Rocket Mortgage to trim 8% of workforce as home-loan market shrinks • Hacker News Board

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#211

Post by lmt55 » Thu, Apr 28, 2022, 1:01 PM UTC

nly wrote: post #166

lmt55 wrote: post #109

Earlier quoted context omitted.

I own a house in London. Its total value increase since I bought it 5 years ago is much less than my salary.

Then I guess your salary is amazing, because many house prices across London have doubled in 5 years. If you somehow bought a house at a reasonable earnings multiple, say 4x earnings, then your house has appreciated essentially what you earned over the last 5 years. This is just math.

Can you tell me an area where average house prices have doubled in the last 5 years? I can't think of one. Most expensive areas have gone sideways since Brexit, and risen a bit since the pandemic. Most cheap areas have grown slowly since Brexit.

https://www.bloomberg.com/graphics/property-prices/london/ shows the median as having gone up around 6% in total since 2017. Trying a mix of neighbourhoods in that tool, I can't see any which are close to 100% up.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#212

Post by refurb » Thu, Apr 28, 2022, 1:02 PM UTC

lmt55 wrote: post #109

pjc50 wrote: post #105

Earlier quoted context omitted.

> Going in debt for 30-40 years has zero appeal for me Going into debt at the lowest interest rate you'll ever be offered to buy a leveraged asset that's likely to increase in price and reduce the overhead you pay on your largest expense, housing, and hedge against the risk of rent increases and security against the whims of landlords? > Germany Oh, Germany. Somehow Germany has escaped the constantly increasing house…

I own a house in London. Its total value increase since I bought it 5 years ago is much less than my salary.

I mean the folks that bought homes in Detroit in 1960 probably feel a bit different in 1980.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#213

Post by lotsofpulp » Thu, Apr 28, 2022, 1:02 PM UTC

llampx wrote: post #152

cammikebrown wrote: post #15

Earlier quoted context omitted.

It's pushing 6% if you have worse credit (700-750). But don't worry about that, NINJA loans are back: https://i.redd.it/wnzuveooo5w81.jpg

No Income, No Job anything?

No assets.

https://www.investopedia.com/terms/n/ninja-loan.asp

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#214

Post by refurb » Thu, Apr 28, 2022, 1:03 PM UTC

brundolf wrote: post #20

Is this because individuals aren't as interested in buying houses, or because investors are buying more of them (and don't need financing)?

What kind of an investor wouldn't use leverage when rates are this low?!?

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#215

Post by Gareth321 » Thu, Apr 28, 2022, 1:04 PM UTC

cascom wrote: post #122

runeks wrote: post #106

Earlier quoted context omitted.

Sure. > Why do you refinance if rates go up? Surely the point is that if rates go up you've locked in a better rate You don't have to, but you can choose to either (a) keep the same rate and owe the same amount, or (b) get the new (higher) rate and owe less. > How does half your debt disappear if rates go up? It doesn't exactly. However, the market value of your mortgage loan halves if the rate doubles (roughly). Thi…

Except no bank (at least in the us) will cut that deal, because they don’t mark those loans to market.

The person is describing a bond loan. They're not offered in most countries.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#216

Post by ilikehurdles » Thu, Apr 28, 2022, 1:04 PM UTC

JetAlone wrote: post #101

kortilla wrote: post #94

Earlier quoted context omitted.

Getting a mortgage is the easiest way to build wealth through government subsidized leverage (mortgage interest deduction).

There are 3 good replies to this one giving a decent analysis for why I might want to reconsider my position. It's hard to pick which one to answer to. Would you say that mortgage is probably driven down 8% because just can't afford the down payment anymore, or people like me who seem to have an irrational aversion to it?

Is 8% referring to Rocket Mortgage layoffs?

Over the last two or so years, mortgage rates hit historic lows, which meant the demand for cheap mortgages increased significantly, both from people wanting to enter the market and those refinancing. Consider that the $500k mortgage that would have cost $2300/mo in 2019 suddenly costs like $1600/mo in 2021.

Absolutely I jumped on that train, as many others did. Lenders were overwhelmed and had to hire a lot to meet this demand.

If you missed that window, well rates are above what they were pre-pandemic, looking back at least a decade, so refinancing for lower payments no longer makes sense for most borrowers. People still are buying homes, but high prices and that disappeared “once-in-a-lifetime deal” are going to suppress demand.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#217

Post by refurb » Thu, Apr 28, 2022, 1:04 PM UTC

francisofascii wrote: post #165

refurb wrote: post #30

This is actually a good thing. House cycles exist and it's better to have smaller, more frequent ones than massive ones like 2008. Canada never had a 2008 housing crash. Housing has been on a tear since the early 2000's and the average sale price of a home (nationally) is 2x that of the US despite lower salaries, higher taxes and a lack of 30-year fixed rates. That is a bubble. My opinion is the US market is hot , bu…

Isn't that because Canada has much lower property taxes than the US? So you have the same effect that you see in California, where low taxes drive up prices.

I don't think spending $6,000 less in property taxes each would justify a $500,000 increase in price.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#218

Post by bombcar » Thu, Apr 28, 2022, 1:05 PM UTC

pooper wrote: post #114

lmt55 wrote: post #102

Earlier quoted context omitted.

This is fair, you didn't miss those people. But I think it was worth me highlighting them because they are, as I argued, very important. I somewhat agree with your argument. Housing costs more than other assets compared to its economic value, exactly because people have an emotional reaction to the idea of owning it - or the idea of not owning it. However I have seen middle-class people overextend themselves to 'buy…

A real estate investment newsletter suggests that for a successful real estate investment, as a rule of thumb you should be able to charge almost one percent of the cost of the house as rent because a rational investor shouldn't count on the value of the house going up. I am curious what you guys think of this statement. I think the idea is if the potential rent you get out of your investment is too much under one pe…

House prices are kind of attached to rent, but not entirely - especially in areas where there are few rentals, or lots of them.

Actual rental revenue received can be significantly lower than calculated if there are vacancies, etc. It’s much easier to do on an apartment building with many units.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#219

Post by foobarian » Thu, Apr 28, 2022, 1:05 PM UTC

mtlynch wrote: post #194

xwdv wrote: post #178

Earlier quoted context omitted.

You don’t actually have to invest at all. Over time inflation makes your payments cheaper and cheaper. By the time you reach the end of your 30 year fixed mortgaged in the year 2052 you’re still paying in 2022 dollars which is probably less than half of what the average mortgage in 2052 is. If you invest on top of that and get some small decent return you come out even more on top.

But if the situation is that in 2022, you have enough cash to buy a house outright or get a mortgage and invest your cash, you still do have to invest your cash to benefit from the mortgage. If I have $300k in cash today, and I want to buy a $300k house, then I can get a mortgage and let inflation shrink my mortgage payments, but it's also shrinking the $300k I have in cash. I don't see how you can profit from the mo…

Index fund: VOO, FXAIX, etc.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#220

Post by ratsforhorses » Thu, Apr 28, 2022, 1:06 PM UTC

milkshakes wrote: post #138

agent008t wrote: post #136

Earlier quoted context omitted.

>buying an asset class that has a history of appreciating in value Correction - over a time period of decreasing interest rates. Housing, on its own, is a depreciating asset. It is a consumable like a TV. It deteriorates with time. "Housing always goes up", without an understanding of why it has been going up, can be a dangerous belief and could be one of the reasons why housing at the moment is so expensive relative…

housing might depreciate, but the same is not generally true for the real estate it sits on

Is this also true for places like Detroit, small inner towns in the mid ? West... my impression was that once banks got involved lending money the prices took off, I was under the impression that getting a house loan directly contributes to the amount of money in circulation...thereby increasing ? inflation.... another myth?) I heard was that in China houses are leased for x years (80?) thereby leading to a lot of Chinese buying foreign Real Estate.... if RE has the reputation of accruing value surely it'd be a good thing to put the brakes on companies from investing in it? I mean seeing endless same housing is kind of mind numbing....

I also have a theory that high RE prices are a perfect vehicule for stashing/laundering large sums of money....

Also to what extent isn't it political cronyism with the construction industry that leads to such shitty urbanistic decisions like we have in Romania where people are pawns to short term greed ...