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Homebuyers must ‘learn to live’ with near-7% mortgage rates says RE/MAX chairman

cnn.com

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Re: Homebuyers must ‘learn to live’ with near-7% mortgage rates says RE/MAX chairman

#41

Post by jacquesm »

Meanwhile, real estate brokers fees in the US and Canada are ridiculous.

I once made a bid on a property slightly under the asking price and the bid was accepted, then, upon reading the fine print it was said that the buyer was responsible for the real estate brokerage fee of the seller. So, I asked to see the amount they had agreed upon and this was so exorbitant that I ended up backing out of the deal (I had not signed the purchase contract yet). Then the real estate brokerage contacted me and asked to re-negotiate because they figured they had better get something than nothing. I negotiated it down to 1/5th of their original price and the deal went through.

Weirdest arrangement, so somehow you can push the costs of selling a property to the buyer, who has no say in the amount negotiated. It wasn't exactly a hot property so I think that factored into all of this but I'm still not sure if this was just an attempt at taking advantage of someone new to real estate transactions on that side of the Atlantic or whether or not this is a common arrangement.

As for the 7% mortgages: those aren't all that rare historically, but they were usually coupled with stronger markets and lower inflation. In a weak market agreeing to a high interest rate can set you up for future trouble. So unless you see a mortgage as a way to keep more options open rather than a necessity I'd advise caution.

Re: Homebuyers must ‘learn to live’ with near-7% mortgage rates says RE/MAX chairman

#42

Post by pradn »

codampa01314 wrote: post #27

Another step closer to revolt. There's only so much pressure the general public will be able to handle. History has taught us when there is a massive unbalance in "haves" and "have nots" things don't play out in ways where we just "sit down and discuss what's going on."

The US public seems to have the capacity to absorb an incredible amount of misery while just acting up at tame things like elections. There are occasional protests and riots, but really quite few - and they dissipate quickly.

Hell, we had 30 years of hollowed-out de-industrialization in the Rust Belt, with hardly a peep on the "revolt" front. There's been slow electoral changes, however.

Re: Homebuyers must ‘learn to live’ with near-7% mortgage rates says RE/MAX chairman

#43

Post by codampa01314 »

dudul wrote: post #37
codampa01314 wrote: post #27

Another step closer to revolt. There's only so much pressure the general public will be able to handle. History has taught us when there is a massive unbalance in "haves" and "have nots" things don't play out in ways where we just "sit down and discuss what's going on."

Is that what History taught us? I thought it taught us that humanity could go for literally centuries with a minuscule group of elites owning everything and the rest of the population owning nothing more than their clothes.

Apparently you haven't done your researc.

Re: Homebuyers must ‘learn to live’ with near-7% mortgage rates says RE/MAX chairman

#44

Post by jacquesm »

majormajor wrote: post #40

The headline is awful - the longer sentence is in the article: '“We’re just going to have to learn to live with 6.5% or 7% mortgage rates for six to 18 months,” said Liniger.' The headline is also awful because before 2008 those would be good rates anyway. If you bet on the 2020-2021 trend continuing you could be in a bad place now, but... that was a weird trend to bet on continuing given the COVID factors that are n…

That means that contracts signed in that period will have that percentage baked into them and that means that for those that ink those contracts that it will take up to 30 years at those rates, unless you can refinance but that will cost you too.

Re: Homebuyers must ‘learn to live’ with near-7% mortgage rates says RE/MAX chairman

#45

Post by kjghkjghkjgh »

kstrauser wrote: post #10

“Real estate CEOs must `learn to live’ with lower sales, say resistant buyers”. The amount I can pay each month hasn’t changed drastically. If interest payments to my credit union go up, then the principal payments I can make to a seller have go down. The price I can pay is less than it was a couple of years ago. That means your commissions will be dropping, too, Mr. Liniger. You’ll just have to live with it.

Well good luck with that but customers don't determine CEO pay.

Re: Homebuyers must ‘learn to live’ with near-7% mortgage rates says RE/MAX chairman

#46

Post by bhawks »

fxtentacle wrote: post #34

My personal prediction is that the higher interest rates will make companies and institutional investors withdraw from the housing market, especially office buildings. That would ease competition for land, thereby reducing housing prices for average citizens.

Reducing prices requires increasing supply - but what is going to incentivize folks sitting on a 30year mortgage at 3% to sell?

The Fed's low rate policy during pandemic and then the rapid rate rise has broken the housing market. There is no reason to sell and no reason to buy.

That's why you see a severe transaction drop but roughly no change in prices. It'll be this way for awhile.

Re: Homebuyers must ‘learn to live’ with near-7% mortgage rates says RE/MAX chairman

#47

Post by FirmwareBurner »

paxys wrote: post #17
causality0 wrote: post #2

I'm constantly reminded to be thankful to be a homeowner in America. Most other countries don't even have fixed-rate mortgages and many of my international friends are facing massive unexpected jumps in their monthly housing costs.

In most countries buying a house doesn’t involve taking out loans that take 30 years to pay off in the first place.

What are you talking about? It's exactly the same in Europe. Unless they get help from their parents, most middle class people need 30 years to pay off their homes here too.

It's the same shit everywhere in the west. Real estate is priced at the maximum amount the market would bear.

Re: Homebuyers must ‘learn to live’ with near-7% mortgage rates says RE/MAX chairman

#48

Post by seanmcdirmid »

itake wrote: post #35
interactivecode wrote: post #6

Earlier quoted context omitted.

Can you imagine having such unexpected jumps in housing costs and not even owning your home? That would be way way worse

Can you explain this more? When I rented, I paid a flat rate. When rent increased, it only went up 10% at max. Now that I am a homeowner with a 30y fixed mortage, I have many unexpected jumps (thousands in home repairs, increasing property taxes and insurance). Unexpected jumps are way bigger as a home owner than they ever were as a renter. Oh, and my house value has dropped $100k since I bought it.

Many people live in rental markets where rent increases are more than 10%. At least if you own there is some upside at the end of it. And you can estimate how much your upkeep will rise over the years.

Re: Homebuyers must ‘learn to live’ with near-7% mortgage rates says RE/MAX chairman

#49

Post by codampa01314 »

boringg wrote: post #33
codampa01314 wrote: post #27

Another step closer to revolt. There's only so much pressure the general public will be able to handle. History has taught us when there is a massive unbalance in "haves" and "have nots" things don't play out in ways where we just "sit down and discuss what's going on."

Nah history has taught us mortgages can go way higher. Your part of the online crowd constantly trying to say the next French revolution is coming (been hearing that refrain since the 00s). Also when you buy a house - if you didnt factor in mortgage rates changing thats 95% on you. 6 % isnt even that high. Mortgage is too high offload and move elsewhere. People need to take some responsibility for their purchases.

hopefully you figure this out before it's too late...

Re: Homebuyers must ‘learn to live’ with near-7% mortgage rates says RE/MAX chairman

#50

Post by prepend »

boringg wrote: post #33
codampa01314 wrote: post #27

Another step closer to revolt. There's only so much pressure the general public will be able to handle. History has taught us when there is a massive unbalance in "haves" and "have nots" things don't play out in ways where we just "sit down and discuss what's going on."

Nah history has taught us mortgages can go way higher. Your part of the online crowd constantly trying to say the next French revolution is coming (been hearing that refrain since the 00s). Also when you buy a house - if you didnt factor in mortgage rates changing thats 95% on you. 6 % isnt even that high. Mortgage is too high offload and move elsewhere. People need to take some responsibility for their purchases.

It’s high when home prices have grown substantially since the last time mortgages were 7%.

Also, it’s not really a “haha, you suck at planning” so much as a new generation is hit with much higher home prices when they are entering buying time of their life.

Mortgages have been 4% for the last 20 years or so, so an entire generation has had 4% mainly due to government subsidization. And now the government can’t or won’t do that any more. If the next generation can’t buy homes because prices and rates are too high, that’s not good for social stability.

I don’t think it’s the French Revolution, but I do think there will be “why are we not paying for social programs when we have mortgage interest rate deductions for people with $750k mortgages [0]. That was palatable when the middle class had mortgages. But people who are stuck perpetually renting will likely vote to stop that.

[0] https://www.rocketmortgage.com/learn/mortgage-interest-deduc...

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