Mortgage rates

FireFoley

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Total mortgage application(purchase and refi)down 55% since FEB....Fed about to start taper tantrum(raising rates)…..

Name calling aside, I am seeing something very worrisome out there. Housing will take a long time to sort out b/c of all the extraordinary BS going on between the FED and the Stimulate Me Money. But the treasury market is suddenly not acting like we are going to have inflation, not acting like we are going to have a FED taper and not acting like we are going to have economic growth. The 10 yr. kissed 1.55% today and looks to be headed lower. Now Mortgage rates only loosely follow long treasurys, more importantly Mtge. rates follow the Mortgage backed securities market. The Fed is currently buying 40Billion in MTGES a month. If they taper that down to zero, that will be the real tell as to where mortgage rates are headed. Until the Fed and gov't allow market forces to work, all of us can only guess what the outcomes will be
 

Concrete Helmet

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Until the Fed and gov't allow market forces to work, all of us can only guess what the outcomes will be
Oh they'll do everything they can to float the turd along and suck in as many dipsh!ts as possible until the thing is crayon tipping the bowl on the way down...Look at the NASDAQ....It's a one day trader circle jerk going up 100-200 points in the morning and then selling off by the afternoon...the only solid sector over the last 4 months is financials which will tank once all the dipsh!ts who just ran out and overspent on their new 500K house lose their jobs because corporations will see they don't need the overhead when the economy is not recovering....oh and then there is the manipulated commodities market which the Government control through their henchmen(Blackrock,JPM) and the lying ass Fed....smart people aren't buying the ******** CPI numbers either...they fill up at the pump and buy groceries like the rest of us...
But where is inflation? Where is the new infrastructure deal? Where is Solyndra...errrr I mean solar energy growth?
tenor.gif
 

alcoholica

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You’ve been predicting housing crash for many months now and couldn’t be more wrong....give it a rest.
The market will crash. There are time cycles to these things. Stocks can crash quickly due to their level of turnover and liquidity. Housing is about as illiquid as you can get.

the last go around, we saw 2006 as the peak, with 2007 as a ho hum year in housing. In late summer of 2008, the stock market started to go off the ledge. Only took the stocks a few months to bottom out. The housing market in G'ville bottomed out about the end of 2010 give or take a few months. So roughly two years later. Liquid vs. illiquid.

But things aren't equal. In the 2005 run up, it was fueled by crazy structures and fraud. There was an area in Jax, where a great number of people bought homes on ARM's because it was cheaper than rent. Thought they'd be able to sell at a higher price at the rate adj period....nope. People taking out 3 or even 4 mortgages because they were told they could tap into their homes equity. But now it's fueled by low rates and moratoriums on FC's and evictions. Rates can change quickly and I haven't heard anything about the judge ruling against the CDC on moratoriums, so it may stand. FC's in FL will probably take between 12 and 24 months depending on the back log and location.

It takes time, but if you aren't getting out of RE now, there's going to be a period of purgatory, where nothing moves. I do think that the lack of volume compared to 2006 and the ability to affect values quickly through RE adjustments, that this could/should turn quicker than the prior crash. But you'll see the stocks crash first.
 

Concrete Helmet

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The market will crash.
It's already starting...I work in the industry and have seen our orders go down 40% over the last 6-8 weeks. Our 2 largest clients (Lenders) are both down over 50% in total mortgage applications including both purchase and refi's....There are already tons of stories out there about how fast housing is falling off after March and save for a few weekly upticks have been trending downward since February.
But like you are saying these things take time for John Q Public to notice and the Gov. will try and suppress MSM from reporting too much about it...those of us on the inside have a head start on the bad news.
 

alcoholica

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It's already starting...I work in the industry and have seen our orders go down 40% over the last 6-8 weeks. Our 2 largest clients (Lenders) are both down over 50% in total mortgage applications including both purchase and refi's....There are already tons of stories out there about how fast housing is falling off after March and save for a few weekly upticks have been trending downward since February.
But like you are saying these things take time for John Q Public to notice and the Gov. will try and suppress MSM from reporting too much about it...those of us on the inside have a head start on the bad news.
True, but the prices haven’t started crashing. In fact, I’ve noticed a trend of price increases on Zillow for listings. But yes, things are becoming more evident. Hell, housing starts were cut in half before the stock crash in ‘08. I still think Dec of next year is a reasonable target
 

soflagator

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The market will crash. There are time cycles to these things. Stocks can crash quickly due to their level of turnover and liquidity. Housing is about as illiquid as you can get.

the last go around, we saw 2006 as the peak, with 2007 as a ho hum year in housing. In late summer of 2008, the stock market started to go off the ledge. Only took the stocks a few months to bottom out. The housing market in G'ville bottomed out about the end of 2010 give or take a few months. So roughly two years later. Liquid vs. illiquid.

But things aren't equal. In the 2005 run up, it was fueled by crazy structures and fraud. There was an area in Jax, where a great number of people bought homes on ARM's because it was cheaper than rent. Thought they'd be able to sell at a higher price at the rate adj period....nope. People taking out 3 or even 4 mortgages because they were told they could tap into their homes equity. But now it's fueled by low rates and moratoriums on FC's and evictions. Rates can change quickly and I haven't heard anything about the judge ruling against the CDC on moratoriums, so it may stand. FC's in FL will probably take between 12 and 24 months depending on the back log and location.

It takes time, but if you aren't getting out of RE now, there's going to be a period of purgatory, where nothing moves. I do think that the lack of volume compared to 2006 and the ability to affect values quickly through RE adjustments, that this could/should turn quicker than the prior crash. But you'll see the stocks crash first.

You and I have discussed this before, and big picture I don't think you're wrong. I do still have an inkling, or hope, that it's not to the same degree as '07-'10 or even worse as you suggest, but I also recognize some of you are have boots on the ground in this arena(even if Crete is apparently only just getting coffee and dry cleaning). And as I mentioned last week, any non-essential or investment properties that you're not planning to hold for a minimum 10 years should probably be listed and closed immediately(we just did yesterday). Personally though, I think we see a cooling in prices, likely soon, followed by a cooling in equities appetite(starting already). But given the consumer driven market that we're in now, I think the housing pull back may lead the way, simply because the closest link to consumer confidence is generally confidence in real estate. Seeing and knowing that their homes are appreciating, or at a minimum maintaining value, is psychologically huge for people and trickles to everything else. If we see a serious decline there, we'll see overall sentiment fall and it will be reflected in companies' earnings. Not to mention just the emerging from this "Covid coma" mindset, where money stops coming in in tranches, and instead reality starts hitting some in the face. I'm not saying we won't see a sizeable retracement in stocks before. I think that's brewing as we speak. But if we're talking complete crash, I think stocks actually follow housing.

Funny you mentioned the late summer of 2008. I had two investment properties in a garbage area of north Miami that I owned for less than 2.5 years and sold in June of 2005 for a nice gain. But when I sold my home in Tequesta(Jupiter) in September 2008, which I'd owned for close to 6 years, was obviously much nicer and 30 years newer, I had to sell it at breakeven, and one of the stipulations was that I rented it from them for a year until they were ready to move down from NY. Otherwise, I was bringing cash to the table. So you're going off a ledge description is spot on. Nothing made sense in the lead up, and made even less in that moment.
 

BMF

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We're currently looking in the Gulfport/west St. Pete area....and anything worth a sh*t goes in a couple of days. My wife flew down there on Monday and is looking at anything on the market. The issue that Crete brings up: the lack of refi's and new mortgages isn't because people are getting out of RE, it's because there's no inventory. Back in 2005-2010 there was plenty of inventory, right now there's not (as far as refi's go, most people who aren't dipsh*ts have already refi'd, so that market has dried up too). I agree that a 'correction' is coming (but I'm hesitant to call it a 'crash'). We're looking in the $300k-$400k range which is making it harder (because that's a price range that most working adults can afford, especially at the current interest rates). Our plan is to keep it as a rental - hoping to buy a nicer, more long term home after the 'correction' happens.
 

Concrete Helmet

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Crete is apparently only just getting coffee and dry cleaning
Damn the coffee boy just found a fed.tax lien that could have been a potential 60k claim on an investment closing for later today....amazing that his wife trust him enough to do the final update on all title searches that were previously done by a professional abstractor...I think he found somewhere near 2 million in potential claims over the last few years.....I'm such a good coffee boy :lol:

In regards to the rest of the post you are pretty much spot on about investment property....If you ain't gonna hold it for income later down the road I'd send it immediately to anyone who would buy at close to market....
 

alcoholica

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You and I have discussed this before, and big picture I don't think you're wrong. I do still have an inkling, or hope, that it's not to the same degree as '07-'10 or even worse as you suggest, but I also recognize some of you are have boots on the ground in this arena(even if Crete is apparently only just getting coffee and dry cleaning). And as I mentioned last week, any non-essential or investment properties that you're not planning to hold for a minimum 10 years should probably be listed and closed immediately(we just did yesterday). Personally though, I think we see a cooling in prices, likely soon, followed by a cooling in equities appetite(starting already). But given the consumer driven market that we're in now, I think the housing pull back may lead the way, simply because the closest link to consumer confidence is generally confidence in real estate. Seeing and knowing that their homes are appreciating, or at a minimum maintaining value, is psychologically huge for people and trickles to everything else. If we see a serious decline there, we'll see overall sentiment fall and it will be reflected in companies' earnings. Not to mention just the emerging from this "Covid coma" mindset, where money stops coming in in tranches, and instead reality starts hitting some in the face. I'm not saying we won't see a sizeable retracement in stocks before. I think that's brewing as we speak. But if we're talking complete crash, I think stocks actually follow housing.

Funny you mentioned the late summer of 2008. I had two investment properties in a garbage area of north Miami that I owned for less than 2.5 years and sold in June of 2005 for a nice gain. But when I sold my home in Tequesta(Jupiter) in September 2008, which I'd owned for close to 6 years, was obviously much nicer and 30 years newer, I had to sell it at breakeven, and one of the stipulations was that I rented it from them for a year until they were ready to move down from NY. Otherwise, I was bringing cash to the table. So you're going off a ledge description is spot on. Nothing made sense in the lead up, and made even less in that moment.
Yeah, I think we’re ending up at the same place for the most part, just on different trains.

My big fears with RE right now are:

1) Low rates/no where for rates to go
2) increasing mtg debt, with lower overall CC debt, leads me to think there’s some debt consolidation going on.
3) future turnover of RE

at prices today, it will be difficult to sell a house after FC’s and evictions start affecting prices. Many that were in the ‘05 rise were just now able to sell and put their equity toward a down payment on a nicer home. So I’m really concerned and turnover and volume once things start tightening.
 

alcoholica

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Damn the coffee boy just found a fed.tax lien that could have been a potential 60k claim on an investment closing for later today....amazing that his wife trust him enough to do the final update on all title searches that were previously done by a professional abstractor...I think he found somewhere near 2 million in potential claims over the last few years.....I'm such a good coffee boy :lol:

In regards to the rest of the post you are pretty much spot on about investment property....If you ain't gonna hold it for income later down the road I'd send it immediately to anyone who would buy at close to market....
tenor.gif
 

BMF

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Robert Shiller: Home prices will fall and 'cause some pain'

Robert Shiller: Home prices will fall and 'cause some pain'


The housing market is hot as home prices continue to rise, but Nobel Prize winning economist Robert Shiller predicts prices will eventually drop. "They'll come back down, not overnight, but enough to cause some pain," Shiller told Yahoo Finance Live.

"This is not a market that collapses overnight," Shiller said. "It's less short run volatile than the stock market. But you can see that we're seeing price increases now that haven't quite been realized since those years just before the financial crisis."

Shiller said there is no "clean explanation" why the housing market is so hot. He expects it to continue another year or two driven by low interest rates and the COVID-19 pandemic work-from-home revolution.

"This is not a market that collapses overnight," Shiller said. "It's less short run volatile than the stock market. But you can see that we're seeing price increases now that haven't quite been realized since those years just before the financial crisis."

Shiller said there is no "clean explanation" why the housing market is so hot. He expects it to continue another year or two driven by low interest rates and the COVID-19 pandemic work-from-home revolution.
 

FireFoley

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As someone who predicted a full fledged crash in 2005 (I sold my primary home that year and did not buy back until 2010), I am fully predicting NO crash this time. Things are totally different. However I am predicting a steady, very slow price decline that will take a long time to shake out. The factors have all been stated such as NO inventory, ZERO % rates. etc. etc. etc. People do not own 5, 10, 15 homes on SPEC trying to sell to the next sucker. But when rates rise even slightly and meet already inflated prices, the slow decline will begin. No one wants to sell for less than their next door neighbor or even worse sell for less than they purchased, so it takes a long time to shake out. there will be an incredible amount of stagnation b/c no one will sell their home b/c they have a 2% mortgage. Then when new homes start selling for less than people paid for their existing home, things will pick up to the downside again. but NO crash. Their is just not enough leverage out there for that to happen. There is plenty of debt, but not enough leverage.
 

alcoholica

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As someone who predicted a full fledged crash in 2005 (I sold my primary home that year and did not buy back until 2010), I am fully predicting NO crash this time. Things are totally different. However I am predicting a steady, very slow price decline that will take a long time to shake out. The factors have all been stated such as NO inventory, ZERO % rates. etc. etc. etc. People do not own 5, 10, 15 homes on SPEC trying to sell to the next sucker. But when rates rise even slightly and meet already inflated prices, the slow decline will begin. No one wants to sell for less than their next door neighbor or even worse sell for less than they purchased, so it takes a long time to shake out. there will be an incredible amount of stagnation b/c no one will sell their home b/c they have a 2% mortgage. Then when new homes start selling for less than people paid for their existing home, things will pick up to the downside again. but NO crash. Their is just not enough leverage out there for that to happen. There is plenty of debt, but not enough leverage.
Agree with a whole lot of this. Especially the stagnation. I’m leaning more on the banks liquidating FC’s and driving prices down, since they may actually be the market in some areas. Although I’m probably under estimating the will of the Fed Gov’t to keep pumping out money.
 

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