Mortgage rates

[BMF]

This article is on MSN today - in 6 months lumber should be back to $600, but don't expect it to drop to pre-pandemic levels of $400:

Lumber prices are cooling after rallying over 400% in 12 months. Here is where 4 experts say the red-hot commodity goes from here.

 

[BMF]

2 months later. Just bought a house in KC via video walk-through!
Heading up next Friday for inspections.
Grandkids, here we come!

Congrats! I hope it works out and the closing goes well. I'm going through the process now and it's ridiculous (I have an 800+ credit score, a $200k+ income, no debt except current mortgage, & only borrowing $250k). I had to do a 3-way call w/ Citi Cards because one of my credit cards didn't show up on my credit report - I pay off any credit card I use every month. So I had to sit on the phone for 25 minutes. The biggest pain in my ass is I have to produce a "remote work letter" (saying that I'm going to be assigned to Tampa vs. DC).....and my boss hasn't produced the letter yet.

 

[CGgater]

This article is on MSN today - in 6 months lumber should be back to $600, but don't expect it to drop to pre-pandemic levels of $400:

Lumber prices are cooling after rallying over 400% in 12 months. Here is where 4 experts say the red-hot commodity goes from here.

So somebody thinks we should be happy with lumber “only” costing us 50% more than pre covid prices? Sounds reasonable.

 

[FireFoley]

Congrats! I hope it works out and the closing goes well. I'm going through the process now and it's ridiculous (I have an 800+ credit score, a $200k+ income, no debt except current mortgage, & only borrowing $250k). I had to do a 3-way call w/ Citi Cards because one of my credit cards didn't show up on my credit report - I pay off any credit card I use every month. So I had to sit on the phone for 25 minutes. The biggest pain in my ass is I have to produce a "remote work letter" (saying that I'm going to be assigned to Tampa vs. DC).....and my boss hasn't produced the letter yet.

I read this and feel you were lucky to only have to waste 25 minutes of your life you will never get back. I have the same reaction everyday when I am forced to spend countless time on most pointless endeavors: Are you ready?......

 

[BMF]

So somebody thinks we should be happy with lumber “only” costing us 50% more than pre covid prices? Sounds reasonable.

It's similar to gas going from $2 to $3/gallon. We'll just suck it up and get used to it. We'll look back on the years 2020 & 2021 when we're old men (or older men) and remember all this bullsh*t - covid, inflation, stolen election, race/race/race/race/race, transgender everything, BLM/Antifa riots, stock market rally, masks, main stream media non-sense, etc. Inflation is going to be something we'll be dealing with for a long, long time. I hate the term "the new normal", but prices on certain items (like lumber) may become the "new normal".

 

[FireFoley]

It's similar to gas going from $2 to $3/gallon. We'll just suck it up and get used to it. We'll look back on the years 2020 & 2021 when we're old men (or older men) and remember all this bullsh*t - covid, inflation, stolen election, race/race/race/race/race, transgender everything, BLM/Antifa riots, stock market rally, masks, main stream media non-sense, etc. Inflation is going to be something we'll be dealing with for a long, long time. I hate the term "the new normal", but prices on certain items (like lumber) may become the "new normal".

Exactly!. I have said the same thing about mortgage rates for over 10 years. One of the main ways people got into overpriced homes thru 2006 was thru the use of an initial teaser rate. They could not afford the 6 or 7% so they took the 1 yr. introductory rate at 2% or so and had no idea what LIBOR was or stood for, thinking they would refi all the time. So a few years ago I was asked what the 30yr. rate was that would cause people to pause and I said 5%. Well it hit 5% in late '18 and my friend who does lots of real estate, said her area just dried up. Asked recently the same question, I have said 4% will cause people to retreat, especially at these prices. I remember screaming at the TV when all these idiots say 4-5% mortgage rates are so historically low, you have to pounce. They are historically low but almost anyone under the age of 45 and has been in the market for a home in their life don;t know a mortgage rate above 5% and many think anything above 3% is expensive.

 

[BMF]

Exactly!. I have said the same thing about mortgage rates for over 10 years. One of the main ways people got into overpriced homes thru 2006 was thru the use of an initial teaser rate. They could not afford the 6 or 7% so they took the 1 yr. introductory rate at 2% or so and had no idea what LIBOR was or stood for, thinking they would refi all the time. So a few years ago I was asked what the 30yr. rate was that would cause people to pause and I said 5%. Well it hit 5% in late '18 and my friend who does lots of real estate, said her area just dried up. Asked recently the same question, I have said 4% will cause people to retreat, especially at these prices. I remember screaming at the TV when all these idiots say 4-5% mortgage rates are so historically low, you have to pounce. They are historically low but almost anyone under the age of 45 and has been in the market for a home in their life don;t know a mortgage rate above 5% and many think anything above 3% is expensive.

I agree w/ this. In 2006 mortgages were over 6%. Most of these retards have no clue what a 5+% rate looks like. I've said this before, but if not for covid I think we would have already seen the next housing crash (bubble, correction, or whatever). Covid not only delayed it, but caused the housing boom to BOOM! with the artificial lowering of interest rates, people wanting bigger homes or to move out of cities, etc. Things will settle down, eventually, but as long as these rates stay under 3.5% I can see the boom continuing until 2023 when the Fed starts raising rates.

 

[FireFoley]

I agree w/ this. In 2006 mortgages were over 6%. Most of these retards have no clue what a 5+% rate looks like. I've said this before, but if not for covid I think we would have already seen the next housing crash (bubble, correction, or whatever). Covid not only delayed it, but caused the housing boom to BOOM! with the artificial lowering of interest rates, people wanting bigger homes or to move out of cities, etc. Things will settle down, eventually, but as long as these rates stay under 3.5% I can see the boom continuing until 2023 when the Fed starts raising rates.

I agree with the time line and reasoning, but I don;t think the FED raising rates will be a factor. The FED only sets overnight rates, and only 'interfere" with longer rates thru QE and their BS purchases. I mention this b/c the day after the last FED meeting, 2 yr rates went up 10 basis points and longer rates went DOWN 10 basis points, yet 30yr. mortgage rates went up .125. That was b/c the thought of the FED slowing their MBS(mortgage securities) purchases would drive up mortgage rates, so banks, etc. started just on the thought. I am not saying to ignore longer rates, but the FED raising overnight rates, could actually cause the yield curve to flatten as long rates might go lower. I would keep an eye on MBS rates and demand.

 

[Concrete Helmet]

I agree with the time line and reasoning, but I don;t think the FED raising rates will be a factor. The FED only sets overnight rates, and only 'interfere" with longer rates thru QE and their BS purchases.

I think we are trapped in an area where we can't go above 3.0%...In fact I doubt we see the 10yr go much over 2.0% for at least the next 5 years. We'll just keep bouncing off whatever ceiling is set at.

 

[FireFoley]

I think we are trapped in an area where we can't go above 3.0%...In fact I doubt we see the 10yr go much over 2.0% for at least the next 5 years. We'll just keep bouncing off whatever ceiling is set at.

I don;t really disagree and know that regardless of what the FED says they are doing, they know the economy is trapped. If we are able to bust out to higher long rates, it could get very interesting tho.

 

[bradgator2]

Coworker just bought a home and locked in his rate today, 2.65 for a 30yr.

I refi’d 2 years ago for a 15 year at 2.85. I ran all the numbers today for current rates for the remaining 13 years and the amount saved would not be worth the hassle.

 

[FireFoley]

Coworker just bought a home and locked in his rate today, 2.65 for a 30yr.

I refi’d 2 years ago for a 15 year at 2.85. I ran all the numbers today for current rates for the remaining 13 years and the amount saved would not be worth the hassle.

Wow that is some terms. Now the question is will your co-worker take advantage and get it paid off in much less time? Or did they max out b/c of those terms?

 

[NVGator]

Congrats, I think. You have ballz buying a home with only a virtual view, but at least you did not waive inspection like a lot of buyers are. good luck with everything

There's absolutely no Buyers waiving inspections. None. No one is waiving that. Appraisal, maybe, but not inspections. Houses are being offered on left and right via Zoom or FaceTime. It's the New Norm.

 

[bradgator2]

Wow that is some terms. Now the question is will your co-worker take advantage and get it paid off in much less time? Or did they max out b/c of those terms?

Excellent question. But this guy is a true rarity. Mid 40s. PhD Physicist. Excellent income. Never married. No kids. Been in an apartment his whole life. Dude has been searching for a home for years. Never pulled the trigger on some excellent opportunities and is now caught up in the crazy market. He is putting down whatever it takes to make his mortgage payment the same as his current rent. For this house, that's $130,000. Knowing him, he'll have the damn thing paid for in 5 years. What's funny is I am trying to convince him not to put so much down with the rate he locked in. The dude doesnt even own a hammer and I think he underestimates "the rest of the story" that comes with home ownership.

Cute house. Actually got it a little under their asking:
6227 NE 62nd St, Silver Springs, FL 34488 | MLS #OM621936 | Zillow

 

[FireFoley]

There's absolutely no Buyers waiving inspections. None. No one is waiving that. Appraisal, maybe, but not inspections. Houses are being offered on left and right via Zoom or FaceTime. It's the New Norm.

Maybe not where you live, but I personally know of some seller's who sold homes and the buyers waived inspection. Maybe that meant the buyer's will cover all repairs or whatever, but when people get caught up in a momentum like this, they will do anything to get that last edge.

 

[BMF]

Excellent question. But this guy is a true rarity. Mid 40s. PhD Physicist. Excellent income. Never married. No kids. Been in an apartment his whole life. Dude has been searching for a home for years. Never pulled the trigger on some excellent opportunities and is now caught up in the crazy market. He is putting down whatever it takes to make his mortgage payment the same as his current rent. For this house, that's $130,000. Knowing him, he'll have the damn thing paid for in 5 years. What's funny is I am trying to convince him not to put so much down with the rate he locked in. The dude doesnt even own a hammer and I think he underestimates "the rest of the story" that comes with home ownership.

Cute house. Actually got it a little under their asking:
6227 NE 62nd St, Silver Springs, FL 34488 | MLS #OM621936 | Zillow

That's a nice first home! When I was a young firefighter, making around $30k (in the 90's), I bought my first house for $120k (7.125%) and it was a huge struggle. I remember an old lieutenant on my shift told me, "A house will one hundred & two hundred dollar you to death!" I figured out what he meant real quick!

 

[BMF]

I have mentioned BlackRock and the Gov't multiple times in this Forum. BlackRock is zeroing in on convincing the Morons in the gov't that we the average schmuck are even bigger Morons that the gov't lackeys and are not smart enough to manage our own retirement monies. So BlackRock wants to create gov't sponsored retirement accts. for all the saps out there and convince the gov't to allow BlackRock to "manage" all the accts. in exchange for a guaranteed monthly payment to all the schmucks in the future. That is just one of the many steps BlackRock has in mind to get their grubby paws on as much of our money as possible.

Blackstone to buy Home Partners of America in $6 billion deal - WSJ

Private equity firm Blackstone Group Inc has agreed to acquire Home Partners of America Inc, which buys and rents single-family homes, in a $6 billion deal, the Wall Street Journal reported on Tuesday, citing sources familiar with the matter.

The deal comes on the heels of a pandemic fueled demand for spacious homes in the United States, as millions of Americans work from home and take classes remotely.

Home Partners owns more than 17,000 houses in the United States, according to the report. It buys, rents out and eventually offers its tenants a chance to buy them. (WSJ News Exclusive | Blackstone Bets $6 Billion on Buying and Renting Homes)

Both Blackstone and Home Partners were not immediately available for comment.

 

[Concrete Helmet]

Private equity firm Blackstone Group Inc has agreed to acquire Home Partners of America Inc, which buys and rents single-family homes, in a $6 billion deal

As I said here a couple of years back rental property is the new bond...think about it...with yields trapped at all time lows the return on bonds against inflation is negative and it doesn't have tax benefits that RE does.. RE is spinning a higher yield and when you consider that the price of bonds will fall in the unlikely event that the Fed ends this perpetual circle jerk of bouncing off such a low ceiling that even if/when yields come up the price of bonds will fall(although RE will too too). We'll likely never see 6% plus yielding bonds in our lifetime. Pretty easy to get 6%plus on RE and with the added tax benefits it's a no brainer.

 

[FireFoley]

Blackstone to buy Home Partners of America in $6 billion deal - WSJ

Private equity firm Blackstone Group Inc has agreed to acquire Home Partners of America Inc, which buys and rents single-family homes, in a $6 billion deal, the Wall Street Journal reported on Tuesday, citing sources familiar with the matter.

The deal comes on the heels of a pandemic fueled demand for spacious homes in the United States, as millions of Americans work from home and take classes remotely.

Home Partners owns more than 17,000 houses in the United States, according to the report. It buys, rents out and eventually offers its tenants a chance to buy them. (WSJ News Exclusive | Blackstone Bets $6 Billion on Buying and Renting Homes)

Both Blackstone and Home Partners were not immediately available for comment.

So years ago Blackstone bought a shyt ton of houses in foreclosure and spun that off into Invitation Homes (INVH). So I read this article very early thins morning and see that the Blackstone Real Estate Investment Trust is is going to own these houses, which is actually a non publically traded REIT. So the pricing of the shares of this REIT is based on how they value the properties, which can be very subjective. So based on this transaction each home is valued at about 350K. Well I know from the past that many of these companies own a lot of shyt homes that are not worth 350K each, so that is why I have a feeling that this transaction is going to be under that non pubic REIT. Either way it will offer more cash flow for those who own that particular REIT, which I do not, FWIW.

 

[Gator By Marriage]

Maybe not where you live, but I personally know of some seller's who sold homes and the buyers waived inspection. Maybe that meant the buyer's will cover all repairs or whatever, but when people get caught up in a momentum like this, they will do anything to get that last edge.

Seen it happen several times here in the N. Atlanta suburbs, including the house next door to us. (With the house next door, I personally thought the buyer was nuts on general principle, but at least in that case the former owner was the GC on the house when it was built and was/is a pretty anal guy. If there was something that needed fixing, then the previous owner didn't know about it.)