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U.S. mortgage interest rates jump to 6.52%, highest since mid-2008

reuters.com

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Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008

#171

Post by seer-zig »

LandR wrote: post #18
dymk wrote: post #7

Earlier 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…

No post body was provided.

Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008

#173

Post by aschearer »

seer-zig wrote: post #170
aschearer wrote: post #95

People are bringing up that past rates were higher but leaving out how much lower past prices were. Have a look at rates over time[1] vs median home price[2]. Yes rates were 16% in 1980 but the median home was $64,000. That's $230,000 in today's dollars. If you'd prefer to pick a time when rates were more comparable, how about 2001 at 7%. The median home price was $180,000. $301,000 in today's dollars. Today's median…

Inflation at work.

Home prices have gone up faster than the dollar has inflated, as I outlined above.

Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008

#174

Post by thunky »

aschearer wrote: post #95

People are bringing up that past rates were higher but leaving out how much lower past prices were. Have a look at rates over time[1] vs median home price[2]. Yes rates were 16% in 1980 but the median home was $64,000. That's $230,000 in today's dollars. If you'd prefer to pick a time when rates were more comparable, how about 2001 at 7%. The median home price was $180,000. $301,000 in today's dollars. Today's median…

> Today's median home is selling for $440,000

Not for long.

Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008

#175

Post by lumost »

ProfessorLayton wrote: post #169
lumost wrote: post #78

Earlier quoted context omitted.

The economics of housing are weird. Someone who bought the 1MM house at 2.5% still has a payment based on 2.5%. This individual's house might be nominally underwater, but they are still comfortably making payments. If they were to move, then they would lose both the downpayment and their monthly payment would increase. So the best bet for them is to stay put. However this might mean that they put the house up for sal…

It gets even weirder if that person loses their ability to continue to pay their relatively comfortable mortgage and they have to put their house on the market. In this tremulous economy being underwater is still a very uncomfortable place to be, unless one has plenty of cash reserves — which may be unwise to spend on an overvalued asset.

aye - we may get general debt reform if enough homes become underwater. I'd have to imagine that the number of people able to buy a million dollar house at the 15% interest rates of the 1970s is not large enough to support the current market.

Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008

#176

Post by bdlowery »

atlantas wrote: post #99
theandrewbailey wrote: post #21

People with adjustable or variable rate mortgages are probably full of regret right now.

RIP Canada. Over 50% of mortgages since 2021 are variable rate! https://www.reuters.com/article/canada-banks-mortgage-rates-...

Every mortgage rate in Canada is reevaluated every 5 years. It sucks

Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008

#177

Post by hackeraccount »

thunky wrote: post #174
aschearer wrote: post #95

People are bringing up that past rates were higher but leaving out how much lower past prices were. Have a look at rates over time[1] vs median home price[2]. Yes rates were 16% in 1980 but the median home was $64,000. That's $230,000 in today's dollars. If you'd prefer to pick a time when rates were more comparable, how about 2001 at 7%. The median home price was $180,000. $301,000 in today's dollars. Today's median…

> Today's median home is selling for $440,000 Not for long.

This. You want to cut the heart of inflation jack up rates. Deeply unpleasant for everyone but it'll work.

Re: U.S. mortgage interest rates jump to 6.52%, highest since mid-2008

#178

Post by hackeraccount »

sytelus wrote: post #114
adamredwoods wrote: post #20

I 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…

Can't you buy now at high APR and then refinance later? I would think these large rates would not last more than 2-3 years. You will take some hit for short period but also might get better deal as there are not a lot of buyers. After rates come down, you might easily end up paying 5-10% over asking price. Is there any issues in refinancing later?

I tend to agree with your logic but a lot of people think they know what rates will be like and what a home will be worth and any number of things in 2 to 3 years. I'd say that they everyone is always gonna pay more then they want and only question is if it's going to the seller or the bank.

My dad gave me these rules for home buying:

* can I make the monthly payment for as long as I own the home?

* don't buy unless you expect not to sell for 5 years

* put down at least 10%

* don't get an ARM

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