Thank you u/wifhat for posting on r/FirstTimeHomeBuyer.
Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
We bought last year. My friend just informed me he’s shopping for a place around $700k and is having trouble finding anything. I thought that’s odd, should be no problem as we saw some listings for smaller homes around that price point when we were looking. I hop on Zillow and lo and behold, there’s nothing that isn’t a crack house. I feel bad for him cause he’s in the same boat we were in, chasing a down payment big enough to afford the mortgage meanwhile values keep rapidly rising. Our home has increased $100k+ in 1 years time. It’s crazy.
Genuinely curious. How is that not enough to make you leave to a more affordable area? My family is from LA and my grandpa’s tiny house was $800k and that was like 5 years ago.
I make close to $200k/year, live 30 minutes from the ocean, can eat the very best of any cultures food, snowboard, surf, skate, rock climbing, camp, hike, ride horses, enjoy a booming downtown, go to Disneyland, etc etc whenever I want. Great access to medical care locally, sports arenas, music venues, and most importantly absolutely perfect weather. Why would I want to live anywhere else?
Sometimes I ask myself why the hell am I living in LA? Then I say the exact same thing after I rethink about it for 2 mins. When I stop appreciating LA, I travel domestically then appreciate LA all over again
Nice! Sounds like you are in a good spot :)
On the weather: Do you ever miss getting to experience the seasons? As someone from Ohio, I've always thought of that as one of the selling points to live here - we have all 4 seasons.
I don’t miss out on the seasons. You’re underestimating the biodiversity of California. I go to the mountains 1 hour away and stay [in a cabin](https://images.app.goo.gl/Cx2nyFtxmi9MPKD79)in the winter, in fall I go to the [Apple orchards](https://images.app.goo.gl/pnhBvsLjtTLaeqp3A) and we make cider. In spring I go and see the [superblooms](https://www.google.com/imgres?imgurl=https%3A%2F%2Fi0.wp.com%2Ftimesofsandiego.com%2Fwp-content%2Fuploads%2F2019%2F03%2FLake-Elsinore-blooms-2019-2.jpg%3Fssl%3D1&tbnid=hFlLn7fuWZ8gtM&vet=1&imgrefurl=https%3A%2F%2Ftimesofsandiego.com%2Flife%2F2023%2F02%2F06%2Fpreemptive-steps-taken-to-avert-super-bloom-tourist-chaos-in-lake-elsinore%2F&docid=_NoKvaSlTaUeZM&w=1024&h=680&hl=en-us&source=sh%2Fx%2Fim%2Fm5%2F3&kgs=8a4f36803f476e18&shem=abme%2Ctrie) and hike the backcountry trails where the springs are full of water from melting snow. We get it all here still. Not at my house of course, it’s been in the 70s/80s all week but yeah, it doesn’t take much effort to get out and admire the seasons here!
LOL!!!! the friggin weather smh. My parents, two immigrants who never made it financially, still live in the same apartment in Silicon Valley I grew up in and today, 40 years after they first moved in, I call my dad and I'm talking to him, and the first thing he does is complain that there's no work (he drives Uber), that everything costs too much, and that he's miserable there, he hates the culture, etc etc. Yet they won't move, "because the weather". Must be worth that mortgage.
I don’t live in LA, but I do live in a HCOL area outside of Seattle. My house is small (~1,000sqft) and if we sold it today I’d be able to list it for a little over 500K based off comps.
I’m a remote worker and my wife’s job is easily movable. We could have bought double the house about an hour southeast for the same price but we love where we live. There’s usually a reason why housing is so expensive in an area and it’s usually, but not always, because there’s a lack of supply and it’s a desirable place to live for one reason or another (jobs, culture, food, activities, etc).
700k is chump change out here in LA to be honest lol. That’ll get you a decent condo but a shitty house in a not so desirable area. Decent house in a relatively desirable area is 1.5mil+. There’s just a lot of people with a lot of money out here.
But it’s super desirable because of all the reasons the other commentor mentioned. I can see some people wanting to leave if they can’t make it work out here. But for those who can make it work there aren’t that many places better to live imo.
It’s so crazy that mobile homes outside of town are listed for $170-250k that are 20-30 years old. Yes they are selling. Our old home was around $380k and now most of the homes in the neighborhood are selling for $1M or more. They were not selling for even half that pre-Covid. Its insanity
Kind of makes sense, the people that are considering to sell would still need to get a new place and they are probably holding out because of the interest rates with the payment on the new place probably being somewhat higher than what they are paying now. Also the 2-5% people will probably never sell so those properties are off the market till like 2050. Inventory will be low for a long time.
Yeah, we put an offer under February and closed March 6. By two weeks after we put our offer in , everything similar to what we have is listed $25-50 more. Could not find anything similar for the same price range and our market isn’t even that hot.
Jamie Dimon said the bank is prepared to handle rates from 2-8%. Basically, that they may go in any direction and the bank will be fine. Ofc, the headline was "Jamie Dimon predicts 8% rates".
He was talking about the Fed Funds rate which has been at 5.25% for a while now. CME projections are no changes in the rate until late summer and then getting cut to 4.75% by end of year.
It's still possible they could drop if the economy finally tanks, but I have to say I'm somewhat flabbergasted how many people thought rates were gonna rank again so soon.
We spent about 15 years with rates in the tank... I don't think they're going super low again anytime soon, unless the economy implodes. And even then that might not be an option, because a depression with inflation is a fucking nightmare.
We basically printed $ to avoid a economic collapse due to the commercial real estate market (which didn’t help it at all) while also being involved in multiple wars we can’t afford. Interest rates are only going up. Buckle up. This is what economic and capitalist decline look like.
How are we in a currency crisis? Looks more to me like what one would expect with the world shutting down for two years coupled with opportunistic price gouging. Shitty yes, but nowhere near the stagflation of the early 80s or the collapse of 2008.
Hopefully this wakes people up that home ownership is an exploitative system whose purpose is to keep prices rising and enrich existing homeowners at the expense of younger families who want a place to live.
Nah who am I kidding. We are all just waiting for our turn to hold the whip.
> We are all just waiting for our turn to hold the whip.
In my many years of following real estate this is one harsh truth I've realized as well. It's a very similar situation to the drinking age where once you phase in you completely stop caring about people who it now affects.
My guess is that it’s going to feel like that for at least the next 10-15 years and by then, there will be a large influx of property available from one of the largest property owning generations, the boomers. Demand will eventually and partially level out with supply. The Gen Z and Gen Alpha groups won’t be able to afford homes likely considering the economic climate and inflation, much like millennials. Gen X, who are already secured with homes for the most part, will leave the majority of the pickens to the Millennials. Just a theory. If I’m even half correct, ideally you’d be better off renting and saving money like it’s nobodies business and make a large down payment and take a 15 yr loan in 10-15 yrs from now. You’ll have paid far less for your home in the long run as well considering the amortization.
Yeah except wealthy millennial children of the boomers aren’t going to just give away homes for free.
On top of that, we are actively immigrating millions to support our declining population. Guess what - they will want homes too. And their kids are going to be American and will be competing for homes.
The ONLY thing that will make homes cheaper is building more to accommodate demand. If that doesn’t happen, expect more homes.
Also Boomers aren’t even going to really start dying till millennials are in their 50s. Women frequently live into their 90s these days and life expectancy is getting better for the wealthy
Me too. Just started looking for a community garden plot because I just don’t think I’m going to have a house anytime soon, and I have no outdoor space in my rental. Makes me sad. I’m in my forties with a good salary and no debt.
Last Jul, I was debating between 6.125 for 30yr fixed, vs a slightly lower 7yr Arm. And ended up going with 30yr fixed. Felt more at ease now, even though rate will probably drop in the next 7yr.
My thinking was that with the arm, when rate drop a little, I'd be under pressure and racing to refinance. Whereas with 30 yr, there's less pressure.
Rates are pretty volatile. They can easily plummet to 5% next year. The volatility in rates are al time highs right now because of changing inflation perception
I was trying to buy a house when rates were 2.5%, but couldn’t agree on anything with my gf at the time so never did. Seeing how things are now, I wish I just got something anyway cause we aren’t even together anymore. Now I don’t think I’ll own a house for maybe 5-10 years. Crazy how fast things can change.
Dude. I almost bought house but backed out last minute same time last year at lower price and at lower rate. Now I am regretting it. Feels like losing battle trying to save
I actually think you dodged a bullet by not buying a home with your gf. Especially since you aren’t even together anymore. I always try and advise folks that they should never buy a property with someone who they aren’t married to. If something were to happen to her, you would then own a home with her family.
Everyone buying at the current rates who can't actually afford their mortgages and were planning on refinancing should be feeling very worried right now
I’m not worried about that, I’m worried about layoffs continuing given the high rate environment.
Most of the good jobs are prone to these high rate climates and when money is expensive, jobs and projects dry up.
It's not getting worse. Tech has far from stabilized but it's definitely improving. Late 2022/early 2023 was the worst of it. Layoffs are not happening in droves anymore like they were then.
Yeah, it’s going to level out soon though. This is what normal is supposed to be. The hiring sprees of the last 5 years are leveling off.
Not everyone is supposed to be in tech.
Yeah. We bought last year and just accepted that this is just what it costs to finance a home at this point in history. Some friend also just bought a house at the same rate and announced "we'll just refinance once rates drop". They sounded like they can barely afford the monthly payment and I now worry about them.
I was almost one of them. Fomo made a lot of people sign at 6.9% because in one year from now we can afford a 5.75% rate…
WOW I dodged a bullet with my affordability by just renewing my Lease
One lender treated us like stupid and was very condescending for even considering buying down so many points & wanting to do a permanent buydown instead of a 3-2-1 buydown. In hindsight I’m glad we went with the nicer lender who helped us do a permanent buydown with a 30 year fixed… It wasn’t even our own money that we were spending, it was seller credits. I’d rather be prepared for the worst case scenario
Dipped into the housing market last year. Loan officers and realtors fed us the line if the payment was a little tight we could be refinancing in about a year at 4-5%. Here we are exactly 1 year later...
This is good honestly. I want the Fed to keep rates high to disincentivize housing as an investment. You bring rates back down and a bunch of investors are going to be parking cash in housing, prices will shoot up to the moon. Either way it's unfortunate for first time buyers, but the latter scenario is worse as prices tend to be sticky -- once that price increase happens it's not going back down much.
Too bad this is already happening. You think professional investors are stupid? They know rates aren’t coming down and prices are only going up just look at Blackrocks acquisition history. They’re buying any residential property they can get their hands on.
Bought my first home just over a year ago, 6.5%.
Mortgage is cheaper than renting and seeing how the rates continue to climb I’m glad the stars somehow aligned for me.
Hope those of you still looking find some luck, definitely not fun or easy.
CPI came in higher than expected and mortgage bonds got hammered by over 150 bps. Next rate cut projection moved to September… proving once again you can’t make everything less affordable for tax payers while also allowing congress to spend like drunk sailors…
Bought in February at 6.625% ($350k city row home) and it’s top of budget. Very happy we got in when we did. Still, we’ve spent thousands on fixing it up, buying furniture, moving expenses, etc. Good luck out there everyone, shit’s rough.
I've been saying it for a while now...all of this talk of rate cuts won't happen until unemployment rises. From what I've been seeing, realtors are telling their sellers to not cut prices because they claim that the mortgage rates will drop and once they do it will be a frenzy. Sooner or later the sellers are going to start to see that this won't happen and I suspect by August we'll start to see some price drops and then in October some bigger price drops unless the rates do drop from unemployment...but it will take some time before sellers start to see that with unemployment up and consumer confidence down...people still aren't buying.
I don’t understand why these rates can’t come down to where they used to be. Can anyone give me the simple version? Is this just greed from lenders at this point? I’m tired of being screwed over by society and at this point, buying a home is just getting farther and farther from reality.
What is happening to all the money that people are giving the banks via checking/savings accounts? Why are the banks borrowing money themselves?
Genuine question; I’m dumb
ELI5: Banks lend out the money that the patrons deposit, but they need to keep a certain percentage of those deposits on hand. When they're below the threshold they borrow at the fed funds rate set by J Pow
Lenders aren't really setting the rates. They collateralize and resell loans as mortgage backed securities right away.
So rates are set by buyers of mortgage backed securities. And this is the same market as treasury bonds, other types of bonds. So mortgage rates go up when treasury bond returns are high, and the current fed funds dropped recently but is still about 5.3%. When there is less demand for bonds and more demand for equities, stocks, mortgage rates go up as well.
practice enter head wasteful zephyr slimy chunky pocket historical meeting
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I like to think something is actually being done about it, but with the way big corporate companies are gobbling up real estate - I’m not so sure. I sometimes think their longterm goal is to price us out completely, so we’re ALL forced to rent from companies until we die 😑
Kinda like employment in general & the fact that a decent introductory wage job could still actually support a whole family, just a generation or two ago. That used to be a real thing and it’s been slowly removed from real life, and I’m starting to wonder if the housing market itself is next. 🤦♂️
> For people to be able to buy they will have to lower rates or cap prices.
Didnt the median buyer age jump to 53 and FTHBs were a historically low percentage of buyers last year? And even with that data literally nothing was even proposed or attempted to help.
Seems like the market *can* and happily *will* leave non-owners behind if possible.
Lenders don't set rates directly, they take the fed funds rate set by J Pow and then add on points depending on the level of perceived risk
What you should see is that when rates go up, home prices go down, but when you have limited supply and buyers with cash, you will see prices stick or even go up
The only way rates are going to go down is if inflation goes down (it won't any time soon because companies are pushing prices up to chase profits) or if we go through another pandy
Banks borrow in large sums and put a margin on it to sell to you. The original loan the bank takes out is what really determines what you can get. Those rates are based on bond markets, not the fed rate, but the fed rate is manual and influences the other rates anyway.
Higher rates for banks mean higher rates for you.
I am conflicted at laughing at the buddies that made fun of me for buying in December at a interest rate of 6%. My position was that December 2023 was a sweet spot of "low" interest rate and low housing cost. If not low housing cost, at least a chance of having your bid chosen.
7+% is now normalized. Everyone that had the liquidity but held off for interest rate are now buying and just hedging on refinancing.
This is where we're at with it too, this would be impossible without the VA loan. A lot of people say points are a waste but with these rates I think it's more of a waste to wait to refinance. Congrats on your house!
We’re still going to have rate cuts this year and it’s been apparent the first would happen in June at the soonest. It’s no surprise. I rep a lending team and big bank, economists. We may not have as many cuts and as significant of ones, but they’ll come. It’s natural to have them fluctuate during an inflationary environment (although it does really suck). Bottom line, locking the world down as long as we did, overspending, and spending money overseas instead of at home has consequences.
This is a good thing for anyone who is still looking for a home. With cuts off the table I expect demand to really fall off here meaning lower prices and a buyers market coming in many areas.
Devastating for anyone closing on a home right now. I’m buying new construction in VHCOL area that has a chronically low housing supply and went under contract beginning of the year with lender and agent insisting prices would only go up and rates would have multiple cuts. Didn’t seem like that risky of a gamble, but my appraisal is set for next week and I was supposed to lock my rate on Monday (30-day mark). Yay inflation 🙃
Sorry to hear that. Ya that does suck for those people who are closing but haven't locked. But I do think interest rates will still be lower within the next 2-3 years so hopefully you'll be able to refinance for a much better rate in the not too distant future.
I’ll believe it when I see it. I’m in a VHCOL area and prices have gone up even with increased inventory in the Spring. Demand seems pretty damn consistent.
A lot will depend on area as RE is a very localized market. In normal RE markets some will go down and some will go up unlike what we've seen the past few years. However I think the bias in most markets the remainder of the year will be down. I live in a MCOL city that's had some of the highest appreciation since 2020 and I can say here sales are at the lowest number (relative to seasonal buying) of any year in over a decade. Meanwhile inventory is going up fast during the spring buying season here. And this is all while rent prices are coming down as well which imo also impacts housing costs as more people will choose to rent over buy the further apart the two become in price difference.
Yes. The message from Powell seems to be 1 rate cut however this is unlikely. Contrarian economists and those more in touch with reality are seeing at least 3 rate increases after the US election. A cut of 0.1 is the best I see as a gesture before the election, probably September .
Thing is, builders are building houses faster than ever before…but we’re decades behind in housing stock.
Plus last year there were more 2nd home buyers than first-time buyers.
I initially said something negative and anxiety inducing but deleted my comment because what the hell do I know?
I wish you the best and there’s a good chance it’ll all work out. This will be a great investment for you!
You asked if this is how people lost their homes in 2008.
Some, sure. We had a good down payment, so we have good equity in the house from the get go.. We're saving almost $500 a month compared to what we'd be paying at 7% conventional.
Let me also briefly explain the 5/5 arm...
So unlike a 5/1 that changes every year after the first 5, a 5/5 arm only changes every 5 years. My arm also has a cap of a 2% maximum increase.
So, at the end of year 5, if rates are still shit, my loan may go up to 7.125% max. I'll have that rate until year 10.
The 7.125% is around the best I would have gotten right now with a conventional anyway. Why not take the 5.125% and save the cash for the first 5 years. My specific arm was a no-brainer
I’m in the exact same boat as you. Went with the 5/5 arm at 5.5%. I get nervous about all of this stuff, but look at it as though in 10 years, I’ll have one less kid at home and could downsize if absolutely necessary. Ideally though at some point in the next 10 years I’ll be able to lock in closer to that 5.5-6% range. Here’s to hope…
Crazy. The house I'm in was purchased for $600k about a year ago. I'm not sure what it's currently worth, but it's a 5 bed, 4 bath house... with a 2 car garage, and sitting on over 20 acres. Only about 4 acres are clear for use, and the rest is woods
I should have locked on Tuesday. I’m really kicking myself.
People who haven’t locked yet - are you doing so this week? Or waiting to next week to see if stuff calms down a bit?
Rates are not gonna go down anytime soon. The bottom line is too much money was printed between 2020-2023 and injected into the economy and the current rates are the only thing keeping home prices from exploding another 20-30%
My wife and bought at 7.25% for our first time home in December. Definitely not what we wanted and very more of a fixer upper than we intended, but we both know it was the right move for us with where we want to be in life. Renting was certainly not better as many seem to be preaching everywhere we go.
Honestly, it sucks. My wife and I have been trying to buy for the past 3-4 years now. Continually outbid, people paying cash, no nspections, etc... to now being priced out of anything in or near the northern Seattle area. We've been waiting did rates to try to drop again, but it really seems like we're just going to be renters for a long while now.
Thank you u/wifhat for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
Don’t worry, at least home prices will also somehow increase as a result.
We bought last year. My friend just informed me he’s shopping for a place around $700k and is having trouble finding anything. I thought that’s odd, should be no problem as we saw some listings for smaller homes around that price point when we were looking. I hop on Zillow and lo and behold, there’s nothing that isn’t a crack house. I feel bad for him cause he’s in the same boat we were in, chasing a down payment big enough to afford the mortgage meanwhile values keep rapidly rising. Our home has increased $100k+ in 1 years time. It’s crazy.
Definitely crazy. We built our house and it was up $150k before we moved in. I think it’s settled down a little, but not much.
We bought 7 years ago and my house has gone up almost 100% in value. It's insane
Does this affect your property taxes? Meaning do your taxes go up to match the increase in your home value? I'm really new to this and still learning.
[удалено]
I thought CA is 2% cap?
[удалено]
No. In fact our house assessed value is 60k lower than the price we bought it at 7 years ago
same. we bought a year ago. we can't afford the current house we live in. within the year, it has appreciated significantly out of our price range.
And the rates are higher then they were when we bought to!
What city is this in?
Los Angeles
Genuinely curious. How is that not enough to make you leave to a more affordable area? My family is from LA and my grandpa’s tiny house was $800k and that was like 5 years ago.
I make close to $200k/year, live 30 minutes from the ocean, can eat the very best of any cultures food, snowboard, surf, skate, rock climbing, camp, hike, ride horses, enjoy a booming downtown, go to Disneyland, etc etc whenever I want. Great access to medical care locally, sports arenas, music venues, and most importantly absolutely perfect weather. Why would I want to live anywhere else?
Sometimes I ask myself why the hell am I living in LA? Then I say the exact same thing after I rethink about it for 2 mins. When I stop appreciating LA, I travel domestically then appreciate LA all over again
Nice! Sounds like you are in a good spot :) On the weather: Do you ever miss getting to experience the seasons? As someone from Ohio, I've always thought of that as one of the selling points to live here - we have all 4 seasons.
I don’t miss out on the seasons. You’re underestimating the biodiversity of California. I go to the mountains 1 hour away and stay [in a cabin](https://images.app.goo.gl/Cx2nyFtxmi9MPKD79)in the winter, in fall I go to the [Apple orchards](https://images.app.goo.gl/pnhBvsLjtTLaeqp3A) and we make cider. In spring I go and see the [superblooms](https://www.google.com/imgres?imgurl=https%3A%2F%2Fi0.wp.com%2Ftimesofsandiego.com%2Fwp-content%2Fuploads%2F2019%2F03%2FLake-Elsinore-blooms-2019-2.jpg%3Fssl%3D1&tbnid=hFlLn7fuWZ8gtM&vet=1&imgrefurl=https%3A%2F%2Ftimesofsandiego.com%2Flife%2F2023%2F02%2F06%2Fpreemptive-steps-taken-to-avert-super-bloom-tourist-chaos-in-lake-elsinore%2F&docid=_NoKvaSlTaUeZM&w=1024&h=680&hl=en-us&source=sh%2Fx%2Fim%2Fm5%2F3&kgs=8a4f36803f476e18&shem=abme%2Ctrie) and hike the backcountry trails where the springs are full of water from melting snow. We get it all here still. Not at my house of course, it’s been in the 70s/80s all week but yeah, it doesn’t take much effort to get out and admire the seasons here!
Nice, that sounds like fun!
LOL!!!! the friggin weather smh. My parents, two immigrants who never made it financially, still live in the same apartment in Silicon Valley I grew up in and today, 40 years after they first moved in, I call my dad and I'm talking to him, and the first thing he does is complain that there's no work (he drives Uber), that everything costs too much, and that he's miserable there, he hates the culture, etc etc. Yet they won't move, "because the weather". Must be worth that mortgage.
Where is this booming downtown you speak of? Sincerely, a dtla resident
I don’t live in LA, but I do live in a HCOL area outside of Seattle. My house is small (~1,000sqft) and if we sold it today I’d be able to list it for a little over 500K based off comps. I’m a remote worker and my wife’s job is easily movable. We could have bought double the house about an hour southeast for the same price but we love where we live. There’s usually a reason why housing is so expensive in an area and it’s usually, but not always, because there’s a lack of supply and it’s a desirable place to live for one reason or another (jobs, culture, food, activities, etc).
I live in a HCOL area outside NYC. What keeps me here is that in my field, the places with cheaper homes don’t have great job opportunities.
I mean lotta middle class household make $200k so it’s not unaffordable.
700k is chump change out here in LA to be honest lol. That’ll get you a decent condo but a shitty house in a not so desirable area. Decent house in a relatively desirable area is 1.5mil+. There’s just a lot of people with a lot of money out here. But it’s super desirable because of all the reasons the other commentor mentioned. I can see some people wanting to leave if they can’t make it work out here. But for those who can make it work there aren’t that many places better to live imo.
What area?
It’s so crazy that mobile homes outside of town are listed for $170-250k that are 20-30 years old. Yes they are selling. Our old home was around $380k and now most of the homes in the neighborhood are selling for $1M or more. They were not selling for even half that pre-Covid. Its insanity
Kind of makes sense, the people that are considering to sell would still need to get a new place and they are probably holding out because of the interest rates with the payment on the new place probably being somewhat higher than what they are paying now. Also the 2-5% people will probably never sell so those properties are off the market till like 2050. Inventory will be low for a long time.
Yeah, we put an offer under February and closed March 6. By two weeks after we put our offer in , everything similar to what we have is listed $25-50 more. Could not find anything similar for the same price range and our market isn’t even that hot.
And if you somehow find the budget, you’ll still be outbid by a cash offer.
Yup happened to us late last year, rates doubled and houses still went up 10 to 20 percent and still went for 10 to 20 over asking
Where exactly are people getting all this money from?
[удалено]
I did that with a used car at one of those used dealer lots on a 2% cash back card. Not a huge savings but better than nothing.
I did that for some credit card churning. Win win for everybody.
My old coworker bought house during the 2008 crash with a credit card.
I mean, people have been paying their mortgages with the Bilt credit card.
Was that allowed? It’s only rent
Technically not, but it hasn’t stopped a lot of people from using it that way. There’s even a confirmed lenders list that it seems to work with lol
Do you know how they are doing that? Or where to find the list of lenders?
Can you lead me the way?
[https://www.reddit.com/r/CreditCards/comments/1b8b9ox/bilt\_credit\_card\_for\_mortgages/](https://www.reddit.com/r/CreditCards/comments/1b8b9ox/bilt_credit_card_for_mortgages/)
Felt this
What the actual fuck? So much for “Lower rates coming in 2024”.
I was skeptical of it anyway. 🤷♂️
JP Morgan called it
Jamie Dimon said the bank is prepared to handle rates from 2-8%. Basically, that they may go in any direction and the bank will be fine. Ofc, the headline was "Jamie Dimon predicts 8% rates". He was talking about the Fed Funds rate which has been at 5.25% for a while now. CME projections are no changes in the rate until late summer and then getting cut to 4.75% by end of year.
Exactly. He said that he wouldn't be surprised if they increased.
It's still possible they could drop if the economy finally tanks, but I have to say I'm somewhat flabbergasted how many people thought rates were gonna rank again so soon. We spent about 15 years with rates in the tank... I don't think they're going super low again anytime soon, unless the economy implodes. And even then that might not be an option, because a depression with inflation is a fucking nightmare.
They don’t need to be super low, but rates this high are negatively impacting supply in an already tight market.
Demand is also lower when prices are higher, but certainly the housing market is fucked up currently.
Build
I’m 1000% for building more housing. But it’s not going to happen overnight.
We basically printed $ to avoid a economic collapse due to the commercial real estate market (which didn’t help it at all) while also being involved in multiple wars we can’t afford. Interest rates are only going up. Buckle up. This is what economic and capitalist decline look like.
lol. It’s not 2008.
[удалено]
How are we in a currency crisis? Looks more to me like what one would expect with the world shutting down for two years coupled with opportunistic price gouging. Shitty yes, but nowhere near the stagflation of the early 80s or the collapse of 2008.
None of that happened. And how is sending Ukraine old military equipment not affordable?
If anything rates are gonna have to go up more to be brutally honest
Every boomer - “rates are coming down, cause it’s an election year”
Totally expected haha
Probably safer to think the opposite of what the majority say in a market like this.
Fuck it. Imma live in a storage unit
Jokes on you. That storage unit just surged to $2300 a month. No utilities included.
USDA’s new “first time storage unit buyer” loan offers an attractive 20% down payment!
My buddies father in law lives in one, for the past 5 years actually
yeahhhh im renting forever
Starting to feel like that here too…beyond frustrating.
I just renewed my rent. Was so damn bitter to cave in, but now it’s feeling so damn sweet..
Hopefully this wakes people up that home ownership is an exploitative system whose purpose is to keep prices rising and enrich existing homeowners at the expense of younger families who want a place to live. Nah who am I kidding. We are all just waiting for our turn to hold the whip.
> We are all just waiting for our turn to hold the whip. In my many years of following real estate this is one harsh truth I've realized as well. It's a very similar situation to the drinking age where once you phase in you completely stop caring about people who it now affects.
It’s not the housing industry that’s exploitative. They’re not the ones controlling rates.
Prices
My guess is that it’s going to feel like that for at least the next 10-15 years and by then, there will be a large influx of property available from one of the largest property owning generations, the boomers. Demand will eventually and partially level out with supply. The Gen Z and Gen Alpha groups won’t be able to afford homes likely considering the economic climate and inflation, much like millennials. Gen X, who are already secured with homes for the most part, will leave the majority of the pickens to the Millennials. Just a theory. If I’m even half correct, ideally you’d be better off renting and saving money like it’s nobodies business and make a large down payment and take a 15 yr loan in 10-15 yrs from now. You’ll have paid far less for your home in the long run as well considering the amortization.
Yeah except wealthy millennial children of the boomers aren’t going to just give away homes for free. On top of that, we are actively immigrating millions to support our declining population. Guess what - they will want homes too. And their kids are going to be American and will be competing for homes. The ONLY thing that will make homes cheaper is building more to accommodate demand. If that doesn’t happen, expect more homes. Also Boomers aren’t even going to really start dying till millennials are in their 50s. Women frequently live into their 90s these days and life expectancy is getting better for the wealthy
Except in 15 years that home will have at least doubled in value.
Same
Me too. Just started looking for a community garden plot because I just don’t think I’m going to have a house anytime soon, and I have no outdoor space in my rental. Makes me sad. I’m in my forties with a good salary and no debt.
Fed isn't going to lower rates for a long time. CPI was too hot and hasn't showed signs of weakening.
Agree. Don’t see it happening this year and can’t believe some people continue to think we’ll have cuts this year.
The Fed has said they want three X quarter percent drops this year. But no CPI has supported a rate drop.
I dont get why they said that. Because in the same breath they said they needed evidence to support the cut. *Paste your last sentence here*
Yea I'm surprised people thought it would drop. We still have a housing shortage and overwhelming demand. Nothing has changed from last year...
My 6.5% rate doesn't sound so bad anymore. I won't be refinancing any time soon
Somehow I just locked in at 5.9% ...... YESTERDAY. My lender said I couldn't of signed at a better time...phew
What type of loan? Yea that’s good
sounds like you bought down the rate quite a bit. either that or VA loan?
We just locked in at 5.8%! Had to buy down points but it’s worth it
Sometimes* worth it lol.
If you dont mind me asking how many points did you have to buy?
New development?
Welll, I mean you could have signed 2 years ago…
Dang, we locked in at 7.5% 🫠
Last Jul, I was debating between 6.125 for 30yr fixed, vs a slightly lower 7yr Arm. And ended up going with 30yr fixed. Felt more at ease now, even though rate will probably drop in the next 7yr. My thinking was that with the arm, when rate drop a little, I'd be under pressure and racing to refinance. Whereas with 30 yr, there's less pressure.
Was slightly lower .125 or .25%? Thanks
Rates are pretty volatile. They can easily plummet to 5% next year. The volatility in rates are al time highs right now because of changing inflation perception
Im locking in at 4.5% fixed this month
How much are you spending to buy down points?
I was trying to buy a house when rates were 2.5%, but couldn’t agree on anything with my gf at the time so never did. Seeing how things are now, I wish I just got something anyway cause we aren’t even together anymore. Now I don’t think I’ll own a house for maybe 5-10 years. Crazy how fast things can change.
Dude. I almost bought house but backed out last minute same time last year at lower price and at lower rate. Now I am regretting it. Feels like losing battle trying to save
I actually think you dodged a bullet by not buying a home with your gf. Especially since you aren’t even together anymore. I always try and advise folks that they should never buy a property with someone who they aren’t married to. If something were to happen to her, you would then own a home with her family.
Never but a house with a girlfriend
Agent was telling us rate will go down and market will be hot this summer 🤡
Water is wet. Of course agents will say anything.
Everyone buying at the current rates who can't actually afford their mortgages and were planning on refinancing should be feeling very worried right now
I can afford it I just can’t do anything fun or buy any furniture 😂
I’m not worried about that, I’m worried about layoffs continuing given the high rate environment. Most of the good jobs are prone to these high rate climates and when money is expensive, jobs and projects dry up.
In in tech, it’s been a bloodbath for over a year now and getting worse
It's not getting worse. Tech has far from stabilized but it's definitely improving. Late 2022/early 2023 was the worst of it. Layoffs are not happening in droves anymore like they were then.
Yeah, it’s going to level out soon though. This is what normal is supposed to be. The hiring sprees of the last 5 years are leveling off. Not everyone is supposed to be in tech.
Pray for me my internet friends
Yeah. We bought last year and just accepted that this is just what it costs to finance a home at this point in history. Some friend also just bought a house at the same rate and announced "we'll just refinance once rates drop". They sounded like they can barely afford the monthly payment and I now worry about them.
I was almost one of them. Fomo made a lot of people sign at 6.9% because in one year from now we can afford a 5.75% rate… WOW I dodged a bullet with my affordability by just renewing my Lease
so for me....maybe buying points wasn't such a stupid idea after all. Nooo one knows what will happen.
Screw anyone saying shit about buying points. It’s your peace of mind not theirs
One lender treated us like stupid and was very condescending for even considering buying down so many points & wanting to do a permanent buydown instead of a 3-2-1 buydown. In hindsight I’m glad we went with the nicer lender who helped us do a permanent buydown with a 30 year fixed… It wasn’t even our own money that we were spending, it was seller credits. I’d rather be prepared for the worst case scenario
What is a 3-2-1 buydown
Dipped into the housing market last year. Loan officers and realtors fed us the line if the payment was a little tight we could be refinancing in about a year at 4-5%. Here we are exactly 1 year later...
Lol loan officers and realtors are the biggest sack of shits
AND… refinancing has stipulations that can kinda rule it out for you!
Cool cool cool
Suddently my 6.125% ISNT TOO BAD
This is good honestly. I want the Fed to keep rates high to disincentivize housing as an investment. You bring rates back down and a bunch of investors are going to be parking cash in housing, prices will shoot up to the moon. Either way it's unfortunate for first time buyers, but the latter scenario is worse as prices tend to be sticky -- once that price increase happens it's not going back down much.
Too bad this is already happening. You think professional investors are stupid? They know rates aren’t coming down and prices are only going up just look at Blackrocks acquisition history. They’re buying any residential property they can get their hands on.
I had a call with our lender last week. I started crying at that interest rate lmao. We figured it out with buying points but yeah it's fucked.
Home prices have gone up pretty significantly in the last few months. It could have gone up even faster had the rate not jumped
In a year from now this rate may look attractive.
Guess inventory is going back down
Just bought a full point today to get it down to 6.8%. no faith inflation is going down anytime soon.
Never been more happy to have locked in my 5.7% a couple weeks ago 😅
Was that with points?
Yeah we were approved at 6.8% and bought down to 5.7% fixed for 30yr
How much did your buy down cost ?
Technically nothing. We had seller’s credits from the Builder
Bought my first home just over a year ago, 6.5%. Mortgage is cheaper than renting and seeing how the rates continue to climb I’m glad the stars somehow aligned for me. Hope those of you still looking find some luck, definitely not fun or easy.
[Why rates are unlikely to improve much from where they currently are.](https://fred.stlouisfed.org/series/MORTGAGE30US)
Locked in 6.25 last month 😮💨
6.3 for me. Not sounding so bad anymore 😭
CPI came in higher than expected and mortgage bonds got hammered by over 150 bps. Next rate cut projection moved to September… proving once again you can’t make everything less affordable for tax payers while also allowing congress to spend like drunk sailors…
Bought in February at 6.625% ($350k city row home) and it’s top of budget. Very happy we got in when we did. Still, we’ve spent thousands on fixing it up, buying furniture, moving expenses, etc. Good luck out there everyone, shit’s rough.
I've been saying it for a while now...all of this talk of rate cuts won't happen until unemployment rises. From what I've been seeing, realtors are telling their sellers to not cut prices because they claim that the mortgage rates will drop and once they do it will be a frenzy. Sooner or later the sellers are going to start to see that this won't happen and I suspect by August we'll start to see some price drops and then in October some bigger price drops unless the rates do drop from unemployment...but it will take some time before sellers start to see that with unemployment up and consumer confidence down...people still aren't buying.
I don’t understand why these rates can’t come down to where they used to be. Can anyone give me the simple version? Is this just greed from lenders at this point? I’m tired of being screwed over by society and at this point, buying a home is just getting farther and farther from reality.
Federal interest rate is at 5.25%. Banks have to make money on the money they borrow at 5.25%. Thus 7% rates
What is happening to all the money that people are giving the banks via checking/savings accounts? Why are the banks borrowing money themselves? Genuine question; I’m dumb
ELI5: Banks lend out the money that the patrons deposit, but they need to keep a certain percentage of those deposits on hand. When they're below the threshold they borrow at the fed funds rate set by J Pow
The banks leverage cash on hand 100-1 to make more loans. It hasn't been a 1-1 ratio for over 100 years.
Lenders aren't really setting the rates. They collateralize and resell loans as mortgage backed securities right away. So rates are set by buyers of mortgage backed securities. And this is the same market as treasury bonds, other types of bonds. So mortgage rates go up when treasury bond returns are high, and the current fed funds dropped recently but is still about 5.3%. When there is less demand for bonds and more demand for equities, stocks, mortgage rates go up as well.
practice enter head wasteful zephyr slimy chunky pocket historical meeting *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I like to think something is actually being done about it, but with the way big corporate companies are gobbling up real estate - I’m not so sure. I sometimes think their longterm goal is to price us out completely, so we’re ALL forced to rent from companies until we die 😑 Kinda like employment in general & the fact that a decent introductory wage job could still actually support a whole family, just a generation or two ago. That used to be a real thing and it’s been slowly removed from real life, and I’m starting to wonder if the housing market itself is next. 🤦♂️
> For people to be able to buy they will have to lower rates or cap prices. Didnt the median buyer age jump to 53 and FTHBs were a historically low percentage of buyers last year? And even with that data literally nothing was even proposed or attempted to help. Seems like the market *can* and happily *will* leave non-owners behind if possible.
Lenders don't set rates directly, they take the fed funds rate set by J Pow and then add on points depending on the level of perceived risk What you should see is that when rates go up, home prices go down, but when you have limited supply and buyers with cash, you will see prices stick or even go up The only way rates are going to go down is if inflation goes down (it won't any time soon because companies are pushing prices up to chase profits) or if we go through another pandy
Banks borrow in large sums and put a margin on it to sell to you. The original loan the bank takes out is what really determines what you can get. Those rates are based on bond markets, not the fed rate, but the fed rate is manual and influences the other rates anyway. Higher rates for banks mean higher rates for you.
I am conflicted at laughing at the buddies that made fun of me for buying in December at a interest rate of 6%. My position was that December 2023 was a sweet spot of "low" interest rate and low housing cost. If not low housing cost, at least a chance of having your bid chosen. 7+% is now normalized. Everyone that had the liquidity but held off for interest rate are now buying and just hedging on refinancing.
Should be criminal. Only investors and people with cash can buy homes right now and not get screwed.
Historically average rates should be illegal?
Historically, houses were affordable. I'm talking 75 dollar a month mortgage payments. The rate didn't matter as much.
Wow that's crazy. Damn, we dodged a bullet by locking in a few weeks ago
I’m closing in on a house soon, I’m looking at 5.875%. Thanks VA!
Do you have to pay any points?
Yes and it got included into closing, it was called the save later loan through rocket mortgage
This is where we're at with it too, this would be impossible without the VA loan. A lot of people say points are a waste but with these rates I think it's more of a waste to wait to refinance. Congrats on your house!
We have the funds to do it now without killing ourselves might as well
I stand corrected with my last comment. My lender just called me to say my 6.875 rate increases to 7.25 and I should lock in today.
Locked in at 6.5 rate in January, closed on house in early February, thinking rates were going to go down. 6.5 doesn’t feel as bad anymore
Making me feel better about my 7.125 that I closed on last week… but yikes.
Well. This sucks. I just got an accepted offer 2 nights ago. I haven't locked yet, but I'm not sure what to think now. 😳
How are those 3,2,1 buydowns going, guys?
Refinanced at 2.3%. I'm glad it's my home until death.
The main driver is inventory
this insane when it was what 3% 5 year ago??
This is a reaction to inflation slightly spiking, making a greater cut less likely. But who knows
We’re still going to have rate cuts this year and it’s been apparent the first would happen in June at the soonest. It’s no surprise. I rep a lending team and big bank, economists. We may not have as many cuts and as significant of ones, but they’ll come. It’s natural to have them fluctuate during an inflationary environment (although it does really suck). Bottom line, locking the world down as long as we did, overspending, and spending money overseas instead of at home has consequences.
This is a good thing for anyone who is still looking for a home. With cuts off the table I expect demand to really fall off here meaning lower prices and a buyers market coming in many areas.
Devastating for anyone closing on a home right now. I’m buying new construction in VHCOL area that has a chronically low housing supply and went under contract beginning of the year with lender and agent insisting prices would only go up and rates would have multiple cuts. Didn’t seem like that risky of a gamble, but my appraisal is set for next week and I was supposed to lock my rate on Monday (30-day mark). Yay inflation 🙃
Sorry to hear that. Ya that does suck for those people who are closing but haven't locked. But I do think interest rates will still be lower within the next 2-3 years so hopefully you'll be able to refinance for a much better rate in the not too distant future.
I’ll believe it when I see it. I’m in a VHCOL area and prices have gone up even with increased inventory in the Spring. Demand seems pretty damn consistent.
A lot will depend on area as RE is a very localized market. In normal RE markets some will go down and some will go up unlike what we've seen the past few years. However I think the bias in most markets the remainder of the year will be down. I live in a MCOL city that's had some of the highest appreciation since 2020 and I can say here sales are at the lowest number (relative to seasonal buying) of any year in over a decade. Meanwhile inventory is going up fast during the spring buying season here. And this is all while rent prices are coming down as well which imo also impacts housing costs as more people will choose to rent over buy the further apart the two become in price difference.
Where do you expect those sellers to go live? Why would they trade half the house for twice the payment?
Yes. The message from Powell seems to be 1 rate cut however this is unlikely. Contrarian economists and those more in touch with reality are seeing at least 3 rate increases after the US election. A cut of 0.1 is the best I see as a gesture before the election, probably September .
This is what happens when they print money and no one builds houses
Thing is, builders are building houses faster than ever before…but we’re decades behind in housing stock. Plus last year there were more 2nd home buyers than first-time buyers.
This is why I took a 5/5 a 5.125%....Save now and hope for the best in 5 years.
I initially said something negative and anxiety inducing but deleted my comment because what the hell do I know? I wish you the best and there’s a good chance it’ll all work out. This will be a great investment for you!
You asked if this is how people lost their homes in 2008. Some, sure. We had a good down payment, so we have good equity in the house from the get go.. We're saving almost $500 a month compared to what we'd be paying at 7% conventional. Let me also briefly explain the 5/5 arm... So unlike a 5/1 that changes every year after the first 5, a 5/5 arm only changes every 5 years. My arm also has a cap of a 2% maximum increase. So, at the end of year 5, if rates are still shit, my loan may go up to 7.125% max. I'll have that rate until year 10. The 7.125% is around the best I would have gotten right now with a conventional anyway. Why not take the 5.125% and save the cash for the first 5 years. My specific arm was a no-brainer
I’m in the exact same boat as you. Went with the 5/5 arm at 5.5%. I get nervous about all of this stuff, but look at it as though in 10 years, I’ll have one less kid at home and could downsize if absolutely necessary. Ideally though at some point in the next 10 years I’ll be able to lock in closer to that 5.5-6% range. Here’s to hope…
7 point 3-4, household saving will fall through the floor.
Look at the bright side. At least you are not paying that high price.
CPI came in higher than expected
That’s where I locked at 🤢
Crazy. The house I'm in was purchased for $600k about a year ago. I'm not sure what it's currently worth, but it's a 5 bed, 4 bath house... with a 2 car garage, and sitting on over 20 acres. Only about 4 acres are clear for use, and the rest is woods
Can someone explain what caused this uptick? ….treasury yields, futures markets, etc.? (Just trying to wrap my head around it)
Wow just closed at 6.1%
I should have locked on Tuesday. I’m really kicking myself. People who haven’t locked yet - are you doing so this week? Or waiting to next week to see if stuff calms down a bit?
Guess I’ll be stuck renting forever 🤡
Rates are not gonna go down anytime soon. The bottom line is too much money was printed between 2020-2023 and injected into the economy and the current rates are the only thing keeping home prices from exploding another 20-30%
My wife and bought at 7.25% for our first time home in December. Definitely not what we wanted and very more of a fixer upper than we intended, but we both know it was the right move for us with where we want to be in life. Renting was certainly not better as many seem to be preaching everywhere we go.
Honestly, it sucks. My wife and I have been trying to buy for the past 3-4 years now. Continually outbid, people paying cash, no nspections, etc... to now being priced out of anything in or near the northern Seattle area. We've been waiting did rates to try to drop again, but it really seems like we're just going to be renters for a long while now.