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(Slate)   No, Slate. There will never be another house bought or sold in the United States ever again, from now until the end of time. Thanks for the insightful question   (slate.com) divider line
    More: Stupid, Real estate, Mortgage loan, Great Depression, home prices, Double-digit interest rates, housing market, Mortgage, high interest rates  
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986 clicks; posted to Business » and Main » on 29 Sep 2022 at 3:29 PM (10 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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View Voting Results: Smartest and Funniest
 
2022-09-29 3:12:29 PM  
"High" interest rates? Bullsh*t. Rates are trending closer to normal, if anything. Anyone who thinks 2.5% on a mortgage is normal hasn't paid attention to the last 50+ years.
 
2022-09-29 3:39:18 PM  

beezeltown: "High" interest rates? Bullsh*t. Rates are trending closer to normal, if anything. Anyone who thinks 2.5% on a mortgage is normal hasn't paid attention to the last 50+ years.


Under 3% for a long term loan won't be happening again for a long time, if ever.
 
2022-09-29 3:48:35 PM  
LOL
 
2022-09-29 3:56:46 PM  

beezeltown: "High" interest rates? Bullsh*t. Rates are trending closer to normal, if anything. Anyone who thinks 2.5% on a mortgage is normal hasn't paid attention to the last 50+ years.


Okay, Boomer.
 
2022-09-29 3:58:35 PM  
People paid 10.8% interest 30 years ago.
 
2022-09-29 4:03:23 PM  
Mortgage rates are about what they were in the aughts before the mortgage crisis.
 
2022-09-29 4:06:22 PM  
Here before the "locked in at 4%/I got mine so fark you" crowd arrives.
 
2022-09-29 4:08:17 PM  

blackminded: Here before the "locked in at 4%/I got mine so fark you" crowd arrives.


4%? psh go be poor somewhere else. mine is 3.2%.. i think, i'd have to ask my wife.
 
2022-09-29 4:16:58 PM  
We live in an area that was a bubble a few months ago, and it's correcting. The "value" of the house has dropped by $100k in about four months. Houses are now on the market for a couple of months rather than a couple of days. I think that's good--a slow leak is better than a bust.
 
2022-09-29 4:18:08 PM  

chasd00: blackminded: Here before the "locked in at 4%/I got mine so fark you" crowd arrives.

4%? psh go be poor somewhere else. mine is 3.2%.. i think, i'd have to ask my wife.


she's busy

/at bk
 
2022-09-29 4:23:42 PM  
Holy sh*t... The Fed has made everyone a total f*cking pussy.

Welcome to reality. Guess what, it's probably going to 10% or more... Yes, then the world will fold it upon itself and we'll all die.

Prepare yourself.

LOL... wow.
 
2022-09-29 4:25:48 PM  
I'm going to buy another one just to spite you ninnies.
 
2022-09-29 4:26:26 PM  

chasd00: blackminded: Here before the "locked in at 4%/I got mine so fark you" crowd arrives.

4%? psh go be poor somewhere else. mine is 3.2%.. i think, i'd have to ask my wife.


You got scrod. 2.375 for 30 years here, no points. Probably the only time in my life I timed something perfectly.

But seriously, came to say the same thing. 6 or 7%, whatever the rates are now, are higher than they were a couple years ago. But that does not mean they're high.

Wait until they hit double digits.

Silly FUD article is silly FUD.
 
2022-09-29 4:40:54 PM  
I know it sucks for people struggling to buy a home to now have higher interest rates to deal with. Hopefully though, it will scare off all the farking investment buyers who just want to run a rental empire. And at least those who do buy at elevated interest rates can potentially refinance after some time.
 
2022-09-29 4:51:01 PM  

NewportBarGuy: Holy sh*t... The Fed has made everyone a total f*cking pussy.

Welcome to reality. Guess what, it's probably going to 10% or more... Yes, then the world will fold it upon itself and we'll all die.

Prepare yourself.

LOL... wow.


media.tenor.comView Full Size

I'm sorry, the explosion turned out to be an implosion. It's easy to get those mixed up in the initial examination of the aftermath.
 
2022-09-29 4:51:43 PM  

mofa: People paid 10.8% interest 30 years ago.


We paid almost 12% on our first home back in the late 70s.
 
2022-09-29 4:59:50 PM  

yakmans_dad: mofa: People paid 10.8% interest 30 years ago.

We paid almost 12% on our first home back in the late 70s.


What legit terrifies me is that housing was 2.5-3.5x the median income back then on one income, and now it's like... 4-5x on two incomes. That's really apples and oranges, comparatively speaking.

/Anything less than $250k in my area requires a lot of renovation just to make it reasonable.
//Seriously, I've been in numerous houses where I had to turn sideways to fit through doors.
 
2022-09-29 5:10:41 PM  

NewportBarGuy: Holy sh*t... The Fed has made everyone a total f*cking pussy.

Welcome to reality. Guess what, it's probably going to 10% or more... Yes, then the world will fold it upon itself and we'll all die.

Prepare yourself.

LOL... wow.


Maybe the price of a house will fall to only 4 times your annual income instead of 10 times that.
 
2022-09-29 5:28:41 PM  

jso2897: beezeltown: "High" interest rates? Bullsh*t. Rates are trending closer to normal, if anything. Anyone who thinks 2.5% on a mortgage is normal hasn't paid attention to the last 50+ years.

Okay, Boomer.


GenX here, Edgy McPointless.

You don't have to be old to read and understand financial and economic history.
 
2022-09-29 5:30:26 PM  
I wouldn't expect housing prices to fall any time soon, especially in in-demand areas.

Higher interest rates are reducing sales, which is making fewer houses being built, so supply will remain low.

In in-demand areas, the only solution is to loosen zoning rules so more units can be built on a given piece of land.  Most in-demand areas are near 100% built up.  The only way to provide affordable units is to build up (condos/apartments in taller buildings).  This requires massive zoning law changes in areas where most voters are of the GOT MINE FARK YOU variety.

IE, if you already own your home in an in-demand area, it is in your self interest to keep housing costs high, so your house remains valuable.  The best way to do this is to vote to limit additional development.
 
2022-09-29 6:11:27 PM  

chasd00: blackminded: Here before the "locked in at 4%/I got mine so fark you" crowd arrives.

4%? psh go be poor somewhere else. mine is 3.2%.. i think, i'd have to ask my wife.


First house I bought - in 1984 - I forget what the hell the mortgage interest rate was.  Probably around 10% +/- a few points.

This place, our forever home, we bought in 2014 with a 30 year fixed at 4.5%.  We refinanced in 2020 to a 15 year fixed at 2.7%.

I am neither bragging or complaining.  This is certainly no claim to any smarts or virtue on my part.  I mention it merely to provide additional data for analysis.
 
2022-09-29 6:21:56 PM  

Bonzo_1116: NewportBarGuy: Holy sh*t... The Fed has made everyone a total f*cking pussy.

Welcome to reality. Guess what, it's probably going to 10% or more... Yes, then the world will fold it upon itself and we'll all die.

Prepare yourself.

LOL... wow.

Maybe the price of a house will fall to only 4 times your annual income instead of 10 times that.


Yeah... that's going to be the thing. I don't know what prices will do. I think we're going to find out that a lot of people used the low internet rates to buy multiple homes for Air B&B and can they maintain them with fewer renters in a down economy? If not you'll see them hit the market almost all at once. Kind of like 2007 but not nearly as bad.

We might get a correction a bit but I don't see them "crashing"... the rates will take care of prices appreciating but going down?

Think we'd need to see 5-6% unemployment with thoughts of it going higher to freak people out.

Who knows. All speculation at this point. But we've been doing really stupid shiat for 10 years now and it's going to bite us in the ass.,
 
2022-09-29 6:41:03 PM  
There used to be these things called "savings accounts"...
 
2022-09-29 7:20:37 PM  

beezeltown: "High" interest rates? Bullsh*t. Rates are trending closer to normal, if anything. Anyone who thinks 2.5% on a mortgage is normal hasn't paid attention to the last 50+ years.


Yeah the same thing is happening in the UK and people are losing their shiat. Everyone has been saying for years that rates were unreasonably low but some people apparently thought this was the "new normal" and would last forever.
Despite every mortgage advert, application and form warning that rates could go up, and people talking for a year that rates would rise, there are people who appear utterly shocked that rates have risen.
 
2022-09-29 8:23:54 PM  

blackminded: Here before the "locked in at 4%/I got mine so fark you" crowd arrives.


I'm at 2.4% so...
/ VA Loan
 
2022-09-29 8:51:13 PM  
It never occurs to slate that you can put more than 20 percent down in order to reduce the monthly payment amount, and total interest paid.
 
2022-09-29 8:57:36 PM  

Geotpf: I wouldn't expect housing prices to fall any time soon, especially in in-demand areas.

Higher interest rates are reducing sales, which is making fewer houses being built, so supply will remain low.

In in-demand areas, the only solution is to loosen zoning rules so more units can be built on a given piece of land.  Most in-demand areas are near 100% built up.  The only way to provide affordable units is to build up (condos/apartments in taller buildings).  This requires massive zoning law changes in areas where most voters are of the GOT MINE FARK YOU variety.

IE, if you already own your home in an in-demand area, it is in your self interest to keep housing costs high, so your house remains valuable.  The best way to do this is to vote to limit additional development.


California is getting a green light to start putting housing in sh*tty strip mall and commercial spaces.

About f*cking time.

We need condos and apartments a whole bunch more than we need more indoor bouncy castle playlands or pop-up Halloween stores.
 
2022-09-29 10:14:06 PM  
Interest rate don't matter. It's how much the monthly mortgage is. So your house is worth $350k at 2.5% and it's worth $100k or less at 8% ish. People thinking their house is worth a fixed amount are deluded.
 
2022-09-29 10:20:37 PM  

beezeltown: "High" interest rates? Bullsh*t. Rates are trending closer to normal, if anything. Anyone who thinks 2.5% on a mortgage is normal hasn't paid attention to the last 50+ years.


6% is "normal".  The low rates of the last decade are outliers, just like the double digit rates of the early 1980s.  30-year mortgages hiat 18.45% in October of 1981.
 
2022-09-29 10:47:13 PM  

mcmnky: You got scrod. 2.375 for 30 years here, no points. Probably the only time in my life I timed something perfectly.


I keep seeing comments like this and I'm a bit confused. It might be because I'm Canadian and our mortgage system may be different?

Here, our mortgages renew typically every 3 to 5 years (though longer and shorter are possible), which means that sweet 2.7% mortgage I got three years ago is coming up for renewal soon, and it'll be probably around 5% or whatever. Amortization is an entirely separate thing.

Is it different in the US? Can you really lock in for 30 years?
 
2022-09-29 11:01:11 PM  

slantsix: mcmnky: You got scrod. 2.375 for 30 years here, no points. Probably the only time in my life I timed something perfectly.

I keep seeing comments like this and I'm a bit confused. It might be because I'm Canadian and our mortgage system may be different?

Here, our mortgages renew typically every 3 to 5 years (though longer and shorter are possible), which means that sweet 2.7% mortgage I got three years ago is coming up for renewal soon, and it'll be probably around 5% or whatever. Amortization is an entirely separate thing.

Is it different in the US? Can you really lock in for 30 years?


Yeah. Crazy, huh? I think most places are closer to your system--you might take 30 years to pay off a house, but it's a series of 5-yr loans, right?

In the USA, we can get 15, 20, even 30 year mortgages. That rate is fixed for 30 years with no penalty for early payment. So if rates go even lower I can refinance. Or if I don't have a better use for my money, I can pay it off early.

Or I can take 30 years to pay it off at a crazy low interest rate. It's not hard to find a place to put money with returns better than 2.375%.
 
2022-09-29 11:24:21 PM  

mcmnky: Yeah. Crazy, huh? I think most places are closer to your system--you might take 30 years to pay off a house, but it's a series of 5-yr loans, right?

In the USA, we can get 15, 20, even 30 year mortgages. That rate is fixed for 30 years with no penalty for early payment. So if rates go even lower I can refinance. Or if I don't have a better use for my money, I can pay it off early.

Or I can take 30 years to pay it off at a crazy low interest rate. It's not hard to find a place to put money with returns better than 2.375%.


That's absolutely insane. Why would a bank ever do that? Doesn't that seem incredibly risky? And you can renegotiate if the rate goes down? WTF! Though to be fair we can renew before the date is up, but there are penalties.....

Yes, ours are a series of short term loans, and you can go with fixed or variable rate. Amortization is separate - to a max of 25 years if you need loan insurance (aka you put less than 20% down).
 
2022-09-30 12:01:23 AM  

slantsix: mcmnky: Yeah. Crazy, huh? I think most places are closer to your system--you might take 30 years to pay off a house, but it's a series of 5-yr loans, right?

In the USA, we can get 15, 20, even 30 year mortgages. That rate is fixed for 30 years with no penalty for early payment. So if rates go even lower I can refinance. Or if I don't have a better use for my money, I can pay it off early.

Or I can take 30 years to pay it off at a crazy low interest rate. It's not hard to find a place to put money with returns better than 2.375%.

That's absolutely insane. Why would a bank ever do that? Doesn't that seem incredibly risky? And you can renegotiate if the rate goes down? WTF! Though to be fair we can renew before the date is up, but there are penalties.....

Yes, ours are a series of short term loans, and you can go with fixed or variable rate. Amortization is separate - to a max of 25 years if you need loan insurance (aka you put less than 20% down).


Why? OPM. Other people's money. It isn't like the bank giving me the mortgage is waiting around 30 years to get paid back. My loan has been ground up and packaged like steak turned into hamburger. My mortgage is less than 2 years old, and I think we're on the 3rd different address to send payments to.

The bank isn't making the loan based on the interest rate or even my ability to pay.  It's the bigger fool theory. As long as there's a bigger fool they can sell it to, they'll make the loan.

My savings account currently pays 2.1% interest. I could easily see a day where my savings account pays a higher interest rate than I'm being charged for my mortgage. I think my first account when I was a kid paid 5%.
 
2022-09-30 12:30:42 AM  

mcmnky: Why? OPM. Other people's money. It isn't like the bank giving me the mortgage is waiting around 30 years to get paid back. My loan has been ground up and packaged like steak turned into hamburger. My mortgage is less than 2 years old, and I think we're on the 3rd different address to send payments to.

The bank isn't making the loan based on the interest rate or even my ability to pay.  It's the bigger fool theory. As long as there's a bigger fool they can sell it to, they'll make the loan.

My savings account currently pays 2.1% interest. I could easily see a day where my savings account pays a higher interest rate than I'm being charged for my mortgage. I think my first account when I was a kid paid 5%.


That's kind of what I'm trying to get at - it doesn't 'feel' like sound economic sense. I say that because I'm not an economist. This is the definition of being on shaky ground, and will be the reason the banks cry out for bailouts in a few years.
 
2022-09-30 12:33:02 AM  
So I forget, which housing market am I supposed to believe is terrible for the economy and will kill us all?   The one where no one can afford to buy a house or the one where anyone who sells the house will take a loss?
 
2022-09-30 8:24:13 AM  

slantsix: mcmnky: Why? OPM. Other people's money. It isn't like the bank giving me the mortgage is waiting around 30 years to get paid back. My loan has been ground up and packaged like steak turned into hamburger. My mortgage is less than 2 years old, and I think we're on the 3rd different address to send payments to.

The bank isn't making the loan based on the interest rate or even my ability to pay.  It's the bigger fool theory. As long as there's a bigger fool they can sell it to, they'll make the loan.

My savings account currently pays 2.1% interest. I could easily see a day where my savings account pays a higher interest rate than I'm being charged for my mortgage. I think my first account when I was a kid paid 5%.

That's kind of what I'm trying to get at - it doesn't 'feel' like sound economic sense. I say that because I'm not an economist. This is the definition of being on shaky ground, and will be the reason the banks cry out for bailouts in a few years.


I think also that most people probably don't actually keep that mortgage for 25 years. People die, divorce, have kids, kids leave home. They want to move for some reason, and  can't keep that same mortgage.

As someone who is currently paying 20k to break a very low rate mortgage early, and moving into a much higher rate mortgage, I can tell ya, the bank ain't losing money on mine. Sadly.
 
2022-09-30 10:39:24 AM  
I don't know if any non-commercial entity will  ever buy or sell the majority of residential homes again.
 
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