Posted on 10/26/2022 6:37:24 AM PDT by Oldeconomybuyer
(Reuters) - The average interest rate on the most popular U.S. home loan rose to its highest level since 2001 as tightening financial conditions weigh on the housing sector, data from the Mortgage Bankers Association (MBA) showed on Wednesday.
(Excerpt) Read more at reuters.com ...
Should be at least 10%
We’ll be back in Jimmy Carter territory soon. Way to go, Joe!!
I like it.
People need to wake the hell up.
It’s going to get real ugly. Personal savings have crashed since Biden took office and stand at 3.5%. That means people can’t come up with down payments to lower mortgage amounts.
It’s sucks that 51% of the country that is awake has to suffer because 49% are stupid and evil.
Back in Jimmy Carter days, the liberals still viewed home ownership as part of the American dream, a natural aspiration for working- and middle-class people, and a source of financial security and intergenerational wealth.
The left today doesn’t care. The activist left is actually hostile to private homeownership and wants to shift the norm to apartment living. The cubicle rat woke stormtroopers prefer to live in central cities anyhow, and many of them are down on the idea of having kids.
Making housing unaffordable serves the same goal as making gasoline and automobiles unaffordable.
You speak the truth.
“Should be at least 10%”
Hopefully that happens. By my calculation, at 9.6% the ability to buy a home is literally cut in half for the same payment, relative to the minimum 15 months ago, of 2.88%.
Obviously prices haven’t dropped that much, due to the lag time in people realizing that their homes have greatly depreciated. But prices have to go down...they cannot tread water with lead weights.
That’s what it was when I bought my first house in 1990. A couple of years later it dropped to 8% so i refinanced and paid $100 less a month. That was back when you could buy a house for $82,000.
my daughter is in the mortgage industry...with a couple years to retirement...
It’s going to get real ugly. Personal savings have crashed since Biden took office and stand at 3.5%.
************
The ugliness is only beginning. Rising rates depress stock and bond prices. Some pension funds are going to start feeling the squeeze.
Meanwhile inflation is destroying the purchasing power of peoples’ savings and retirement accounts.
Buckle up. And pay off every debt you can.
Is this Trump’s fault, Putin’s fault or a good thing?
CDs I notice are actually starting to pay some interest again...looks like it is time to move some money back into those...
Still not as high as during Jimmy Carter’s term which was 8% in 1977
“prices haven’t dropped that much”
Yup. Home prices in down markets are “sticky”—because sellers keep waiting for the Unicorn herd to arrive and save them....
At some point they “capitulate” and then it is time to catch the falling knife.
A lower rate but higher cash availability (liquidity) option is the “high” interest savings accounts.
More info on those here:
https://www.forbes.com/advisor/banking/savings/best-high-yield-savings-accounts/
Prices don't have to go down, inflation can increase devaluing the dollar and raising house prices even more.
From the early 70s to the mid 80s housing prices increased 5 to 10 fold.
So, people buying housing at these inflated prices may find that they got a bargain in 5 to 10 years.
Hard to tell which way it's going to go, not sure how to play this.
That is about half-way to the Carter era apex, but Biden still has 2 years, so it is doable.
With mortgage rates over 7%, the FED 3/4 point increases are lagging so far behind that they are having about as much impact as Biden’s Inflation Reduction Act.
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