I 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)
If so, renting will also be much more expensive
U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
81–90 of 178 posts
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#82Earlier quoted context omitted.
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?
Do you have to pay tax to the Government where you live to buy a house ? I'm wondering if Stamp Duty is just a UK thing. Here we pay a tax to the government when you buy that is based on the value of the house you are buying. Up to £250,000 Zero The next £675,000 (the portion from £250,001 to £925,000) -5% The next £575,000 (the portion from £925,001 to £1.5 million) -10% The remaining amount (the portion above £1.5…
Yes well, that's probably a lot better than paying a typical USA real estate tax, which must be paid quarterly and non-payment means the enclosing town takes your house away. What are RE taxes like in London? Do rich foreigners pay anything to park money into central London properties?
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#83Earlier quoted context omitted.
> 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…
How are these firms able to buy at such low rates? I thought these loans were reserved for owner-occupied homes.
They don't need to use mortgage financing, they can borrow the money through other methods. One consequence of Fed Reserve rate setting in combination with a regulated mortgage market is that private equity firms can borrow at lower rates than individual borrowers. I wouldn't be surprised to learn that this dynamic has been a major contributor to housing prices rising so quickly.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#84I 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…
If there is a chance you will want to move in the next 10 years, then the numbers are even worse! Not only are you paying more every month with higher rates, but the amortization schedule is not in your favor. For your hypothetical $1M house and a 6->7% rate change you build about 20% less equity each year also.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#85people 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.
You cannot do a cash out refinance if you don't already have a mortgage on the property. You can do a home equity loan or line of credit but those come at higher interest rates than a refinance.
But yes the real winners are almost always those who have ample resources.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#86people 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.
In California property tax is also fixed based off purchase price (thanks Prop 13, love it or hate it) so one could pay ~1% on 1M at 7% vs 1.5M at 3% and then simply refinance the 7% later.
This assumes you'd anticipate rate cuts in the near-ish future. This property tax arbitration could easily go wrong.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#87Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#88I 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.
This is such a common confusion, someone made a handy diagram for telling apart the firms comprising the cross product of {"Black", "Bridge"} x {"rock", "water", "stone"}.
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#89Earlier quoted context omitted.
> a few points of interest are not going to dissuade my decision Perhaps not, but if you run the math you'll see a "few points" very quickly means you'll have to buy much less house than you may have desired.
Er, either that or the seller is going to get a much lower price than they desired. In reality, a linear solution of these two conflicting desires.
There's a lot of opportunist sellers with locked-in sub 4% rates that are only selling because they can make a quick buck.
I think we'll see desperate folks buying overpriced homes half the size that they could have afforded just months ago
Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008
#90people 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.
You cannot do a cash out refinance if you don't already have a mortgage on the property. You can do a home equity loan or line of credit but those come at higher interest rates than a refinance. But yes the real winners are almost always those who have ample resources.
did something change? normally even on a home you own outright you can get up-to 80% of the appraised value difference