Mortgage Rates

[AWillow]

I listened to an interesting radio program yesterday while driving and I didn’t even know but in the 80s I guess interest rates were 16% for a 30 yr fixed. I can’t even imagine the only time I’ve bought since 2010 interest rates have been low around three or two what do you guys predict that the interest rates are going to be in the next four years specially with dingdong Biden at the helm?!

 

[Tall Timbers]

I listened to an interesting radio program yesterday while driving and I didn’t even know but in the 80s I guess interest rates were 16% for a 30 yr fixed. I can’t even imagine the only time I’ve bought since 2010 interest rates have been low around three or two what do you guys predict that the interest rates are going to be in the next four years specially with dingdong Biden at the helm?!

They probably topped 16%. Some banks were paying 17% or so for CD accounts around the peak. I had two home loans in earlier years. The first one was 8 something % and the 2nd one was 11%.

The Fed may keep rates relatively low while there is a OWG servant in the White House. If rates get into double digits again the USA dollar would likely collapse on account of the inflation proofed bonds. Since the Fed has clearly been playing politics, that would more likely happen while someone like Trump was in office. Notice that so far the Fed has done a thing to mitigate the inflation that is here and headed towards being much worse.

I don't think most people could afford home loans with double digit interest rates given the price of homes nowadays.

 

[3 Nails 4 Given]

The rates are artificially low now because of the fed printing more cash and the stimulus money from Covid.

The next housing market crash will make 2008 look like child’s play.

When rates are high lumber is cheaper, when the rates are low lumber skyrockets. People are buying houses now they won’t be able to afford after the markets correct. Especially if those people gambled on a ARM adjustable rate mortgage.

 

[RobinB]

I listened to an interesting radio program yesterday while driving and I didn’t even know but in the 80s I guess interest rates were 16% for a 30 yr fixed. I can’t even imagine the only time I’ve bought since 2010 interest rates have been low around three or two what do you guys predict that the interest rates are going to be in the next four years specially with dingdong Biden at the helm?!

I got in the mortgage biz in early 86 and rates were just coming down. I started processing loans at 13%-- and that was so much below what they had been the phones were ringing off the hook.

 

[RobinB]

The rates are artificially low now because of the fed printing more cash and the stimulus money from Covid.

The next housing market crash will make 2008 look like child’s play.

When rates are high lumber is cheaper, when the rates are low lumber skyrockets. People are buying houses now they won’t be able to afford after the markets correct. Especially if those people gambled on a ARM adjustable rate mortgage.

The good news is through this mortgage boom most people are getting fixed rate mortgages, not the ARMs that will backfire on them in the future.

 

[3 Nails 4 Given]

The good news is through this mortgage boom most people are getting fixed rate mortgages, not the ARMs that will backfire on them in the future.

But they’re paying three times as much for framing packages. So that puts new construction well over $125 a square ft.
Homes are selling for close to three times their worth in many places.

Real estate that was selling for $230,000 in some places is selling for over $500,000. In June or July when the no eviction mandates are removed there is going to be a massive number of defaults and bankruptcies.

Many hotel chains and restaurants were devastated by the Covid shutdowns. This artificial market is going to crash hard.

 

[Footsteps]

You know inflation is severe if you are out of toilet paper and are willing to use a twenty dollar bill.

 

[AWillow]

The good news is through this mortgage boom most people are getting fixed rate mortgages, not the ARMs that will backfire on them in the future.

Yes I just bought a house at 3.25% and when I first bought property in 2010 I got an inheritance from my grandmother and prices were rock bottom thankfully and the rates were low then and then sold the 1sr one and bought another condo w the rates still low and so that’s why after my seven year arm was up I thought I need to do this again but this time I got a 30 year fixed-!

 

[Wings Like Eagles]

They probably topped 16%. Some banks were paying 17% or so for CD accounts around the peak. I had two home loans in earlier years. The first one was 8 something % and the 2nd one was 11%.

The Fed may keep rates relatively low while there is a OWG servant in the White House. If rates get into double digits again the USA dollar would likely collapse on account of the inflation proofed bonds. Since the Fed has clearly been playing politics, that would more likely happen while someone like Trump was in office. Notice that so far the Fed has done a thing to mitigate the inflation that is here and headed towards being much worse.

I don't think most people could afford home loans with double digit interest rates given the price of homes nowadays.

Yes--the price of houses has moved up as the interest rates for carrying mortgages have been so low. The Fed has no real ability to do much to raise rates and that takes advantage of every saver. I think the people who are buying up real assets are betting on short-term high inflation and then the smart ones will unload before the bottom falls out. Inflationary depressions are much worse than deflationary depressions (as hard as that is to imagine) so the latter will be what the Masters of the Universe will be looking to maneuver.

 

[Wings Like Eagles]

The rates are artificially low now because of the fed printing more cash and the stimulus money from Covid.

The next housing market crash will make 2008 look like child’s play.

When rates are high lumber is cheaper, when the rates are low lumber skyrockets. People are buying houses now they won’t be able to afford after the markets correct. Especially if those people gambled on a ARM adjustable rate mortgage.

According to Zero Hedge, the price of lumber is falling precipitously.

 

[3 Nails 4 Given]

Yes I just bought a house at 3.25% and when I first bought property in 2010 I got an inheritance from my grandmother and prices were rock bottom thankfully and the rates were low then and then sold the 1sr one and bought another condo w the rates still low and so that’s why after my seven year arm was up I thought I need to do this again but this time I got a 30 year fixed-!

Our bank offered a equity accelerator program by paying our house payment bi weekly, payroll deducted, turned our 30 year mortgage into a 18 year mortgage.

We took advantage of that and paid extra on it every month which reduced it to a 15 year loan.

 

[Tall Timbers]

Yes I just bought a house at 3.25% and when I first bought property in 2010 I got an inheritance from my grandmother and prices were rock bottom thankfully and the rates were low then and then sold the 1sr one and bought another condo w the rates still low and so that’s why after my seven year arm was up I thought I need to do this again but this time I got a 30 year fixed-!

I'm so glad you've got a fixed... We're heading into hard times I think and it's good you have a fixed amount to pay.

According to Zero Hedge, the price of lumber is falling precipitously.

Yeah, I was reading about that this morning. Prices of lumber are falling fast.

 

[3 Nails 4 Given]

I'm so glad you've got a fixed... We're heading into hard times I think and it's good you have a fixed amount to pay.



Yeah, I was reading about that this morning. Prices of lumber are falling fast.

Which is going to hurt the builders who just paid 300% more for the 40 houses they just framed that aren’t sold yet.

There are some 1400 sq. Ft. Cracker box homes in a new subdivision near me they’re asking $230,000 for. There’s at least 20 of them been built in that subdivision, that sat for 6 years with only three houses in it.

When this stimulus money runs out, watch out!

 

[Tall Timbers]

Which is going to hurt the builders who just paid 300% more for the 40 houses they just framed that aren’t sold yet.

In the market where my son is buying, they're selling the homes before they are built. In his case he locked in a price before the lumber price surge. His house is now getting built and anyone else purchasing what he will be paying around $325,000 for will be paying around $400,000. For him the unknown is interest rates. He can't lock in that number until he's a lot closer to moving in. I think he's supposed to be able to move in around October. Back when he first moved to the area, he opted to buy after he couldn't find a decent rental and a decent price.

 

[3 Nails 4 Given]

I hope for his sake he is able to lock in before this housing bubble busts. The last one was blamed on subprime lending.

What they are doing now is no different, they’ll just blame the crash on Covid and Trump. It’s literally a house of cards right now.

Throw in the $80,000 new Silverado Bubba just bought with 10 year financing, along with the $230,000 home on his $15 a hour job. What could possibly go wrong?

Venezuela?

 

[AWillow]

In the market where my son is buying, they're selling the homes before they are built. In his case he locked in a price before the lumber price surge. His house is now getting built and anyone else purchasing what he will be paying around $325,000 for will be paying around $400,000. For him the unknown is interest rates. He can't lock in that number until he's a lot closer to moving in. I think he's supposed to be able to move in around October. Back when he first moved to the area, he opted to buy after he couldn't find a decent rental and a decent price.

Well I just checked the current rates and it’s lower than the rate I got about a month ago but what can you do!?

 

[Tall Timbers]

Well I just checked the current rates and it’s lower than the rate I got about a month ago but what can you do!?

But you've probably got a decent rate. A couple years from now your rate should look very, very good... if we're still allowed to own stuff a couple of years from now.

 

[Ghoti Ichthus]

I listened to an interesting radio program yesterday while driving and I didn’t even know but in the 80s I guess interest rates were 16% for a 30 yr fixed. I can’t even imagine the only time I’ve bought since 2010 interest rates have been low around three or two what do you guys predict that the interest rates are going to be in the next four years specially with dingdong Biden at the helm?!

Unemployment was high back then, too. A lot of foreclosures.

 

[3 Nails 4 Given]

Well I just checked the current rates and it’s lower than the rate I got about a month ago but what can you do!?

Back when I was still in the mortgage game my broker, who was a super nice guy, told me, If it’s not two full percentage points lower it’s really not worth refinancing because of all the associated costs.

We refinanced once shortly after the rate we had dropped 2.25 %. That is also when we were allowed to join in their pilot equity acceleration program.

We saved a considerable amount on interest off of our original 30 loan. Which we managed to close in 15 years, by the lower rates and bi weekly payments.

 

[Ghoti Ichthus]

But they’re paying three times as much for framing packages. So that puts new construction well over $125 a square ft.
Homes are selling for close to three times their worth in many places.

New construction cost for suburban single family homes here is being figured between $200 and $475 per square foot minimum, in part because almost all of it is McMansions. They're going like hotcakes. Doesn't matter what the internet says about per foot building costs here. Contacting a builder, bank, realtor, etc. reveals the ugly truth. The rest of the ugly truth is you *can't* find someone to build something small and *inexpensive* because it's not *profitable* so $100-$150 per square foot new houses *don't exist*

Property is nuts, too. One particular 80 x 200 piece of property in a nice middle class area of the City, not even on a corner, is listed for $1.6 million. The only reason it hasn't sold is because the owners can't say the various utilities are present due to MAJOR utility work in the street and no building permits will be issued until the MAJOR utility work in that street is finished (the whole project end-to-end and street repair afterwards), so the owners are probably stuck for another year or two

The only houses that aren't moving quick as a bunny are those with huge problems (properties that were used to make meth, mold, serious structural, sewage, or flood damage, rat infestation, spreading sinkhole, pollution/chemical contamination, etc.).