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Posted: 3/22/2022 6:25:53 PM EST
[Last Edit: CoconutLaCroix]
The average rate on the popular 30-year fixed mortgage hit 4.72% on Tuesday, moving 26 basis points higher since just Friday, according to Mortgage News Daily.
As a result of the recent spike in rates, economists are now lowering their home sales forecasts for this year.


Most estimates at the end of last year had the average 30-year mortgage rate hitting 4.5% by the end of 2022, but the war in Ukraine, rising oil prices and inflation have all lit a fire under interest rates.

View Quote

https://www.cnbc.com/2022/03/22/mortgage-rates-are-surging-faster-than-expected-prompting-economists-to-lower-their-home-sales-forecasts.html?utm_source=dlvr.it&utm_medium=twitter






And the Fed hasn't even ceased their $40 billion monthly MBS purchases yet. That fully ends starting in April.... Aaaand they're possibly going to start selling the $2.9 Trillion they already own, which will cause rates to pop even more.

Rates were 2.7% 6 months ago.

Going from 2.7% to 6% just added about $800 to the monthly payment on a median home for the avg prospective home buyer.

Things are starting to look yucky for the housing bubble.



ETA 9/25  4.95%!

Attachment Attached File



Eta 6/14 6%




7/7 5.3% - fastest drop since 2008

https://www.nasdaq.com/articles/current-mortgage-rates-drop-by-half-a-percentage-point

8/27 7% - fastest surge in history
cmmg
Link Posted: 3/22/2022 6:29:09 PM EST
[#1]
Poor millennials just can't catch a break ...
Link Posted: 3/22/2022 6:29:11 PM EST
[#2]
And burst goes the bubble!  Thanks a lot FJB!
Link Posted: 3/22/2022 6:32:56 PM EST
[#3]
I get the feeling I won't be refinancing for quite some time.
It's going to be a crazy ride

Link Posted: 3/22/2022 6:33:04 PM EST
[Last Edit: CoconutLaCroix] [#4]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By jollyg83:
And burst goes the bubble!  Thanks a lot FJB!
View Quote

It needs to burst.

The primary driver of the bubble has been socialistic interest rate manipulation. Now that the Fed has quit sticking its thumb on the scales by purchasing $40 billion in monthly MBS, we're finally getting a glimpse of what free market mortgage rates look like.

But not the full picture yet, because in order for it to be a free market the Fed will need to dump the $2.72 Trillion it already owns. We're all in favor of privatization right? I am.

This chart should be Zero, as it was up until 2009.
Attachment Attached File






Link Posted: 3/22/2022 6:35:24 PM EST
[Last Edit: CoconutLaCroix] [#5]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By RIP-Yataski:
Poor millennials just can't catch a break ...
View Quote
If they've been diligently building up a down payment, they might catch a break soon enough. Higher rates rewards savers and screws debtors when the home prices adjust back down to reflect the true state of demand absent of the cheap credit.
Link Posted: 3/22/2022 6:36:37 PM EST
[#6]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ContrarianIndicator:
If they've been diligently building up a down payment, they might catch a break soon enough. Higher rates rewards savers and screws debtors when the home prices adjust back down to reflect the true state of demand.
View Quote

I hope you’re right even thought I don’t have a high enough down payment.
Link Posted: 3/22/2022 6:39:33 PM EST
[#7]
Crazy how that's a full 2 pts higher than I got on a 20 year fixed in October (refi).  It will certainly start to cool the housing market, but with true inflation at 10%+, the effective interest rate is still -5.28%!
Link Posted: 3/22/2022 6:42:28 PM EST
[#8]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By USMC2111:
Crazy how that's a full 2 pts higher than I got on a 20 year fixed in October (refi).  It will certainly start to cool the housing market, but with true inflation at 10%+, the effective interest rate is still -5.28%!
View Quote
Well now that the Fed's thumb is off the scale of the MBS market, maybe they'll go positive
Link Posted: 3/22/2022 6:42:58 PM EST
[#9]
so it almost doubled due to a .25 percent hike??
Link Posted: 3/22/2022 6:43:03 PM EST
[Last Edit: Pallas] [#10]
Goddamn Biden has made it unaffordable for people to buy homes now.

It's quite obvious that we will need some sort of stimulus because fuel, food, and interest rates are hurting the transvestites.
Link Posted: 3/22/2022 6:44:08 PM EST
[#11]
It’s long overdue. I don’t think many, if any learned from the last bust - banks included. This one has a feel of 10x worse. I’m seeing subdivisions that would’ve had 150 footings dug in a month, now just a few guys out there shoving the dirt piles they moved yesterday back where they were. Someone knows it’s coming.
Link Posted: 3/22/2022 6:44:54 PM EST
[#12]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By bakkbakk:
so it almost doubled due to a .25 percent hike??
View Quote


Banks are factoring in the fed rate increases, would be my guess.  Rates will be going up all year.
Link Posted: 3/22/2022 6:45:31 PM EST
[#13]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ContrarianIndicator:
If they've been diligently building up a down payment, they might catch a break soon enough. Higher rates rewards savers and screws debtors when the home prices adjust back down to reflect the true state of demand absent of the cheap credit.
View Quote

why are we applauding having to pay banks more instead of homeowners? We are in a housing supply shortage regardless of rates. This just fucks homeowners.
Link Posted: 3/22/2022 6:46:39 PM EST
[#14]
Meh. Sp500 closed over 4500. We all knew the free money train was going to end.  It’s what you did with free money times that matter.
Link Posted: 3/22/2022 6:48:32 PM EST
[Last Edit: CoconutLaCroix] [#15]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By bakkbakk:
so it almost doubled due to a .25 percent hike??
View Quote
Mainly because the Fed is no longer buying Mortgage Backed Securities.

There is a massive void in the MBS market now that the Fed is exiting the game. They have essentially nationalized 1/3rd of the mortgage market over the last 2 years.

And that void is possibly going to be widened if they start dumping the trillions in MBS they already own.

That void has to be filled by the market, and there's not anywhere near enough demand so MBS prices will fall and MBS yields will rise which will result in rapidly rising mortgage rates.


Link Posted: 3/22/2022 6:50:11 PM EST
[Last Edit: CoconutLaCroix] [#16]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By bakkbakk:

why are we applauding having to pay banks more instead of homeowners? We are in a housing supply shortage regardless of rates. This just fucks homeowners.
View Quote
It screws debtors who bought into the hysteria and living beyond their means by overextended themselves on homes they couldn't truly afford absent the artificially low rates and rewards people who have been diligently saving down payments.
Link Posted: 3/22/2022 6:51:34 PM EST
[#17]
Good, maybe it will slow down the amount of people buying up rural farm land and dropping in million dollar McMansions in our area.
Link Posted: 3/22/2022 6:52:02 PM EST
[#18]
You young guns ain’t seent nothin yet.
My first place was a double wide modular.  12%, and I was glad to get that.   My last note was 1.75.   I made $$$ on every single one.
What a country.
Link Posted: 3/22/2022 6:52:30 PM EST
[#19]
Sub 5% is historicaly low, heck sub 7 is "good" historicly. Folks need to stop there bitchen.
Link Posted: 3/22/2022 6:52:51 PM EST
[Last Edit: CoconutLaCroix] [#20]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By DVCER:
You young guns ain't seent nothin yet.
My first place was a double wide modular.  12%, and I was glad to get that.   My last note was 1.75.   I made $$$ on every single one.
What a country.
View Quote
12% rates would be a dream for me. And they really should be closer to there considering where inflation really is if we measured it the same way we did in the 70's and 80's
Link Posted: 3/22/2022 6:53:14 PM EST
[#21]
Damn. That sucks.
If the market doesn't cool and people keep throwing money at homes it's going to make buying a home for first time buyers impossible.
Link Posted: 3/22/2022 6:53:21 PM EST
[#22]
Leverage will get spicy with rates rising.  Who goes kaboom first?
Link Posted: 3/22/2022 6:54:11 PM EST
[#23]
Good
I’m not sure there’s a real bubble but I want to buy a rental
Link Posted: 3/22/2022 6:54:22 PM EST
[#24]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ContrarianIndicator:
12% rates would be a dream for me. And they really should be closer to there considering where inflation really is if we measured it the same way we did in the 70's and 80's
View Quote View All Quotes
View All Quotes
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ContrarianIndicator:
Originally Posted By DVCER:
You young guns ain't seent nothin yet.
My first place was a double wide modular.  12%, and I was glad to get that.   My last note was 1.75.   I made $$$ on every single one.
What a country.
12% rates would be a dream for me. And they really should be closer to there considering where inflation really is if we measured it the same way we did in the 70's and 80's


Yeah at 8% (yeah right) inflation a 5% mortgage is still lower.
Link Posted: 3/22/2022 6:54:38 PM EST
[#25]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ContrarianIndicator:
It screws debtors who bought into the hysteria and living beyond their means by overextended themselves on homes they couldn't truly afford absent the artificially low rates and rewards people who have been diligently saving down payments.
View Quote

I wouldnt say debtors are living beyond their means if they bought a house they could afford during a time of low rates. I understand the rest though
Link Posted: 3/22/2022 6:55:51 PM EST
[#26]
I signed my lending on a new house two weeks ago.  We all knew hikes were coming.
Link Posted: 3/22/2022 6:56:09 PM EST
[#27]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By MilHouse-556:
Damn. That sucks.
If the market doesn't cool and people keep throwing money at homes it's going to make buying a home for first time buyers impossible.
View Quote
The market will definitely cool. People can't afford this shit as it is. Your home is only worth what the next person is willing to pay for it, and that next person's ability to stretch themselves is rapidly getting squeezed by the higher rate. Prices will have to accommodate. Supply and Demand.

In some areas RE investors are over 40% of the market now which is fucking insane, and they'll be the first to start scurrying away the moment things start to look sour, followed by the people who just bought the top, and then we slowly tumble from there. The last bubble took 4 years to bottom out, and the only reprieve was the Fed jumping in and starting their unconstitutional MBS purchase program
Link Posted: 3/22/2022 6:56:14 PM EST
[#28]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By RIP-Yataski:
Poor millennials just can't catch a break ...
View Quote


housing prices dropping like a rock and curbing inflation would greatly benefit first time home buyers like millennials and the poor.

i sure wish i could go back 5 or 7 years and buy a couple more houses.
Link Posted: 3/22/2022 6:57:19 PM EST
[#29]
Link Posted: 3/22/2022 6:58:47 PM EST
[Last Edit: CoconutLaCroix] [#30]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By bakkbakk:

I wouldnt say debtors are living beyond their means if they bought a house they could afford during a time of low rates. I understand the rest though
View Quote
Not all, but a large percentage. I know lots of people overextending themselves on homes right now. People who jumped into a house recently and can't even afford furniture. But they had to buy because it was "now or never" and "prices are never coming back down."

So now they have some folding chairs in their living room and a blow up mattress, and are living hand to mouth in a home they can't afford. When they finally go underwater, they'll walk away. And many of them will probably be losing their jobs in the recession that we are almost guaranteed to have now that the yield curve is about to invert. We'll see if the Fed and Govt try to inflate their way out of a recession that was caused by inflation this go around.
Link Posted: 3/22/2022 6:59:13 PM EST
[#31]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Pallas:
Goddamn Biden has made it unaffordable for people to buy homes now.

It's quite obvious that we will need some sort of stimulus because fuel, food, and interest rates are hurting the transvestites.
View Quote


Lol wait wut
Link Posted: 3/22/2022 6:59:31 PM EST
[#32]
I am so glad the wife and I got ours at 3.125% in December.  Add the base price of our house (from Mar '21 to now) has gone from $231k to $310k.

We are fortunate.
Link Posted: 3/22/2022 7:01:38 PM EST
[#33]
Fuck yes.  I want to buy a house, and the retarded prices on everything have been a hurdle.  I want this shit to crater hard.
Link Posted: 3/22/2022 7:02:50 PM EST
[#34]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ContrarianIndicator:
12% rates would be a dream for me. And they really should be closer to there considering where inflation really is if we measured it the same way we did in the 70's and 80's
View Quote View All Quotes
View All Quotes
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ContrarianIndicator:
Originally Posted By DVCER:
You young guns ain't seent nothin yet.
My first place was a double wide modular.  12%, and I was glad to get that.   My last note was 1.75.   I made $$$ on every single one.
What a country.
12% rates would be a dream for me. And they really should be closer to there considering where inflation really is if we measured it the same way we did in the 70's and 80's


Really, dumb luck for me.  I hate to see young people struggling, but if my college drop out ass can figure out how to get from electrician to here, and retired early, anyone can.   I’m on my (hopefully) forever place, a couple acres with a National monument on my back fence.

Attachment Attached File

Link Posted: 3/22/2022 7:04:43 PM EST
[#35]
Prices drop a bit but the higher rates will be painful.
Link Posted: 3/22/2022 7:05:13 PM EST
[#36]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By DVCER:


Really, dumb luck for me.  I hate to see young people struggling, but if my college drop out ass can figure out how to get from electrician to here, and retired early, anyone can.   I'm on my (hopefully) forever place, a couple acres with a National monument on my back fence.

https://www.ar15.com/media/mediaFiles/857/B2799CCD-5F85-4DB1-BEAB-D309E4C744CF_jpe-2322893.JPG
View Quote
Looks like a slice of heaven to me! I'm ready to get the hell out of the city
Link Posted: 3/22/2022 7:05:14 PM EST
[Last Edit: fuzzy03cls] [#37]
Good!. Down the block from me...3 lots were just cleared to build houses.  On a corner. 3 lots...side by side by side, that's like a full block!
WTF!!! Feel sorry for the guy at the end on the other corner.
Link Posted: 3/22/2022 7:05:22 PM EST
[#38]
All we're lacking to reproduce the Carter years is double digit interest rates to go along with double digit inflation.  We're getting there.  
Link Posted: 3/22/2022 7:07:16 PM EST
[Last Edit: OregonShooter] [#39]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By RIP-Yataski:
Poor millennials just can't catch a break ...
View Quote


This millennial sure as hell did when I purchased a HUD home in 2011 for 140k that sold new for 260K in 2006.
Link Posted: 3/22/2022 7:08:22 PM EST
[#40]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Darrellbear:
All we're lacking to reproduce the Carter years is double digit interest rates to go along with double digit inflation.  We're getting there.  
View Quote


Curious what your recommendations are?
Link Posted: 3/22/2022 7:09:08 PM EST
[#41]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ContrarianIndicator:
Looks like a slice of heaven to me! I'm ready to get the hell out of the city
View Quote


It is nice.  We were just flying a kite out back.  Far west Colorado.

Attachment Attached File

Link Posted: 3/22/2022 7:09:59 PM EST
[#42]
Look back to mortgage rates from 1981
I got a 15% when I divorced and was thrilled
People would be jumping off the roof!
Link Posted: 3/22/2022 7:14:41 PM EST
[Last Edit: Baddy] [#43]
Can’t wait to see what effect this (and maybe we need a good hurricane season to boot) has on the FL market.

We’ve been looking to sell/buy locally but things have just been so ridiculous. 1700 sq ft 3/2 we looked at in an older neighborhood went for $250k 15 years ago, we got outbid on exactly a year ago at $625k, now is back on the market at $800k. +22% in a year.

So many out-of-staters cashing out for $$$ in NY/NJ/CA coming down to wide-open FL and buying for cash.
Link Posted: 3/22/2022 7:14:58 PM EST
[#44]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ContrarianIndicator:
Not all, but a large percentage. I know lots of people overextending themselves on homes right now. People who jumped into a house recently and can't even afford furniture. But they had to buy because it was "now or never" and "prices are never coming back down."

So now they have some folding chairs in their living room and a blow up mattress, and are living hand to mouth in a home they can't afford. When they finally go underwater, they'll walk away. And many of them will probably be losing their jobs in the recession that we are almost guaranteed to have now that the yield curve is about to invert. We'll see if the Fed and Govt try to inflate their way out of a recession that was caused by inflation this go around.
View Quote View All Quotes
View All Quotes
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ContrarianIndicator:
Originally Posted By bakkbakk:

I wouldnt say debtors are living beyond their means if they bought a house they could afford during a time of low rates. I understand the rest though
Not all, but a large percentage. I know lots of people overextending themselves on homes right now. People who jumped into a house recently and can't even afford furniture. But they had to buy because it was "now or never" and "prices are never coming back down."

So now they have some folding chairs in their living room and a blow up mattress, and are living hand to mouth in a home they can't afford. When they finally go underwater, they'll walk away. And many of them will probably be losing their jobs in the recession that we are almost guaranteed to have now that the yield curve is about to invert. We'll see if the Fed and Govt try to inflate their way out of a recession that was caused by inflation this go around.

Mention the yield curve to 100 people and 99 will have eyes gloss over.  Understanding what is happening underneath the surface is foreign to most.
Link Posted: 3/22/2022 7:15:45 PM EST
[#45]
Oh dang Im gonna be fuuuuuuuuucked.
Link Posted: 3/22/2022 7:16:34 PM EST
[#46]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Off-the-Grid:
Prices drop a bit but the higher rates will be painful.
View Quote
You could actually wind up winning if you've been saving

400k Median home
30 yr
2.7% rates (like 7 months ago)
7.5% avg down payment
=$1750 monthly payment

Attachment Attached File


400k Median home
30 yr
8.5% rates (pretty avg for the US)
7.5% down payment
= $3k monthly payment (fucked)

Attachment Attached File


But the good news is home prices will have to drop to a level people can afford and to get us back to $1750 monthly payment at the higher 8.5% rate, median home prices would have to fall to $225k.

Attachment Attached File



BUUUT, if you saved up say $80k for a down payment your payment will be $1420 a month, on a 15 year.

So you'd have a lower payment and you'll be on the debt hamster wheel for half the time!

Attachment Attached File

Link Posted: 3/22/2022 7:18:14 PM EST
[Last Edit: CoconutLaCroix] [#47]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By DVCER:


It is nice.  We were just flying a kite out back.  Far west Colorado.

https://www.ar15.com/media/mediaFiles/857/74EF7363-0A8C-4CBA-B9FB-394AB655D8AE_jpe-2322899.JPG
View Quote
That's probably my favorite type of terrain. Looks like the Colorado National Monument near GJ. Loved that area out west
Link Posted: 3/22/2022 7:19:53 PM EST
[#48]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Baddy:
Can’t wait to see what effect this (and maybe we need a good hurricane season to boot) has on the FL market.

We’ve been looking to sell/buy locally but things have just been so ridiculous. 1700 sq ft 3/2 we looked at in an older neighborhood went for $250k 15 years ago, we got outbid on exactly a year ago at $625k, now is back on the market at $800k. +22% in a year.

So many out-of-staters cashing out for $$$ in NY/NJ/CA coming down to wide-open FL and buying for cash.
View Quote


If a 600-800k waterfront tear down in the 2004-2006 peak fell to 200-250k, then the current same 1.2m will fall to 400-450k? Waterfront will probably be strong enough to not be a terrible day if you can hold it for 10 years.
Link Posted: 3/22/2022 7:20:43 PM EST
[#49]
Originally Posted By ContrarianIndicator:
The average rate on the popular 30-year fixed mortgage hit 4.72% on Tuesday, moving 26 basis points higher since just Friday, according to Mortgage News Daily.
As a result of the recent spike in rates, economists are now lowering their home sales forecasts for this year.


Most estimates at the end of last year had the average 30-year mortgage rate hitting 4.5% by the end of 2022, but the war in Ukraine, rising oil prices and inflation have all lit a fire under interest rates.

View Quote

https://www.cnbc.com/2022/03/22/mortgage-rates-are-surging-faster-than-expected-prompting-economists-to-lower-their-home-sales-forecasts.html?utm_source=dlvr.it&utm_medium=twitter

https://pbs.twimg.com/media/FObNrFEXMAcOhuv?format=jpg&name=small


And the Fed hasn't even ceased their $40 billion monthly MBS purchases yet. That fully ends starting in April.... Aaaand they're possibly going to start selling the $2.9 Trillion they already own, which will cause rates to pop even more.

Rates were 2.7% 6 months ago.

Going from 2.7% to 4.7% just added about $500 to the monthly payment on a median home for the avg prospective home buyer.

Things are starting to look yucky for the housing bubble.
View Quote

Cup and handle
Link Posted: 3/22/2022 7:21:48 PM EST
[#50]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By exponentialpi:
Leverage will get spicy with rates rising.  Who goes kaboom first?
View Quote


I hate to say it, but I'm thinking about grabbing some puts on the Detroit 3. Low inventory. Fucked supply chain. Rising commodity costs. All in on low mpg vehicles. How long does sticker price + hold up?
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