Going Down! Mortgage Rates Keep Rising, UP 68.75% Under Biden While Mortgage Payments UP 27.25% As Mortgage Applications Decline 6.3% From One Week Earlier

Confounded Interest ^ | 04/06/2022 | Anthony B. Sanders

[Browns Ultra Fan]

Mortgage applications are going down as expectations of monetary tightening send mortgage rates soaring.

Mortgage applications decreased 6.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 1, 2022.

The Refinance Index decreased 10 percent from the previous week and was 62 percent lower than the same week one year ago.

The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 9 percent lower than the same week one year ago.

Bankrate’s 30-year mortgage rate rose only slightly today to 4.86%, but the 30-year mortgage rate has risen 68.75% and a fixed-rate mortgage payment has risen 27.25% under Biden.

The rest of the story? The adjustable rate mortgages (ARMs) remain at only 6.8% of loan origination volume despite being almost 150 basis points lower in rate (4.90 FRM versus 3.38% 5/1 ARM).

Meanwhile, US Treasury yields rose again with the 10-year yield rising almost 10 basis points … again.

And President Obama spoke at The White House defending his healthcare initiative, The Affordable Care Act. It seems that Nancy Pelosi, Amy Klobuchar, Jame Clyburn and the others were thrilled to see Obama back in The White House. So much so that Biden was abandoned on stage and left to wander aimlessly around.

[Browns Ultra Fan]

To quote Samuel L. Jackson from Jurassic Park, "Hold onto your butts."

[unixfox]

And to make matters worse we have MILLIONS of ILLEGALS flooding our country looking for a place to live.

More governmant housing on the way for parasties.

Enjoy the suck America!

[dynachrome]

“Biden was abandoned on stage and left to wander aimlessly around.” That was the guy who is supposedly in charge.

Let’s see what happens if mortgage rates go up to 12% as they did at one time.

[DEPcom]

“Let’s see what happens if mortgage rates go up to 12% as they did at one time.”

Will home prices come down when interest rates go up?

My brother is convinced the car prices will come down when interest goes up. He thinks the car industry will lower prices because of the high interest rates to make them affordable.

Any truth to his logic?

[Chickensoup]

12!

HA!

Try 16!

[Theoria]

Certainly the opposite is true. Low interest rates, aka free money, certainly helped fuel asset inflation. That, and numerous tax advantages in the housing industry.

NYT article on your question.

[The Louiswu]

"My brother is convinced the car prices will come down when interest goes up. He thinks the car industry will lower prices because of the high interest rates to make them affordable. Any truth to his logic?"

Just a guess here, but if dealers were holding on to a large inventory of cars, they might be willing to lower the price to move the new cars, however, my local dealers, Honda and Toyota for example are almost devoid of ANY cars, so I don't see them lowering prices to move just a few cars. My Honda dealer is offering me a lot of cash for my used CRV and if I didn't need a really reliable ride, I'd be tempted to sell. Just a guess, not a big finance guy, just thought I'd toss in my 2 cents/

[refermech]

Devaluation of the dollar makes everything more expensive. Should cool the housing market as well as everything else too. Maybe depression is coming. Any thoughts?

[Roadrunner383]

As of last week things haven’t slowed down in our area of N.Ga.

Talked to 2 real estate agents about a couple of houses. Both said sellers not accepting any contingencies. They said come with the cash already in the bank and be able to prove it. If it meant selling our home first and renting or staying with relatives or friends then that was what we’d have to do.

One of the agents said he had 23 offers Sat. and Sun., the other agent had 18 offers on the house during the middle of the week. They just threw out offers that weren’t cash up front. This was in the Kennesaw/Woodstock area which are suburbs N. of Atlanta.

[econjack]

This is what you get with a mail order President.

[Theoria]

The government has been able to hide the morass of the economy for years with asset inflation. The amount of money thrown at the markets has merely propped it up.

The dynamics going forward are not well. The amount of labor to do work has gone down. The people who will continue to suffer the most will be those in debt, low education and without skills. I don't know how long .gov can continue holding with the spending.

The only real solution, is deflation.

[cgbg]

Higher interest rates will eventually cause home prices and car prices to go down—because of the impact on monthly payments.

The “stickiness” in home prices is an issue, though—because many of the buyers are “all cash”.

Some of that is the Hedge Funds “investing” in single family homes and some of that is baby boomers cashing out and moving to retirement destinations.

One factor that could cause “stickiness” in the auto sector is supply chain issues.

If the world situation continues to deteriorate it will remain very difficult for manufacturers to get critical raw materials and parts.

[Rainwave]

I really do feel sympathy for any young family or anyone for that matter who has an adjustable rate mortgage on their house during these uncertain times.

[cgbg]

It would be good to see charts for the Rust Belt.

I suspect housing prices would not show similar curves.

Hedge Funds are investing heavily in the Sun Belt, and Idaho is heavily influenced by CA refugees.

All four of the charts also show retirement destinations—baby boomers are cashing out and moving to those places.

[Theoria]

That is true. The south in general is a hot market for people who are fleeing other areas.

[woodbutcher1963]

There are already real estate “deals” in places like rural New York State.

For example, my wife sent me a listing last month in western New York right near the PA border. It was a 180 acre farm. Updated house, barn, 30 acres of forest, balance in farm land was being rented to local farmer. It even included all the mineral/natural gas rights. $599K ask.

The states that all the people are fleeing will be where the best real estate deals will be available in the next couple years. People will continue to move to SC, NC, FL, TX, AZ, ID, CO, NH, MT, etc. However, with the increase in real estate prices in Boise/Tampa/Myrtle Beach in the last few years, they are not as attractive as they once were.

[joe fonebone]

Bought my first house in ‘82.
Assumed the sellers mortgage.
The rate was 9.5%.
A virtual bargain back then.
jimmah cahtah is still the worst president this country ever had, but senile ol joe is trying his best to beat him.

[woodbutcher1963]

My first house was 1990 (10.375%)
I eventually refinanced that house down to 6.75%.

Second house mortgage started @ 6.375%. I refinanced that at least once more.

Third/current house I bought ten years ago @ 2.375%. I paid that off last year.
I am debt free for the first time since 1990.

[Dilbert San Diego]

They just threw out offers that weren’t cash up front.

---

What a crazy market we see.

Decades ago, when we bought the house we still live in, the purchase was contingent on the sale of our old house, so we could use the proceeds from that sale to make the down payment on the new house.

Apparently there is no patience for such contingencies anymore. The market seems to be full of people with all the cash in hand to buy properties.

[IYAS9YAS]

Any truth to his logic?

Used to be. Now they'll write you a nine-year note instead of lowering the price. What people are looking for is a payment that fits. If they can afford $400/month, that gets you $24,000 at zero percent over five years. That same payment at 8% gets you $19,700 over five years. To get that same $24,000 at 8% and keep the $400 payment, you have to go out 78 months.

Houses are going to move up and down relative to interest rates but no one offers more than a 30-year note. So if you can't extend the time at higher rates to lower the payment, you have to lower the cost.