[SteveM85]

Originally Posted by tsek

Please don't make this discussion personal.

My point is, a 7-8% 30Y rate makes it impossible for all first-time buyers, and also effectively traps homeowners who don't have sufficient positive equity. Hence the word disaster.

I don't know about impossible, they could adjust down budget, but no question it's a detriment. That's obvious. Everyone knows higher interest rates can create a barrier. There's no doubt about it.
Best of luck in the search

[brownedbits]

Originally Posted by tsek

My point is, a 7-8% 30Y rate makes it impossible for all first-time buyers, and also effectively traps homeowners who don't have sufficient positive equity. Hence the word disaster.

I agree that this is most detrimental to first time buyers. I am not sure about how many homeowners will be trapped. So far, prices haven't dropped much or at all and even newer homeowners have ridden the appreciation wave where they are sitting on some equity. Unless one bought their house yesterday, they have benefitted from the rapid appreciation of homes. The truth of the matter is none of us know how this will play out. Everyone can scream "crash! bubble!" but it doesn't make it so. The housing market will at least cool off with interest rates the way they are. Anything else is just a guess. At the end of the day we all need a place to live and sometimes people absolutely have to move and can't wait until the stars align.

[Cambium]

Originally Posted by tsek

Please don't make this discussion personal.

My point is, a 7-8% 30Y rate makes it impossible for all first-time buyers, and also effectively traps homeowners who don't have sufficient positive equity. Hence the word disaster.

Not just that but let's hope that people weren't doing adjustable mortgages and everyone buying properties locked in rates when they were low. Anyone who has am ARM will get sticker shock when it changes and the bill comes

[MrGompers]

Originally Posted by tsek

It looks like real estate is the last domino standing. The 10Y is still going up... 8% mortgage rates soon? What a disaster.

Cash buyers don't care about interest rates. 30% of all home sales in the US are for cash. I would expect CT percentage to be the same.

[Cambium]

I believe the Fed wants to raise the rates 4 more times this year. So if they do 0.5 points each time that would bring the Avg 30yr fixed mortgage rates to over 7% by end of year.


That means with not so good credit and some banks will be over 8%

[New Englander]

Originally Posted by MrGompers

Cash buyers don't care about interest rates. 30% of all home sales in the US are for cash. I would expect CT percentage to be the same.

Cash buyers and investors won't be able to carry the market in CT. I'm watching this closely as we'll have a good sense of what happens to the RE market over the next few months. We're seeing demand dropping, however, will supply drop as well? If so, we'll see some sort of a short-term equilibrium.

As job losses mount and the labor market tightens with employers requiring employees to be back in the office -- we'll see some real price drops/shifts in the market.

I'm glad to have sold my less desirable properties when I did. Pretty much everyone who sold around me (Fairfield County) did very well. The irrationality of homebuyers was astounding and when they end up in a no equity/negative equity situation, they'll have no one to blame but their choices.

[synchem]

What's worse for 1st time home buyers?

A. High RE prices with lower rates
B. Lower RE prices with higher rates

[beer belly]

Originally Posted by synchem

What's worse for 1st time home buyers?

A. High RE prices with lower rates
B. Lower RE prices with higher rates

IMO, Lower RE prices with higher rates.....can always refi when rates drop

[SteveM85]

Originally Posted by synchem

What's worse for 1st time home buyers?

A. High RE prices with lower rates
B. Lower RE prices with higher rates

Assuming the same house:

"A" means you bought at a market high. If it's a less than say 5-8ish year stint, you may have to sell at a loss. How steep is anybody's guess.

If you plan on refi or staying long term or forever and payoff early, then "B", no question.

Forever and payoff early could be fine with A too

[evitathepup]

Originally Posted by beer belly

IMO, Lower RE prices with higher rates.....can always refi when rates drop

My interest rate as a first-time homebuyer who bought (jumbo loan) in summer 2021 is 2.75%. Not sure when we will see rates that low again and I wouldn’t count on being able to be refinance to a rate that low if I were to buy in the next couple of years, after prices dip a bit. My rate is the lowest my parents (70s) can remember seeing since they were aware of such things.