Mortgage rates

FireFoley said:

Just came across this. Florida only.

Number of Fla. Homes Behind on Rent or a Mortgage? 51%

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The survey is an experimental study to analyze how the pandemic affects people socially and economically, and some industry leaders say the survey should not be taken as a hard-and-fast indicator of how many people actually face eviction.

“(The Household Pulse Survey) is more of a renter-sentiment survey than … a threat-to-eviction survey,” says Apartment Association of Greater Orlando CEO Chip Tatum. “Th

LagoonGator68 said:

The survey is an experimental study to analyze how the pandemic affects people socially and economically, and some industry leaders say the survey should not be taken as a hard-and-fast indicator of how many people actually face eviction.

“(The Household Pulse Survey) is more of a renter-sentiment survey than … a threat-to-eviction survey,” says Apartment Association of Greater Orlando CEO Chip Tatum. “Th

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Yes you are correct. But it is not going to matter for a very long time. They will extend the eviction moratorium and the mortgage forbearance. And those with money will continue to buy over priced homes b/c rates are headed south again. Just as the 10 yr. Treasury sniffs 1% ( I know still laughable), it waves, not hello, but bye bye and heads lower back to 88 basis points. Why? B/C the German 10yr. Bund is headed back to near its all time lows of MINUS 75 basis points as it sniffs MINUS 65 basis points now. Portugal and Spain's 10yr. is now sub ZERO so it just puts the US 10yr. lower. So @Concrete Helmet and his minions can gear up for another refi cycle. The circle jerk never ends and myself and @BMF will have to wait another 5-10 years to pick up the scraps.

FireFoley said:

Yes you are correct. But it is not going to matter for a very long time. They will extend the eviction moratorium and the mortgage forbearance. And those with money will continue to buy over priced homes b/c rates are headed south again. Just as the 10 yr. Treasury sniffs 1% ( I know still laughable), it waves, not hello, but bye bye and heads lower back to 88 basis points. Why? B/C the German 10yr. Bund is headed back to near its all time lows of MINUS 75 basis points as it sniffs MINUS 65 basis points now. Portugal and Spain's 10yr. is now sub ZERO so it just puts the US 10yr. lower. So @Concrete Helmet and his minions can gear up for another refi cycle. The circle jerk never ends and myself and @BMF will have to wait another 5-10 years to pick up the scraps.

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I've been doing a lot of research on this (housing bust/correction): my educated guess is that sometime after July it will start, it may not hit Florida until a few months after that (since so many people are relocating to Florida). But after the usual house selling season ends (May or so), things will start to slow down, people who really want to sell/move will have to lower their asking price, houses will sit on the market longer....leading to a bigger inventory. Then it's go-time. I don't think we'll see anything like we saw in 2008, but there will be a correction. I'm guessing 10-20% (so a $500k house today may go for low $400k's by next fall, winter). I'm willing to wait it out. We're planning to sell here and cash in big-time....then rent in Florida for a year or so until we find the right property.

FireFoley said:

Yes you are correct. But it is not going to matter for a very long time. They will extend the eviction moratorium and the mortgage forbearance. And those with money will continue to buy over priced homes b/c rates are headed south again. Just as the 10 yr. Treasury sniffs 1% ( I know still laughable), it waves, not hello, but bye bye and heads lower back to 88 basis points. Why? B/C the German 10yr. Bund is headed back to near its all time lows of MINUS 75 basis points as it sniffs MINUS 65 basis points now. Portugal and Spain's 10yr. is now sub ZERO so it just puts the US 10yr. lower. So @Concrete Helmet and his minions can gear up for another refi cycle. The circle jerk never ends and myself and @BMF will have to wait another 5-10 years to pick up the scraps.

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You're spot on about the bonds and it is plain to see which way rates will be going for the next few years...sure there might be a few upward jogs with the 10yr here and there but I imagine 15yr 1st mortgages will be in the 1.50% before the end of 2021 with 30yrs at around 2.00-2.50....
There will be some inventory freed up by bank foreclosures by May or so...but not a lot.

I don't see a smaller stimulus package saving many delinquent homeowners by next fall though...eventually the banks will want to lend new(good) money on the property and put it in their REO portfolios to be rehabbed and sold(this became popular with banks around 2012-2015)

Disclaimer needed here because I've been wrong a whole bunch of times before but to me this signals a shift to LT ETF's(16-18%ytd), value stocks and some metals.... and further away from tech/growth for the next few years. Consumer spending is dropping drastically in a lot of areas from what I've been hearing and will offset the stimulus leading the SM down...

@FireFoley - what are the numbers like in "normal" times? It says we're at 7.7% delinquent (and 10% is considered "crisis peak") and forbearance's are around 5.5% - what is a "normal" number?

I posted in the other thread, but the housing market has my full attention. It's still kicking ass here in the DC area, so I'm not too concerned yet about selling - I think we're going to kill it, getting way more than we thought we'd get a year ago. But I want to see what happens to the Florida housing market, with so many people moving to the state.

BMF said:

@FireFoley - what are the numbers like in "normal" times? It says we're at 7.7% delinquent (and 10% is considered "crisis peak") and forbearance's are around 5.5% - what is a "normal" number?

I posted in the other thread, but the housing market has my full attention. It's still kicking ass here in the DC area, so I'm not too concerned yet about selling - I think we're going to kill it, getting way more than we thought we'd get a year ago. But I want to see what happens to the Florida housing market, with so many people moving to the state.

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3 words....location, location, location...

BMF said:

@FireFoley - what are the numbers like in "normal" times? It says we're at 7.7% delinquent (and 10% is considered "crisis peak") and forbearance's are around 5.5% - what is a "normal" number?

I posted in the other thread, but the housing market has my full attention. It's still kicking ass here in the DC area, so I'm not too concerned yet about selling - I think we're going to kill it, getting way more than we thought we'd get a year ago. But I want to see what happens to the Florida housing market, with so many people moving to the state.

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I can't say that I know what is "normal" or "average" but it is safe to say that it is well under 5%. I think I once heard under 2% but do not quote me and that is foreclosure. Nationwide forebearance is new and work arounds had to be done individually. Now it is for all. I agree with you on what will happen in the DC area and you have no worries on selling. Here in FL, I am in an area similar to what you are seeking on the west coast but I am east, and it is similar to DC. If in that meaty price range where the majority seek it goes quick. As someone said location does matter, but in this day, rates matter a shyt ton more than they used to given the huge run up in prices.

But what none of us can know regardless of these stats and %'s, is that given the moratoriums on rental evictions and these mortgage forbearance plans, until they completely stop these emergency situations, the picture will not be clear. You know it used to be obvious who was in trouble or in foreclosure b/c it was a job loss or a medical situation, family issue, etc. Now it is impossible given the gov't hands in every piece of the economy. Similar to @BNAG8R I think I am going to rent again this summer as I feel this will take a long while to shake out, especially in places like AZ, NV, FL. TX etc., all the places that people from CA and NY are fleeing to. But I feel like the higher the price, the larger the % slide, which is not always the case. I think the 350K area and below will be anchored for a long time and prices will compress going downward, just as prices have compressed going upward.

BNAG8R said:

Waiting......waiting..... I’m renting until June, I’d love to see a collapse before then. I don’t care what interest rates do.

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That's our plan, but we'll probably wait longer. We hope to be in a (rental) house by May (or April, if things go well up here). I don't think Florida will take a dip until the 3rd quarter (after July) - more inventory & houses sitting on the market longer due to being over priced, then we'll see sellers (the one's who really want to sell) lowering their asking price. This will (or should) cause a shift in pricing, it may cause potential sellers to panic and list their house earlier than they wanted so they don't miss out on the inflated price tags, etc. I may even wait until early 22 to buy, just depends on what the market is doing. I think you're right on interest rates, even if they go up a little they'll still be near all-time lows (I bought my first house in 1996 at 7.125%).

U.S. Existing-Home Sales Decline for First Time in Six Months

U.S. Existing-Home Sales Decline for First Time in Six Months

Sales of previously owned U.S. homes fell in November for the first time in six months, suggesting that surging prices and a record-low supply are constraining red-hot demand.

Contract closings decreased 2.5% from the prior month’s almost 15-year high to an annualized 6.69 million rate, according to National Association of Realtors data released Tuesday. That was up 25.8% from a year earlier and compared with economists’ forecasts for 6.7 million.

The median selling price jumped 14.6% from a year earlier on an unadjusted basis to $310,800, the fourth straight month of double-digit increases.

The decline signals that strong demand is running up against constraints, with few available properties and weaker affordability likely keeping some buyers out of the market. Still, home sales remain brisk, well above pre-pandemic levels and near the highest since 2005, with demand skewed toward more-expensive houses.

The new fiscal stimulus package, approved by Congress on Monday, could prop up household incomes and keep the purchasing spree going into the first quarter of next year.

“Housing affordability, which had greatly benefitted from falling mortgage rates, are now being challenged due to record-high home prices,” Lawrence Yun, NAR’s chief economist, said in a statement. “That could place strain on some potential consumers, particularly first-time buyers.”

BMF said:

The new fiscal stimulus package, approved by Congress on Monday, could prop up household incomes and keep the purchasing spree going into the first quarter of next year.

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So now people on Govt. asst. will qualify for new home loans....I am truly blessed

Concrete Helmet said:

So now people on Govt. asst. will qualify for new home loans....I am truly blessed

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I plan to sell in the first or early second quarter next year (March, April, or May). Prop away federal government!! Prop away!!

BMF said:

I plan to sell in the first or early second quarter next year (March, April, or May)

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I think you'll be OK but I wouldn't wait any longer than that time line....

On a related topic I heard something quite crazy but in a way it makes sense. If we ever got around to doing student loan forgiveness in say the next 1 to 3 years there is a theory that it would get some silly milly's out of their parents houses and with that debt gone they would qualify for home purchases....errrrrrybody gonna get them a house then....

BMF said:

U.S. Existing-Home Sales Decline for First Time in Six Months

U.S. Existing-Home Sales Decline for First Time in Six Months

Sales of previously owned U.S. homes fell in November for the first time in six months, suggesting that surging prices and a record-low supply are constraining red-hot demand.

Contract closings decreased 2.5% from the prior month’s almost 15-year high to an annualized 6.69 million rate, according to National Association of Realtors data released Tuesday. That was up 25.8% from a year earlier and compared with economists’ forecasts for 6.7 million.

The median selling price jumped 14.6% from a year earlier on an unadjusted basis to $310,800, the fourth straight month of double-digit increases.

The decline signals that strong demand is running up against constraints, with few available properties and weaker affordability likely keeping some buyers out of the market. Still, home sales remain brisk, well above pre-pandemic levels and near the highest since 2005, with demand skewed toward more-expensive houses.

The new fiscal stimulus package, approved by Congress on Monday, could prop up household incomes and keep the purchasing spree going into the first quarter of next year.

“Housing affordability, which had greatly benefitted from falling mortgage rates, are now being challenged due to record-high home prices,” Lawrence Yun, NAR’s chief economist, said in a statement. “That could place strain on some potential consumers, particularly first-time buyers.”

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Did you see that at the going pace, there is a 2.9 month supply of existing homes on the market? Also did you see that sales of homes priced 750K and above increased by 82%. That is kind of what I have been thinking/saying. A lot of these people were in the 500-600K crowd, but with rates this low, they "stretch" a bit b/c the monthly payment is not any larger than when they first started pondering a home. This is where the problem will be if rates ever rise or if there is some other shock in the future.

FireFoley said:

Did you see that at the going pace, there is a 2.9 month supply of existing homes on the market? Also did you see that sales of homes priced 750K and above increased by 82%. That is kind of what I have been thinking/saying. A lot of these people were in the 500-600K crowd, but with rates this low, they "stretch" a bit b/c the monthly payment is not any larger than when they first started pondering a home. This is where the problem will be if rates ever rise or if there is some other shock in the future.

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I've said it before, but I don't think the coming "crash" will be anything like the previous one....but something's gotta give. The jobs are all coming back and inflation will take off sooner or later. But these rates are supposed to stay low for another 2 years or so. We've had two houses in our neighborhood go up in the last 3 weeks for significantly higher than we ever thought we'd see (similar homes to ours). Our plan is still to rent when we move to Florida, and take our time looking for the right property and hopefully wait out a crash. Right now everyone seems to be making money (in the markets and in real estate). It's definitely worrisome, especially at my age and place in my life.

People are moving to Florida in droves...

BMF said:

I've said it before, but I don't think the coming "crash" will be anything like the previous one....but something's gotta give. The jobs are all coming back and inflation will take off sooner or later. But these rates are supposed to stay low for another 2 years or so. We've had two houses in our neighborhood go up in the last 3 weeks for significantly higher than we ever thought we'd see (similar homes to ours). Our plan is still to rent when we move to Florida, and take our time looking for the right property and hopefully wait out a crash. Right now everyone seems to be making money (in the markets and in real estate). It's definitely worrisome, especially at my age and place in my life.

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US home prices rise at fastest pace in more than 6 years

I guess Goon is not familiar with the term.....Blow off top.....

Florida simply doesn't have the diversity of industries to support a sustained economic uprising(especially with the condition of tourism/travel/hospitality)....we go through this every 10-12 years in a normal economic cycles.....here is how it goes(BTW I've seen it happen 4 times in the 56 years I've lived here)

Yankee become enamored with Mickey Mouse and lower taxes....
Yankee moves to Florida with high hopes and plenty of Disney tickets in pocket...
Yankee blinded by his northern property value mistakenly buys at the top of his range...
Yankee #A is a professional and excited by the new office his company JUST opened here....
Yankee # B is a Ham & Egger who thinks he knows a trade or is an unskilled laborer/salesman/********ter(usually a loudmouthed know it all) but was making $XXXX a week up north....

Fast forward 18-24 months...

Yankee #A is sweating bullets because rumors are flying that corporate is not happy with revenue from the new Orlando office and is either going to consolidate(lay people off) or cut losses and decide Florida is made up of a bunch of cheap rednecks who don't buy their goods or services....

Yankee # B can't believe how sh!tty the pay is here in Florida(Orlando especially) and he and his fat ass wife who works at a bank are barely making $2,500 a MONTH take home between BOTH of them....

Both are ready to bail but realize they are 20-40% upside down in their house because the market flattened out or worse went down.....meanwhile they've racked up 35k in CC debt and this time the bank wouldn't float them a HELOC....."whadya's mean our house is only worth 130k...we paid $250k less than 2 years ago"
This one gets short sale for 145-155K or sold on the courthouse steps for $125k


Yankee A usually cuts losses with 24-30 month's takes a loss on the 600K dream house and hauls ass back back north when he gets a tip that there is an opening back at corporate
This one is usually short sale because Yankee A is somewhat responsible and knows foreclosure is a big black eye...sometimes he just eats the 120-150k loss...house sells for 390-420k


Now the 3rd player in the game of cards is Larry the Bricklayer(insert any construction trade here)....local boy. Been layin alot of bricks and is gettin tarred of that old F150 and his fatass wife is tarred of living next to those noisy Puerto Ricans in East Orlando....Hell ol Larry the Brick layer can show the bank where he's been making 6-8 grand a month for the last 8-12 month's and he ain't never really liked livin next to them damned Ricans anyway....Hell their buying a fancy new house in Lake Nona with all the fixins where he's been laying all those bricks. Now he'll be neighbors with Yankee #A(he built Yankees house)....and just to be fair since Larry just financed him a 60k Bass boat with no money down and 180 month financing he just HAD to buy fat ass Becky a 25k diamond and a new Lexus SUV....

Fast forward 18-24 months and besides Larry and Becky's pending deeevorce the Judge want's to know who's getting the house and how any bank will be able to refinance it when it's 25-35% negative equity....

RINSE AND REPEAT.....