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Old 10-24-2018, 02:58 AM
 
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With homebuilding stocks down 40%, investors hope Fed gets the message and slows rate hikes

Quote:
-Homebuilder shares plunged 40 percent from their mid-January high, a move reminiscent of their pre-financial crisis move starting in 2004.

-Mortgage rates hitting 5 percent could represent an important inflection point for housing.
https://www.cnbc.com/2018/10/23/with...e-message.html

No comment.....lol
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Old 10-24-2018, 02:47 PM
 
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Quote:
Originally Posted by C2BP View Post
With homebuilding stocks down 40%, investors hope Fed gets the message and slows rate hikes



https://www.cnbc.com/2018/10/23/with...e-message.html

No comment.....lol

Federal reserve has two mandates; to control inflation and promote employment. One is steadily increasing, while the other is at record historical lows.


Thing about inflation is you can't always predict how much of it is coming and when; if allowed to go on unchecked it can (and has) gotten away from governments, and then whoaaa Nellie!


US treasury is printing money in part to pay for DT's/GOP's "tax reform" that is starving the same for revenue. World markets have perked up and noticed, so I wouldn't place entire blame on the Fed.


Mortgage rates are largely affected by long bond yields (ten or thirty year T-bills), as such actions by the FR are only part of the story.


Home builders in USA have more fundamental problems to worry about than rising interest rates.


On average in most areas of USA homes (existing and new construction) are still far too expensive for average buyer, especially young people looking for first time purchase.


Labor is becoming tight forcing construction companies/contractors to raise pay for even the unskilled/non-union (and quite often illegals) they had turned to for cheap labor to beat down unions.


Rising interest rates do not (nor have not historically) spelled all doom and gloom for housing market. If a property is priced correctly so people can afford even with higher interest rates, things will sell. Lord knows our parents and others made that move in 1970's and 1980's when mortgage rates were much higher than today.
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Old 10-24-2018, 02:55 PM
 
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Quote:
Originally Posted by BugsyPal View Post
Oh I don't know; it really all depends on long bond (mostly ten year) yields.


Right now you have a federal reserve raising interest rates, *and* US treasury department flooding market with bonds to finance deficit spending. The latter is increasing at rapid rates thanks to DT/GOP tax cuts for the wealthy and businesses that is starving the treasury for revenue. Whatever bounce that so called tax "reform" provided is beginning to wane, and effects likely totally gone by sometime in 2019.


Meanwhile inflation though muted is rising, as it is wont to do when governments print money. Even if GOP retains their majorities in one or both houses of Congress (and even expands) they won't for a host of reasons make the serious cuts in spending needed to staunch the flow of red ink. That can only come by tackling the entitlement programs, military spending and a few other heavy drains on US treasury.


None of this begins to touch the other main issues facing US home market; prices are still too high for most looking to buy, and inventory in many areas is scarce.


High mortgage rates in of themselves aren't a bad thing. Our parents, grand parents or great-grand parents managed to buy when interest rates were twice or more than current rates. It is the sums borrowed that are more of an issue. This is where current high home prices are killing the market.
"Mortgage rates bust through 5% and keep rising" What do you mean it depends? The OP and I are talking present time, not next spring or 2020.

it has been 20 days since the OP. 30 year rate may have bust through 5%, but it sure as h*ll has not kept rising since. Even the "bust through" part is somewhat of a load of crap as it was more like "mortgage rates HIT 5%" and then "stalled". One can easily obtain a sub 5% mortgage today.
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Old 10-24-2018, 03:07 PM
 
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Thirty year is a hair over 5% as of this morning: https://themortgagereports.com/44586...ecommendations


The 15% is still below 5% however.


It isn't rocket science people. There are ways to negate even a "high" interest rate of 5% when it comes to a mortgage. Making a larger down payment is one tool in the box.


Nation has become soft; the past decade or so of low interest rates has created a bunch of snowflakes of all sorts who just can't make things work otherwise.


That is a shame because absent another major fiscal or economic crisis FR will continue to raise interest rates. And unless (or until) federal government sorts out this country's finances getting spending under control so it issues less debt, rates on T-bills aren't dropping back down to bargain basement levels either.


Simply put US and most world economies are getting back to normal after the upheavals of past decade. As such the need and or wisdom of cheap money is over.


Again the USA has been rather lucky in that despite flooding the economy in past with cheap money inflation didn't run rampant. That needle is now moving and people need to take notice. Things aren't back to "stagflation" levels , but never the less...


Stocks/Wall Street has enjoyed a huge run up thanks to all that cheap money. Now that FR is making moves people are worried. Bunch of guys (or girls) who don't know how to make money in market facing higher interest rates.
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Old Yesterday, 10:21 AM
 
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"US average mortgage rates fall; 30-year loan at 4.75%"

https://finance.yahoo.com/news/us-av...161055532.html
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Old Yesterday, 08:12 PM
 
Location: Boston
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good to see rates rising, creates more investing opportunities, rates were too low for too long
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Old Today, 03:51 AM
 
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mortgage rates hit a multi month low this week and are back under 5%. if markets keep taking a pounding bonds will fall lower and rates will drop as well
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