Posted on 10/28/2022 7:13:21 AM PDT by John W
Home buyers under the age of 45 have never seen home mortgage rates this high. Back in the early 80’s, if you were lucky you could assume someone’s VA loan and get an 8% rate, and a 2nd for the difference... or, start fresh with a mortgage pegged at around 12%.
Rates have stayed low for so long, many potential buyers will walk. That 12% rate on a 50k home loan might have cost you an extra $100 then, but with the typical 250k loan today, it’s more like $300 a month. Yipes!
Cortez just did a presentati9n on Bannon that was good.
Using an average salary in the USA of $71,000, that a person could afford a mortgage payment 9f $1,875 per month.
Using the January 2022 mortgage rates, that $1,875 per month would allow a mortgage on a $425,000 house.
Using the current 7.25% mortgage rate, that same $1,875 per month would only buy a $290,000 house.
Thus the FMV of real estate is crashing.
I still would rather own real estate than hold cash.
I remember getting a 13% or thereabouts mortgage in 83.
Luckily because I was moving and changing jobs, the new employer gave me an interest rate subsidy payment for 5 yrs.
Buyers can ‘t pay 1,000 per month more? Who would have seen this coming?
Given the backdrop of sharply rising mortgage rates (and expectations for continued inflation) that 4% prediction seems ridiculously low. It was so low in fact that it was off by a whopping 155%! Predicting is never easy, but this one wasn’t even in the ball park. Many predictions suffer from various forms of bias and other influences.
I’m no expert but do watch RE activity in two parts of the country and have seen a significant decline in sales lately.
Yup—house flippers and realtors are a dime a dozen.
Smart ones are true Unicorns!
(Stevie Wonder coulda seen this disaster coming...)
Not unusual. They got the direction correct, and that it would be a big big number, and it turned out it was even bigger than that. I don’t even really understand what the allegation being made. Is it that Wall Street economists are all 100% in the tank for Biden, and therefore constantly do their jobs poorly? Their bosses would not keep them around if that were the case. I have worked on Wall Street and management only cares about one thing: always guessing right.
In periods of true inflation there is only one good investment—a politician who gives you special favors from the government.
Everybody else has got a problem.
“My grocery bills are 30% higher...”
You've been here long enough, you know how this works.
See!! The Inflation Reduction Act is working!!!! Sales are down 10%. That will reduce inflation!
With two degrees in economics you should know that inflation is an increase in the money supply and price increases are only a possible consequence of it.
It’s crazy how upside down things are, and I blame what passes for entertainment these days.
You’re probably like me - I bought a ‘starter house’ I could afford with a monthly payment that fit my then-current income.
I wasn’t looking to ‘flip’ it, I wasn’t searching for that diamond in the rough that would make me a bundle once I completely remodeled it. And, since social media didn’t exist, I didn’t feel the need to compete with every other person on Instagram.
Today’s advice is to ‘buy as much house as you can afford, it’s only going up.’
We’ll see how that works out.
Impossible; best economy ever, Jack. Not kidding. Listen, I mean it. C’mon, man.
Oh sure. Sarcasm is always good. But as someone who has in the past been expected to guess these numbers...... it’s not easy.
So happy to have a paid off farm, land, and no plans to move!
But, I bought my first home in 1986, and interest rates were running around 5%, and that was on a VA Home Loan. So, comparatively, it’s not THAT awful to finance a home right now, and you can always re-fi in the future.
Real Estate is always VERY psychological. And, your money needs to go to higher fuel and food prices, which makes it trickier.
My Realtor is as busy as normal, but Midwest Real Estate is a whole ‘nother ballgame than on either coast.
Everybody said housing prices were way too high so this must be good news.
More of President Trump's clever outreach to disaffected Latinos would put 2024 in the bag.
The Fed knows what it is doing...making big dollars for its owners.
Fed wins every time.
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