People with adjustable or variable rate mortgages are probably full of regret right now.
U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
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Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#22Earlier quoted context omitted.
Wait until they see 2026. 10-14% mortgage (my prediction)
rates have nearly tripled in the last year no need to go that far out
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#23people who can buy a house all cash will be the real winners here. if and when rates go down, they can cash out refinance, and if they don't they will benefit from the downward pressure high rates create on prices.
it's rich to be rich.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#24I anticipate people misguidedly objecting to the 2008 comparison due to the traumatic baggage of that era.
Wait until they see 2026. 10-14% mortgage (my prediction)
For anyone relatively young seeing this range and thinking "ridiculous!", it's not.
Growing up my parents rate was 12% and in the early 80s rates got up to over 17% [0].
It is very possible for the era of cheap money to end across the board.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#25I anticipate people misguidedly objecting to the 2008 comparison due to the traumatic baggage of that era.
Wait until they see 2026. 10-14% mortgage (my prediction)
I'm betting the rates will be back to 2% by 2026 as global growth collapses due to a combination of high interest rates, deleveraging of over-leveraged organizations and geopolitical strife causing further de-globalization.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#26I'm all for it. If this edges out the razor thin margins that Redfin et. al. were making on the US housing market, let's go. As a first time homebuyer who would like to purchase a place to live, a few points of interest are not going to dissuade my decision. But I have a strong feeling that the REIT market will pop like the bubble that it is once the financials start looking unfavorable.
Why root for the downfall of Redfin and the like? They were finally a lower cost alternative to the stranglehold that RE agents have had on sellers for decades. Why should it cost 6% to sell a house?
I think what the parent commenter is referring to is Redfin’s (along with Zillow and others) practice of buying homes and flipping them. I thought they stopped that a while ago when they saw where the market was headed though.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#27Pretty crazy correction if you run the math on mortgage payments. I bought a place 1 year ago with a 2.75% rate. Say you're somewhere outside a major metro buying a $500k house. With a $100k down payment, a 2.75% rate equates to $1,633/month. A 6.5% rate equates to $2,500/month. With $600/month in taxes/insurance, the "don't spend more than 40% of your income on housing" rule means the necessary income to comfortably…
The market does not work that way. You're implying that the cause and effect are backwards. It is local wages that set the price! The prices, while they do adjust slowly due to high friction in the housing market, are not exogenous.
That was true before the pandemic. Part of the reason demand surged in "second cities" around the country was because remote work allowed higher paid workers to migrate somewhere cheaper and not only take advantage of low rates but lower housing prices.
It remains to be seen if now that the wave of remote workers is (probably) largely over now that employers are more likely to offer hybrid than fully remote work if these housing markets more severely correct compared to coastal cities (SF, LA, NYC) that have always been expensive.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#28Earlier quoted context omitted.
Wait until they see 2026. 10-14% mortgage (my prediction)
For anyone relatively young seeing this range and thinking "ridiculous!", it's not. Growing up my parents rate was 12% and in the early 80s rates got up to over 17% [0]. It is very possible for the era of cheap money to end across the board. 0. https://www.freddiemac.com/pmms/pmms30
House prices were also much lower in your parents time.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#29I have been wanting to ladder up to a bigger house for a few years now. For a US$1M house, which is the going rate near my area, the jump from 6% to 7% is $5000/month apr interest to $5834/month apr (not including fees, taxes, and insurance). So to go back to the monthly of $5000 (which is out of my budget), a US$1M house would need to fall to $857,153. That is NOT happening around here. I have no idea who is buying…
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Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#30This is great news for cash buyers like my wife and I. We’ve been wanting to get out of our town for a while and move to a neighboring town.
The housing prices are delusional around here. Hopefully this will bring some sellers back down to reality.