This is last week's data, Mortgage News Daily has the 30 year at 7.08% today. -- https://www.mortgagenewsdaily.com/mortgage-rates
Mortgage news daily is not a very accurate source
How so? I see them cited everywhere, even in stuff like CNBC
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
#52People with adjustable or variable rate mortgages are probably full of regret right now.
You would have been an idiot not to at least refinance the ARM (if not get into a fixed) a year ago when rates were low. Check back in 5 years when those ARMs start resetting.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#53I 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…
Where do you live? I live in Santa Barbara, a notoriously expensive area, and our housing prices are dropping / housing on market for way longer. Not that it's a fantastic barometer but the monthly email from Zillow for our zip-code usually forecasts some outrageous 1yr growth figure (ex. forecasted increase of 15%) and yesterday the monthly email predicts a 1yr housing price decline of ~2%. Things move slowly in large assets. Hell, the dot com bubble and 08' housing crash both took over 2 years to unwind.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#54Pretty 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…
That 40% rule seems nuts. Who is making $65k that can truly afford a $500k house?
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#55I 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…
> I have no idea who is buying houses at these prices, if it's not Blackwater-type firms.
US housing at 2% 15-year fixed is the biggest handout the world has ever seen. That's why Blackrock-type firms GOBBLED up real estate.
They were the first ones to back out when interest rates started going up.
They're not the ones buying.
I'm guessing the people who are buying are either 1) completely desperate, 2) oblivious, or 3) are willing to bet they'll have a chance to refinance at a much lower rate within a year or two and don't mind the extra carry-cost until then.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#56I 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…
I think it's a confluence of a few things...
1) You lock your mortgage rate for 90 days, so 90 days ago rates were significantly lower. These will be rolling off soon and by early next year the prevailing rates will obviously be much higher.
2) People are paying points up front to buy down the interest rate.
3) Jumbo mortgages are still much cheaper than conforming (I think a full point).
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#57Reminds me of a tiny script I wrote to see (in your terminal) a graph and amortization table comparing different mortgage & investment scenarios: https://github.com/whyboris/mortgage-and-investments Hope it's useful to at least someone :)
programming/scripting skills came in really handy when evaluating mortgages and things of that ilk.
I'm not sure I could have done the same using Excel, and software doesn't seem to exist to make these calculations easy to understand.
That's to say: Thanks! We need this.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#58I 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…
Minor correction, but you probably mean Blackrock-type firms. Blackwater was a private military company.
Funny picture imagining blackwater kicking down some doors and becoming a landlord
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#59Earlier quoted context omitted.
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.
The 500% difference in housing prices. You are leaving out numerous factors including demand, supply, and local regulations.
Imagine two people. One person makes 50k the other makes 100k. Both have expenses for food, tech, schools etc at 40k. This leaves 10k vs 60k to spend on housing. >500% difference.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#60I 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…
Or to make up for the $834/month, you need another ~$25k of pre-tax income if you follow a 40% rule, ~$30k for 33%, or ~$50k for 20%.