30yr mortgage rates closing in on 6% (premium, foreclosure, equity, default)
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I think the below 4% rate was a historic low and a anomaly that I'm sure a lot of people will have wish they jumped on. I think rates will remain in the mid 5% range for a while. A 5-7% rate is very good by historic measures. People waiting for it to go lower will be left behind just like people that did not get back into the stock market after March.
That is probably true, but a lot of buyers like myself are more fixated on the monthly costs rather than the rate. At the current offer price and current rate the monthly costs on what I have under contract are acceptable, but will soon become unacceptable if the rate keeps going up. The price of the property will have to come down to lower the monthly expense. The seller will likely be reluctant to go along with this and therefore the deal will collapse. I doubt I'm alone.
Heck, yeah. 6 percent sounds like chump change to me. Where were y'all in the early 80s when interest rates were 13 percent and higher?
And people still bought houses!
And how much were houses compared to salaries back then?
There's a reason why my in-laws were able to afford a gorgeous house in an affluent NYC suburb on the salaries of a union telephone guy and a stay at home mom.
That is probably true, but a lot of buyers like myself are more fixated on the monthly costs rather than the rate. At the current offer price and current rate the monthly costs on what I have under contract are acceptable, but will soon become unacceptable if the rate keeps going up. The price of the property will have to come down to lower the monthly expense. The seller will likely be reluctant to go along with this and therefore the deal will collapse. I doubt I'm alone.
I feel your pain--we are in the same situation. I wouldn't mind buying a less expensive house (in fact, I would prefer it), even a little bit of a fixer-upper, but the only one cheaper is a doublewide and we have deep issues with how well it would age and it's resale value, especially since it's lot is not even close to being as nice as the other lots in the area.
According to that (and ignoring the speculation of the coming months, since they did not happen yet), we are only at 2004 numbers, which were still ridiculous IMO. We still have quite a ways to go.
Perspective: I purchased my home in Aug 1983 at a 13.5% interest rate (a good deal at the time for someone with excellent credit). It is long since paid off, after numerous refi's. Younger folks ought to understand that the current, incredibly low interest rates (whether 5/6/7%) are an anomaly and unlikely to continue. A 30 year fixed rate mortgage is a huge bargain at current levels. Don't be surprised if rates go up significantly in the not too distant future. I have always kept my housing costs at or below 20% of gross income, it makes life much easier to avoid financial stress and related problems.
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