Posted on 02/24/2022 10:21:30 AM PST by Browns Ultra Fan
As The Federal Reserve threatens to tighten monetary policy, 30-year mortgage rates have risen to 4.25% leading two major mortgage companies, Rocket Mortgage and United Wholesale Mortgage, to decline to all-time lows.
But wait, Federal Reserve officials signaled they remain on track to raise interest rates next month despite uncertainty posed to the global economy by Russia’s invasion of Ukraine.
While acknowledging the risks created by the conflict, which has triggered one of the worst security crises in Europe since World War II and caused oil prices to surge, U.S. central bankers stressed the need to confront the hottest U.S. inflation in 40 years.
So, The Fed plans to raise rates to fight inflation, even if it tanks the housing and mortgage markets? Fed Funds Futures are still signaling 6 rate hikes over the next year.
At least US Treasury 10Y yields are down just 7.6 bps. Look at 10Y Russian and Ukraine sovereign yields. Now THAT is a yield surge!
(Excerpt) Read more at confoundedinterest.net ...
4.25% OH THE HUMMANITY! I remember when the last time I refinanced my home loan, I’m guessing it was around 2004, I got a 6.375 rate and I was ecstatic.
There were times they were over 18% in the early 1980’s. 4.25% is still a gift.
4.25% is nothing, by first mortgage in 1985 was 11.15% and I was lucky to get that as a first-time home buyer. The prevailing mortgage rates were around 14%
What do you think would happen to the housing market if/when interest rates go back to late 1970s early 1980s levels. it will be really bad.
yeah, I know it must drive folks who lived through the 80s maddening when they hear some complain about 4% interest rates. Still - if we can expect the 30-year to rise to 5-6% (from an all-time low in 2021 of 2.65%) - that should cool off the housing market significantly, right?
So damned happy I sold my house 3 months ago when there was a bidding war on it, moved to my new home and was able to pay cash just in a nick of time!!{
I’m thinking we may list ours a month earlier than planned. End of April. We wanted to wait until the lot is lush green and in full spring bloom, but it should be OKish by then. We have painters coming in tomorrow, and our handyman starts helping with all those honey-do things that never got done after the painters leave. I think we’d better go pick out the carpet - even in normal times it’s a 3 week wait for installation. Where did time go?
If buyers are savvy, they will get pre-approved and lock in the rates pretty soon.
i think it was 1989 we bought our first house....the rate then was something like 10 or 11 percent...
What tightening? The Fed hasn’t tightened, and is still adding to the TRILLIONS of bonds it’s bought through quantitative easing.
To some extent it will but what happens is the market will adjust prices on houses will drop. Significantly and the type of house people will buy will be significantly less than now, the house I purchased was $62,500 my payment was around $600/month
The economy is far weaker now than it was in the eighties. Here in IL, the taxes are so burdensome that my husband and I are living with my mother because neither of she nor us can afford to live on our own, and it got worse after my brother moved to Dallas a few years ago (lucky fvcker).
I don’t think my husband and I will ever own a home at this point, especially in Illinois. I don’t want to stay here, but we can’t put money away quickly enough. Between the inflation and gradually rising interest rates (which I recognize as necessary), plus fuel costs and taxes, my medical care; it’s bad news bears.
I don’t mean to sound harsh but at some point if where you are living becomes untenable you have suck it up and move, sell off everything but the bare essentials, file for bankruptcy, start over somewhere else but wallowing in misery is unhealthy and self destructive
High mortgage rates are a buyer’s best friend.
They force prices down and if you can make the payments for a few years, you refinance when rates go down.
You may have a few lean years, but I have personally benefitted greatly by buying when rates were high.
“High mortgage rates are a buyer’s best friend.”
Sure.
Contracted in 1981 at 12%, 15% at closing, wrecked my finances for the next 20 years.
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