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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

#71

Post by WirelessGigabit »

jacquesm wrote: post #41

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 si…

Was this in the US or Canada?

I've never heard of that in the US.

The buyer 'pays' because the seller puts in the cost of the agent into their asking price, but it's never asked on top of that.

In fact, unlike in Belgium where you need to add another 10%-12.5% over the asking price because the government wants a slice of your hard-earned money AGAIN.

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

#72

Post by ghaff »

tryptophan wrote: post #32
oldgradstudent wrote: post #4

Earlier quoted context omitted.

And no prepayment penalties, which means that if interest rates go down, you can refinance.

How the fuck can it be illegal/penalized to ... pay back your debts? Nope sorry, we don't want your money back yet.

You typically can pay off mortgages in the US early but there's nothing magical about a loan generally that says I can just pay it off at any time for free. It depends on the term of the loan I signed. I may have lent you money because I want a steady stream of income for the next ten years.

It's the same way some bonds are callable and others aren't.

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

#73

Post by pc86 »

kstrauser wrote: post #67
kjghkjghkjgh wrote: post #63

Earlier quoted context omitted.

In that scenario, the bank's profits wouldn't change so why would that affect the stock and his pay?

He’s not a banker. He’s a real estate agent. This is largely a zero-sum game: if the bank is taking more money out of the transaction, sellers (and their agents who work for a percentage of the selling price) will be taking less. It’s not like buyers can magically afford to pay the same principal as before plus new higher interest rates.

This assumes that most people spend the absolute most they can afford for their home purchase. The question is going to be how often is that actually the case?

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

#74

Post by jacquesm »

WirelessGigabit wrote: post #71
jacquesm wrote: post #41

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 si…

Was this in the US or Canada? I've never heard of that in the US. The buyer 'pays' because the seller puts in the cost of the agent into their asking price, but it's never asked on top of that. In fact, unlike in Belgium where you need to add another 10%-12.5% over the asking price because the government wants a slice of your hard-earned money AGAIN.

Canada.

> The buyer 'pays' because the seller puts in the cost of the agent into their asking price, but it's never asked on top of that.

No, this was 'buyer pays fees'.

> In fact, unlike in Belgium where you need to add another 10%-12.5% over the asking price because the government wants a slice of your hard-earned money AGAIN.

The same in NL, transfer tax. And that really adds up with present day real estate prices.

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

#75

Post by pragmatic »

pc86 wrote: post #73
kstrauser wrote: post #67

Earlier quoted context omitted.

He’s not a banker. He’s a real estate agent. This is largely a zero-sum game: if the bank is taking more money out of the transaction, sellers (and their agents who work for a percentage of the selling price) will be taking less. It’s not like buyers can magically afford to pay the same principal as before plus new higher interest rates.

This assumes that most people spend the absolute most they can afford for their home purchase. The question is going to be how often is that actually the case?

More often than not? That's why auto dealerships talk about the monthly payment not the sale price. A majority of Americans are consistently maxed out on all types of debt with Covid resetting that a bit but those savings are rapidly depleting.

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

#76

Post by sofixa »

bhawks wrote: post #46
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.

> Reducing prices requires increasing supply

Or reducing demand, as GP said, from companies withdrawing from the market.

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

#77

Post by WirelessGigabit »

jacquesm wrote: post #74
WirelessGigabit wrote: post #71

Earlier quoted context omitted.

Was this in the US or Canada? I've never heard of that in the US. The buyer 'pays' because the seller puts in the cost of the agent into their asking price, but it's never asked on top of that. In fact, unlike in Belgium where you need to add another 10%-12.5% over the asking price because the government wants a slice of your hard-earned money AGAIN.

Canada. > The buyer 'pays' because the seller puts in the cost of the agent into their asking price, but it's never asked on top of that. No, this was 'buyer pays fees'. > In fact, unlike in Belgium where you need to add another 10%-12.5% over the asking price because the government wants a slice of your hard-earned money AGAIN. The same in NL, transfer tax. And that really adds up with present day real estate prices…

Marketplace did a piece on those buyer fees: https://www.youtube.com/watch?v=ShBvRe0Jv68

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

#78

Post by sofixa »

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.

Exactly. When people barely survive, they don't have the energy or time to revolt.

Revolutions often historically start from disillusioned middle classes who have the time and energy, desire to have things (political power, economic means, etc.) and means of organising, and/or students. When they have some and don't have to worry about the next meal on the table, but want more.

There are definitely big swathes of the US population which has some political and economic power, yet are severely disenfranchised and ignored politically, and squeezed financially on all sides. Add in severe partisanship and general mistrust, agressive propaganda, and yes, you do have favourable conditions for a revolution. Not in any way guaranteed of course.

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

#79

Post by sofixa »

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.

> When I rented, I paid a flat rate. When rent increased, it only went up 10% at max.

10% is still a pretty serious increase. In France there's an index that is the max that rents can be increased with, and it's usually at max 6-7% (usually lower), and cannot be increased in areas that have significant housing shortage vis à vis demand.

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

#80

Post by jacquesm »

WirelessGigabit wrote: post #77
jacquesm wrote: post #74

Earlier quoted context omitted.

Canada. > The buyer 'pays' because the seller puts in the cost of the agent into their asking price, but it's never asked on top of that. No, this was 'buyer pays fees'. > In fact, unlike in Belgium where you need to add another 10%-12.5% over the asking price because the government wants a slice of your hard-earned money AGAIN. The same in NL, transfer tax. And that really adds up with present day real estate prices…

Marketplace did a piece on those buyer fees: https://www.youtube.com/watch?v=ShBvRe0Jv68

There is something fundamentally wrong about these: for one the buyer doesn't normally get to negotiate the sellers fees, for another there is a conflict of interest: the sellers realtor should be working for them and should be paid by them. If I'm paying for the realtor, they're working for me.

Haven't met a realtor that I liked yet. Worse than car sales people.

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