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Surprisingly, some experts believe mortgage rates will fall further. Nobody can be certain of this, because at any time investors may flee the dollar, overwhelming even the Fed's ability to print money and resulting in higher inflation that will necessitate higher interest rates.
<<Greg McBride, CFA, Bankrate’s chief financial analyst, likewise sees rates falling in the coming year. “The recovery will be slow, and spreads between mortgage rates and Treasuries will narrow meaningfully,” he says. “The best rates will typically be in the mid- to high 2s.”
Audrey Boissonou of Guarantee Mortgage in Walnut Creek, California, agrees with that assessment. “I’m locking people in in the high 2s right now,” she says. “I am seeing nothing that makes me think rates will go up. Of course, it all depends on what happens in the next few months. It can all change on a dime.”
Predicting rates is always a challenge, as Boissonou notes. But if the Fed’s attitude is any indication, then rates could remain low over the next year.>>
Lower mortgage rates increase housing demand, all things being equal, and help raise housing prices.
However, not all things are equal. The currently low interest rates result from the artificial intervention of the Fed with unprecedented increases in the money supply reportedly not seen since WWII.
Many experts believe that the Fed has baked a significant inflation into the nation's economy once the economy achieves reopening momentum. This also will raise housing prices.
Also, don't be surprised if population flows begin to favor northeast Ohio. The Southeast is overdue for a massive hurricane and the recent "Godzilla" Saharan dust cloud may trigger another significant Red Tide event by October. Additionally, a Democratic Party wave victory in November may result in a repeal in the SALT tax provision that has adversely impacted for more wealthy investors states with income taxes.
If you rent a high rise unit where you must deal with elevators and common areas, you'll have some increased COVID-19 exposure.
So, if you would enjoy a home more, now is a good time to keep looking. Keep an eye on mortgage rates to see if you can get a lower rate locked-in and certainly before signing a purchase agreement.
Agree rates will go under 3%, they should be there now but new mortgage Apps are still strong so no need for Banks to lower rates at this time.
I disagree on your population flow, population flow to the SE has increased, many yes from SALT tax States but big number of Ohioans looking to locate to the Carolinas. Massive hurricane and your Godzilla event is not even consideration by most, only those with a narrative. Houses in my neighborhood are selling in less than a week, many with multiple bids and out of the the last seven houses that Sold since June, two were Buyeyes.
The NOAA is projecting as much as a foot of sea level rise by 2030. What impact will this have on ocean beach inundation?
All interesting, but here's where the rubber meets the road - the reality on the ground. This is one example, but since the oceans are all interconnected it's as good as any. I just returned from Sanibel Island, FL, a place I have been every year, and sometimes multiple times per year for nearly my entire life of nearly 4 decades.
No change AT ALL to the beaches, erosion, water levels, canals - nothing. Ever. In my lifetime. Just to the eye alone you can tell it's not happening. Meanwhile, the great lakes are at record high water levels and experiencing erosion. But this is all cyclical and can be explained by short term weather events - series of a few cold winters and above average rain. They will drop and there will suddenly be screams of climate change to explain that away....
Experts are horribly wrong on predictions, especially on models with high margins of error. Then of course is the fact that today's coast line was once 100 miles + out to sea in several locations, including the Carolinas millions of years ago. In addition, places like Charleston were once well inland. All before "human produced climate change."
None of this adds up. We are simply living in a period of time where the coasts are where they are and they will change as they always have. We can't stop it or predict it. Enjoy as it is today, and quit worrying about things we are powerless against.
I disagree on your population flow, population flow to the SE has increased, many yes from SALT tax States but big number of Ohioans looking to locate to the Carolinas. Massive hurricane and your Godzilla event is not even consideration by most, only those with a narrative.
Bingo. And as someone presently living in the carolinas for a few more weeks, the inflow is accelerating. Once our time is up in Ohio for my wife's career, we will return here or elsewhere in the SE.
All interesting, but here's where the rubber meets the road - the reality on the ground. This is one example, but since the oceans are all interconnected it's as good as any. I just returned from Sanibel Island, FL, a place I have been every year, and sometimes multiple times per year for nearly my entire life of nearly 4 decades.
No change AT ALL to the beaches, erosion, water levels, canals - nothing. Ever. In my lifetime. Just to the eye alone you can tell it's not happening.
This post is a bunch of baloney, and it will become perfectly obvious to everyone over the next few decades, probably even by 2030.
<<Heavy rains and rising sea levels are causing beaches around the island and the Sanibel Causeway to erode at a more rapid pace.
Lee County workers and research scientists are giving their best effort to restoring the beaches before too much of it is washed away. >>
Yet one of Florida's top sea level rise experts explains why the outlook is much worse for southern Florida.
<<Every section of coast has regional influences that add to or subtract from the GMSL rise. For South Florida, our future “total relative sea level” rise will include an addition of 15 to 20 percent from projected slowing of the Florida Current/Gulf Stream and 20 percent to 52 percent from redistribution of ocean mass as the Greenland and Antarctic ice sheets melt.
Their huge ice masses pull water toward them. As they melt and their mass diminishes, their gravitational attraction diminishes and ocean water redistributes.
This means that South Florida should add 35 percent to 72 percent additional rise to the GMSL projections. The total relative sea-level rise for South Florida by 2046 could thus be 2.7 to 3.4 feet, and within 50 years could be 5.7 to 7.2 feet. This is not an encouraging future when you look at elevation maps of South Florida or most any other coast.>>
Meanwhile, the great lakes are at record high water levels and experiencing erosion. But this is all cyclical and can be explained by short term weather events - series of a few cold winters and above average rain. They will drop and there will suddenly be screams of climate change to explain that away....
Great Lakes water levels are cyclical. Ocean sea level rise over several years has one trend -- up -- and the rate of increase is accelerating.
Arctic Amplification is an empirical fact. The permafrost is thawing releasing massive amounts of methane into the atmosphere.
Experts are horribly wrong on predictions, especially on models with high margins of error. Then of course is the fact that today's coast line was once 100 miles + out to sea in several locations, including the Carolinas millions of years ago. In addition, places like Charleston were once well inland. All before "human produced climate change."
We're talking about climate changes over decades, not hundreds of millions of years.
I'm so sick of Trump-like belittling of scientific experts in favor of Big Lie propaganda and "magic think."
Hasn't the idiocy of ignoring experts been well proven in the Trump administration's handling of the COVID-19 epidemic?
Ignoring experts is even more reprehensible when empirical evidence is ignored or, as in your claims about Sanibel Island, terribly misrepresented.
Bingo. And as someone presently living in the carolinas for a few more weeks, the inflow is accelerating. Once our time is up in Ohio for my wife's career, we will return here or elsewhere in the SE.
Most Americans have NO clue what is coming with climate change, just as they had no clue about the COVID-19 epidemic, in both cases greatly because of "Big Lie" deceit and suppression of scientists practiced by the Trump administration.
Likely a major hurricane hitting a population center will trigger the first wake-up call.
Most Americans have NO clue what is coming with climate change, just as they had no clue about the COVID-19 epidemic, in both cases greatly because of "Big Lie" deceit and suppression of scientists practiced by the Trump administration.
Likely a major hurricane hitting a population center will trigger the first wake-up call.
All interesting, but here's where the rubber meets the road - the reality on the ground. This is one example, but since the oceans are all interconnected it's as good as any. I just returned from Sanibel Island, FL, a place I have been every year, and sometimes multiple times per year for nearly my entire life of nearly 4 decades.
No change AT ALL to the beaches, erosion, water levels, canals - nothing. Ever.
<<Particularly problematic are Palm Beach and Lee counties, where 77,205 and 58,601 properties are at risk of flooding but do not fall within the federal flood maps, the highest discrepancies in the state....
“They’re going to watch the value of their property plummet over time,” he said. “That might make them think twice,” he said, adding that it might also convince them to ask their elected representatives “to do something about it.”>>
Sanibel is part of Lee County, FL. The above findings are based on CURRENT sea levels, and now that sea level rise is rapidly accelerating, flooding risks will affect ever more coastal properties. The inevitable declines in property values will impact local economies and certainly governmental finances. Currently, coastal properties are often the most valuable properties in coastal counties.
Also, note the substantial discrepancies in flood risk properties in the Carolinas.
Economic conditions in coastal counties especially will worsen when beach vacations become a thing of the past.
As ocean beaches become inundated, Great Lakes beaches may become the only surf beaches in the U.S., unless there is significant and rapid migration of ocean beaches, an extremely difficult process in developed areas.
Currently, the federal government subsidizes the FEMA flood insurance program to the tune of billions annually. Billions are spent by the federal government on beach "replenishing" and other anti-erosion infrastructure in the ocean coasts. As the federal budget increasingly is obliterated and other pressing needs are left unmet, these wasteful programs likely have an limited life.
Combined with warmer, more humid temperatures and increased risks of more powerful and damaging hurricanes, a Great Climate Change migration seems inevitable, ironically accelerated by the climate change deniers that often dominate the political scene in Florida, the Carolinas, and other coastal states.
All of this in enlightening. But the OP wanted to know whether it was the right time to buy in the Cleveland suburbs. smh
That question involves U.S. macroeconomics and northeast Ohio microeconomics IMO. So my answer to the question is that my opinion is that now is a good time to buy a house IF you have a very safe job or superb skills that always will be in demand in this economy. With the rapid advance of artificial intelligence (AI), such job skills may be more transitory than imagined by their possessors; e.g., many radiologists and attorneys are burnt toast in the opinion of some experts. AI expertise obviously is a great job skill.
So, what about the U.S. macroeconomic outlook? My opinion is that U.S. faced many problems before the advent of the Trump administration, including declining international competitiveness; massive federal debt and unfunded liabilities; excessive corporate debt; very weak savings, especially retirement savings; poor tax system; failing education system including for university students increasingly burdened by student loans; and, most disturbingly IMO, the onslaught of climate change.
The inept Trump administration has done little to alleviate any of these problems, and its handling of the COVID-19 epidemic has greatly impaired the ability of the U.S. to deal with these difficult problems, and actually has greatly aggravated many of the problems.
Some predict a coming depression that would suggest lower housing prices in the years ahead. E.g., search for "Nouriel Roubini Depression."
My expectation is that such a depression likely will be an inflationary depression, as most famously experienced by Germany after WWI. In the wake of Milton Friedman, Ben Bernanke and the heavy influence of monetarism, it would seem inconceivable that the Federal Reserve would shrink the money supply, as unbelievably occurred during the Great Depression (it always amazed me when my parents told me that there was no currency available during the Great Depression; my mother, a teacher, amazingly was paid for in script issued by her school board and she said it was as a good as dollars in stores). Additionally, the U.S. federal government and major corporations had brick "sh*thouse" (perhaps a dated analogy today when most persons have never experienced an outhouse, but I still like it) balance sheets entering the Great Depression, especially compared to today. The Fed already talks about "helicopter money," a concept that would have appalled the financial leaders of the 1930s.
If we have a hyperinflation, my bet, then owning a house with a 3 percent mortgage would be a great store of value in a sea of risk as long as you can afford to service the mortgage and pay taxes (it is a scary proposition about how to protect the purchasing power of savings in the years ahead, especially if an inflationary depression were to wipe out the "old" U.S. dollar; my bet is copper but "Dr. Copper" may be a risky bet in any economic depression, despite its essential role in de-carbonizing the global economy; others suggest gold, silver, and even the likes of bitcoin, and of these three, silver IMO has the most favorable attributes, especially for students of the gold/silver ratio).
Yet, with climate change, mankind is about to enter a reality that it hasn't experienced since Noah, and it won't be just sea level rise, but also rapidly rising temperatures, food shortages, and, catastrophically, even decreased oxygen levels in the atmosphere.
Now consider that the NOAA sees sea level rise reaching a foot or more from current levels in this decade. Recently, sea level has been rising 1/4 inch/year, up from 1/8th an inch, just a few years ago. To reach a foot of sea level increase, the annual increase will have to reach over an inch per year. Persons will definitely witness the increasing inundation of coastal areas in this decade. Read about Miami Beach, Miami, and especially Key West experiences in recent years.
So, turning to Cleveland microeconomics, I've said repeatedly that northeast Ohio likely will see net inbound migration by 2030. It will be slow at first, but maybe not. How many Americans have heard of the Thwaites Glacier? How many Americans know about rapid hurricane intensification or considered the possibility of a Dorian-like hurricane hitting a heavily developed part of Florida?
My thesis is that when you consider the impacts of climate change, Cleveland with its generally above average amenities, relatively low property values, greatly moderating winters, and great supply of fresh water, is a very logical destination for climate change refugees.
Of course, a very important issue is the quality of life improvement provided by home ownership, perhaps at a very reasonable economic cost compared to apartment renting.
Apart from the longer-term trends discussed above, I have a harder time comprehending the Cleveland housing market over the next few years. It's possible that many market participants may not be able to afford more expensive homes. E.g., barring significant federal aid, Cleveland's medical institutions may face great financial peril.
Perfectly timing any market is a herculean task. It's very possible that there may be many months of great bargains in the Cleveland housing market in the next couple years, something akin to the market lows in March and April in the U.S. stock market. Yet I really wonder if new entrants into the Cleveland housing market won't scoop up more expensive homes, considering the vast number of U.S. coastal residents who may experience a wake-up call in the next few years.
Spencer Glendon, whose warnings were featured in the article in post 4, is an extremely prominent individual in U.S. financial circles.
Sadly, most of us won't have access to the same climate change research available to leading financial institutions. However, Glendon, one of the key players in the above project, already has provided the punchline for anybody smart enough to pay attention.
BTW, here's an article about the "human climate niche" that I had missed, but discovered while looking for the info on Glendon. Personally, I greatly enjoy four seasons of weather. I'm not fond of high temperatures nor high humidity, nor of "treading water," one of Bill Cosby's great comic lines that I often think about these days.
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