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Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

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Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#51

Post by rvba »

hans1729 wrote: post #19
cammikebrown wrote: post #2

Seems like the bubble burst is going to be more sudden than we thought. 30 year mortgages are suddenly at nearly 5.5-6%, listings are sitting on the market for longer, and multiple cities are cracking down on Airbnb.

I mean, it's not really a burst, we're just hearing the hissing noise of the obvious leak. The true demand from people with the intend to actually live in the estates has been constantly decreasing since around 2000; the real salarys dropped since then, so did the buying power. The only reasons people found buyers at x3-x10 (!) prices were a) that there is a class of people wealthy enough to still afford the purchase…

Due to QE central bank bought stock from private equity - and private equity used thia money to buy homes.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#52

Post by apexalpha »

smcl wrote: post #43
apexalpha wrote: post #42

Earlier quoted context omitted.

It's not in the Netherlands. Practically everyone has fixed rates here. Especially in the past few years with the low interest rates.

Fixed for the entire duration of the mortgage, and at the rate the commenter mentioned?

Mine is fixed for 20 on a 30 year mortgage but you can always choose between variable, 10 year fixed, 20 year or 30 year.

Mortgages are (almost) always 30 years duration.

I don't know what country in Europe you can't get fixed rates but it's not the Netherlands, that I know for sure. (Also there really isn't a 'Europe' for these things, every country is different)

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#53

Post by _v7gu »

nikanj wrote: post #32
refurb wrote: post #30

This is actually a good thing. House cycles exist and it's better to have smaller, more frequent ones than massive ones like 2008. Canada never had a 2008 housing crash. Housing has been on a tear since the early 2000's and the average sale price of a home (nationally) is 2x that of the US despite lower salaries, higher taxes and a lack of 30-year fixed rates. That is a bubble. My opinion is the US market is hot , bu…

If you plot Canadian housing supply vs Canadian city population growth, you get another perspective. Houses are incredibly expensive, because there aren't enough of them

No, no. It's the foreigners' fault. Hypocrisy and xenophobia will fix everything without having to create actually livable cities where people aren't slaves to cars.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#55

Post by oliwarner »

cammikebrown wrote: post #2

Seems like the bubble burst is going to be more sudden than we thought. 30 year mortgages are suddenly at nearly 5.5-6%, listings are sitting on the market for longer, and multiple cities are cracking down on Airbnb.

Whole-term-fixed rates are pretty uncommon in Europe. Fixes of 2, 5 sometimes 10 years are products most providers offer, but as the term increases, the rate shoots up, to offset rate uncertainty.

My question is: why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty? Remortgaging every couple of years takes a bit of time, and shopping around, but is much cheaper.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#56

Post by apexalpha »

oliwarner wrote: post #49
apexalpha wrote: post #33

Earlier quoted context omitted.

That's really high compared to Europe! I just bought a new house with 2% on the interest-only part and 1.6% on the annuity part! In the month after rates grew by about 0.5% though. Seems like we hit the bottom and are climbing very slowly.

And compared to a couple of years ago, that's really expensive. The mortgage we took out two years ago (2 year fix, ~60% LTV) had a introductory rate of 1.2%. That falls back to 3.something variable in September. We'll probably look for another fixed but current 2yr fixed rates seem to be around 2.3% (plus a £1k application). That's an uncomfortable increase on a big loan. What's interesting is the rates on bigger lo…

Mine is currently 105% LTV, haha.

We will drop 0.4% once we get below 66% LTV or so. Also, ours is 20 years fixed. The variable or 5 year fixed was even lower still, around 1.5% at 100% LTV.

It's still ridiculously low, which is why we're happy to pay a bit more to get it fixed for 20 years.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#57

Post by vmception »

alimov wrote: post #36
hans1729 wrote: post #19

Earlier quoted context omitted.

I mean, it's not really a burst, we're just hearing the hissing noise of the obvious leak. The true demand from people with the intend to actually live in the estates has been constantly decreasing since around 2000; the real salarys dropped since then, so did the buying power. The only reasons people found buyers at x3-x10 (!) prices were a) that there is a class of people wealthy enough to still afford the purchase…

maybe one more interesting detail worth noting: c) private equity firms are buying up insane amounts of real estate, being able to outbid regular home buyers and (don’t quote me on this b/c I’m not 100% sure) pay cash for the properties they buy.

Which they only did because they ran out of stuff to invest in (while still attracting so much other capital to invest at all), and the valuations of everything else was already stretched. not suggesting these firms were trying to do anyone favors by allowing people to afford homes the rest of the time, its more so that the math temporarily made sense with that much liquidity in the market so they jumped into real estate

(And yeah people would rather pay the government than invest in your startup so lets not pretend investing in main street was a real option)

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#58

Post by moonchrome »

room271 wrote: post #46
jdasdf wrote: post #40

Earlier quoted context omitted.

It's practically impossible to get fixed rates in europe.

In the UK it's very common, albeit not for 30 years - more often 2, 5, or 10. See e.g. https://www.bankofengland.co.uk/bank-overground/2020/why-are... (In 2020, more than half of new mortgages were fixed for 5 years or more.)

That's not fixed rates, that's just variable rate with a delay, it's impossible to get a 30 year loan with a fixed rate in Croatia.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#59

Post by runeks »

oliwarner wrote: post #55
cammikebrown wrote: post #2

Seems like the bubble burst is going to be more sudden than we thought. 30 year mortgages are suddenly at nearly 5.5-6%, listings are sitting on the market for longer, and multiple cities are cracking down on Airbnb.

Whole-term-fixed rates are pretty uncommon in Europe. Fixes of 2, 5 sometimes 10 years are products most providers offer, but as the term increases, the rate shoots up, to offset rate uncertainty. My question is: why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty? Remortgaging every couple of years takes a bit of time, and shopping around, but is much cheaper.

> My question is: why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty?

To fix your monthly payment for the next 30 years.

Furthermore, with a fixed rate mortgage you can benefit from interest rate volatility since you can always buy back the debt at par. In practice this means you can:

1. Take out a fixed rate loan for $n at x%

2. If the rate doubles (to 2x%) you can refinance and you now only owe half ($n/2)

3. If the rate falls to x% again you can refinance again and now you owe the original amount ($n/2) at the original rate (x%)

This ignores the cost of refinancing the loan, so you’ll be paying some fixed sum for that (which is lost), but if rates moves sufficiently this is a huge benefit that you don’t get with a variable rate mortgage loan.

* This is based on how the Danish Realkredit mortgage works. I’m not certain, but I believe fixed rate mortgages work the same way in other countries.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#60

Post by oblio »

oliwarner wrote: post #55
cammikebrown wrote: post #2

Seems like the bubble burst is going to be more sudden than we thought. 30 year mortgages are suddenly at nearly 5.5-6%, listings are sitting on the market for longer, and multiple cities are cracking down on Airbnb.

Whole-term-fixed rates are pretty uncommon in Europe. Fixes of 2, 5 sometimes 10 years are products most providers offer, but as the term increases, the rate shoots up, to offset rate uncertainty. My question is: why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty? Remortgaging every couple of years takes a bit of time, and shopping around, but is much cheaper.

They're not uncommon, Europe is a big place.
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