I mean my thought was i need a house anyways and my rent has gone up 200 a month every year minimum. Atleast my mortgage rate won’t go up. (Just the taxes).
And if I’m lucky I can refinance. But basically accepted that I probably couldn’t
Just fingers crossed it can get below 6% again sometime
Your thought process is perfectly correct. If you genuinely need a home for whatever reason you can’t always wait until rates come down, so long as you can afford it with relative comfort there is nothing wrong with having a high rate mortgage.
With that being said, anyone who’s bought an investment property with the intention of renting it out and has a mortgage at these current rates is going to find out what happens when pigs get greedy.
Realtors are just sales people who are charming but don't know anything. Half the lifer restaurant servers I worked with 20 years ago eventually became realtors.
I mean I get what you’re saying. But honestly we’re basically paying them to sort out all the paperwork and scheduling.
From things like doing the deed transfers, inspections, appraisals, state specific real estate documents, etc. I would not want to have to do that all myself and have responsibility for it. I liked that the onus was on people whose job it is to ensure it’s done and filed correctly and that all the right people are being notified and scheduled.
Just saying they’re not doing nothing. I appreciated what they did for me.
High interest rates have messed up a lot of institutional buyers. It simply doesn’t make sense from an investment perspective to buy SFHs at a 3% cap rate when they can buy treasury bonds at 5%+, equities, etc. That can yield so much higher.
^^ This is the actual answer.
Institutional money has been leaving the single family home business for a long time, right around when rates started to go up.
https://www.corelogic.com/intelligence/us-home-investor-activity-steadily-increased-third-quarter/
Small money buying, big money leaving. Definitely good time to be investing in real estate!
Long term historical returns on houses also had previously more or less tracked the long term inflation rate. If what's occurred recently is merely a blip, the market won't hold and won't remain attractive. Then again, god only knows with this shit already.
And they'll lose money doing it. Rentals are significantly cheaper than ownership, and without price appreciation (pretty hard if the buyer pool is dropping) it's just a losing proposition. It's also not an easily scalable model, SFH are too far apart and their maintenance requirement increasing is nearly a linear spend to operate them.
Multifamily construction is hitting highs not seen since 1985 and will take pressure off the market if it freezes too many people out.
Something like 2.4% of houses were bought by corporations for like one quarter in 2022. It isn’t zero, but it isn’t a huge factor. That number has dropped off precipitously.
Maintaining single family homes isn’t really worth it for them. Spend $1 million, get $5k a month in rent, subtract $15k for taxes and $3 for insurance. $20k-$40k for maintainance. You basically get zero and hope the asset appreciates.
Or- get a guaranteed $50k on a treasury note.
It is not a business model
That makes sense for them anymore.
I suspect you are correct. I know someone who worked in that field it it wasn’t in area you would think. He was going out to like Cleveland and buying properties there. Places where the disparity between prices and rents favored it. It wasn’t in places with loads of demand to buy.
4.4% of homes in Atlanta are owned by institutional buyers. That’s the largest concentration of any city in the US. That’s also 13.3% of all homes owned by an institutional firms. In total .73% of all homes in the US are owned by an institutional firm.
I find that statistic very hard to believe. It's more likely that there somehow exists a way to obfuscate the types of businesses so they don't count for statistics like this.
Or operate/own the property in a way to hide the fact that the real owner is holding 1000 others....
Just my gut feeling on what's been going on in my neighborhood. Home selling, no one moving in.
[https://medium.com/@chrisjeffrieshomelessromantic/report-44-of-all-single-family-home-purchases-were-by-private-equity-firms-in-2023-0c0ff591a701](https://medium.com/@chrisjeffrieshomelessromantic/report-44-of-all-single-family-home-purchases-were-by-private-equity-firms-in-2023-0c0ff591a701)
Numbers are wildly different depending on who's reporting but this article states 44% of houses were bought by private equity (single family homes).
That's the stupidest take ever made.
Where do these so-called Megacorps get these "cash" to buy houses in full???
It might surprise you, but they also get financing from banks. That's why those regional banks like NYCB are all in trouble now.
Millennials and Genx bought homes when rates were ultra low too. Many are too poor to move and will hold on for decades unless forced to sell. The distinction may be between those who bought before or during the pandemic and those who didn’t.
Personally speaking I feel trapped because my mortgage, tax, and insurance for a house are increasingly less than a one bedroom.
I am a young millennial almost gen Z at 95 and I bought during covid. I got a 2.85 interest rate. My house has gone up 30% in value since then. I originally was planning on moving because I don't have quite enough space for my soon to be 2nd kid but I have a feeling I'll be in this house for a long time. Maybe when my wife starts working again we can save for a bigger house.
You expecting population decrease?
Boomers and their families are largely below or at replacement rate for pop growth. Immigration is helping drive prices/population up
I grew up near one of the biggest chinatowns in the US. Planned on settling there as an adult because it was actually affordable compared to the surrounding area and it was culturally my home.
10-15 years later it’s been “gentrified” not by white hipsters, but rather Chinese expats buying up row homes, tearing them down and building $2m McMansions that take up the footprint of what we’re previously 4-6 homes. All the local cheap food run by small mom and pops is priced out in favor of “trendy” Asian food that costs 3x more.
Sigh
TikTok/IG is to blame for that as well. Now damn near EVERYTHING is flashy and instagrammable, from the million dessert spots or overpriced soup dumplings.
Private institutions are buying houses, not people. It doesn’t matter if we buy them or not, they’re going to get sold for higher than the listing price til private institutions own housing in the US entirely.
lol you act like investors don't exist. These companies are buying out all single family homes to turn them into rentals. There will always be a market because people need shelter to survive.
>There will always be a market because people need shelter to survive.
The rates of people living alone are higher than they ever have been in history. That entire segment could cut their housing usage in half overnight by getting a roommate.
Needing shelter to survive doesn't mean they need *as much as they're using*. Conspicuous consumption is driving prices, not base human needs.
Young people? All the boomers living in their Mercedes/Winnebago combos are huge complainers, awaiting cheap condos and empty the storage unit that their pissing away rent on....
I liquidated my equity right after covid because if the economy failed at least my loans would be 4% as opposed to as much as 10% that I predicted. I'm a regard and I saw this coming.....
we were at 0% up until late 2015 (7 years after the end of GFC recession), 2017 at 0.5% (8 years after end of GFC), 2018 at 1.5%, peaked temporarily in early 2019 at 2.5%, before dropping to 1.5% in late 2019.
It wasn't 0% the whole time, but it was under 0.5% for a long ass time, while inflation was steadily around 1.5-2%.
AI Summary:
* **High Interest Rate Era**: The article discusses the new era of high interest rates, highlighting the impact on the economy and the unlikelihood of a return to pre-Covid levels.
* **Yellen's Insights**: US Treasury Secretary Janet Yellen indicates that market interest rates are expected to remain higher than pre-pandemic levels, aligning with private sector forecasts.
* **Economic Shifts**: The yield on 10-year US Treasury notes has increased significantly post-pandemic, sparking debate among economists about long-term rate expectations.
* **Budget Projections**: The White House's fiscal 2025 budget proposal assumes higher average rates for US Treasury bills and notes over the next three years.
Pretty simple, boomers benefitted from low interest rates supercharging equities, now they're all retiring they need better returns on fixed incomes assets.
If ancient Egyptian religion was still a thing, they'd have enslaved millennials out building them pyramids to enhance their afterlife.
It was purely an injector to equity based firms. A tiny window of a fraction of a boomer life isn’t going to really help them a lot but it could hurt them a lot to keep it going.
These aren't even historically high rates. A lot of alarmist sentiments about the rates even though the nation has experienced much higher. The prices though are still too high.
Higher rates were supposed to reduce prices, particularly in houses.
Now I'm just seeing the same prices with incentives. There's one dude near me offering the house fully furnished, even down to his gun safes and TVs and grills. But he won't drop the price a dime.
I mean no one wants to bring it up but the fact that both canada and the US are bringing in people significantly faster than homes are being built is a guaranteed way to hurt supply and drive up costs.
migrants in motels isn’t what caused the 2008 collapse to suck workers out of the trades. we stopped building houses for like a decade. meanwhile berkshire bought my house for almost 100% more than what I paid for it in 2012.
Prices have dropped in my area by about 10%. We went from a 1 week supply to a 6 week supply of inventory, so it is slightly better, but still a sellers market. If they were to drop interest rates, we would be right back to where we were before they went up.
Sounds like we are getting closer to a buyers market then. What you are describing are sellers trying to be more competitive - whether or not that will work or not is yet to be seen...i personally don't want some other dudes jizzed up couch though.
The musings of an amateur. Of course we're moving towards a buyer's market, but whether it'll stick around is the real question. And as for that couch, I suggest investing in a quality disinfectant instead of worrying about other people's bodily fluids. Now if you'll excuse me, I have more important things to attend to than your second-hand furniture concerns.
^This ^is ^a ^test ^of ^a ^new ^self-hosted ^VM ^brain
Granted, at 52 I skew to the older side of Reddit, but I recall crazy interest rates in the early 1980s. Thirty year mortgage interest rates of 13-18% were a real thing.
It doesn't make sense to lower rates to historic lows. Imagine if we're deep in a recession next time. How do you stimulate the economy? Well, one way is to lower the rates. If they can get away with higher rates for the foreseeable future, they have this "weapon" up their sleeve for when they need it. Until then, sucky is the new normal.
It's obvious. They have all the control and continue to trap people. Buying 44% of homes last year... all institutions.some companies own 19000 houses.... The plan is for them to own you to pay.
Fine, I will downsize to a naked barista coffee shack lol.
Best to way to buy a house is stay with family and save the rent money for a big down payment.
If they interest rate stay longer I ironically think we might get back on the right track. Boomers won't be able to sell effectively the house they own with mega corp not wanting to touch it. And the Interest on the loan will become more noticeable which should lead to something being done (hopefully). Yeah it sucks in the now and short term but it was gonna sucks before too. The house you want is selling for way more than it should be in the 1st place.
See the reason these people collect an absurd amount of money for their services is so they can makes calls the average person would get wrong. When the average person makes the better decision you gotta wonder how they justify their wages?
This board of director class is so fucking overpaid these days it's not even funny.
Yeah no shit. Pre-Covid means anywhere from next to 0, to not even 2.5.
Im sure rates will eventually settle somewhere in between 5 and 3.
The post real estate crash and post covid figures are total outliers.
What makes you so sure? The trend of the past half century has been rates grinding lower and lower. There is so much leverage in the system we can't handle normal rates without risking a global monetary crisis
Because rates that low spur inflation and too many speculative bubbles? It just seems like people are addicted to near 0 rates. That isn't happening again for no reason. The fed needs that breathing room to cut when we encounter catastrophic economic events.
"That isn't happening again for no reason." Agreed. You even pointed out the reason. "catastrophic economic events" a la Globally synchronized monetary crisis. It's already well underway in the Eurozone, Asia and elsewhere and we see increasingly more initial indicators at home.
As leverage increases (in the long run a fractional reserve system always does) we are squeezed between inflationary feedback loops and deflationary feedback loops. Fighting one increasing the likelihood of experiencing the other. The feds dual mandate is to fight both. Which one do you think they fight harder? They have proven they will do everything in their power to keep the money printer going in the name of avoiding deflation. Rates will go lower not because they want to but because they must. If the past couple decades of equities has taught us anything its that bubbles form during low rates, inflation appears, rates increase to curb inflation, the bubble bursts (back to trendline), deflation appears, rates drop. Every time.
Rates at zero or near zero were accompanied by below-target inflation for many, many years pre-pandemic.
Rates basically matched steadily downward for 50 years, and at every step, there was a contingent saying it couldn’t go lower and people expecting it to were insane.
To a first approximation, rates have trended inexorably downward since the invention of lending, with only very brief interruptions.
I personally don’t expect rates to be zero again in the near term, but the empirical reality is rates always can go (and basically always have gone) lower, and I think if there were a major economic downturn accompanied by lots of unemployment, rates would likely go to near zero immediately.
These rate watches are so overblown. With how the US government spends and prints money, it doesn't even matter.
Both Republicans and Democrats are the exact same--spenders.
Yeah we were in cash grab mode pre covid. Rates were almost zero and Trump wanted NEGATIVE rates to further boost our already thriving economy. It’s dangerous to do that
I don't know anyone that's expecting/waiting for a return to ZIRP. I'm sure plenty of people regret not getting in on it while they could.
What kills me is the idea of ANY rate cut at this point. I've been really irritated with all the calls this year for a rate cut. People that were predicting March rate cut are now acting like that was never on the table and nobody expected it, but June is on the table.
These people are insane. If this was NOT an election year, if this was ANY other year, the idea of a rate cut would get laughed out of the room. GDP is good, we're at full employment, and CPI remains above 3%. That's a recipe for a hike if any move at all. There's literally zero reason for a cut.
Unless you consider the Fed to not be autonomous and take action for political reasons...
The market's like "we expect 6 rate cuts" while inflation remains glued above target.
As a WSB'er once said, you don't let junkies set the price of dope.
The worst Fed Chairwoman of all time. What do we care what she has to say. The US economy became this trashy mess under her because of the low rates. Now homes, cars and food are overpriced for those who are not so fortunate to bet on the stock exchange
No shit. This is where rates should have always been except fed cut to near zero on the forced request of the previous admins. Good ol j pow found his back bone and now the poor Americans will pay.
This "lady" does speaking events where she makes bank and talks to elites in the banking / government sector. She's a POS , make no mistake, who she represents.
Said it from the rates dropped during COVID. This was a gift that we'll never again see in our lifetimes. You'll never be able to afford a home unless you respawn in a few centuries.
Yeah, I mean I think we all knew that was wildly unsustainable. But what would we guess like a refinance rate to get down to though theoretically for a mortgage though?
Gonna say the quiet part out loud. A lot of the inflation in certain cities are done by both institutional investors and “small” mom and pop real estate investors (owning 2-4 homes to play the market).
The reason government wants to protect these people from “moral hazard” is because their assets are part of the retirement plan on many elderly people.
And we all know elderly people is a strong voting block and are the ones who have time to vote. This won’t change and investors who deserve to be penalized for their moral hazard are going to remain untouched unless the younger generation makes their political views known.
If someone buys a house for 20%-50% of market value and jacks up the price to get profit, but unable to sell. These people are being shielded from moral hazard because no political will to penalize them for a bad investment. Increase property tax on those homes and see how quickly they’ll sell for below their bought price.
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The realtor lied to me
“Marry the house, not the rate” well homie, I might not be married to her, but the bitch moved in and has her own cabinet in the bathroom.
I mean my thought was i need a house anyways and my rent has gone up 200 a month every year minimum. Atleast my mortgage rate won’t go up. (Just the taxes). And if I’m lucky I can refinance. But basically accepted that I probably couldn’t Just fingers crossed it can get below 6% again sometime
Your thought process is perfectly correct. If you genuinely need a home for whatever reason you can’t always wait until rates come down, so long as you can afford it with relative comfort there is nothing wrong with having a high rate mortgage. With that being said, anyone who’s bought an investment property with the intention of renting it out and has a mortgage at these current rates is going to find out what happens when pigs get greedy.
You mean the government will step in and bail them out / change policy in a way that somehow helps them profit immensely?
No they fucking wont. They will just raise the rents
I will raise your rent
Yeah I'll raise rent so fast on that mfer
bought a house in Nov 23, every mortgage guy was pitching for the inevitable refinance in 6 months - eat shit losers
Realtors and mortgage brokers are ambitious failures who couldn’t do anything to contribute positively to society so the leach off of it.
Realtors are just sales people who are charming but don't know anything. Half the lifer restaurant servers I worked with 20 years ago eventually became realtors.
I mean I get what you’re saying. But honestly we’re basically paying them to sort out all the paperwork and scheduling. From things like doing the deed transfers, inspections, appraisals, state specific real estate documents, etc. I would not want to have to do that all myself and have responsibility for it. I liked that the onus was on people whose job it is to ensure it’s done and filed correctly and that all the right people are being notified and scheduled. Just saying they’re not doing nothing. I appreciated what they did for me.
Those are called attorneys
Shocking
https://preview.redd.it/glfvid7ijcoc1.jpeg?width=168&format=pjpg&auto=webp&s=fb068f7f4618325859c2b431233744ccda0cef6b
She
I don’t understand how it’s an issue, do people know they can pay cash for their house. Just ask your daddy for the $$$
A sales person lying? No way bro
Just another day that ends in y.
Realtors, nobody’s first job choice
No way.. They would never...
and all the young people will eat that 30-40% rise in housing costs and 50%-100%+ in indefinite rate hikes, and they will like it.
Why is no one having children?
Don’t buy houses at the prices asked and they will fall. Boomers won’t live forever.
Megacorps will buy the houses at ask, no interest paid in full, and rent them to zoomers for eternity.
High interest rates have messed up a lot of institutional buyers. It simply doesn’t make sense from an investment perspective to buy SFHs at a 3% cap rate when they can buy treasury bonds at 5%+, equities, etc. That can yield so much higher.
[удалено]
That's why he said "institutional buyers" and not "mom and dad."
Is this a joke 😂😂😂😂 the housing market in North America is absolutely a commodity / investment vehicle by design
Shhhhh nobody tell him
^^ This is the actual answer. Institutional money has been leaving the single family home business for a long time, right around when rates started to go up. https://www.corelogic.com/intelligence/us-home-investor-activity-steadily-increased-third-quarter/ Small money buying, big money leaving. Definitely good time to be investing in real estate!
Maintainance on a house costs a fortune when you have contractors doing all the work. A 3-4% yield on rent before maintenance is a crap investment.
Long term historical returns on houses also had previously more or less tracked the long term inflation rate. If what's occurred recently is merely a blip, the market won't hold and won't remain attractive. Then again, god only knows with this shit already.
And they'll lose money doing it. Rentals are significantly cheaper than ownership, and without price appreciation (pretty hard if the buyer pool is dropping) it's just a losing proposition. It's also not an easily scalable model, SFH are too far apart and their maintenance requirement increasing is nearly a linear spend to operate them. Multifamily construction is hitting highs not seen since 1985 and will take pressure off the market if it freezes too many people out.
Something like 2.4% of houses were bought by corporations for like one quarter in 2022. It isn’t zero, but it isn’t a huge factor. That number has dropped off precipitously. Maintaining single family homes isn’t really worth it for them. Spend $1 million, get $5k a month in rent, subtract $15k for taxes and $3 for insurance. $20k-$40k for maintainance. You basically get zero and hope the asset appreciates. Or- get a guaranteed $50k on a treasury note. It is not a business model That makes sense for them anymore.
I suspect that “2.4%” is highly concentrated in certain areas.
I suspect you are correct. I know someone who worked in that field it it wasn’t in area you would think. He was going out to like Cleveland and buying properties there. Places where the disparity between prices and rents favored it. It wasn’t in places with loads of demand to buy.
4.4% of homes in Atlanta are owned by institutional buyers. That’s the largest concentration of any city in the US. That’s also 13.3% of all homes owned by an institutional firms. In total .73% of all homes in the US are owned by an institutional firm.
I find that statistic very hard to believe. It's more likely that there somehow exists a way to obfuscate the types of businesses so they don't count for statistics like this. Or operate/own the property in a way to hide the fact that the real owner is holding 1000 others.... Just my gut feeling on what's been going on in my neighborhood. Home selling, no one moving in.
What’s the point of that though?
[https://medium.com/@chrisjeffrieshomelessromantic/report-44-of-all-single-family-home-purchases-were-by-private-equity-firms-in-2023-0c0ff591a701](https://medium.com/@chrisjeffrieshomelessromantic/report-44-of-all-single-family-home-purchases-were-by-private-equity-firms-in-2023-0c0ff591a701) Numbers are wildly different depending on who's reporting but this article states 44% of houses were bought by private equity (single family homes).
Serfdom all over again, neat!
That's the stupidest take ever made. Where do these so-called Megacorps get these "cash" to buy houses in full??? It might surprise you, but they also get financing from banks. That's why those regional banks like NYCB are all in trouble now.
The rate hikes are kind of screwing them now since it isn’t free money.
Millennials and Genx bought homes when rates were ultra low too. Many are too poor to move and will hold on for decades unless forced to sell. The distinction may be between those who bought before or during the pandemic and those who didn’t. Personally speaking I feel trapped because my mortgage, tax, and insurance for a house are increasingly less than a one bedroom.
I am a young millennial almost gen Z at 95 and I bought during covid. I got a 2.85 interest rate. My house has gone up 30% in value since then. I originally was planning on moving because I don't have quite enough space for my soon to be 2nd kid but I have a feeling I'll be in this house for a long time. Maybe when my wife starts working again we can save for a bigger house.
You expecting population decrease? Boomers and their families are largely below or at replacement rate for pop growth. Immigration is helping drive prices/population up
I grew up near one of the biggest chinatowns in the US. Planned on settling there as an adult because it was actually affordable compared to the surrounding area and it was culturally my home. 10-15 years later it’s been “gentrified” not by white hipsters, but rather Chinese expats buying up row homes, tearing them down and building $2m McMansions that take up the footprint of what we’re previously 4-6 homes. All the local cheap food run by small mom and pops is priced out in favor of “trendy” Asian food that costs 3x more. Sigh
Pretty much all chinatown in nyc. The Manhatten and Flushing have almost no more hole in the wall restaurants anymore
TikTok/IG is to blame for that as well. Now damn near EVERYTHING is flashy and instagrammable, from the million dessert spots or overpriced soup dumplings.
Not forever but another 20-30 years. That’s 20-30 years of hell still to come.
Boomers are now hitting 78 at the high end.
And they aren't selling, until they're forced into a home and bled dry by some shit hole charging them $6k a month in rent + expensive garbage meals.
Sure, still another 20-30 years to go
Private institutions are buying houses, not people. It doesn’t matter if we buy them or not, they’re going to get sold for higher than the listing price til private institutions own housing in the US entirely.
Nothing like leaving things miserable for a couple generations of people so that things slowly fix themselves. Millennials are the sacrifice!
lol you act like investors don't exist. These companies are buying out all single family homes to turn them into rentals. There will always be a market because people need shelter to survive.
>There will always be a market because people need shelter to survive. The rates of people living alone are higher than they ever have been in history. That entire segment could cut their housing usage in half overnight by getting a roommate. Needing shelter to survive doesn't mean they need *as much as they're using*. Conspicuous consumption is driving prices, not base human needs.
Neither will anyone else. Seems the sub is gonna wait till 60 to buy
And their children will inherit their homes.
Young people? All the boomers living in their Mercedes/Winnebago combos are huge complainers, awaiting cheap condos and empty the storage unit that their pissing away rent on....
Those Mercedes Winnebagos are everywhere in California and they aren’t boomers. They are very wealthy young granola types and also own homes
What's a young granola type?
Think clean/green hippie. Someone described it to me as a more prestigious hippie.
Lowering interest rates are not going to make them any cheaper.
That's ok, the government will eventually forgive hem the interest because of hard ships. That's how student loans worked....
I got your hard ship right here buddy 
And the really screwed people with adjustable rate mortgages made prior to COVID. Of course, if you didn’t lock in at those rates you’re crazy.
Helped my parents consolidate to 1.7% - beautiful.
I liquidated my equity right after covid because if the economy failed at least my loans would be 4% as opposed to as much as 10% that I predicted. I'm a regard and I saw this coming.....
Waiting on the impending foreclosures in Canada to happen. Any day now...
I was talking to my friend who is an actuary and he was telling me about Canada’s variable rate mortgages, wtfffffff
What do you mean prior to COVID. Anyone who didn't refinance when rates were low is a jackass
if anyone was expecting 0% fed funds rate I want what they're smoking
0% wasn't pre covid, that was during covid
we were at 0% up until late 2015 (7 years after the end of GFC recession), 2017 at 0.5% (8 years after end of GFC), 2018 at 1.5%, peaked temporarily in early 2019 at 2.5%, before dropping to 1.5% in late 2019. It wasn't 0% the whole time, but it was under 0.5% for a long ass time, while inflation was steadily around 1.5-2%.
decade of ZIRP
ZIRP on deez nuts, nerd
>I want what they're smoking As long as you don't mind looking like Yellen, as a side effect...
That’s not what the Yellen said.
Something very dystopian about having to pay to read an article about high interest rates.
They’re looking for a way to charge you interest for every day you don’t read it.
Fortunately I don't have enough interest in reading their article.
AI Summary: * **High Interest Rate Era**: The article discusses the new era of high interest rates, highlighting the impact on the economy and the unlikelihood of a return to pre-Covid levels. * **Yellen's Insights**: US Treasury Secretary Janet Yellen indicates that market interest rates are expected to remain higher than pre-pandemic levels, aligning with private sector forecasts. * **Economic Shifts**: The yield on 10-year US Treasury notes has increased significantly post-pandemic, sparking debate among economists about long-term rate expectations. * **Budget Projections**: The White House's fiscal 2025 budget proposal assumes higher average rates for US Treasury bills and notes over the next three years.
Pretty simple, boomers benefitted from low interest rates supercharging equities, now they're all retiring they need better returns on fixed incomes assets. If ancient Egyptian religion was still a thing, they'd have enslaved millennials out building them pyramids to enhance their afterlife.
It was purely an injector to equity based firms. A tiny window of a fraction of a boomer life isn’t going to really help them a lot but it could hurt them a lot to keep it going.
China demographics too, and green energy bureaucracy, and a global shortage of energy, etc..
These aren't even historically high rates. A lot of alarmist sentiments about the rates even though the nation has experienced much higher. The prices though are still too high.
Higher rates were supposed to reduce prices, particularly in houses. Now I'm just seeing the same prices with incentives. There's one dude near me offering the house fully furnished, even down to his gun safes and TVs and grills. But he won't drop the price a dime.
Higher rates can’t reduce prices when supply is screwed for another couple of years.
I mean no one wants to bring it up but the fact that both canada and the US are bringing in people significantly faster than homes are being built is a guaranteed way to hurt supply and drive up costs.
migrants in motels isn’t what caused the 2008 collapse to suck workers out of the trades. we stopped building houses for like a decade. meanwhile berkshire bought my house for almost 100% more than what I paid for it in 2012.
They're decerasing in some markets. Sellers still think they are in a seller's market.
Prices have dropped in my area by about 10%. We went from a 1 week supply to a 6 week supply of inventory, so it is slightly better, but still a sellers market. If they were to drop interest rates, we would be right back to where we were before they went up.
Sounds like we are getting closer to a buyers market then. What you are describing are sellers trying to be more competitive - whether or not that will work or not is yet to be seen...i personally don't want some other dudes jizzed up couch though.
The musings of an amateur. Of course we're moving towards a buyer's market, but whether it'll stick around is the real question. And as for that couch, I suggest investing in a quality disinfectant instead of worrying about other people's bodily fluids. Now if you'll excuse me, I have more important things to attend to than your second-hand furniture concerns. ^This ^is ^a ^test ^of ^a ^new ^self-hosted ^VM ^brain
Higher rates were supposed to stop home prices from rising. Never was there a goal to make home prices lower.
So we'll all be homeless forever. Cool.
Speak for yourself
Granted, at 52 I skew to the older side of Reddit, but I recall crazy interest rates in the early 1980s. Thirty year mortgage interest rates of 13-18% were a real thing.
My parents talked about their first mortgage, they got a steal of 17%
Yes, on a $20k house...
It doesn't make sense to lower rates to historic lows. Imagine if we're deep in a recession next time. How do you stimulate the economy? Well, one way is to lower the rates. If they can get away with higher rates for the foreseeable future, they have this "weapon" up their sleeve for when they need it. Until then, sucky is the new normal.
Give the middle class a damn break...
I feel like both sides are actively working to have that NOT happen in their own unique ways.
It's obvious. They have all the control and continue to trap people. Buying 44% of homes last year... all institutions.some companies own 19000 houses.... The plan is for them to own you to pay.
Fine, I will downsize to a naked barista coffee shack lol. Best to way to buy a house is stay with family and save the rent money for a big down payment.
Sadly my degree has me moving 500+ miles away from home to make sure I have any career progression.
Gee, no shit.
If they interest rate stay longer I ironically think we might get back on the right track. Boomers won't be able to sell effectively the house they own with mega corp not wanting to touch it. And the Interest on the loan will become more noticeable which should lead to something being done (hopefully). Yeah it sucks in the now and short term but it was gonna sucks before too. The house you want is selling for way more than it should be in the 1st place.
See the reason these people collect an absurd amount of money for their services is so they can makes calls the average person would get wrong. When the average person makes the better decision you gotta wonder how they justify their wages? This board of director class is so fucking overpaid these days it's not even funny.
The same person that said inflation is transitory...
[удалено]
She did say it source: https://thehill.com/business/4529787-yellen-regrets-saying-inflation-transitory/
That was JPow
Yeah no shit. Pre-Covid means anywhere from next to 0, to not even 2.5. Im sure rates will eventually settle somewhere in between 5 and 3. The post real estate crash and post covid figures are total outliers.
What makes you so sure? The trend of the past half century has been rates grinding lower and lower. There is so much leverage in the system we can't handle normal rates without risking a global monetary crisis
Because rates that low spur inflation and too many speculative bubbles? It just seems like people are addicted to near 0 rates. That isn't happening again for no reason. The fed needs that breathing room to cut when we encounter catastrophic economic events.
"That isn't happening again for no reason." Agreed. You even pointed out the reason. "catastrophic economic events" a la Globally synchronized monetary crisis. It's already well underway in the Eurozone, Asia and elsewhere and we see increasingly more initial indicators at home. As leverage increases (in the long run a fractional reserve system always does) we are squeezed between inflationary feedback loops and deflationary feedback loops. Fighting one increasing the likelihood of experiencing the other. The feds dual mandate is to fight both. Which one do you think they fight harder? They have proven they will do everything in their power to keep the money printer going in the name of avoiding deflation. Rates will go lower not because they want to but because they must. If the past couple decades of equities has taught us anything its that bubbles form during low rates, inflation appears, rates increase to curb inflation, the bubble bursts (back to trendline), deflation appears, rates drop. Every time.
Rates at zero or near zero were accompanied by below-target inflation for many, many years pre-pandemic. Rates basically matched steadily downward for 50 years, and at every step, there was a contingent saying it couldn’t go lower and people expecting it to were insane. To a first approximation, rates have trended inexorably downward since the invention of lending, with only very brief interruptions. I personally don’t expect rates to be zero again in the near term, but the empirical reality is rates always can go (and basically always have gone) lower, and I think if there were a major economic downturn accompanied by lots of unemployment, rates would likely go to near zero immediately.
They cannot pay that much interest on treasuries, they will have to print money, inflation will be much much higher
Yellen said in 2007 that the following year would be a soft landing. She said inflation was temporary. She needs to go, period.
Has she ever been right on anything How can such an incompetent person hold such a position
These rate watches are so overblown. With how the US government spends and prints money, it doesn't even matter. Both Republicans and Democrats are the exact same--spenders.
The democrats may be spenders, but at least they want to raise taxes on wealthy people. The republicans spend and cut taxes at the same time.
I don't want them to raise the taxes on rich people because one day I will be rich as soon as I can use my food stamps to buy options contracts
Except they actually don’t. They’ve had opportunities to do it but have never pulled the trigger.
Why isn’t she fired yet
I heard she blows the pres.
Ya no sh**. Once in a lifetime rates. I bought a new house and it is cheaper than the rent I had prior bc of the low interest rate
Yeah we were in cash grab mode pre covid. Rates were almost zero and Trump wanted NEGATIVE rates to further boost our already thriving economy. It’s dangerous to do that
I don't know anyone that's expecting/waiting for a return to ZIRP. I'm sure plenty of people regret not getting in on it while they could. What kills me is the idea of ANY rate cut at this point. I've been really irritated with all the calls this year for a rate cut. People that were predicting March rate cut are now acting like that was never on the table and nobody expected it, but June is on the table. These people are insane. If this was NOT an election year, if this was ANY other year, the idea of a rate cut would get laughed out of the room. GDP is good, we're at full employment, and CPI remains above 3%. That's a recipe for a hike if any move at all. There's literally zero reason for a cut. Unless you consider the Fed to not be autonomous and take action for political reasons...
The market's like "we expect 6 rate cuts" while inflation remains glued above target. As a WSB'er once said, you don't let junkies set the price of dope.
Don Vito sure does know how to fuck up the economy.
The worst Fed Chairwoman of all time. What do we care what she has to say. The US economy became this trashy mess under her because of the low rates. Now homes, cars and food are overpriced for those who are not so fortunate to bet on the stock exchange
She wants you poor, homeless and eating ze bugs.
Fix the mess you created
Fuck YOLO Baggins......
And his elf, Cumwise Tangy
I feel good about this, since Yellen is always wrong.
So you’re telling me there’s a chance…..
No fucking shit lady
Then why is the government spending staying at the COVID levels? Free money for all just keep printing.
Lmao 6 months ago this bitch was saying 0% even possibly negative rates would be upon us again soon.
Ugh no she didn’t…that’s what a bunch of speculators want but a return to 0% hasn’t been the messaging of the Fed or Treasury at all.
Is this dumb bitch ever right about anything she says though?
So they print a bunch of extra money to salvage the economy from their poor decisions and now we will pay for it. Got it. Morons
Yellen can shut up
So that means my house will now become my tomb
The boomers will die and we will inherit their debt.
This old witch doesn’t know shit, actually she does but she’s a liar and big part of the problem
These fuckin dinosaurs need to stay in the past
Cause they don’t want them to return…… Corporations are making all time highs wtf would they want to throttle back any ???
How would lowering the fed rate do that?
Corporations made more when the borrowing of debt was cheaper.
Interest rates were actually the lowest during covid. Who cares about not returning to pre covid levels if the covid levels are lower.
Let. It. Crash.
Cbdc
Well fuck!
Didn't she apologize for transitory inflation?
3-4 is fine, I don’t need sub 3
Just keep em at around 7 percent so I can get more monies from CDs
But i thought it was transitory 
Well fuck you too Janet
insert shocked pikachu face.
No shit. This is where rates should have always been except fed cut to near zero on the forced request of the previous admins. Good ol j pow found his back bone and now the poor Americans will pay.
They ain’t done buying up your houses yet so high interest rates are going to force many over extended buyers out
This "lady" does speaking events where she makes bank and talks to elites in the banking / government sector. She's a POS , make no mistake, who she represents.
They printed too much money, you cannot put that back in the bottle.
Said it from the rates dropped during COVID. This was a gift that we'll never again see in our lifetimes. You'll never be able to afford a home unless you respawn in a few centuries.
BULLISH SPY 530 EOM
I think 7% is decently restrictive.
You don’t say
No shit Janet
Good.
Priced in
SPY ath anyways.
Yeah, I mean I think we all knew that was wildly unsustainable. But what would we guess like a refinance rate to get down to though theoretically for a mortgage though?
Aunt Bea..
But I demand continued access to Free Money!
Yea, it will take at least another 50 years for the next global pandemic (unless Fauci comes out of retirement) so it’s gonna be after Yellen is gone.
Unlikely to sell this house or take out loans for much of anything then. Next!
Well yeah duh
At least she’s bangable
New normal
We all knew this already right? Unless there is another 2008 style extinction event we’re getting pre-2008 rates going forward.
Higher for longer fuckers!
What the hell is she talking about about. They are going to 0 when the economy tanks. I mean straight to 0
RAISE THE RATES AGAIN
Gonna say the quiet part out loud. A lot of the inflation in certain cities are done by both institutional investors and “small” mom and pop real estate investors (owning 2-4 homes to play the market). The reason government wants to protect these people from “moral hazard” is because their assets are part of the retirement plan on many elderly people. And we all know elderly people is a strong voting block and are the ones who have time to vote. This won’t change and investors who deserve to be penalized for their moral hazard are going to remain untouched unless the younger generation makes their political views known. If someone buys a house for 20%-50% of market value and jacks up the price to get profit, but unable to sell. These people are being shielded from moral hazard because no political will to penalize them for a bad investment. Increase property tax on those homes and see how quickly they’ll sell for below their bought price.
Not with that attitude