Housing market's gonna crash

nooshinjohn

Our rate is 2.5% fixed...

newbie308

What disturbs me is not the principal or the interest on it, but that the taxes are 5% more than the principal and interest combined, and that will never go down or go away.

motorstereo

Ok what's going to happen if the real estate market doesn't crash? Since they're not making any more land my crystal ball doesn't see a crash but it does see higher prices.

Jstas

That's pretty obtuse and pretty much troll baiting.

Real estate is not just housing.

Housing is only part of real estate.

Real estate encompasses all land, developed and undeveloped.

The housing market relies on the mortgage industry and borrowing. The borrowing vs. valuation of the property borrowed against, that's where the problem is.

motorstereo

^^^^^^^Call it trolling if you'd like but those houses that are soon to crash do have to reside somewhere so real estate is a big part of the overall equation. Just saying.

ken brydson

Just sayin'.…

sucks2beme

If buyers can't afford it, the thing will sit on the market.
And the seller doesn't want to eat the loss. So then what?
There was about 8 years of that limbo around Memphis.
Are we ready for something like that to happen everywhere?
Dallas market pre-2008 didn't go crazy. This time, it was a
hotbed of crazy price hikes. I don't think they will be as lucky
this time around. And let's face it, Los Vegas is going to be
another blood bath.

nooshinjohn

So is Los Angeles… My wife and I were smart and bought in a fantastic neighborhood with great schools at the bottom of the market. We re-fied two years ago and took nothing out but reduced our term by 5 years at the same payment. We were up 700k on our purchase price but with rates like they are, our market value has slipped 100k since July.

aprazer402

motorstereo

ken brydson wrote: »

Just sayin'.…

FWIW I paid 7 3/8% (it was an excellent rate at the time) for the life of my mortgage. It was far better than paying my much cheaper rent in the long run but some people just don't think long term.

treitz3

Yeah, it was either the 70's or 80's that a 7-8% mortgage was either good or the norm. People have been very spoiled the last decade with staggeringly low interest rates. I wouldn't be surprised if the rates keep going up, maybe even doubling and staying there for a very long time. Like, maybe a decade or more, just like back then.

Tom

Emlyn

Having the ability to take out a 30 year loan at between 2 to 3 percent interest is a sign there's something seriously wrong with an economy. It was only that way for so long because of the economic collapse around 2008 and the struggle to get out of that mess.

polrbehr

treitz3 wrote: »

Yeah, it was either the 70's or 80's that a 7-8% mortgage was either good or the norm. People have been very spoiled the last decade with staggeringly low interest rates. I wouldn't be surprised if the rates keep going up, maybe even doubling and staying there for a very long time. Like, maybe a decade or more, just like back then.

Tom

90s as well. We bought our house in 1996 through an FmHA loan with a variable interest rate, but capped at 7.25% for life. So @motorstereo you are not far off of that, though not sure when you bought?

I should add, my max monthly payment (without taxes or insurance) is capped at $741.

audioluvr

So I shouldn't complain about my 3.25% 15 yr fixed?

pitdogg2

Actually during the early 80's it was over 16%, early 90's they fell to about 10%. I can remember my father stating us kids would never be able to afford a house if something didn't change. I just locked in a 5.5% for 30yrs. Do to the astronomical property taxes in my city I couldn't go with a 15-20yr loan. I've never ever had a mortgage longer the 15yrs previously. My bank loan officer was stating how outrageously high they had become. I calmly look at him and stated my first mortgage was 8.3% so my 5.5% was super in the grand scheme of things. Of course he is only 30yrs old so he honestly had no idea how high they had been in the last decades.

Rocket mortgage history
vvvvvvv

Interest rates reached their highest point in modern history in 1981 when the annual average was 16.63%, according to the Freddie Mac data.

In the 1990s, inflation started to calm down a little bit. The average mortgage rate in 1990 was 10.13%,

mhardy6647

IIRC, our first mortgage (1982, give or take) was at 13.25%.

tratliff

I've seen rates as high as 9% during my tenure as a homeowner. At this point I am just happy I refinanced 18 months ago at 2.25% for 15 years. Not sure I will have that opportunity again in my lifetime.

pitdogg2

tratliff wrote: »

I've seen rates as high as 9% during my tenure as a homeowner. At this point I am just happy I refinanced 18 months ago at 2.25% for 15 years. Not sure I will have that opportunity again in my lifetime.

That is great! I actually gave up a 2.5% loan that had no escrow for the taxes and insurance. If I kept it I couldn't live on $200 a month to pay bills, gas and food. It wasn't an easy decision, the current atmosphere I fully expected all that to continue to escalate.

motorstereo

Tom[/quote]

90s as well. We bought our house in 1996 through an FmHA loan with a variable interest rate, but capped at 7.25% for life. So @motorstereo you are not far off of that, though not sure when you bought?

I should add, my max monthly payment (without taxes or insurance) is capped at $741.
[/quote]
Early 1988 I bought mine which was at the peak of the condo bubble when condos were selling for as much as single family homes. That also was an interesting time in the housing market.

audioluvr

pitdogg2 wrote: »

That is great! I actually gave up a 2.5% loan... If I kept it I couldn't live on $200 a month to pay bills, gas and food. It wasn't an easy decision, the current atmosphere I fully expected all that to continue to escalate.

Male gigolo not paying as good as it used to? Damn!

pitdogg2

audioluvr wrote: »

pitdogg2 wrote: »

That is great! I actually gave up a 2.5% loan... If I kept it I couldn't live on $200 a month to pay bills, gas and food. It wasn't an easy decision, the current atmosphere I fully expected all that to continue to escalate.

Male gigolo not paying as good as it used to? Damn!

If you seen me naked you'd understand!!!


😂

txcoastal1

Lol...the 420 workout
... and my body by bud....yeah, not a pretty site
All that matters is I can still shoot straight

pitdogg2

I can definitely shoot straight! So I've still got that going for me😂😂

treitz3

https://www.realtor.com/news/trends/home-prices-expected-to-fall-even-if-no-recession/

Investment companies have basically come to a screeching halt. This will have a big impact on availability and demand.

Tom

Jstas

I can't believe we're still pushing the "not inflation" and "not a recession" narrative.

pitdogg2

Jstas wrote: »

I can't believe we're still pushing the "not inflation" and "not a recession" narrative.

You mean like get vaccinated and stop the spread ..... Yea same people!

🤣🤣

VR3

No inflation here, just paying more for quality products and service

skipshot12

Well, my first home in the 80’s had a 12.5% fixed 30 year interest rate.
That was at a reduced rate as it was thru the VA.

I don’t think we’re done with rate hikes yet…

Jstas

The Feds flat out said they were going to do staged rate increases over the next 6 months and that was back at the end of June. If their timeline is accurate, they have two more hikes coming before the end of the year. Then they're going to reassess and see if more rate hikes are needed.

I heard a talking head on a news channel I was surfing past say that he would not be surprised if we hit 10% rates by next spring. That might be extreme but we haven't see inflation like this since the Carter administration and digging out of that is what led to the 12-13% rates.

skipshot12

Oh man, 10% not good.

Unless cd rates go up in relation to rates.
Remember my Pop getting 2 year cd’s @ 13%.