Mortgage rates

[Detroitgator]

Where is a good source to see lumber prices?

Click on any one you want for historical, these are spot. Other things like crypto are linked at the top.
Futures

 

[alcoholica]

Spoke with one of our Residential Lenders today. She said that they are already not replacing positions and letting everything fall thru attrition now, as they are seeing the market signally the end of this market is near. I asked what they are basing things on, and she didn't know, just that on their weekly meetings they are being told to be prepared for the loan market to start slowing significantly.

Keep in mind that they were never at capacity to handle the rush during this market, Many of the lenders, underwriters, and processers were working long hours and collecting huge bonuses.

I jokingly asked when I'll be able to lowball and come to her for a loan. She said they were told that in a year, they'd be wishing they were working 60 hr weeks.

 

[5-Star Finger]

just that on their weekly meetings they are being told to be prepared for the loan market to start slowing significantly
I jokingly asked when I'll be able to lowball and come to her for a loan. She said they were told that in a year, they'd be wishing they were working 60 hr weeks.

I'll share a couple thoughts as a person who has been in the business a long time (even prior to last big bubble).

Right now, the slow down is created by a lack of inventory. I can tell this by the number of "prequalified and looking" people I've got, the phone activity for new prequals, and the time it is taking motivated borrowers to get under contract. I expect a rebound towards the end of the summer through early fall.

However, if history is a guide mistakes will be repeated. During this lull, rates need to adjust upward to flatten out demand and curb the unsustainable value increase. The extreme lack of supply is signaling builders to build like crazy - a massive second spike will only reinforce this. You'll get an massive oversupply with the builders overextended. Sound familiar?

One thing that was done much better this time is that the GSEs slapped a stupid large delivery charge on second homes and investments early in the explosion (probably not early enough) which tweaked the pricing and limited the expansion of the bubble to what should be mostly primary residences. The low rates were also signaling property investors to buy up inventory as rentals with essentially free money.

 

[alcoholica]

I'll share a couple thoughts as a person who has been in the business a long time (even prior to last big bubble).

Right now, the slow down is created by a lack of inventory. I can tell this by the number of "prequalified and looking" people I've got, the phone activity for new prequals, and the time it is taking motivated borrowers to get under contract. I expect a rebound towards the end of the summer through early fall.

However, if history is a guide mistakes will be repeated. During this lull, rates need to adjust upward to flatten out demand and curb the unsustainable value increase. The extreme lack of supply is signaling builders to build like crazy - a massive second spike will only reinforce this. You'll get an massive oversupply with the builders overextended. Sound familiar?

One thing that was done much better this time is that the GSEs slapped a stupid large delivery charge on second homes and investments early in the explosion (probably not early enough) which tweaked the pricing and limited the expansion of the bubble to what should be mostly primary residences. The low rates were also signaling property investors to buy up inventory as rentals with essentially free money.

I assume by in the business you mean realtor?

people keep saying we have a lack of inventory. We have an artificial lack of inventory. We are going to see the end of COVID deferments in a few months. We only just recently got a judge to order the eviction moratorium was not in the CDC’s purview. So until we start seeing the evictions and FC’s run through the system, we have no idea what kind of glut in inventory we’ll have or not have. I’m betting it will be substantial.

We also need to look at rates. The average rate in 2016 was 6.41%. You also have to look at housing starts back then. Far more robust than today.

sure, there is some short term success to still be had, that’s been my forecast, but this market is a paper tiger. It’s being fueled by low rates and essentially government support. Neither are long-term sustainable.

to put it another way, a larger lender in the FLGA housing has taken it’s foot off the gas. I will always trust the lenders over the realtors. From 2008 until sometime around 2011 or 2012, I was told by realtors that the market would rebound next quarter, then the next and then the next.

 

[5-Star Finger]

I assume by in the business you mean realtor?.

Nope - lending. I've done just about everything on the mortgage side from servicing to origination, including a stint on the lock desk for one of the big five. Currently I'm in branch-level origination for mid-sized lender operating in over 20 states. There's a a lot of artificial signals right now, and you mentioned another. Keep in mind that tends to be a much bigger one in highly urban markets.

We basically agree. The steps that need to be taken to mitigate the withdrawal symptoms will not be. Every bubble deflates and everything points to this beginning that phase. I'd prefer a slow leak but we'll probably get a pop instead. Not an 08 pop, but a pop.

We do have a new branch location start this fall, but it's in an insolated market which had very little softening even in 2008. We matched our previous year totals as of April's fundings, so we're well capitalized to weather whatever downturn happens. Killing the second home/investment surge early in the process will help considerably - but you're probably not going to see a pricing move aggressive enough to stop the construction surge before we get to a tipping point.

 

[alcoholica]

Nope - lending. I've done just about everything on the mortgage side from servicing to origination, including a stint on the lock desk for one of the big five. Currently I'm in branch-level origination for mid-sized lender operating in over 20 states. There's a a lot of artificial signals right now, and you mentioned another. Keep in mind that tends to be a much bigger one in highly urban markets.

We basically agree. The steps that need to be taken to mitigate the withdrawal symptoms will not be. Every bubble deflates and everything points to this beginning that phase. I'd prefer a slow leak but we'll probably get a pop instead. Not an 08 pop, but a pop.

We do have a new branch location start this fall, but it's in an insolated market which had very little softening even in 2008. We matched our previous year totals as of April's fundings, so we're well capitalized to weather whatever downturn happens. Killing the second home/investment surge early in the process will help considerably - but you're probably not going to see a pricing move aggressive enough to stop the construction surge before we get to a tipping point.

there will come a point where math will overcome FOMO. Rates are so low, that any increase in rates will significantly impact pricing. It's just math.

I've stated it before and it appears to be viewed as myth by a lot of people, but when you buy high (like right now) there is an amortization burnoff period before most people can sell and buy back in. People do not tend to live within their means when it comes to buying their house, they want to maximize their means. People also don't like to bring money to closing when they sell.

All of that to say, the turnover provided in a down market will be provided in large part by FC's and short sales, or by banks in other terms. If you're at a bank in 20 states, then you're at a bank that will want to liquidate that bad debt off their balance sheets. Meaning they will be motivated to cut prices. So there will be some great deals for people, but when you're locked in to your new house you just paid $200/SF, you probably won't be able to take advantage.

I'm not sure what artificial signal you're claiming I stated, but if you think rising construction costs or latent supply of housing are false flags, they you might be a math is racist type of guy...

All I can say is, if you are commission based, I hope you saved a lot of money. If you have a salary component, I hope you're valuable enough to be kept around.

 

[BMF]

When is the FC and eviction protection set to end? June 30th?

 

[alcoholica]

When is the FC and eviction protection set to end? June 30th?

Not exactly sure. Haven’t looked that up. We’ve got a lot going on the commercial side. Credit is tightening up and lending is b1tching because they aren’t making goals. So everything is taking longer to get deals pushed thru.

 

[LagoonGator68]

Not exactly sure. Haven’t looked that up. We’ve got a lot going on the commercial side. Credit is tightening up and lending is b1tching because they aren’t making goals. So everything is taking longer to get deals pushed thru.

Lendingtree is pushing 2% 15 year money up to 500k all over the web this morning

 

[BMF]

Not exactly sure. Haven’t looked that up. We’ve got a lot going on the commercial side. Credit is tightening up and lending is b1tching because they aren’t making goals. So everything is taking longer to get deals pushed thru.

We're searching for a home in the St. Pete/Gulfport area and haven't had much luck - anything 'nice' is gone quickly, or it's simply more than we want to pay. Wife spent all week down there last week w/ no luck. We're both flying down on Wed for 24 hours to look at a couple of houses - 1 is not on the market, but the realtor knows the guy interested in selling. We're considering renting, asking for a clause to get out of the lease if we find something. We need to make a decision within the next 3 to 4 weeks (hopefully) on renting or buying. If we rent, we'd have the funds to do an all-cash deal. We plan to keep this house 10 years or so, so I'm not too concerned if the market downturns for a few years (it'll come back during the 10 years we keep it). This is a tough decision - we're selling at the perfect time....and buying at the worst.

 

[LagoonGator68]

When is the FC and eviction protection set to end? June 30th?

Yes, but FHA only announces the 90 day extensions 3-10 days before expiration, so far.

 

[alcoholica]

Lendingtree is pushing 2% 15 year money up to 500k all over the web this morning

You quoted a comment about commercial credit issues and then talked about residential rates. Been watching the WH press briefings too much...they starting to rub off.

 

[LagoonGator68]

You quoted a comment about commercial credit issues and then talked about residential rates. Been watching the WH press briefings too much...they starting to rub off.

This entire discussion has been about residential until you conflated.

 

[alcoholica]

This entire discussion has been about residential until you conflated.

Learn to read old man. I was explaining why I was busy. I wasn’t conflating anything. Go drink your ensure and watch your bird feeder

 

[alcoholica]

We're searching for a home in the St. Pete/Gulfport area and haven't had much luck - anything 'nice' is gone quickly, or it's simply more than we want to pay. Wife spent all week down there last week w/ no luck. We're both flying down on Wed for 24 hours to look at a couple of houses - 1 is not on the market, but the realtor knows the guy interested in selling. We're considering renting, asking for a clause to get out of the lease if we find something. We need to make a decision within the next 3 to 4 weeks (hopefully) on renting or buying. If we rent, we'd have the funds to do an all-cash deal. We plan to keep this house 10 years of so, so I'm not too concerned if the market downturns for a few years (it'll come back during the 10 years we keep it). This is a tough decision - we're selling at the perfect time....and buying at the worst.

Yep, if you can work remotely, check out some other areas nearby and just monitor the market. I’m sure you can find a decent rental in rural Polk County, or one of the rural counties to the NE. You could even try as North as Levy.

 

[alcoholica]

We're searching for a home in the St. Pete/Gulfport area and haven't had much luck - anything 'nice' is gone quickly, or it's simply more than we want to pay. Wife spent all week down there last week w/ no luck. We're both flying down on Wed for 24 hours to look at a couple of houses - 1 is not on the market, but the realtor knows the guy interested in selling. We're considering renting, asking for a clause to get out of the lease if we find something. We need to make a decision within the next 3 to 4 weeks (hopefully) on renting or buying. If we rent, we'd have the funds to do an all-cash deal. We plan to keep this house 10 years of so, so I'm not too concerned if the market downturns for a few years (it'll come back during the 10 years we keep it). This is a tough decision - we're selling at the perfect time....and buying at the worst.

Also, if you can borrow someone’s RV long term, there are KOA’s and some nice RV “resorts” in FL

 

[Concrete Helmet]

You quoted a comment about commercial credit issues and then talked about residential rates. Been watching the WH press briefings too much...they starting to rub off.

Don't bother Otis he's still sleeping it off..

 

[LagoonGator68]

Also, if you can borrow someone’s RV long term, there are KOA’s and some nice RV “resorts” in FL

Little t has a van down by the river in Steinhatchee

 

[soflagator]

Yep, if you can work remotely, check out some other areas nearby and just monitor the market. I’m sure you can find a decent rental in rural Polk County, or one of the rural counties to the NE. You could even try as North as Levy.

BMF is a valued member here, a friend really. He’s come to us for advice on moving to SW-Osu Florida. With the criteria of quiet, away from people, and the best bang for his buck, I think Immokalee is the only logical answer.

 

[5-Star Finger]

Yes, but FHA only announces the 90 day extensions 3-10 days before expiration, so far.

They'll be another wave with smaller buckets of those who qualify. They are trying to manage the effect. One of the many hats I've worn over the 18 years I've been doing this was as a contract post-closing QC underwriter for Fannie. The number of repurchases is totally managed by the GSEs during most market conditions. They would set us on deficiency and tell us to flag and return any with that issue - if we were more successful at that task than they intended, they tell us to avoid looking for that item and would issue a mortgagee letter addressing it - LOL.