Posted on 06/02/2023 5:34:40 AM PDT by millenial4freedom
Homebuying demand has dipped over the last month due to elevated mortgage rates and a scarcity of homes for sale. Average weekly rates hit 6.79% this week, their highest level since November. That has priced many people out of the housing market; the typical U.S. homebuyer’s monthly housing payment hit a record high of $2,651 this week, up roughly $350 from a year ago.
(Excerpt) Read more at finance.yahoo.com ...
The fuse is lit on this bubble bomb.
Our kid purchased a house 18 months ago, and the value of it has gone down. Depressing for a first-time home buyer. That said, they locked into a 30-year fixed @ 3.125%. Even with the lowered value of their house, they would be paying at least 1/3rd more on their mortgage @ 6.75%.
I have a mortgage now. I borrowed some dudes money 15 yrs ago. Every year his money value goes down by inflation and he only charges me a low interest rate.
I should do the math sometime, I bet we came out pretty good.
Now if deflation were to come along....
Anyone dumb enough to submit to the slavery of being a caretaker for the state, especially in this market, gets what they deserve.
Personally, it has always been a goal to save 30% of my income each month. While that was not always possible, especially when raising a family, it was a worthy goal that helped prioritize spending. That includes spending on housing. It used to be recommended to not have a mortgage payment greater than 30% of income. 30% was slightly higher than my personal risk tolerance. It limits long-term savings and investments, especially when that does not include savings for what I consider short-term savings for big ticket items like vacations, automobiles and emergencies. Those are things you do not want to finance through borrowing if you ever want to become debt free.
The key to being debt free is, believe it or not, is not going into debt. That snowballs over time. It becomes increasingly easier to become and remain debt free when you save and pay with cash.
“why banks increase their risk portfolio by lending to people when a mortgage payment is 41% of a person’s income.”
At the end of the day there is a government bailout.
Heads they win, tails we lose.
What is stupid about buying a house with a mortgage?
In my suburban town the market has pretty much collapsed in terms of inventory. Usually at this time of year there are 35-40 homes on the market as people rotate out of town.
Currently there are 17 homes on the market in my town.
The “Zillow Value” of my home has gone up $25k in the last two months. The house next door sold for above asking the day it went on the market.
While I appreciate the higher value to my home, its kind of scary to see the prices continue to increase...which in turn means, there is nowhere for me to move if I want to downsize.
2) A mortgage is all front end loaded with the interest.
Sure, 3% mortgages were a great deal, but all that did was artificially raise home values. I came from the 80's when a decent rate was 11%, (which kept property values from skyrocketing).
Saving every penny you can, pack a lunch every day, buy and drive used vehicles, don't run up credit cards, and let the cash build. In surprisingly short time you can buy the house you can afford with cash. Short sales are great buying opportunities.
You are absolutely correct. Therein lies two major problems: how banks and government operate. There is no escaping disaster, the default of both. Bailouts have a limit. There comes a time when there is no more money to bailout unless hyperinflation results.
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