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We have national investors AND the Chinese buying up brand new homes in HOA neighborhoods- and this is the Midwest.
if they have more properties in a neighborhood than can win a vote (ie, more than 1/3 when 2/3 have to approve a rule change) then it's going to be a problem for that neighborhood.
downplaying the number of foreclosures ("this number")?
I believe it's quoted, but ...
Even in '07-'10 - the foreclosure rate topped out at 2.3%
in 2019, foreclosures were almost unheard of. 0.39%
Now, there were about the same rate - with the moratorium - in 2020.
So, even if they TRIPLED to ~1% in 2021, they'd still be half of 2010.
If you want to focus on this issue - paying the mortgage - concentrate on the delinquency rate right now. And guess what - the delinquency rate was down for March.
Until about 4 months ago, nobody was getting ARM's. And ARM's that reset at a higher rate or even balloon and require refinancing - that's a HUGE part of the mortgage meltdown in 2008.
Agree with what you have presented.
In 1989 1 out of every 230 mortgages were 3% down or less. In 2007 it was 1 in 3. Default early the lender looses a ton. Collection costs, missed payments, high cost to fix the house prior to selling. No one fixes up their house when they don't have money for payments.
Down payments are the biggest barriers holding back those who want to own a home but don’t currently. 54% of that group say they can’t afford a down payment. Other common barriers include home prices being too high in their area (36%) and difficulty qualifying for a mortgage due to a low credit score (32%).
How do we "help"? Why the 2003 Down Payment Assistance Act of course. ... sigh
In a nutshell - A basic economic principle was violated. When standards are lowered, quality and efficiency suffer. Lowering standards to allowed people who never qualified, to qualify. They didn't qualify before the bubble and haven't since. Everything else is after the fact and made it worse. Like pouring gasoline on a fire. If standards aren't lowered, nothing bad happens.
Mortgage interest rates on the 30 year have doubled under Biden.
Few saw the last bubble. Peter Schiff was mocked and even called a communist when he correctly called the last top. He sees another top.
Highly inflated mortgage rates + highly inflated housing prices = a recipe for a financial disaster.
New homes that were affordable two years ago are now squeezing family budgets. They have no equity and no path to refinance when mortgage rates drop. Without margin in their budgets, they are one unexpected, major expense away from foreclosure.
However, I don't expect housing prices to drop soon. Demand far outpaces supply.
Last edited by Mad_Jasper; 05-03-2022 at 09:39 AM..
Highly inflated mortgage rates + highly inflated housing prices = a recipe for a financial disaster.
New homes that were affordable two years ago are now squeezing family budgets. They have no equity and no path to refinance when mortgage rates drop. Without margin in their budgets, they are one unexpected, major expense from foreclosure.
However, I don't expect housing prices to drop soon. Demand far outpaces supply.
This sums it up well. The only thing that could help drop prices across the board market wise is if many of these cities people are fleeing or avoiding become or are made affordable. The vacancy rate in cities is probably higher than in surrounding suburbs.
Highly inflated mortgage rates + highly inflated housing prices = a recipe for a financial disaster.
New homes that were affordable two years ago are now squeezing family budgets. They have no equity and no path to refinance when mortgage rates drop. Without margin in their budgets, they are one unexpected, major expense away from foreclosure.
However, I don't expect housing prices to drop soon. Demand far outpaces supply.
if you mean "quickly-rising mortgage rates", sure.
To me, "highly-inflated" means "greater than normal/average/historical". And these aren't those.
I worried going into 2020 that would constrain the market more (we already had fairly low inventory) was the inevitable rise in rates to ~6%, and what Sellers holding refinanced mortgages below 4% would do when they started considering moving and looked at what they could afford with a 6% rate (ie, not a huge upgrade in houses).
So, rates dropping where "everybody" was at/below 3% AND huge rises in home prices has hurt the flow of new listings worse than I expected. And we could easily see those folks who had been in their house 10 years say "I'll wait another 5 and see how it shakes out".
if you mean "quickly-rising mortgage rates", sure.
To me, "highly-inflated" means "greater than normal/average/historical". And these aren't those.
I worried going into 2020 that would constrain the market more (we already had fairly low inventory) was the inevitable rise in rates to ~6%, and what Sellers holding refinanced mortgages below 4% would do when they started considering moving and looked at what they could afford with a 6% rate (ie, not a huge upgrade in houses).
So, rates dropping where "everybody" was at/below 3% AND huge rises in home prices has hurt the flow of new listings worse than I expected. And we could easily see those folks who had been in their house 10 years say "I'll wait another 5 and see how it shakes out".
No, I mean highly inflated. It's nearly doubled in less than two years, along with the sharp increases in home prices and economic devastation of the pandemic.
The average home mortgage payment for new buyers is 30% more than it was in 2020 and you get less home for the buck.
did y'all complain when mortgage rates went from barely under 5% to under 3%? Did you call them "highly-deflated"?
Of course not.
Too many people choose to ignore the only charts/info that actually matter:
Median income/median home price in your location.
Affordability measures. Not "more" or "less" but only "affordable" or "not affordable"
Mortgage payment to disposable income.
did y'all complain when mortgage rates went from barely under 5% to under 3%? Did you call them "highly-deflated"?
Of course not.
Too many people choose to ignore the only charts/info that actually matter:
Median income/median home price in your location.
Affordability measures. Not "more" or "less" but only "affordable" or "not affordable"
Mortgage payment to disposable income.
The jest of my OP (since you seemed to miss it) is that doubling the interest rate in an out-of-control housing market is a recipe for disaster.
That's not a complaint, that's an observation. The topic of this thread is "real estate bubble". My comments were related to that subject.
You are arguing with yourself for the sake of arguing.
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