Posted: 12/14/2008 6:47:39 PM EDT
| If my wife and I wait until late summer/fall to buy a new house(prices will have to be at rock bottom by then) will we be able to even finance it? |
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Quoted:
If my wife and I wait until late summer/fall to buy a new house(prices will have to be at rock bottom by then) will we be able to even finance it? I dunno, but I was talking with my mortgage broker the other day, she thinks new rates might drop down to 4.5ish (probably not that low for re-fi). I don't know that you would see a better rate than that if you waited 20 years. If you are serious about buying, there are tons of deals to be had, just make sure your credit is in order and you can actually bring money to put down. |
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Housing prices won't bottom until 2012-2013.
The Alt-A loan and option-ARM loan time bomb explodes in 2010-2011 with a 70 percent default rate and 1.5 trillion dollars in bad mortgages. We've only seen half of the mortgage crisis so far (subprime). Currently 10 percent of all mortgages are either in default or late payments. Excellent 60 minutes video on the real estate time bomb that has yet to arrive: http://www.cbsnews.com/video/watch/?id=4668112n |
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Quoted:
Housing prices won't bottom until 2012-2013. The Alt-A loan and option-ARM loan time bomb explodes in 2010-2011 with a 70 percent default rate and 1.5 trillion dollars in bad mortgages. We've only seen half of the mortgage crisis so far (subprime). Currently 10 percent of all mortgages are either in default or late payments. The Alt-A and option-ARM time bomb has already begun with the 2/28's, the 3/27's will start next year. 2009-2011 will be interesting years. Remember that they were STILL writing these garbage loans as late as 1st QTR 2008. 
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Most mortgage brokers have zero clue as to how the the economy, the fed, the money supply, and the real estate market actually work.
There are some that do "get it" and they are still in the game, and the idiots have largely flushed out. From an economist's view I would recommend that if you find the home you want now and you can afford it, then buy it now. Rates are very low. If they get lower, big deal they will not go down THAT much lower because they can only go so low. Also lending rates and the Fed rates are not the same thing even though they tend to correlate with the FED in the lead, the ability to lower rates gets murky when they are this low. Also there is not much competition left and the banks are in a very conservative mode. If you choose to wait it out, get a sizeable down-payment together in the meantime. |