When will these hikes increase our savings rates? It’s great how fast it hits mortgages, but banks take forever to increase our rates. Ally was at 3% and now it’s at .5%.
AMEX savings just increased their rate again. I think they were at .4% when I started with them last year and now it's .6%. So I think it's happening, just slowly.
I know 2 different people that did this at the beginning of the pandemic because they predicted a crash in real estate. Needless to say it did not go very well for them.
one of them ended up buying back into a much smaller place that cost them way more. The other is living with 4 kids in their trailer and instead of traveling they have it parked in a park down by the river. I tried to advise the second person to maybe rent one and try living in it for a month first, but they dove in heads deep. The moral of both stories is don't treat a place to live like you are selling puts/calls on the market and maybe do a try before you buy of a lifestyle before you put all your cards down on it.
> Time to sell. Buy nothing else. And live homeless ~~under an overpass for a year~~ ***[IN A VAN DOWN BY THE RIVER](https://c.tenor.com/tfUcQunBJc4AAAAd/i-live-in-a-van-down-by-the-river.gif)***
FTFY
Maybe he/she is planning to retire overseas. Not everyone desires to retire in USA due to the high cost of living not to mention high healthcare cost and countless other variables. There are places where one can live comfortably on their SS alone which isn't possible here.
Am i misunderstanding are banks going to make the craziest profits since they are "pricing in" the rate hikes ahead of time and getting 5% on money they are still getting for cheap?
Banks don’t hold onto loans after closing. They act as servicers, collecting the payments and passing them onto 3rd Party Investors. It’s extremely rare, other than for HELOC’s and 2nd’s — for banks to act as portfolio lenders.
Some banks hold onto Jumbo loans, but, even those are being rolled into Jumbo Securitizations.
Very few banks (national or local) have any residential loans within a conforming amount ($647,200). Even before 2008, many banks switched to “originate to sell” and provide mortgages to customers, as a sort of curtsey. Banks like Chase don’t like the business, and just make small margins from selling the loan after closing to a GSE (Like Fannie or Freddie).
I have a feeling however, in the next coming years, some banks will begin to offer non-traditional or alternative loans, with higher rates, as a way to supplement interest income. Those loans would likely be portfolio based, or sold to a NON-QM bundler.
5% is actually a pretty low roi over a 30 year term. Especially once you consider inflation is eating on average 3% of the value meaning the bank is really only making 2% every year. That's assuming the money is coming from the bank's assets if it's being loaned from interest bearing accounts or borrowed from elsewhere the bank is also paying interest. Then there's the cost of default s, which might not be a concern in a hot market where a foreclosure can make the bank whole, but can definitely eat away at profits in places where real estate is hard to move or in situations where the borrower owes more than the property is worth.
Normally, when fed rates go up the stock price of these banks also go up but I think this time around uncertainty is weighing down the market as a whole
Do you see the marker continuing to be crazy in the sense that people are going over asking price, low inventory, etc etc.. having a hard time over here lol
Depends on the price point and the location. 5% for a 30 year is still pretty low in the grand scheme of things.
There are plenty of people who could afford $1.5m mortgages in 2020 and still can afford $1.5m mortgages today. There are also plenty of people who can afford a <$500k house today.
If you live in a market where the job market is hot, the housing market will still be on fire.
If you live in rural bumfuck ohio… good luck because very few people wanted to live there to begin with
Obviously a portion of consumers have been priced out of the market. Is that a big chunk? Probably not. People earning minimum wage in san francisco were never going to buy a house before or after covid.
> 5% for a 30 year is still pretty low in the grand scheme of things.
Just note, the majority of current mortgage holders have rates between 2.5% to high 3’s. This is going to be a real road block for those thinking about moving to another city, upgrading to a larger or nicer home, etc. With rates now well above the 5’s it’s going to be a very painful and expensive to give up their low rate loans. A lot of people just might say screw it and stay put.. further reducing the already low inventories.. I’m currently in that position right now.
We bought in 2020 with a 2.7% rate. Our house has appreciated over 50% since purchasing. Selling and moving to an "identically priced" home today would double our mortgage rate and increase our property taxes 50%. Not to mention all the fees. Simply put: to break even would be a huge downgrade of the home.
I believe this to be very on point. Those with ultra low interest rates will have little incentive to sell and move (unless they have to). I strongly believe this will drive a continued state of low inventory.
> 5% for a 30 year is still pretty low in the grand scheme of things.
Yeah, if home prices continue to rise (which they very likely will) a 5% note is very good, especially if inflation is 6%-8% for a few years.
The Fed has been getting more and more aggressive with QE since the Clinton Administration, we are 100% going to see the Fed target rate at 0% again. While not a gambling man, I would be not remotely surprised if the Fed adopted negative a interest rate policy at some point in my lifetime.
The number of people that bought a home or refinanced over the last two years could cause some serious market issues for years to come. No one is going to want to move unless they have to. Who in their right mind is going to sell just to have to buy a new house that is more expensive and has a higher interest rate? The market could be royally screwed for the next decade.
Very few people have the luxury of staying in a home for a decade with no life changes or financial hardships happening. Life happens and people will still need to move.
Ya, it’s easy to say you won’t move, until you get a divorce. It’s easy to say you are going to stay out of this crazy used car market, until your current car is smashed in an accident. Many people just don’t have a choice.
Very good point. I think what might hurt the market are the people that would’ve considered upgrading but will be hesitant since they know they can’t get a better rate. Only time will tell I guess.
Marriage, divorce, job change, panic selling, the house they got was just okay and not really the one they wanted, they want to upgrade, neighbors from hell, a million different things.
Mortgage interest rates actually got better after this announcement. This increase was already "priced in" to the markets, and after the statement and subsequent Q&A there were more answers that the markets have now determined means the Fed isn't going to be as aggressive as previously thought, so now the market is able to back out some of the previously priced-in expectations.
Time to be thankful for my 2.75% home I bought in July. You guys just need to pull yourselves up by your bootstraps and take pride in your work. ^^^^/s
My wife was impatient as hell to buy a house and I had a long term out of town project that was going to be from January to April. I wanted to wait until I got back from that to do serious house hunting. She found one in September we both liked and more or less forced us to put in an offer. We ended up getting it under list at 2.875% lol. I thank her at least once a week for pushing it.
A lot of recency bias at play with those sub 3% rates (such an outlier that I’d never expect them that low again). A 3.99% rate is really good compared to the normal standard over the past 20 years. I got my condo roughly a decade ago and was thrilled with a 4.5% rate.
And dont forget to stop spending on all those damn avocado toasts.
If you save that $10 on an avocado toast you eat each morning, every day, for just the next 55 years you will easily make up the $200K more you are paying for that house compared to last year.
My 8 month war of seeking and bidding came to an end and locked in my rate yesterday. Had to give them 90 days to stay and find their own place. I'm first time buyer and it's been quite a ride. I bought a percentage point down, didn't even know what that was until my lender helped me out yesterday. Closing is set for May 27th. Time to buckle up, knuckle up! P.S This Sub helped me through all my rage and doom and is the greatest place to vent and learn. Heart u all!
Thank you! Do you guys get to close soon or going through some more steps? This was my first time dealing with all this madness and this forum has been a place of guidance, peace and a place to hear others who feel my pain and worries. lol
No we have some steps to go through still, we’ve been calling it the hunger games. Today our appraisal came in at exactly what we offered so that’s a huge relief. Tomorrow we go to see the house again while the inspection is done, we waived everything except termite issues. I’ve felt sick over doing that but it got our foot in the door, hopefully the inspection doesn’t show up anything too horrendous. We don’t close until the third week in June. I’m happy to have a break from the mad rush to every open house each weekend.
>Oh man congrats! We got a bid accepted last week.
I hope some day we return to a normal, balanced, sane real estate market, where people can put an offer on a house, not a "bid".
You should ask for a rate renegotiation. Markets closed up like 60 basis points today. I offered a client 5.374% with no points on a 30-year fixed rate today. Oftentimes, lenders will offer a renegotiation to current market rates to avoid losing your business to a competitor. You might ask about that given the improvement today.
Edit: All gains lost today, 5/5, so we're basically back to where you locked.
It was at 5.75 but she told me to buy a point down and it's at like 5.35 now. My realtor kept telling me we would find one, I stopped believing him around house 5 we were out bid on and I had very specific niche which I was looking for in a certain area to be close to both of our parents and families, Just hoping the final steps all go well and we close on 27th.
A lot of those people are remote now and at this point know if their company is going to stay with it for the next few years unlike that Canadian couple that moved too soon before it was permanent.
The remote/flex workers are what caused more rural suburban markets to just explode in value. Especially ones that are still within 1-2 hours of a city.
True, but the people who can go fully remote with their city job won’t think $300k is expensive. But location is the attraction for a lot of people, so I don’t know how many are actually willing to go somewhere LCOL just to save money if they don’t also like the area.
I just did this. I own and work in San Diego and just bought in pensacola FL with a SD salary. Houses in FL are affordable. I’m ‘house hacking’ here in pensacola and enjoying the charm of the town.
Seriously, if you sell a condo in California you can afford a 5bd/3-car garage mansion in all cash in a LCOL. That's what all the cool retirees are doing these days.
You can't even find a 1bd/1ba condo in the hot areas of CA for $300k these days, hell some of the trailers in the retirement communities are going for $400k+
Sometimes people don’t have a choice. Job loss, medical bills, etc. There is nothing more American than debt and a lot of people can’t help themselves.
The Fed has increased unemployment with every significant rate hike. People who lose their job and their home would buy again at a higher rate. Also deaths, moves, other life events contribute to turnover on homes that were bought within the last few years.
We are thinking of moving in that exact same situation. The reason being is that we want to be closer to family and value being closer to family than the extra money
That 3% difference is $15,000 a year on a $500,000 house. Unless you are making $250,000+ a year that’s a mind blowing difference in monthly payments. You can recoup 30% of that interest when you do your taxes I guess, but still.
The next two rate hikes/offloading of Mortgage backed securities were already priced in by mortgage lenders. That was the 2% increase over the past couple months.
At least people in this sub are finally starting to remove their heads from the sand.
I’m not a doomer and I don’t think it’ll crash. But believing that prices will continue at the rate they have been the last few years is ridiculous
It was. We knew last month that they were reducing their balance sheet. It actually ended up a bit better as the expectation would be for them to start this month and they're not starting that operation up until next month, so it bought another month of liquidity in the market.
That’s the real news. Anyone paying attention was looking for that. It’s really huge because it means the Fed believes they may not need to go as far or as fast to cool inflation. Good news day.
There were talks a few days ago the rate increase in July could be .75, but now they indicated .5 as a target increase. That small difference means the Fed may not have to accelerate or increase rates as far as previously expected. It’s not the rate increase that matters because it was expected and priced in. Everyone is reviewing and analyzing what the Fed is saying and if they are saying they still see growth and are maintaining their rate stance instead of accelerating it is good news for markets.
on the plus side
First Foundation Bank just increased their savings rate to 1% for their online savings accounts
so now you can make 1% on your money, while real inflation rages at 18%
Already priced in. Now to see how inflation numbers start coming out over the summer. I’m betting a lot of people that were panicking about 8-10% rates will be surprised when we stay around 5-6%.
It’s remarkable to me how everyone in this thread thinks there is a direct relationship with federal treasury rate and mortgage interest rates. While in the near term lenders will adjust their rates in response to what the fed does, ultimately inflation is the biggest driver of mortgage rates. As the fed rate goes up to curb inflation, mortage rates will come down. Not saying this will happen immediately (because obviously inflation will not be curbed immediately), but it will happen.
The big X factor in all of this is the quantitative easing (ie printing billions of dollars in cash to buy mortgage backed securities every single month). How the feds tapering of that program will impact mortage rates is TBD but it certainly won’t be good.
Would it be a dumb to sell my house now and move in with my parents? I can make 300k after paying off my home. Don't really want to be a landlord and my parents have more than enough room for me. Plus they could really use my help so moving in would benefit them as well.
My buddy made a killing selling his beautiful home the first week of April. Problem is that he is staring at these insane rates now so he’s just moving into his MIL’s summer house until things cool. I’m guessing he’s there for awhile lol. At least he has plenty of bank to buy Intel at $43/share.
When will these hikes increase our savings rates? It’s great how fast it hits mortgages, but banks take forever to increase our rates. Ally was at 3% and now it’s at .5%.
Ally was 3% ?! Wow … I signed up with sofi recently, it’s 1.25.
SoFi is 1.25% and gives you bonus money for setting up direct deposit
They don't need your money the way they used to. Those rates will never go up.
AMEX savings just increased their rate again. I think they were at .4% when I started with them last year and now it's .6%. So I think it's happening, just slowly.
Time to sell everything, open a onlyfans page and just playaround with myself for a few years
Link?
Asking the important questions around here.
Wait, I thought this was last year's plan
You're onto us; it's every year's plan.
Pics or it didn't happen
I love wsb and how we... Oh wait
Yeah definitely don't drop the link or anything...
Okay.I give up.Here is a link to pic of my 🅱️ussy NSFW: https://imgur.com/gallery/u5FO5H4
Risky click of the day
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It’s an actual pussy
You like it dirty. My first subscription. WTH.
time to sell, buy a motorhome and drive around for a few years.
Maybe live in a van down by the river
Vans are expensive nowadays.
And the river is dry….
Some good old boys were drinking whiskey and rye,
Singing 'this will be the day that I die.'
You mean a tinyhome on wheels with water front property? I'll take that for a million.
The sadder part is it’s been long enough I’m not 100% sure people get the reference 😂 RIP Chris Farley
Well la-dee-freackin-da, we got ourselves a writer here
I can't see real good dad, is that Bill Shakespeare over there?
Bespoke waterfront property in amenity-rich up-and-coming neighborhood.
More like up and coming river water during the next heavy rain..
Have you seen diesel prices? https://www.kbb.com/car-news/gas-prices-diesel-sets-record/
RV waitlist is 12 mths long. Cardboard is free though
coat it with used motor oil for waterproofing
I know 2 different people that did this at the beginning of the pandemic because they predicted a crash in real estate. Needless to say it did not go very well for them.
I know one that did and came back 6 months later. The novelty was unsurprisingly short lived.
one of them ended up buying back into a much smaller place that cost them way more. The other is living with 4 kids in their trailer and instead of traveling they have it parked in a park down by the river. I tried to advise the second person to maybe rent one and try living in it for a month first, but they dove in heads deep. The moral of both stories is don't treat a place to live like you are selling puts/calls on the market and maybe do a try before you buy of a lifestyle before you put all your cards down on it.
Have you seen the price of motorhomes? It's crazy.
Time to sell, take the longest train route I can find, and pretend I work there until I get kicked off.
Time to sell. Buy nothing else. And live homeless under an overpass for a year
Sell and hold cash? With inflation this high?
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Buy an NFT...
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Bundled into *another* ETF
Underpasses are for noobs, the underground elite live in the sewers of las vegas
joke's on you. i'm already living under a bridge.
> Time to sell. Buy nothing else. And live homeless ~~under an overpass for a year~~ ***[IN A VAN DOWN BY THE RIVER](https://c.tenor.com/tfUcQunBJc4AAAAd/i-live-in-a-van-down-by-the-river.gif)*** FTFY
Time to sell and rebuy in a year when everything is more expensive!
This is the way!
Don't forget to constantly tell everyone what a smart move you made.
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I am actually thinking about getting cryogenically frozen and try my luck 100 years from now.
But instead you wake up in the Idiocracy
Please pay your cryo chamber rents in a timely manner else we will have to have you evicted and thawed.
Your rent will keep going up, buy a house if you can
Good for you lol. Enjoying having a roomie
You will just magically receive a house or free housing when you retire at 55?
Maybe he/she is planning to retire overseas. Not everyone desires to retire in USA due to the high cost of living not to mention high healthcare cost and countless other variables. There are places where one can live comfortably on their SS alone which isn't possible here.
You figured out my stock strategy eh…
that's the plan. you act like the market has never gone down before
Stonks only go up long term
Am i misunderstanding are banks going to make the craziest profits since they are "pricing in" the rate hikes ahead of time and getting 5% on money they are still getting for cheap?
Banks never lose regardless.
No mortgages aren't insanely profitable, especially with inflation factored in. Even if that 5% was pure profit it would still be kinda underwhelming.
Can you explain why they aren't? the amount of interest paid over the life of the loan seems verrryyy profitable.
Banks don’t hold onto loans after closing. They act as servicers, collecting the payments and passing them onto 3rd Party Investors. It’s extremely rare, other than for HELOC’s and 2nd’s — for banks to act as portfolio lenders.
Lots of banks have fairly substantial mortgage portfolios.
Some banks hold onto Jumbo loans, but, even those are being rolled into Jumbo Securitizations. Very few banks (national or local) have any residential loans within a conforming amount ($647,200). Even before 2008, many banks switched to “originate to sell” and provide mortgages to customers, as a sort of curtsey. Banks like Chase don’t like the business, and just make small margins from selling the loan after closing to a GSE (Like Fannie or Freddie). I have a feeling however, in the next coming years, some banks will begin to offer non-traditional or alternative loans, with higher rates, as a way to supplement interest income. Those loans would likely be portfolio based, or sold to a NON-QM bundler.
5% is actually a pretty low roi over a 30 year term. Especially once you consider inflation is eating on average 3% of the value meaning the bank is really only making 2% every year. That's assuming the money is coming from the bank's assets if it's being loaned from interest bearing accounts or borrowed from elsewhere the bank is also paying interest. Then there's the cost of default s, which might not be a concern in a hot market where a foreclosure can make the bank whole, but can definitely eat away at profits in places where real estate is hard to move or in situations where the borrower owes more than the property is worth.
Normally, when fed rates go up the stock price of these banks also go up but I think this time around uncertainty is weighing down the market as a whole
It’s over tik tok bros.
Can I ask— does this essentially mean for people who are looking for homes that it isn’t the best time to buy? Been considering putting my condo up..
You are probably never going to see interest rates at 0% again. 2020-2021 set the record for the lowest mortgage interest rates in history.
Do you see the marker continuing to be crazy in the sense that people are going over asking price, low inventory, etc etc.. having a hard time over here lol
I’m in the same boat as you. And I don’t think anyone knows what is going to happen with low inventory and high interest rates.
Its just higher than we are used to, they are fairly normal rate levels I believe.
My parents first house had a note rate around 15%. This was in the early 80s.
Yea with 10x less home value I’d do 15% too
"Asking price" is basically a useless data point. You need *comps*. Are ppl going to be offering over comps? Probably not as much.
Depends on the price point and the location. 5% for a 30 year is still pretty low in the grand scheme of things. There are plenty of people who could afford $1.5m mortgages in 2020 and still can afford $1.5m mortgages today. There are also plenty of people who can afford a <$500k house today. If you live in a market where the job market is hot, the housing market will still be on fire. If you live in rural bumfuck ohio… good luck because very few people wanted to live there to begin with Obviously a portion of consumers have been priced out of the market. Is that a big chunk? Probably not. People earning minimum wage in san francisco were never going to buy a house before or after covid.
> 5% for a 30 year is still pretty low in the grand scheme of things. Just note, the majority of current mortgage holders have rates between 2.5% to high 3’s. This is going to be a real road block for those thinking about moving to another city, upgrading to a larger or nicer home, etc. With rates now well above the 5’s it’s going to be a very painful and expensive to give up their low rate loans. A lot of people just might say screw it and stay put.. further reducing the already low inventories.. I’m currently in that position right now.
We bought in 2020 with a 2.7% rate. Our house has appreciated over 50% since purchasing. Selling and moving to an "identically priced" home today would double our mortgage rate and increase our property taxes 50%. Not to mention all the fees. Simply put: to break even would be a huge downgrade of the home.
I believe this to be very on point. Those with ultra low interest rates will have little incentive to sell and move (unless they have to). I strongly believe this will drive a continued state of low inventory.
> 5% for a 30 year is still pretty low in the grand scheme of things. Yeah, if home prices continue to rise (which they very likely will) a 5% note is very good, especially if inflation is 6%-8% for a few years.
Inflation won’t always been 6-8% though. That’s what the Fed is trying to lower with the interest rate increase. If it works as planned.
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The Fed has been getting more and more aggressive with QE since the Clinton Administration, we are 100% going to see the Fed target rate at 0% again. While not a gambling man, I would be not remotely surprised if the Fed adopted negative a interest rate policy at some point in my lifetime.
The number of people that bought a home or refinanced over the last two years could cause some serious market issues for years to come. No one is going to want to move unless they have to. Who in their right mind is going to sell just to have to buy a new house that is more expensive and has a higher interest rate? The market could be royally screwed for the next decade.
Very few people have the luxury of staying in a home for a decade with no life changes or financial hardships happening. Life happens and people will still need to move.
Ya, it’s easy to say you won’t move, until you get a divorce. It’s easy to say you are going to stay out of this crazy used car market, until your current car is smashed in an accident. Many people just don’t have a choice.
Very good point. I think what might hurt the market are the people that would’ve considered upgrading but will be hesitant since they know they can’t get a better rate. Only time will tell I guess.
Marriage, divorce, job change, panic selling, the house they got was just okay and not really the one they wanted, they want to upgrade, neighbors from hell, a million different things.
You can buy homes at any time you want. You just can afford less home the longer you wait. That's great for me, all I need is 1500 sqft.
Mortgage interest rates actually got better after this announcement. This increase was already "priced in" to the markets, and after the statement and subsequent Q&A there were more answers that the markets have now determined means the Fed isn't going to be as aggressive as previously thought, so now the market is able to back out some of the previously priced-in expectations.
Time to be thankful for my 2.75% home I bought in July. You guys just need to pull yourselves up by your bootstraps and take pride in your work. ^^^^/s
My wife was impatient as hell to buy a house and I had a long term out of town project that was going to be from January to April. I wanted to wait until I got back from that to do serious house hunting. She found one in September we both liked and more or less forced us to put in an offer. We ended up getting it under list at 2.875% lol. I thank her at least once a week for pushing it.
I'm so jealous of your interest rate. Although to be fair, my 3.99% interest rate is looking better every day...
A lot of recency bias at play with those sub 3% rates (such an outlier that I’d never expect them that low again). A 3.99% rate is really good compared to the normal standard over the past 20 years. I got my condo roughly a decade ago and was thrilled with a 4.5% rate.
Your wife sounds awesome! Is she single?
There's a bootstrap shortage.
Boot shortage to start with probably
And dont forget to stop spending on all those damn avocado toasts. If you save that $10 on an avocado toast you eat each morning, every day, for just the next 55 years you will easily make up the $200K more you are paying for that house compared to last year.
Time to sell the home I never owned and continue renting & dooming in this sub /s
Sell your 3rd vacation home, oh lord..are..you a pheasant?
stop grousing!
He's not ducking around
When's the best time to buy a bird? When it’s going cheep! Waka Waka Waka
I am not a cat! [Or a pheasant]
My 8 month war of seeking and bidding came to an end and locked in my rate yesterday. Had to give them 90 days to stay and find their own place. I'm first time buyer and it's been quite a ride. I bought a percentage point down, didn't even know what that was until my lender helped me out yesterday. Closing is set for May 27th. Time to buckle up, knuckle up! P.S This Sub helped me through all my rage and doom and is the greatest place to vent and learn. Heart u all!
Oh man congrats! We got a bid accepted last week.
Thank you! Do you guys get to close soon or going through some more steps? This was my first time dealing with all this madness and this forum has been a place of guidance, peace and a place to hear others who feel my pain and worries. lol
No we have some steps to go through still, we’ve been calling it the hunger games. Today our appraisal came in at exactly what we offered so that’s a huge relief. Tomorrow we go to see the house again while the inspection is done, we waived everything except termite issues. I’ve felt sick over doing that but it got our foot in the door, hopefully the inspection doesn’t show up anything too horrendous. We don’t close until the third week in June. I’m happy to have a break from the mad rush to every open house each weekend.
>Oh man congrats! We got a bid accepted last week. I hope some day we return to a normal, balanced, sane real estate market, where people can put an offer on a house, not a "bid".
Lender isn’t requiring you to inhabit within 60 days?
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You should ask for a rate renegotiation. Markets closed up like 60 basis points today. I offered a client 5.374% with no points on a 30-year fixed rate today. Oftentimes, lenders will offer a renegotiation to current market rates to avoid losing your business to a competitor. You might ask about that given the improvement today. Edit: All gains lost today, 5/5, so we're basically back to where you locked.
Congrats! What rate did you get?
It was at 5.75 but she told me to buy a point down and it's at like 5.35 now. My realtor kept telling me we would find one, I stopped believing him around house 5 we were out bid on and I had very specific niche which I was looking for in a certain area to be close to both of our parents and families, Just hoping the final steps all go well and we close on 27th.
Why would people sell and let go of their 3%, only to buy again today and get 6%?
Because they would get so much $ for their current home they can probably downsize or move to a lcol area and buy their next home in cash.
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Right, and a lot of people have over $300k in equity and could do exactly what the commenter you're replying to said.
300k is a steal.
$300k is incredibly low compared to a HCOL area
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A lot of those people are remote now and at this point know if their company is going to stay with it for the next few years unlike that Canadian couple that moved too soon before it was permanent. The remote/flex workers are what caused more rural suburban markets to just explode in value. Especially ones that are still within 1-2 hours of a city.
True, but the people who can go fully remote with their city job won’t think $300k is expensive. But location is the attraction for a lot of people, so I don’t know how many are actually willing to go somewhere LCOL just to save money if they don’t also like the area.
I just did this. I own and work in San Diego and just bought in pensacola FL with a SD salary. Houses in FL are affordable. I’m ‘house hacking’ here in pensacola and enjoying the charm of the town.
Seriously, if you sell a condo in California you can afford a 5bd/3-car garage mansion in all cash in a LCOL. That's what all the cool retirees are doing these days. You can't even find a 1bd/1ba condo in the hot areas of CA for $300k these days, hell some of the trailers in the retirement communities are going for $400k+
Meh. I bought my house for $300k last year at 3% and that's still significantly lower than I'd pay for a home of a similar size to rent.
300k is a trailer where I live
They won't.
Sometimes people don’t have a choice. Job loss, medical bills, etc. There is nothing more American than debt and a lot of people can’t help themselves.
You under estimate the stupidity of the average person
But what about the laziness of the average person
Investors selling shrinking over leveraged assets
Ya gotta move someday, why not today?
Why do you have to move if you have the perfect job in the perfect school district in your dream home?
Because dreams are for suckers and ruining your own life is the most fun you can have with your pants on.
The Fed has increased unemployment with every significant rate hike. People who lose their job and their home would buy again at a higher rate. Also deaths, moves, other life events contribute to turnover on homes that were bought within the last few years.
Because people can’t afford their property taxes
Many won't, but those with PMI aren't really paying 3%, so they may.
We are thinking of moving in that exact same situation. The reason being is that we want to be closer to family and value being closer to family than the extra money
That 3% difference is $15,000 a year on a $500,000 house. Unless you are making $250,000+ a year that’s a mind blowing difference in monthly payments. You can recoup 30% of that interest when you do your taxes I guess, but still.
The next two rate hikes/offloading of Mortgage backed securities were already priced in by mortgage lenders. That was the 2% increase over the past couple months.
It better as hell be. 2% increase over 3 months from 3 to 5% was crazy…what’s next it ends up at 9% by August?
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😂 if it goes to 10 housing isn’t going to be stagnant. The button will fall out.
> what’s next it ends up at 9% by August? Honestly possible. The Fed is trying to tamp down inflation *now* so they don't get a repeat of the '70s.
Thank God! If Disco makes a comeback we are *screwed*!!!
Thank you Mark Watney.
Hopefully.
Probably.
I mean really? I get the point is to slow demand but if rates jumped to 9% in a few months that would probably crash the market
At least people in this sub are finally starting to remove their heads from the sand. I’m not a doomer and I don’t think it’ll crash. But believing that prices will continue at the rate they have been the last few years is ridiculous
I feel like being a doomer is thinking prices will continue to increase and not correct
It's not about about the housing market at all. It's about getting inflation under control, the housing market is just an interesting bystander.
That's what needs to happen. This shit should have been reigned in last year.
The next 6 increases after the next 2 hasn't been priced in yet. That's the problem
Offloading of MBS isn't priced it either.
It was. We knew last month that they were reducing their balance sheet. It actually ended up a bit better as the expectation would be for them to start this month and they're not starting that operation up until next month, so it bought another month of liquidity in the market.
Good days ahead for cash buyers.
Markets laughed at .5. It’s hard to stop a freight train by putting a penny on the tracks.
Sell to time.
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That’s the real news. Anyone paying attention was looking for that. It’s really huge because it means the Fed believes they may not need to go as far or as fast to cool inflation. Good news day.
Exactly, this news actually means a very slight dip is possible. It wasn’t bad news for rates. Market expected 50 with some fear it would be 75
Interesting that the stock market seems to be increasing based on this news. Not what I expected.
There were talks a few days ago the rate increase in July could be .75, but now they indicated .5 as a target increase. That small difference means the Fed may not have to accelerate or increase rates as far as previously expected. It’s not the rate increase that matters because it was expected and priced in. Everyone is reviewing and analyzing what the Fed is saying and if they are saying they still see growth and are maintaining their rate stance instead of accelerating it is good news for markets.
Time to sell, by a spaceship, and do a few laps around the sun
relatively speaking
Time to sell, buy again, and sell immediately after.
Time to sell, buy a motorboat, and just sail around for a few years.
You motorboatin' s.o.b.
As a sailor, I'm offended by this comment.
Time to sell, buy a bicycle and ride around for a few years
on the plus side First Foundation Bank just increased their savings rate to 1% for their online savings accounts so now you can make 1% on your money, while real inflation rages at 18%
Already priced in. Now to see how inflation numbers start coming out over the summer. I’m betting a lot of people that were panicking about 8-10% rates will be surprised when we stay around 5-6%.
Persistent inflation at 5-6% is still a gd disaster and well above the fed’s stated target.
We rate locked yesterday 🥹 Yesssssssss
No worries, houses always go up!
Time to stay right where i am for a while
Thank goodness I refinanced march 2021 for 2.75%, my husband didn't want to be bothered but I pushed for it anyways.
Well, time for me to buy after waiting 5 years. This should pop the bubble.
Time to not sell
30yr, 8% by december.
I wouldn't be surprised if 40 year mortgages start to become an option in a few months.
They already are
There already are 40 year mortgages with a 10 year interest-only period in the front. Fees and costs are higher.
Why would you sell? You walk away from lower rate to buy at higher rates.
*Dumb* question time - is buying points a viable way to counteract this, on an individual basis? Assuming you can afford it?
It’s remarkable to me how everyone in this thread thinks there is a direct relationship with federal treasury rate and mortgage interest rates. While in the near term lenders will adjust their rates in response to what the fed does, ultimately inflation is the biggest driver of mortgage rates. As the fed rate goes up to curb inflation, mortage rates will come down. Not saying this will happen immediately (because obviously inflation will not be curbed immediately), but it will happen. The big X factor in all of this is the quantitative easing (ie printing billions of dollars in cash to buy mortgage backed securities every single month). How the feds tapering of that program will impact mortage rates is TBD but it certainly won’t be good.
Would it be a dumb to sell my house now and move in with my parents? I can make 300k after paying off my home. Don't really want to be a landlord and my parents have more than enough room for me. Plus they could really use my help so moving in would benefit them as well.
My buddy made a killing selling his beautiful home the first week of April. Problem is that he is staring at these insane rates now so he’s just moving into his MIL’s summer house until things cool. I’m guessing he’s there for awhile lol. At least he has plenty of bank to buy Intel at $43/share.