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

#431

Post by kelnos » Thu, Apr 28, 2022, 7:49 PM UTC

DamnYuppie wrote: post #425

woeirua wrote: post #410

I won't feel one ounce of pity for the "investors" who lose their shirts when this bubble finally pops. We should regulate investors almost entirely out of housing. Yes, there is still a need for people with lots of capital to go in and repair dilapidated homes. But we don't need people hoarding homes and renting them out as AirBnbs.

I have seen AirBnB referenced many times in these comments as having something to do with the increase in home prices. From what I can find there are 660,000 AirBnB hosts in the US; this was found under the Airbnb Statistics by Region section from here https://www.stratosjets.com/blog/airbnb-statistics/ seems to also be found here https://ipropertymanagement.com/research/airbnb-statistics . Most likely both of those…

Just wanted to point out that the article you reference says 660k listings in the US, not hosts. I was initially concerned by your wording that the number of properties for rent on Airbnb was much higher (since often hosts have multiple properties, or the host is listed as a management company), but it does seem that 660k is the number of listings.

And I agree with you that number is much lower than I would have expected, and doesn't seem like enough to meaningfully move housing prices overall. Also consider that some number of those listings are people renting out a spare room in their owner-occupied property, which I don't think is fair to count "against" Airbnb; not sure what that number is, though.

It would be interesting to also see more local numbers. Like what percent of units in each of SF, NYC, downtown LA, Chicago, DC, etc. are listed on Airbnb? There are a lot of housing units in small towns and cities across the US that don't have much tourist appeal, so they likely don't see many Airbnb listings. But they also likely don't have housing-cost issues like some cities that are more attractive to tourists.

I think people try to invent complicated reasons for skyrocketing home prices, when it's fairly simple: we aren't building enough in the places where people want to live. Sure, other things (Airbnb, foreign investment[0], cheap credit, etc.) don't help matters, but I think they're pretty minor factors. If there's demand, and you don't meet it, prices go up. Econ 101.

It's interesting to note that Vancouver and Toronto instituted 20% and 15% (respectively) foreign buyer taxes for home purchases a bunch of years ago. These taxes did actually do their job of deterring foreign buyers, but, sadly, home prices still continued to go up, undeterred. And now Canada overall has barred foreign buyers for two years. I doubt it will help. I expect Airbnb bans would have a similar non-effect.

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

#432

Post by IMSAI8080 » Thu, Apr 28, 2022, 7:52 PM UTC

jjav wrote: post #419

IMSAI8080 wrote: post #363

Earlier quoted context omitted.

Well it's an unknowable gamble. You might also be locking in an excessively high rate. The flexible approach of continuously re-mortgaging would have been the better strategy for the last 10 years with interest rates that went down. In the next 10 years, who knows.

> Well it's an unknowable gamble. You might also be locking in an excessively high rate. The flexible approach of continuously re-mortgaging would have been the better strategy for the last 10 years with interest rates that went down. There is no gamble, that's why it is almost a free lunch. If rates keep going down as last ~10 years, you're never locked in, you keep refinancing to a lower and lower rate. If rates go…

I didn't correctly read your comment sorry. I don't know about the US system, but here the fixes normally do have a lock-in typically on a ratchet system where they are expensive to exit in the early part of the loan and cheaper later. For example one I just checked charges you 5% of the loan to exit any time in the first 5 years and then 3% to exit any time in the next 5 years. There is also a significant discrepancy in the interest rates charged for different term lengths e.g. the offer presented may be 3.7% for a lifetime fix or 2.4% for a 5 year. So you're paying 1.3% extra for the lifetime fix right out of the gate. So the gamble is will 5 year fixes cost more than 3.7% in 5 years time? If not, then you won on the 5 year fix.

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

#433

Post by wheelerwj » Thu, Apr 28, 2022, 7:55 PM UTC

kelnos wrote: post #427

woeirua wrote: post #410

I won't feel one ounce of pity for the "investors" who lose their shirts when this bubble finally pops. We should regulate investors almost entirely out of housing. Yes, there is still a need for people with lots of capital to go in and repair dilapidated homes. But we don't need people hoarding homes and renting them out as AirBnbs.

It's somewhat fashionable for well-off people/families to have a vacation home somewhere vacation-y. Before Airbnb, most of those homes just sat vacant for most of the year[0]. Clearly, that's not a great use of that land. Often these sorts of properties would be in pretty desirable locations, and doing it this way would deprive most people the use of that space. Certainly there are still some people who are wealthy…

> Certainly there are still some people who are wealthy enough to keep their vacation homes vacant most of the time (and prefer it that way, since doing short-term rentals tends to involve quite a bit of wear-and-tear on a house and its furnishings). But many list on Airbnb now. I consider this a net positive for society.

why? Do you think the average person is renting out vacation homes for extended stays?

Yes, having cool places to stay is fun but there are better ways to accomplish that then rich people renting out their 2-nth homes.

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

#434

Post by mdavidn » Thu, Apr 28, 2022, 7:57 PM UTC

bradfa wrote: post #404

redshirtrob wrote: post #272

Earlier quoted context omitted.

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) ha…

I didn't even know this was a thing, selling off the servicing of loans. Our first home's mortgage was with HSBC and HSBC did everything, up until we sold that house. Our second (now current) home mortgage was with a local credit union and they did everything, too. Dealing with the local credit union was super easy for everything. Not that HSBC was bad, but the credit union was always local people to talk to and neve…

Yes. This first happened to me in 2008, when Bank of America sold my auto loan. I was sending payments to Citizens thereafter.

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

#435

Post by kelnos » Thu, Apr 28, 2022, 7:57 PM UTC

wheelerwj wrote: post #433

kelnos wrote: post #427

Earlier quoted context omitted.

It's somewhat fashionable for well-off people/families to have a vacation home somewhere vacation-y. Before Airbnb, most of those homes just sat vacant for most of the year[0]. Clearly, that's not a great use of that land. Often these sorts of properties would be in pretty desirable locations, and doing it this way would deprive most people the use of that space. Certainly there are still some people who are wealthy…

> Certainly there are still some people who are wealthy enough to keep their vacation homes vacant most of the time (and prefer it that way, since doing short-term rentals tends to involve quite a bit of wear-and-tear on a house and its furnishings). But many list on Airbnb now. I consider this a net positive for society. why? Do you think the average person is renting out vacation homes for extended stays? Yes, havi…

> Do you think the average person is renting out vacation homes for extended stays?

Why do the stays have to be extended? I consider simply making more nice real estate in desirable locations accessible to more people a good thing. Doesn't matter if it's for a long weekend or several months.

> Yes, having cool places to stay is fun but there are better ways to accomplish that then rich people renting out their 2-nth homes.

Such as? Hotels are the primary existing option, and they're fine, but not always what I'm looking for (especially if I want to cook; hotel rooms with full kitchens are rare and expensive). Hostels are meh; I'm not a broke college student anymore. Actual bed and breakfasts are nice, but aren't for everyone. If I want to stay in something that feels like an actual home for a short duration, is there a better way than something like Airbnb?

To be clear, I agree with the top-level poster's bit about us not needing people hoarding homes just so they can rent them out as Airbnbs. That's exclusionary, (literally) rent-seeking behavior. But is there no middle ground where people like that don't get to satisfy their greed, but we still get to have nice things?

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

#436

Post by jjav » Thu, Apr 28, 2022, 8:00 PM UTC

ac29 wrote: post #397

jjav wrote: post #308

Earlier quoted context omitted.

> And now you don't have a place to live in and spending your retirement money to rent one, or take a dip in your quality of life. As you say, keeping up with rent is easy (not necessarily, but for those in professional careers) early in life, but as your income plateaus later in your career it starts to become harder to keep up with relentless rent increases. But then it's in retirement that a lifetime of renting re…

> But then it's in retirement that a lifetime of renting really hurts. That assumes that the mortgage (+tax, +maintenance, +etc) is the same cost or less than renting is. That almost certainly isnt the case at first - at least in the area I live, I see houses renting for far less than just the interest on the mortgage would be (if purchased today, presumably the owners bought at lower prices and/or lower interest rat…

> That almost certainly isnt the case at first

Agreed, at first the monthly cost of ownership is likely higher than rent. But my quoted comment was about retirement age, which is at the tail end, not at first.

It doesn't take long for rent to catch up and from there on rent will forever go up while the mortgage will either stay fixed or only go down via refinances. Even if refinancing doesn't work (in a rising rate market like right now) the mortgage is effectively going down via inflation while rents keep up with inflation.

In my case the first year of ownership was fairly painful as the cost was much higher than previous rent (although for a nicer place). By the second year was able to refinance so it wasn't bad anymore. By the third year, with rents rising, my mortgage was already about par with local rents.

Ever since then, rents have gone up massively (about 4x-5x) and my mortgage has only gone down (today about 30% of the inital monthly payment in absolute dollars, or effectively only about 15% considering inflation).

Most importantly, it will be paid off before I retire so once I'm on a limited fixed income that's one monthly cost I won't have to worry about. Having seen some forever-renter extended family reach retirement age with rising rents, it's a sad and painful situation.

My advice to anyone is that unless you hate your future self, buy a house in your 30s if at all possible.

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

#437

Post by charcircuit » Thu, Apr 28, 2022, 8:01 PM UTC

woeirua wrote: post #410

I won't feel one ounce of pity for the "investors" who lose their shirts when this bubble finally pops. We should regulate investors almost entirely out of housing. Yes, there is still a need for people with lots of capital to go in and repair dilapidated homes. But we don't need people hoarding homes and renting them out as AirBnbs.

>we don't need people hoarding homes

If you made a good enough offer you could buy it from them. Investors aren't trying to hoard. They want to make a return on their investment.

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

#438

Post by Msw242 » Thu, Apr 28, 2022, 8:01 PM UTC

techsupporter wrote: post #426

Msw242 wrote: post #417

Earlier quoted context omitted.

Why do you think that person wasn't an adult?

Because it is very odd framing, to say the least, to refer to someone in a professional context as a "girl."

I'm 30 and I use "girl" as a female equivalent of "guy."

Just sounds informal to me, nbd

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

#439

Post by tick_tock_tick » Thu, Apr 28, 2022, 8:03 PM UTC

woeirua wrote: post #410

I won't feel one ounce of pity for the "investors" who lose their shirts when this bubble finally pops. We should regulate investors almost entirely out of housing. Yes, there is still a need for people with lots of capital to go in and repair dilapidated homes. But we don't need people hoarding homes and renting them out as AirBnbs.

We regulated investors into the housing market. We've created a nearly guaranteed ROI by making it impossible to build.

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

#440

Post by ericd » Thu, Apr 28, 2022, 8:03 PM UTC

IMSAI8080 wrote: post #363

jjav wrote: post #314

Earlier quoted context omitted.

> However they are currently running at an interest rate of a little under 4% which is much higher than the rate offered on a typical 5 year year fix. This makes them unattractive when you can just perpetually keep re-mortgaging on 5 year fixes. Renewing after 5 years will presumably get you whatever rate is then? Which might be much higher. It's always better to get a fixed rate (for the life of the loan) mortgage.…

Well it's an unknowable gamble. You might also be locking in an excessively high rate. The flexible approach of continuously re-mortgaging would have been the better strategy for the last 10 years with interest rates that went down. In the next 10 years, who knows.

30 year fixed mortgages in the US typically allow prepayment with no penalty other than some relatively nominal origination costs on the new loan, so you have a free option to lower by taking out a new mortgage when rates drop, while being protected on the other side. That combined with a few other features make them an extraordinarily good deal (especially when they have a strongly negative real rate, like now).