a worst case scenario to make it look like you made a great deal. When instead you should just said hey guys, I know I F***ed up by not making wise investment decisions, but I can only learn from it. Good news is, I really love where I live compared to that crumy apartment I used to have. Then I would have saluted you with respect.



Anyway, my wife is craving Olive Garden...see ya!
 
[quote author="blackvault_cm" date=1231582396][quote author="flmgrip" date=1231581853]which gets me to my next point...



i bought a home jan 08. i'm not gonna say where, what builder etc...

i paid $575k, i put down $160k

my mortgage is $2200k fixed 30 years

my maintance, hoa, mello roos is about $600 a month

i'm not inlcuding property tax since i save at least that amount in taxes



so i'm paying $2800 a month for "rent" of a 3bed, aprox 2000sft house that i love, enjoy the neighbour hood and like. no street noise, no neighbours a floor above me etc... i really like this place and will stay here for quite a while...



----------------------------now i am simplifying the math but it works for me...



i could have stayed in that piece of shit rental apartment with my girlfriend, pay $2200 a month, here the street, people trying to accelarate from 0to50 from one stop sign to the next, hear the neighbours kids above doing dance exercises and playing the piano, have a fridge that rattles randomly at night and the IC refuse to fix, i could have an AC that makes a ton of noise wheneve it drains water, look for uncovered parking every night... but i'd be saving about $600 a month.



so this year i saved $7200 you say... well not really, because i would have put the down payment money in the stock market, to simplify it i am picking one mutual fund and one stock i own. i do not have time to trade and pay attention to the market so i am somewhat forced to buy and hold...



so here are the numbers...



the same floorplan is selling right now for about $560

so i lost $7200 + $15000=$22200.- because i bought a year ago, but if i would have not bought the home i would have done this



put $80k into apple stock price 1/1/08 was around $180 but to be fair it was at $145 three weeks later so let's say i bought it at $145, that gives me about 550 shares

put $80k into a vanguard wellington fund for $31/share so that gives me about 2580 shares



1/1/08 these shares were worth $160k (my downpayment) , taking prices from jan 09 these shares are

apple at $95 = 52250 "lost" $27750

wellington at $24.67 = 63650 "lost" $16350



so i lost $22k because i bought a house, but i would have lost $44k if i would have waited a year



bring it on guys !</blockquote>


Your calculations and theory on finance is one of the most appauling ones I've seen. I lost a handful of my financial brain-cells just reading this.</blockquote>


I am trying to figure out if this is denial or ignorance. Perhaps it is ignorance driven by denial. It is hard to say...
 
[quote author="blackvault_cm" date=1231580348][quote author="rickhunter" date=1231567034]



The only thing I can see that can dip home prices significantly from NOW is if the interest rates went up to 9-10%. Not REO's, not anything else. Only interest rates. <strong>It aint gonna happen in the next 2 years.</strong> So therefore, I do not think there will be that kind of a dip you're hoping for.</blockquote>


Who can tell me whats wrong with the bolded statement?



I'll tell you, it's the fact that rickhunter is predicting that rates aren't going to go up after he said that nobody can predict things and predicting things are pointless. Not only is he predicting, he is predicting with a specifc time period.



Here is his previous statement from page one...



<em>"I think what?s stupid is people sitting around trying to ask/predict/answer the following?like they know it to be true.



1. Mortgage Rates going up in 2011?

2. Market bottoming in 2011?

3. When?s the best time to buy?



The overthinking part implies that one should not try to PREDICT the future!"</em>



It's really no big deal, I just thought it was commical...carry on. Rd 3.</blockquote>


I didnt sit around with a bunch of people asking for their opinions on a blog.

That would be comical!



This is my belief. I hope it to be true. I'm not trying to pour it down people's throats.



Do you get the difference?
 
[quote author="IrvineRenter" date=1231583295][quote author="blackvault_cm" date=1231582396][quote author="flmgrip" date=1231581853]which gets me to my next point...



i bought a home jan 08. i'm not gonna say where, what builder etc...

i paid $575k, i put down $160k

my mortgage is $2200k fixed 30 years

my maintance, hoa, mello roos is about $600 a month

i'm not inlcuding property tax since i save at least that amount in taxes



so i'm paying $2800 a month for "rent" of a 3bed, aprox 2000sft house that i love, enjoy the neighbour hood and like. no street noise, no neighbours a floor above me etc... i really like this place and will stay here for quite a while...



----------------------------now i am simplifying the math but it works for me...



i could have stayed in that piece of shit rental apartment with my girlfriend, pay $2200 a month, here the street, people trying to accelarate from 0to50 from one stop sign to the next, hear the neighbours kids above doing dance exercises and playing the piano, have a fridge that rattles randomly at night and the IC refuse to fix, i could have an AC that makes a ton of noise wheneve it drains water, look for uncovered parking every night... but i'd be saving about $600 a month.



so this year i saved $7200 you say... well not really, because i would have put the down payment money in the stock market, to simplify it i am picking one mutual fund and one stock i own. i do not have time to trade and pay attention to the market so i am somewhat forced to buy and hold...



so here are the numbers...



the same floorplan is selling right now for about $560

so i lost $7200 + $15000=$22200.- because i bought a year ago, but if i would have not bought the home i would have done this



put $80k into apple stock price 1/1/08 was around $180 but to be fair it was at $145 three weeks later so let's say i bought it at $145, that gives me about 550 shares

put $80k into a vanguard wellington fund for $31/share so that gives me about 2580 shares



1/1/08 these shares were worth $160k (my downpayment) , taking prices from jan 09 these shares are

apple at $95 = 52250 "lost" $27750

wellington at $24.67 = 63650 "lost" $16350



so i lost $22k because i bought a house, but i would have lost $44k if i would have waited a year



bring it on guys !</blockquote>


Your calculations and theory on finance is one of the most appauling ones I've seen. I lost a handful of my financial brain-cells just reading this.</blockquote>


I am trying to figure out if this is denial or ignorance. Perhaps it is ignorance driven by denial. It is hard to say...</blockquote>


i enjoy the strong points given to me to show that i am wrong...

1) denial

2) ignorance

3) i can't do math...

4) it's just a theory



uuhhhmmm ok, real strong points
 
I may not have much credibility because I am an '08 knife catcher. With that caveat, we were not willing in '05, 06 or even '07 to live in what we could afford for the cost of it. We weren't going to move to some crap neighborhood in Anaheim or Santa Ana to buy an SFR. Condo was out of the question because it wasn't going to give us any more for our money than what we had for the rental in CDM. When a SFR in a city that we actually would live in became affordable, we did it.



Hubby loves actually have our own place.... it means something to him on a pride level. I've finally got the yard to grow tomatoes and tons of other things and the boxer that I've been wanting for 20 years. If what you want becomes affordable, then maybe you go for it. Yeah, it's declined in value since we bought it, but so has the payment, thanks to a lovely re-fi at these incredible rates.



We weren't going to give up our steal of a rental to go rent something that had a yard. The fact that it's ours and we have Maggie the rescue boxer, wouldn't have come with a different rental. And the different rental woud have cost us more per month than we were paying. Stop beating up on Rick so much. Sometimes it just is the right time for someone to buy.



And I'm going to be honest here. I wanted to back out of buying this house and lose our good faith deposit after joining this board. There are analytical times that I wish I had convinced hubby to do so, but the longer we are in our home, the happier I am with the decision and the less it matters what it's worth. Do I think it would be cool to be in a better neighborhood? Yes! If I was in a better neighborhood, would I think it would be cool to be in an even better one? Yes. Hubby would like to be in a better neighborhood too, but a lot less so than me. He really likes it here and loves being on the deed of his own home.



When I make the mortgage payment, I get a kick out of seeing some of it going to principal. I love looking at the amortization schedule and seeing where every month more of the payment goes to principal and I love seeing how much we are saving on taxes.
 
BV, I have the upmost respect for you, but come on, if you are going to go out to dinner, do NOT go to Olive Garden. Frozen dinners are cheaper and easier than that. I'd invite you and Mrs BV over for homemade raviolis if you promise not to diss on our calculations :)
 
[quote author="rickhunter" date=1231567034]

The only thing I can see that can dip home prices significantly from NOW is if the interest rates went up to 9-10%. Not REO's, not anything else. Only interest rates. It aint gonna happen in the next 2 years. So therefore, I do not think there will be that kind of a dip you're hoping for.</blockquote>


I'll pose the opposite question.



What will both stabilize and significantly increase prices in the next twelve months?
 
[quote author="No_Such_Reality" date=1231587945][quote author="rickhunter" date=1231567034]

The only thing I can see that can dip home prices significantly from NOW is if the interest rates went up to 9-10%. Not REO's, not anything else. Only interest rates. It aint gonna happen in the next 2 years. So therefore, I do not think there will be that kind of a dip you're hoping for.</blockquote>


I'll pose the opposite question.



What will both stabalize and significantly increase prices in the next twelve months?</blockquote>


who says that they need to significantly increase in the next 12 months... nothing is going to do that, but stabilizing them, fully in some areas and relatively in others, wouldn't necessarily be a bad thing for the rest of us that want to have our jobs and increase our earnings.
 
[quote author="stepping_up" date=1231588326][quote author="No_Such_Reality" date=1231587945][quote author="rickhunter" date=1231567034]

The only thing I can see that can dip home prices significantly from NOW is if the interest rates went up to 9-10%. Not REO's, not anything else. Only interest rates. It aint gonna happen in the next 2 years. So therefore, I do not think there will be that kind of a dip you're hoping for.</blockquote>


I'll pose the opposite question.



What will both stabalize and significantly increase prices in the next twelve months?</blockquote>


who says that they need to significantly increase in the next 12 months... nothing is going to do that, but stabilizing them, fully in some areas and relatively in others, wouldn't necessarily be a bad thing for the rest of us that want to have our jobs and increase our earnings.</blockquote>


That's fine, but...



if they aren't going up and it's not cheaper than renting, what's the rush?
 
[quote author="flmgrip" date=1231581853]



bring it on guys !</blockquote>


As much as we'd like to do that, you haven't provided enough information to give a "good" answer. We would be speculating on alot and it would not be accurate.



But i'd like to mention one other point and that is, you haven't been here and met the other people. There are a significant portion of people on here who are going to purchase a home outright or have purchased a home with a significant discount that what you have. To call these "people out" is foolish at best.

good luck with your home

-bix
 
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