CMRivdogs Posted June 14, 2022 Share Posted June 14, 2022 29 minutes ago, 1776 said: Thirty year fixed mortgage rates are above 6% now. On the plus side we've stopped getting mail and phone calls from brokers asking if we want to refinance. Quote Link to comment Share on other sites More sharing options...
Motown Bombers Posted June 14, 2022 Author Share Posted June 14, 2022 Working in a bank, a lot of people in the origination side have been laid off. I think most of them understood it was going to be temporary. Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 14, 2022 Share Posted June 14, 2022 (edited) 30 minutes ago, Deleterious said: That doesn't seem right. the increase or the trouble for investors? Payment on a 100K for 30yr at 3.5% = $449. At 6.0% = $600. 150 = 33% of 450 Of course a mortgage payment may include taxes and insurance so the net increase in a prospective total payment may be a lower % of that larger total, but that is the calc for the mortgage piece. Edited June 14, 2022 by gehringer_2 Quote Link to comment Share on other sites More sharing options...
CMRivdogs Posted June 14, 2022 Share Posted June 14, 2022 A lot of the investment buying around here is cash offers. Now whether they turn a profit when they try to flip is another story. I haven't checked rental rates lately, Either way it's the average home buyer who is getting screwed Quote Link to comment Share on other sites More sharing options...
Screwball Posted June 14, 2022 Share Posted June 14, 2022 55 minutes ago, CMRivdogs said: We closed June 1 2020. Nothing like watching a house being built 700 miles away. I think at one point we were up about $70 thousand with one of the best lots in the sub. Not looking to sell anytime soon, I figure it will be on our heirs. I'm curious to see where it goes, the ones that did buy and sell quickly did ok. There is still one on the market that hasn't seen movement at least on Realty.com and Zillow. Upside it is a big military area and a college town. Good location between two major shopping areas (Richmond and Newport News). I am hoping that tempers things a bit. This reminds me of something else. I was remodeling my basement last year. In October of 2020 I was buying 4x8x1/2 un-sanded plywood for a little less than $30 bucks a sheet. This is up from low $20 range the last time I bought. 2x4s were going for almost $5 when they used to be less than 4. By January, the plywood was over $50 bucks and the 2x4s were over $6, so I stopped. Screw that. Around the same time, I went to my son's house who lives in a sub-division around Columbus, Ohio. Just in the last year (at that time) they started at least 8 or 10 new homes. How the hell does a home builder square the skyrocketing price of lumber with a house he quoted for X amount? And what does the person who wanted the house built do when the builder comes knocking - saying I need more money - which is the only thing I can think of he can do. Of course product inflation is not exclusive to homes. I've been retired for a few years now, but I wonder how much machine tooling has risen. Quote Link to comment Share on other sites More sharing options...
Screwball Posted June 14, 2022 Share Posted June 14, 2022 29 minutes ago, CMRivdogs said: A lot of the investment buying around here is cash offers. Now whether they turn a profit when they try to flip is another story. I haven't checked rental rates lately, Either way it's the average home buyer who is getting screwed Who are the cash people? I'm guessing people like Blackstone (private equity) and/or foreigners. Blackstone is now 'the largest owner of real estate in the world That is from 2015. Quote Link to comment Share on other sites More sharing options...
CMRivdogs Posted June 14, 2022 Share Posted June 14, 2022 That's pretty much who I'm assuming. Somebody like Blackstone. My niece had a house outside of Raleigh,NC last year. The house sold as soon as the agent listed it. Some outfit out of Texas, I think they ended up either renting or flipping it. Quote Link to comment Share on other sites More sharing options...
CMRivdogs Posted June 14, 2022 Share Posted June 14, 2022 12 minutes ago, Screwball said: This reminds me of something else. I was remodeling my basement last year. In October of 2020 I was buying 4x8x1/2 un-sanded plywood for a little less than $30 bucks a sheet. This is up from low $20 range the last time I bought. 2x4s were going for almost $5 when they used to be less than 4. By January, the plywood was over $50 bucks and the 2x4s were over $6, so I stopped. Screw that. Around the same time, I went to my son's house who lives in a sub-division around Columbus, Ohio. Just in the last year (at that time) they started at least 8 or 10 new homes. How the hell does a home builder square the skyrocketing price of lumber with a house he quoted for X amount? And what does the person who wanted the house built do when the builder comes knocking - saying I need more money - which is the only thing I can think of he can do. Of course product inflation is not exclusive to homes. I've been retired for a few years now, but I wonder how much machine tooling has risen. I chatted with the guy who put our fence up a few months after we closed. He said he had to go back to one quote after they found the lumber and up the price quite a bit. I don't remember how much. We decided early on we didn't want wood. Too much upkeep. Decided on an aluminum wrought iron style. A bit more pricy than wood but won't have to replace it any time soon unless a deer tries to run through it again. I figure we have nothing to hide, the fence was strictly to keep the dog in. The neighbors are welcome to join us when we enjoy the patio. We'll even provide the wine. Quote Link to comment Share on other sites More sharing options...
1776 Posted June 14, 2022 Share Posted June 14, 2022 35 minutes ago, CMRivdogs said: We'll even provide the wine. Now we’re talking 🍷 Quote Link to comment Share on other sites More sharing options...
Jim Cowan Posted June 14, 2022 Share Posted June 14, 2022 2 hours ago, 1776 said: Thirty year fixed mortgage rates are above 6% now. I forget what my highest mortgage rate in the 1980's was, probably about 12% for 25 years fixed. Variable rates got up around 18%, so I was lucky to have chosen fixed. I used to listen to institutional investment managers back then who predicted a return to "hat-sized interest rates" and they were eventually correct. Quote Link to comment Share on other sites More sharing options...
Motown Bombers Posted June 14, 2022 Author Share Posted June 14, 2022 It wasn't that long ago that interest rates were at 6%. The SCRA, which was passed in the mid 2000's under the Bush administration, capped interest rates at 6%. Quote Link to comment Share on other sites More sharing options...
Screwball Posted June 14, 2022 Share Posted June 14, 2022 Historical 30 yr rates going back to 1971 from Freddie Mac 30-Year Fixed-Rate Mortgages Since 1971 I would do historical banking interest rates but I'm out of Kleenex right now. Thanks assholes! Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 14, 2022 Share Posted June 14, 2022 7 minutes ago, Motown Bombers said: It wasn't that long ago that interest rates were at 6%. The SCRA, which was passed in the mid 2000's under the Bush administration, capped interest rates at 6%. If you want to go way back to our parents gen, my recollection was that mortgages were mostly in the 4-6% range in the long post WWII period, roughly up until about where the chart starts. I guess the average on the charts represents a range, but at least in this area it wasn't hard too hard to beat. My parents took a mortgage in 72 at 5.5% I took a new one in 79 at 7.5%, and in 87 at 8.5% (memory more hazy about the last one). Quote Link to comment Share on other sites More sharing options...
Hongbit Posted June 14, 2022 Share Posted June 14, 2022 The assumption by all is a recession is coming. Rates will tumble back down once it hits. Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 14, 2022 Share Posted June 14, 2022 33 minutes ago, Hongbit said: The assumption by all is a recession is coming. Rates will tumble back down once it hits. the reality that the population continues to get older hasn't changed, the normal condition of this economy is going to be slow per capita growth, and if immigration is suppressed, the lack of domestic population growth will keep gross GDP growth small. That's not a horrible thing - 2% real per capita growth and everyone doubles their wealth every 30 yrs. The risks are not addressing income inequality and getting into a boom and bust cycle chasing the 4% growth that is really only possible with a continually expanding population. The population boom appears to be over in the developed world, but the political economists don't all seem to have gotten the message. Quote Link to comment Share on other sites More sharing options...
CMRivdogs Posted June 14, 2022 Share Posted June 14, 2022 Quote Link to comment Share on other sites More sharing options...
pfife Posted June 14, 2022 Share Posted June 14, 2022 4 hours ago, Screwball said: So are all the people who have recently bought. They are underwater already. A house across the street from me sold a couple months ago for 144,000. The people who bought it put a for sale sign in the yard a few weeks ago with an asking price of 155,000. They are screwed. It won't sell, and if it did, they won't even get the 144,000. The machine is already broken. I think this is happening near me too. There's a house that's been for sale for a week now. 1-2 months ago you couldn't keep a house on the market for asking price for a day! Quote Link to comment Share on other sites More sharing options...
Screwball Posted June 15, 2022 Share Posted June 15, 2022 Not the Onion *** While I'm here. The other problem with the house across the street is it's not worth that much to begin with. Cheap credit and easy money does this. Not like we haven't watched this movie before. This is Cornhole, where things are cheap compared to the median and this is overpriced. *** It will be fun to watch the tape tomorrow for the FOMC release. Will be be 50 or 75 bps? If they go 50 I expect a strong move to the upside as I think the market has priced in at least 50, for now. Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 15, 2022 Share Posted June 15, 2022 about 4 blocks away a builder bought a very small rundown house and is trying to sell a new >2000 sq ft house built to custom spec on the 0.2 acre lot for $400/sq ft. Needless to say, it hasn't moved yet. Quote Link to comment Share on other sites More sharing options...
oblong Posted June 15, 2022 Share Posted June 15, 2022 They can’t stop building mansions here in Dearborn. Knock down everything from a 1000 sq foot house except one wall, to avoid certain rules as it’s classified as a remodel instead of new construction. Then cover as much greenspace as possible and put a circular drive out front. Then wonder why the east end floods. Quote Link to comment Share on other sites More sharing options...
Jim Cowan Posted June 15, 2022 Share Posted June 15, 2022 59 minutes ago, oblong said: They can’t stop building mansions here in Dearborn. Knock down everything from a 1000 sq foot house except one wall, to avoid certain rules as it’s classified as a remodel instead of new construction. Then cover as much greenspace as possible and put a circular drive out front. Then wonder why the east end floods. That's been the southern Ontario model for decades, cover as much of your building lot with house as you possibly can. Who needs a yard, or trees? Quote Link to comment Share on other sites More sharing options...
Deleterious Posted June 15, 2022 Share Posted June 15, 2022 (edited) 50bps is off the table today. Give me 90/10 it will be 75/100bps. Edited June 15, 2022 by Deleterious Quote Link to comment Share on other sites More sharing options...
Hongbit Posted June 15, 2022 Share Posted June 15, 2022 1 hour ago, Deleterious said: 50bps is off the table today. Give me 90/10 it will be 75/100bps. Agree. It will probably be 75. The 50 ship sailed on Monday. A full point seems more likely than 50bps. Quote Link to comment Share on other sites More sharing options...
1984Echoes Posted June 15, 2022 Share Posted June 15, 2022 1 hour ago, Hongbit said: ... A full point seems more likely than 50bps. I was thinking this... A full point to... make a point? Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 15, 2022 Share Posted June 15, 2022 3 minutes ago, 1984Echoes said: I was thinking this... A full point to... make a point? The last time the US was suffering serious inflation, the idea of the central bank raising interest rates in response was still considered a controversial new approach. Today it's what everyone expects and has already discounted. I don't see much reason for the Fed to slow walk it. They need to do 100pts. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.