Record home prices and now 30 year rates 7% +, FAIL (currency, loans, percentage)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Despite near constant moaning from some quarters US economy is actually doing rather well.
Very true - which is why I expect yet another interest rate hike.
Quote:
Originally Posted by BugsyPal
Those with good to excellent credit and are able to put down 15%-20% or more if not paying all in cash are more constrained by inventory issues IMHO.
Regarding inventory, it all comes down to the Fed's efforts to combat inflation by raising interest rates and quantitative tightening.
At one extreme, this will result in a recession with a lot of people losing their jobs, many of whom will also lose their houses (increasing the supply of housing on the market)
At the other extreme, the Fed engineers a "soft landing" without a recession and without substantial job loss. In that case, high mortgage interest rates will persist for many years to come, keeping the "stalemate" in place where existing homeowners just won't sell because they love legacy their low-interest-rate mortgage.
It is starting to look like the "soft landing" scenario is more likely than not. We could see inventory at historic low levels for another 5 years.
Last edited by moguldreamer; 10-28-2023 at 07:35 AM..
on the bright side, the low interest mortgages will promote the rental market for nice homes because many people owning them will turn them into rentals.
on the bright side, the low interest mortgages will promote the rental market for nice homes because many people owning them will turn them into rentals.
Why would you purchase a high interest 2nd home just so you can rent out the low interest first home?
Regarding inventory, it all comes down to the Fed's efforts to combat inflation by raising interest rates and quantitative tightening.
At one extreme, this will result in a recession with a lot of people losing their jobs, many of whom will also lose their houses (increasing the supply of housing on the market)
At the other extreme, the Fed engineers a "soft landing" without a recession and without substantial job loss. In that case, high mortgage interest rates will persist for many years to come, keeping the "stalemate" in place where existing homeowners just won't sell because they love legacy their low-interest-rate mortgage.
Yes, the effects of those low mortgage rates could persist for a very long time. Even after the current occupant(s) die the heirs have the option to keep the house and the mortgage. An heir could use the house, or rent it out. The sub-three-percent mortgage is the gift that keeps on giving, potentially into the 2050's.
Yes, the effects of those low mortgage rates could persist for a very long time. Even after the current occupants die the heirs have the option to keep the house and the mortgage. An heir could use the house, or rent it out. The sub-three-percent mortgage is the gift that keeps on giving, potentially into the 2050's.
Yes, the effects of those low mortgage rates could persist for a very long time. Even after the current occupant(s) die the heirs have the option to keep the house and the mortgage. An heir could use the house, or rent it out. The sub-three-percent mortgage is the gift that keeps on giving, potentially into the 2050's.
That's why the fixed rate mortgages are dumb. Variable rate allow the market to adjust to whatever the new reality is much quicker than being a frozen quagmire every time rates go up. Canada will be fixed long before we are.
The payment stability isn't worth the list price and sales volume gyrations that fixed rates bring.
That's why the fixed rate mortgages are dumb. Variable rate allow the market to adjust to whatever the new reality is much quicker than being a frozen quagmire every time rates go up. Canada will be fixed long before we are.
Well yes, I had the same thought. Fixed and variable each have their issues. If we had only variable loans in the U.S. we'd be seeing a lot of people selling or losing their homes today because they can't make the higher payments. Maybe Canada is different, in that buyers are not stretching their budget like we do here in the U.S.?? I don't know.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,060 posts, read 7,493,946 times
Reputation: 9787
Quote:
Originally Posted by Annandale_Man
Why would you purchase a high interest 2nd home just so you can rent out the low interest first home?
When the numbers work?
The numbers work for DS and spouse.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
