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

#271

Post by [deleted] » Thu, Apr 28, 2022, 2:30 PM UTC

xadhominemx wrote: post #207

hans1729 wrote: post #19

Earlier quoted context omitted.

I mean, it's not really a burst, we're just hearing the hissing noise of the obvious leak. The true demand from people with the intend to actually live in the estates has been constantly decreasing since around 2000; the real salarys dropped since then, so did the buying power. The only reasons people found buyers at x3-x10 (!) prices were a) that there is a class of people wealthy enough to still afford the purchase…

> The true demand from people with the intend to actually live in the estates has been constantly decreasing since around 2000; the real salarys dropped since then, so did the buying power. > When 90 (?) percent of people simply lack the buying power to participate in the real estate market, but the other 10% happily sell each other estates, that's not a bubble, the real estate market just stopped interfacing with th…

[deleted]

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

#272

Post by redshirtrob » Thu, Apr 28, 2022, 2:34 PM UTC

coredog64 wrote: post #267

redshirtrob wrote: post #237

Has anyone actually used Rocket? Every time I (or a friend) have looked at them they have higher closing costs and wanted multiple points to close the mortgage. I was able to do way, way better by going with a local bank, as did my friends. The only thing I can figure is they are better for folks with "good" (not "excellent") credit and can maybe close the loan faster.

Something to note about your local bank/CU. They might originate the loan, but as sure as water is wet they’re going to sell it to someone else for service. If you have a good working relationship that you can used for good terms, then go for it. But don’t go with a local bank because you think you’ll continue to work with them.

Yeah, I could not care less about what they do with the loan. I'm not looking for a relationship, just the best deal I can get. Full stop. Do people still think otherwise on loans?

All that said, our local CU does in fact keep their own mortgage portfolio. This may be rare, I don't know. They're a large CU associated with a government contractor.

When I bought my house they had the best deal (rate + closing costs) hands down. When I refinanced they were no longer offering 30yr loans on their portfolio (and I wasn't interested in 10/15), but still were originating them to sell. Unfortunately the 30yr rates were not as quite good as I could get elsewhere and closing costs were close to a wash so I went another direction.

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

#273

Post by agent008t » Thu, Apr 28, 2022, 2:35 PM UTC

gbasin wrote: post #227

agent008t wrote: post #168

Earlier quoted context omitted.

Simply put, house price is a function of rents for similar houses and the multiple of annual rent that houses sell for. The multiple is primarily a function of interest rates, and a significant proportion of house price increases in recent decades has been the increase in multiple. It is also a function of expected future house price growth - the higher the expectation, the higher the multiple, which is where psychol…

Housing [land] prices have been grinding higher long before the Great Decline in interest rates https://fred.stlouisfed.org/graph/?g=kYEb

That chart seems to only go back to 1987, which is after the decline in interest rates started: https://fred.stlouisfed.org/series/REAINTRATREARAT10Y

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

#274

Post by eadmund » Thu, Apr 28, 2022, 2:36 PM UTC

hans1729 wrote: post #96

lmt55 wrote: post #91

Earlier quoted context omitted.

I think you have missed a source of demand, and I think it's important. As housing became more and more expensive to young professionals, some people in this group have worked harder and harder to buy property, even to the point where it no longer seems rational. For example, parents taking a lot of wealth out of their retirement savings or their own homes to assist children in buying. Professionals are working more…

I did not miss those people, but my wording was loaded and so the point got lost in translation. I implicitly captured them under b) "[...] it's dumb to buy estates where the price is set by people and institutions that have n times your own income/net worth" , where dumb is a loaded term for your > "to the point where it no longer seems rational" . > But crucially, the presence of this group of people arguably turns…

> I just turned 30 and do well for myself as an employed consultant, but I wouldn't consider buying the dip, unless the dip is at least ~100% of the current market prices (which I don't see happening, but who knows).

You wouldn't buy a house unless it was essentially free? A dip of ~100% means prices at ~0% their current level.

> Going in debt for 30-40 years has zero appeal for me, it just seems like a terrible move.

Debt on its own doesn't matter so much. You already know that you will need to live somewhere for the rest of your life, so that expense is unavoidable. The question is whether you want the amount of that expense to fluctuate according to the market, or if you want to lock in a steadily-decreasing expense with a 30-year fixed rate mortgage (steadily decreasing in real terms, because $100 in 30 years will be worth $50–60; yes, property taxes are likely to increase, and maintenance will move with the market, but mortgage interest and principal will decrease in real terms).

> Even if someone gave me a million Euros, I wouldn't spend 600k of those on a house and then another 300k on renovations, that seems like a terrible waste of resources. With that kind of money, you can buy three small companies in Germany, or stop worrying about retirement, etc.

$1.05 million is hardly enough to live on. That's just $35,000 per annum. It's not nothing, and I surely wouldn't sneer at a gift of $1.05 million, but it wouldn't let me retire today.

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

#275

Post by thebean11 » Thu, Apr 28, 2022, 2:37 PM UTC

ferdowsi wrote: post #187

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).

After the 2017 tax reform bill, itemizing deductions is not cost effective for the vast majority of Americans.

I wonder how the numbers look if you only look at Americans with mortgages though?

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

#276

Post by lmt55 » Thu, Apr 28, 2022, 2:38 PM UTC

lotsofpulp wrote: post #192

lmt55 wrote: post #157

Earlier quoted context omitted.

Doesn't the boomer die-off mean that the boomers' children will be inheriting, not just homes, but piles and piles of liquid assets, much of which they will use to get into the housing market? After all the boomer generation, on average, has over-provisioned for old age, whereas millenials are still underhoused.

>After all the boomer generation, on average, has over-provisioned for old age, whereas millenials are still underhoused. Have they over-provisioned? Everything I have read indicates meager savings for the vast majority of the population, who will need to rely on Medicaid and Social Security to eek out the remainder of their living costs. Nursing home care is especially costly in the event one does not die quickly, a…

I think the reality is more subtle.

A large number of poorer elder people will be in dire financial straits, forced to work beyond their ability to do so and unable to pay for health care.

However there are also a smaller number of extremely rich baby boomers and a very large number of comfortable middle-class ones. The former will obviously pass on large amounts of wealth. The latter have been forced to save large amounts for their old age, because they have known since middle age that the state would not provide for them very well.

In some cases they have decent final salary based pensions and other very good retirement benefits, no longer available to younger generations. In other cases, they have invested significant sums over the last decades and also made large investment gains.

This group has tended to save for the 'worst case' scenario - a long retirement of leisure spending, followed by drawn out old age with significant care needs. Most of them will not need all this capital - they'll either die younger than expected, or have better health into their 80s and 90s than they feared. The excess will be handed on to their children - and will be a significant source of intra-generational inequality in the future.

Remember also that middle-class baby boomers remain an electoral 500-lb gorilla. Governments have been very reluctant to claw back their benefits and care provisions as fast as has happened to other groups. In some cases they will be provided for better than expected when they planned for retirement.

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

#277

Post by refurb » Thu, Apr 28, 2022, 2:39 PM UTC

kasey_junk wrote: post #174

refurb wrote: post #161

Earlier quoted context omitted.

"Fastest growing urban area in Canada" is like the "fastest sprinter at the senior center". Sure it's fast relative to other cities, but not in an absolute sense. Kelowna grew 14% over 5 years? So 2.7% a year? Or 5,500 people per year? Kelowna is a tiny town in the middle of BC. Jobs are scarce. Vast swaths of undeveloped land surround the town. Wages are pretty typical, yet a modest house is $1,000,000. Does that ma…

Kelowna is part of the Okanagan tourist area and on the lake. What happens to the analysis of home prices when you remove the houses within walking distance to the water? It’s been a few years since I was there but last I was it had the very common tourist pattern of expensive vacation homes near the water for wealthy part time occupants and reasonable housing further away for permanent residents. Frankly that area w…

Check out home prices there. Yes, the lake side homes are $2M+ and very impressive, but homes smack in the middle of the city are still close to $1M and 2 bed condos in the $500-$600k range.

And of all the tourist spots in the Okanagan, Kelowna is not a top destination - it's the smaller cosy towns with the corner store and 2 acre lots on the hills overlooking the lakes. Those cost $2M+ and seem a bit more justifiable to me at least. It's like comparing Tahoe, CA to say Tracy, CA.

And I have a family member who owns a 2 bed condo in a small town further south and the price has gone from $300k to $500k. For a plain condo built in 90's in a town of 25,000 filled with people over 60 years old.

It's nuts.

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

#278

Post by spand » Thu, Apr 28, 2022, 2:41 PM UTC

runeks wrote: post #59

oliwarner wrote: post #55

Earlier quoted context omitted.

Whole-term-fixed rates are pretty uncommon in Europe. Fixes of 2, 5 sometimes 10 years are products most providers offer, but as the term increases, the rate shoots up, to offset rate uncertainty. My question is: why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty? Remortgaging every couple of years takes a bit of time, and shopping around, but is much cheaper.

> My question is: why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty? To fix your monthly payment for the next 30 years. Furthermore, with a fixed rate mortgage you can benefit from interest rate volatility since you can always buy back the debt at par. In practice this means you can: 1. Take out a fixed rate loan for $n at x% 2. If the rate doubles (to 2x%) you can re…

Your math is wildly off in point 2. Rates are now above 3% and ie. a 0.5% bond is trading at 77 [1]

[1] http://www.nasdaqomxnordic.com/bonds/denmark/microsite?Instr...

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

#279

Post by mirntyfirty » Thu, Apr 28, 2022, 2:44 PM UTC

xadhominemx wrote: post #207

hans1729 wrote: post #19

Earlier quoted context omitted.

I mean, it's not really a burst, we're just hearing the hissing noise of the obvious leak. The true demand from people with the intend to actually live in the estates has been constantly decreasing since around 2000; the real salarys dropped since then, so did the buying power. The only reasons people found buyers at x3-x10 (!) prices were a) that there is a class of people wealthy enough to still afford the purchase…

> The true demand from people with the intend to actually live in the estates has been constantly decreasing since around 2000; the real salarys dropped since then, so did the buying power. > When 90 (?) percent of people simply lack the buying power to participate in the real estate market, but the other 10% happily sell each other estates, that's not a bubble, the real estate market just stopped interfacing with th…

I’d disagree in the sense that the home ownership population differs from those that have been buying or selling in the last few years.

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

#280

Post by rfoo » Thu, Apr 28, 2022, 2:47 PM UTC

ratsforhorses wrote: post #220

milkshakes wrote: post #138

Earlier quoted context omitted.

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 Ch…

> in China houses are leased for x years (80?)

It's worse. It's the land being leased for 70 years. House usually can't last that long anyway. But not owning the land and no guaranteed usufruct after 70 years is big.