Mortgage rates

I was just headed here to post an update on 30 year rates. 8th month in a row it's gone down. We've had clients already refinance that purchased last year because they could save over a point or point and a half.

 

The housing market could use it. It's been in a slump. SALT caps are partly to blame.

 

Closed 200 plus last month.....again. We'll be hiring another full time closer next week when we get back from vacation.

 

I do not really think housing has been in a funk, I think that prices are just too high for the average person. It is why I think that another tick down in mortgage rates is fool's gold for most people b/c almost everyone is only buying a monthly payment, they are not truly "buying" a home. They only care about the max they can afford. and just like when mortgage rates breached 5% in 2018 and housing truly died, it will happen again if rates approach 5% again. those buying at elevated prices will see just how buying that monthly payment can be dangerous if they go to sell b/c they need more space, etc. I would only recommend re-fiing the amount that you owe, as opposed to purchasing the max you can afford. If you are buying within your means and you plan to stay, then I understand. otherwise, these low mortgage rates can be a big problem down the road.

 

I do not really think housing has been in a funk, I think that prices are just too high for the average person. It is why I think that another tick down in mortgage rates is fool's gold for most people b/c almost everyone is only buying a monthly payment, they are not truly "buying" a home. They only care about the max they can afford. and just like when mortgage rates breached 5% in 2018 and housing truly died, it will happen again if rates approach 5% again. those buying at elevated prices will see just how buying that monthly payment can be dangerous if they go to sell b/c they need more space, etc. I would only recommend re-fiing the amount that you owe, as opposed to purchasing the max you can afford. If you are buying within your means and you plan to stay, then I understand. otherwise, these low mortgage rates can be a big problem down the road.

 

I truly don’t know what the furk you are talking about. I posted a graph with the rates month over month since 2012. They haven’t breached 5% since then. Housing didn’t “die” in 2018. Maybe your neighborhood took a shot but it far from died.

 

It did not last long but there was a short span where the avg. 30 yr. mtg rate ticked above 5% in 2018. As soon as it did, it caused practically every region to see a slowdown in home buying interest. As I said it lasted only a split second, but if you read the articles the interest in buying was seen immediately. It won;t show in a monthly chart b/c it did not last long. That is all I am saying.

 

We saw a short period where our local lenders went to 5.0 and a little above. It had little effect on refi's, maybe down 10% for a month or 2. The biggest problem in our area is lack of affordable or starter houses, 200k-400k. If you're looking in this area in that price range you'll be looking for probably close to a year as one of our young employees and my stepson just found out......and as you mentioned you also run the risk of buying a overpriced house right now when things pull back.

Still as I told my stepson a few month's back when he bought, it's better to pay to buy than to rent as houses in the 1400-1800sqt are starting to rent for $1600-2000 monthly.

 

A realtor friend of mine who works in the NW ATL suburbs said the same thing about houses in the 200-400K range in her area.

 

There isn’t any more affordable housing anywhere in the country. The market has pushed back up outside of what a middle class family can afford. Wages aren’t matching housing prices.

 

We've had that problem here in Central Florida for decades now. When times are good and employment high lenders often allow people to push upward into houses they really shouldn't be in. This is a highly service industry influenced area so even when business is up wages may not follow...
We have seen some price stabilization(not stagnation or decline)lately but listings are a tight nut to crack for even some of the areas better Realtors. Thank God for refi's....

 

Someone above mentioned people are not buying a house, they are buying a payment. That payment is made up of two factors, price of home and cost of funds (interest rate). Price of home is dependent on the market. Market is driven by demand., etc. That rabbit hole can keep going and going.

Cost of funds is dependent on the mortgage interest rate. In the short run, people have x dollars to spend on housing. If interest rates drop, housing prices will increase because people can buy more house (more house cost actually) for the same payment. When the rates creep up, they can afford less house cost for the same payment. Sellers are reluctant to lower house prices because of comparisons and realtors want to keep those high as well.

It will take a little time for all that to level out. So in the short run, its not that there is less demand for housing, its just that prices haven't adjusted for changes in the interest rates.

 

Location, location, location

 

Saw this today...and it screams "you should buy some rental properties!":

Estimates: Florida Growing to 22 Million Residents by 2022

https://www.usnews.com/news/best-st...orida-growing-to-22-million-residents-by-2022

ORLANDO, Fla. (AP) — State demographers estimate Florida's population will surpass 22 million residents as soon as 2022.

Forecasts released earlier this month by the Demographic Estimating Conference estimate that Florida will grow an average of 330,000 people a year over the next five years.

 

From an email I received this week...

 

I raff out roud when I read about the NARROW Straits of Hormuz and it’s illogical effect on oil prices, as if anything about oil prices is logical....

The Straits are 35 to 60 miles wide. Just another excuse to manipulate prices up....

 

That would be an awfully long swim back to shore for the Iranian fast boat crews that harass our naval ships...were we ever to blow a few of them out of the water.

 

Alright.... even though my current 30yr is decent (3.875%) and I have been paying bi-weekly for years (so I am way ahead), I have decided to throw in my towel and shoot for a 15yr at 3.25%. No cash out. With my current balance, payment will rise $265 a month, but I will save $123,000 in interest. Let’s see if this goes down and closes.

 

Congrats and best of luck. That is the way to do it. Don;t take money out but I love how that 6 figure savings looks over time. I am not telling you to wait, I promise. But my prediction is that the 15 yr. mortgage will approach the lows of around 2.75 that the were about 6 or seven yrs. ago. With the 10 yr. Treasury easily breaking 2% on the downside today, I am seeing it challenging its all time low yield of 1.35% sometime in the future. With over 16 trillion dollars of sovereign debt now with negative yields I have a hard time not seeing our treasuries going near zero. The only caveat is the size of debt we have to issue to fund the deficits (thanx to those DC idiots), but with negative yields worldwide I see plenty of foreign governments buying our paper just to get some type of yield.