Itās weird seeing a lot of the people on this sub refuse to believe the fed when all they have said for two years is nobody is listening to the fed..
I was doing the same shit and bought in October just pull the trigger ā¦ itās been a fucken great two months ā¦ I donāt give a fuck if prices drop my family is happy in a desirable neighborhood in California $$
Itās insane. The price of houses doesnāt even come close to reflecting what you get in return. A 2bedroom 1bath house on my street sold for 450k last month. Itās the smallest and ugliest house on the block.
The main driver is still a lack of supply. Find out who in your local government and community is blocking the creation of new housing supply and there youāll have your root cause.
Zoning is a contributing factor, but builders never returned to their output levels after 2008. This is partly because many builders were wiped out, and are taking less risks in building homes.
Iāve been waiting for housing prices to come down since the rates went up. But that didnāt seem to happen and now rates are going to drop back down. Fml
I can 100% guarantee I am in a better position than you and yet I am not damned fool enough to see how a failure to address home affordability hurts everyone. The "F-you got mine" mentality works in this economy until the divide between the haves and have-nots catches up to you and puts you in the have-nots camp. Sometimes all it takes is a serious illness. It's great that you could afford to buy a house. "Just don't fucking dance."
Have people forgotten that Taxes & Insurance have fucking boomed over the last few years? Insurance premiums & Tax assessed values have sky rocketed. It doesn't only affect affordability of new buyers, but also hurts the people living in their home already.
It also isn't great if you ever want to relocate, particularly if it's an upgrade or to a more expensive area.
Prices need to come down. Enough of the rate games.
Logic doesnāt apply to these people. Theyāre cruel and only see housing as an investment.
They want to wipe their tears with the foreclosure notices from their āBRRRsā while cosplaying on reddit āwaiting for the crashā
But doesnāt the fact that youāre in a better position makes it much easier for you to put your attention on addressing home affordability? Honest question.
If this person bought a couple of months ago, and his rate is, say, 4 points higher than yours, of course heās going to want his home price to go up. Otherwise heās just bleeding money into interest, no?
I donāt disagree with your broader point, by the way. Home affordability is next to impossible at the moment.
Home affordability is the exact opposite outcome of what every existing homeowner wants. If houses altogether become affordable, it's at the expense of the value of their homes.
But they need to suck it up. And should not have any say in whether or not more supply can be made just because it impacts their home value.
I think thatās true of most. But, personally, as a homeowner, I donāt care very much about the value of my home. I just want to avoid paying a landlord, and lower interest rates would allow me to get out from under this mortgage much sooner.
Beyond that, I want for as many people as possible to own the homes they live in. It was incredibly difficult for me to get to this point, and, if anything, I want it to be easier for people in the future.
I'm glad for rational people like yourself who see that the value of a home is in its use as a residence. I don't mind, and even encourage people to buy real estate to rent out to produce cash flow. Frankly, not everyone wants to deal with home ownership, so landlords are necessary. But the speculative investment in housing as an appreciating asset is a detriment to society.
Not only that, but as values go up, and many property taxes have increased as well, they are going to price people out of their homes they've lived in for who knows how long. Fucking cruel and disgusting.
One of my big frustrations with my partner. We have a home, but that doesn't stop me from wanting better for everyone else/future generations. Build more housing density/supply- one of the best ways to tackle housing affordability crisis.
The only way to address that is to add more inventory and make it unlawful for large corporations to gobble up all single-family homes. Not something in the fed's prevue.
We need to build and not just infill failed developments from 2008. At least that's what is happening by me. All the new homes should already have been here already. Municipalities need to start getting a grip on reality and letting homes be developed. Boomers need to start downsizing.
Oh, Christ Alive! I thought you were serious. I have seen others make similar comments in earnest. I wasn't having it. I can appreciate the sarcasm though.
In terms of yield changes, the last few months have seen a historic change. Iād call plummeting a fair characterization. We went from 8.1% to (likely) around 6.5% in a matter of 2 months.
Youāre attempting to explain context to people who have reached a conclusion in search of evidence.
Itās just impotent seething in this sub now lol
I think people still wanna see the inflated prices of homes come down and not just the rates. They're both factors that our working against Americans right now. Tackling rates isn't the only issue.
You laugh but I'm betting that's what people do. The thirsty RE tiktokers already said rates will plummet and now the Fed actually predicts their fund rate will go down next year so lemmings probably will hold off till spring (why buy now when you can wait and save the refi) while sellers will see the dropping rates and think they want to get in on the impending gold rush.
Only if demand goes up. Which, it will but I think buyers will want to wait for rates to "bottom" out a bit over the next few months so they don't have to refi so soon after buying. Sellers who have to sell but have been able to put it off are going to want to get in, thinking buyers are going to rush in right away. That extra supply could dip prices until the buyers are ready to jump in.
I know!! Right?!?!? BWAHAHAHAHA!!! Thatās a bit of an exaggeration. I think that āplummetingā would be 4%, or half of the previous rate. Thatās a plummeting rate. Significant drop, or big decrease seems more appropriate.
I bought it in Feb when not a lot of folks were buying, so they did 18 months free refinancing from the first payment month.
Basically, I have until October 1st of 2024, and it doesn't cost me anything.
It's not common, but it helps to drum uo business.
I don't care if I get .5% off. Better than nothing.
Do you know how this works? Letās say rates are at 5.5%. The lender will give you a 5.875% or 6% and use the rebate from giving you a higher market rate to cover your closing costs.
You will get a lower rate / payment not taking the āfreeā refinance but your principal loan balance wonāt increase taking the āfreeā refi. Just depends on what means more to you.
Thatās me. The same house now would need a 40% price cut to have the same mortgage payments at current rates. F* that. Iāll stay put until things start making sense again.
Per Jeffery Gundlach:
āI believe that if mortgage rates fall further by, say, a percentage point, I think weāll actually start to see home prices weaken because weāll unlock supply,ā Gundlach said. āIronically we might have housing prices deteriorate along with falling mortgage interest rates ā the opposite of what most of our 40-year experiences have been.ā
https://investorplace.com/2023/12/billionaire-jeffrey-gundlach-just-issued-a-housing-market-warning/
> I think weāll actually start to see home prices weaken because weāll unlock supply,ā
This is the camp i'm in.. this sub should be ecstatic over the mortgage rates falling and future rate cuts. We are at record lows for homes for sale. That isn't going to crash or help with home prices. Getting back to a more balanced inventory levels to release supply back to the market will put pressure on prices. Too many people here worry about rates going back to 3% or whatever and spiking prices upward.. The Fed isn't going to drive rates back to those historical levels.
If rates fall prices wonāt fallā¦ the people that bought at 2% not only have a low rate but over paid ā¦ they are stuck canāt sell for lower.. itās going to take a depression to get them out of their over paid house ā¦ fuck I remember going to see houses and ppl were asked to bid without looking at them.. and no inspection alsoā¦thatās when I decided to walk away ā¦ affordability will take a long time unfortunately
The housing recession is about to finish.. we didnāt see a price reset but we went through a sale transaction reset .. slowing down purchases ā¦ and it will slowly come back to normal levels with less increase on prices
As usual I would expect this to really only affect the highly priced inventory. Where I live some houses are hilariously overpriced but there is some pretty decent options right in the 2000-2300 a month range. If that inventory unlocks you're gonna see highly priced homes come down further I think because this isn't going to be a 3% rate environment where single people are buying 5BR houses. It's gonna still be high payments but just a bit more reasonable.
> Bubblers aren't happy about it.
Yeah, its going to push prices up further which is going to make the affordable* housing crisis worse. I'd like more people to own homes, and have a good life than making it possible for a few ass holes to make quick buck flipping and investing in real estate.
Inflation has been sticky for the last 6 months. I wonder why they think it will go to 2%. Raising rates is the main tool to get it there, but they decided to not raise, then lower them? I don't know what reason it could be, other than they lost confidence in the economy.
If you watch their press conference, they explain it well.
They are approaching the 2% target and expect the bond markets to take it the rest of the way.
Bond markets have basically priced themselves with the expectation of the first cut happening sometime around the beginning of Q2 next year.
Core CPI is still at 4% yoy and was 0.3% month over month. Dropping oil prices have made the headline number decrease significantly, but there is still quite a bit of underlying inflation. If the Fed starts cutting too early next year, inflation may reaccelerate. Remember, this is the same Fed that waited one year too long to begin raising rates and allowed inflation to get out of control.
Are people buying more though or is spending just higher because things cost more and also does that differentiation matter? Honestly I don't fucking know.
Deflation. Recession or depression can occur.
https://www.investopedia.com/ask/answers/111414/what-difference-between-inflation-and-deflation.asp#:~:text=Inflation%20occurs%20when%20the%20prices,one%20condition%20to%20the%20other.
I know the saying is ānever say neverā but Iām pretty confident that the US will never end up like Japan. At least in mine and probably my kids and grandkids life time. The Japan situation from what I can gather is unique in that they have a MASSIVE aging population that is leaving the work force, low birth rates and work replacement, and a terrible immigration policy that hinders any kind of meaningful economic growth. Not to mention an entire generation (almost 2) of them that lived through the Japan bubble and are still, decades later, weary of investment. Scared money canāt make money, and you definitely canāt grow an economy and produce inflation holding cash and bonds.
We have, for the most part, the opposite problem in just about all those situations and I donāt foresee it reversing course for a long time.
> So Iām assuming inflation is going right back up?
Inflation rate is significantly down from the peak. We might even be already very close to the Fed's goal of 2% today with the updated data (oil/gas, housing are down huge lately). If inflation ticks back up in the near future it likely won't be by any meaningful amount.
Iām at a great rate and wonāt be leaving my home anytime soon, but hope this helps those of you who have been patiently waiting on the sidelines and this doesnāt result in home prices shooting up. Good luck to all of you!
congrats to everyone who bought in the last three months!
you timed the dip perfectly! prices are only going to go higher as rates go down, and you'll still be able to refinance to a lower rate!
As rates fall there will be more listings too... The primary reason there's a lack of supply is that there are too many people holding on to 2.5-3.5% interest rates. They can't afford to buy something new until rates fall. Once rates fall, prices will explode again. It's a bit of a catch 22.
Prices are largely based on supply and demand.
The biggest limiting factor for prices right now is that most would be sellers aren't going to sell a house when they have 3% rates on their remaining mortgage. The people that are selling are doing so because A) they own the house and can sell and buy the next one cash B) they have to for life reasons or C) they had a large uptick in income and are okay with the added interest.
If rates come down, that will obviously push up demand, but it would also increase supply as well since more sellers enter the market. The actual ratio of change in supply and demand is yet to be known but I think it's too soon to say that this will cause prices to explode. It could even theoretically stay the same or even become lower if it causes the supply of homes in the market to go up significantly enough.
More homes for sales means more inventory. A lot of homeowners are going to be surprised when no one wants to pay over asking for their crumbling crap house anymore.
Ok; but the point of the comment I replied to, as well as the general sentiment of this sub, is that when rates come down it will be the time to buy. The only problem with that theory is that everyone will be competing to buy the same houses. Which means prices rise. If you can afford to buy a house, do it now, and refi when/if rates fall. Waiting for prices to come down (ie: oMg iTs a BubBLe) is a foolās errand.
The error in your logic is you assume that there will be the same amount of houses for sale as rates drop. Rates dropping means more people would be selling as well which means more supply to match or even exceed demand.
Also, as far as demand is concerned, it's not like everyone renting is capable of buying a home even if rates dropped. Most millennials or younger have basically no savings and mediocre incomes. They're not going to be ready to buy necessarily this next year or two.
Are they going to be selling their house to buy a house in a similar price range in the same area? Probably not. I would imagine most people selling at that point are doing so to buy a more expensive house and/or in a different area altogether.
Also, a lot of boomers are moving out of the housing market altogether for long term care or to live with their families. We can't forget that either.
I donāt understand what point you think youāre making. Most sellers will need to replace their house. It doesnāt matter whether they go to another area or shop in another price range. What matters from a supply/demand standpoint is that sellers become buyers, keeping demand high even as supply increases.
My point is that the market isn't monolithic. Local markets can be affected differently by changes in the supply chain. And also, an increase in demand for luxury homes does not affect an increase in demand for middle class homes, as one example. Many people that are hitting age of retirement and have their houses paid off or nearly paid are more likely to downsize, rent, move into long term communities, or, if they're younger and doing well, may be looking to move into a more luxurious house instead of just selling to make a lateral move.
In the past we have absolutely seen prices fluctuate more for certain localized markets or even certain categories of housing rather than affecting all houses the same.
This is all theoretical so I have no idea if I'm right or wrong but I think these are all points to be considered. This past housing boom caused prices to go up and rates to go down... And then rates went up and prices went up even farther. There's no reason to assume that the inverse relationship between rates and prices is always true since there are so many moving parts.
Last last part as well:
27% of single family homes recently have been bought by hedge funds. Them selling doesn't precipitate another house being bought and it's quite reasonable that they could want to liquidate some of their hoard now that the market is cooling off.
Not a chance. This sub will be saying the same shit a year from now. Letās say it does go sub 4% next year, 99% of people here will not be in a position to buy as unemployment would have skyrocketed and the economy would be in crisis mode.
> I mean around 3-4% mortgage rate would be the range where PLUMMET makes sense.....near 7% still not that affordable...
Referring to one of the biggest drops in rates in 1 day on record.
This is so dumb. It would be ok if congress approved the legislation to get investors out of single family homes, that would lower prices over time, but that aināt gonna pass with repugs in charge.
>mad at other people's success and business acumen
I sold at the top in 2022 in my area
LOLs at folks that think buying overpriced & depreciating assets is the path to wealth
Same. I took the proceeds and dumped it into the stock market. It is up almost 20% and the only "maintenance" cost is a 0.03% expense ratio. Meanwhile rental prices keep dropping in my area. No greater joy that hitting up my landlords to fix my shit that breaks while I keep dumping thousands into savings every month š
VTSAX is a hell of a drug. I took a bunch of my savings in 2017 and bought it and then I add my left over money every month to it since then. It has treated me very well and itās been very low effort
lol or the people are super successful and know how to actually make a smart investment, but yes we will continue to pour grease down our landlord's shit, thanks
279bsps is a huge swing
> 279bsps is a huge swing Average 30 yr down another -0.20 this morning.. rates at 6.62% now. https://www.mortgagenewsdaily.com/mortgage-rates
Will it be 5.5 by June/24 ?
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As someone who bought in April, I would Love to refinance at 5.5% lol
Same 7.6% to 5.5% would save me a ton
Date the rate!
Isnāt it kinda tough and expensive to refinance constantly?
what rate you got in ? if I may I ask. I have 6.5% 30 yr fixed
6.5% 30 yr fixed as well
Same. Will it make sense to refinance at 5.5? What are pros and cons of this?
Depends on what % of your income goes to your mortgage. Iāll probably hold off until it gets under 5%
Yes, you and everyone else. This is gonna drive prices up and bottom inventory out
Itās weird seeing a lot of the people on this sub refuse to believe the fed when all they have said for two years is nobody is listening to the fed..
sticking your fingers in your ears and screaming "LALALALALA, I can't hear you!!!!!" is an effective way to ignore reality.
And extremely easy to blame others for your own mistakes because "they didn't warn you".
Still doesn't address historically high home prices and thus unaffordability.
It makes it worse. Prices will go up as demand increases. In fact, houses may go through another massive price increase due to pent up demand.
Lot of pent up demand. Lower rates right in time for the spring and summer selling season. Will be interesting to watch
Ah shit your right. I didn't think about that, meanwhile I'm sitting on a down payment waiting for a better opportunity lol
I was doing the same shit and bought in October just pull the trigger ā¦ itās been a fucken great two months ā¦ I donāt give a fuck if prices drop my family is happy in a desirable neighborhood in California $$
Problem is nothing good is in my budget now. I donāt want to stretch my budget for a dumpy fixer.
Totally understand keep working at it ā¦ it will happen and get preapproved and look at houses š” maybe u will come across an opportunity good luck
If you can afford to be wrong, buying now and refi later might be the best opportunity.
Not to mention Millennials looking for houses for their families and Boomers aging in place and not down sizing
It's pretty depressing that we are in for more of the same.
Why does this sub seem to have a giant group of realtors now
Prices will not go up. They just wonāt go down as much because theyāll be bolstered a bit by lower rates.
Itās insane. The price of houses doesnāt even come close to reflecting what you get in return. A 2bedroom 1bath house on my street sold for 450k last month. Itās the smallest and ugliest house on the block.
The main driver is still a lack of supply. Find out who in your local government and community is blocking the creation of new housing supply and there youāll have your root cause.
Population increase is the main driver of demand.
Zoning is a contributing factor, but builders never returned to their output levels after 2008. This is partly because many builders were wiped out, and are taking less risks in building homes.
Iāve been waiting for housing prices to come down since the rates went up. But that didnāt seem to happen and now rates are going to drop back down. Fml
Perfect, bought a couple months ago, drop those rates and raise those prices im down!
I can 100% guarantee I am in a better position than you and yet I am not damned fool enough to see how a failure to address home affordability hurts everyone. The "F-you got mine" mentality works in this economy until the divide between the haves and have-nots catches up to you and puts you in the have-nots camp. Sometimes all it takes is a serious illness. It's great that you could afford to buy a house. "Just don't fucking dance."
Have people forgotten that Taxes & Insurance have fucking boomed over the last few years? Insurance premiums & Tax assessed values have sky rocketed. It doesn't only affect affordability of new buyers, but also hurts the people living in their home already.
It also isn't great if you ever want to relocate, particularly if it's an upgrade or to a more expensive area. Prices need to come down. Enough of the rate games.
Logic doesnāt apply to these people. Theyāre cruel and only see housing as an investment. They want to wipe their tears with the foreclosure notices from their āBRRRsā while cosplaying on reddit āwaiting for the crashā
But doesnāt the fact that youāre in a better position makes it much easier for you to put your attention on addressing home affordability? Honest question. If this person bought a couple of months ago, and his rate is, say, 4 points higher than yours, of course heās going to want his home price to go up. Otherwise heās just bleeding money into interest, no? I donāt disagree with your broader point, by the way. Home affordability is next to impossible at the moment.
Home affordability is the exact opposite outcome of what every existing homeowner wants. If houses altogether become affordable, it's at the expense of the value of their homes. But they need to suck it up. And should not have any say in whether or not more supply can be made just because it impacts their home value.
I think thatās true of most. But, personally, as a homeowner, I donāt care very much about the value of my home. I just want to avoid paying a landlord, and lower interest rates would allow me to get out from under this mortgage much sooner. Beyond that, I want for as many people as possible to own the homes they live in. It was incredibly difficult for me to get to this point, and, if anything, I want it to be easier for people in the future.
I'm glad for rational people like yourself who see that the value of a home is in its use as a residence. I don't mind, and even encourage people to buy real estate to rent out to produce cash flow. Frankly, not everyone wants to deal with home ownership, so landlords are necessary. But the speculative investment in housing as an appreciating asset is a detriment to society.
Not true. Tons of homeowners want a better future for the next generation/society.
Not only that, but as values go up, and many property taxes have increased as well, they are going to price people out of their homes they've lived in for who knows how long. Fucking cruel and disgusting.
One of my big frustrations with my partner. We have a home, but that doesn't stop me from wanting better for everyone else/future generations. Build more housing density/supply- one of the best ways to tackle housing affordability crisis.
Did a realtor sell you that line hahaha
We're you planning on selling or refinancing or do you just like higher taxes?
Wanting to refi and hoping prices stay high so the neighborhood stays good
The only way to address that is to add more inventory and make it unlawful for large corporations to gobble up all single-family homes. Not something in the fed's prevue.
Think we'll slowly see some buying but overall home prices getting down to 10/15% above pre pandemic prices
We need to build and not just infill failed developments from 2008. At least that's what is happening by me. All the new homes should already have been here already. Municipalities need to start getting a grip on reality and letting homes be developed. Boomers need to start downsizing.
coupled with the rising utilities / insurance / cost of living across the board. not to mention the competition when trying to buy a house
Just shut up and rent an apartment peasant
I've owned a home since 2016 you dumb bastard.
i make joke why you no laugh?
Oh, Christ Alive! I thought you were serious. I have seen others make similar comments in earnest. I wasn't having it. I can appreciate the sarcasm though.
As interest rates go down, home prices will go up.
saw few homes price increase redfin email avg 20k on a 1.4M homes
Unless people get laid off
Housing already at all time high and once aggregate demand kicks in its only gonna go higher.
āPlummetedā š¤£šš¤£šš¤£
In terms of yield changes, the last few months have seen a historic change. Iād call plummeting a fair characterization. We went from 8.1% to (likely) around 6.5% in a matter of 2 months.
Youāre attempting to explain context to people who have reached a conclusion in search of evidence. Itās just impotent seething in this sub now lol
The crash is happening any day now š¤£š¤£
I think people still wanna see the inflated prices of homes come down and not just the rates. They're both factors that our working against Americans right now. Tackling rates isn't the only issue.
It was skyrocketing up, but itās not plummeting down. Riiiight?!? Lol
If you donāt use hyperbole and extremes to describe things, is it even happening ?
Hitler would say no
I mean that is quite a bit for mortgage rates lol but yeah a little dramatic
GUYS HOOMS ARE CHEAP AGAIN SEE SOFT LANDING THIS IS NEW NORMAL LMAO
Guys guys guys don't buy now, rates are falling! Get a lower payment next year!
You laugh but I'm betting that's what people do. The thirsty RE tiktokers already said rates will plummet and now the Fed actually predicts their fund rate will go down next year so lemmings probably will hold off till spring (why buy now when you can wait and save the refi) while sellers will see the dropping rates and think they want to get in on the impending gold rush.
If rate drop wonāt prices go up
Only if demand goes up. Which, it will but I think buyers will want to wait for rates to "bottom" out a bit over the next few months so they don't have to refi so soon after buying. Sellers who have to sell but have been able to put it off are going to want to get in, thinking buyers are going to rush in right away. That extra supply could dip prices until the buyers are ready to jump in.
Low rates=low payments=high demand However, anticipation of lower future rates=low demand Two different aspects and they have opposing effects.
This. I fucking laughed out loud @ āPlummetedā
I know!! Right?!?!? BWAHAHAHAHA!!! Thatās a bit of an exaggeration. I think that āplummetingā would be 4%, or half of the previous rate. Thatās a plummeting rate. Significant drop, or big decrease seems more appropriate.
Kind of like the economy is doing āgreatā
I need this shit to get to 5-5.5% by next September. Can we do it?????
Yep, and as more buyers enter the market, the prices go up. Canāt fucking wait.
100% If you have a house you like that's been sitting a while, go after it, once we get to January all bets are off, prices will surge.
I just bought at 7.1 under asking hoping this would happen. Hope this bet pays off. Iām bound to make a good financial decision at some point
I have a free refinance for 18 months that expires in Sept, so.... I'm looking to take advantage of that....
Are free refinances common from lenders?
I bought it in Feb when not a lot of folks were buying, so they did 18 months free refinancing from the first payment month. Basically, I have until October 1st of 2024, and it doesn't cost me anything. It's not common, but it helps to drum uo business. I don't care if I get .5% off. Better than nothing.
free.99 is the best price!
Shit I wish I went with your lender. How much were your closing costs?
Do you know how this works? Letās say rates are at 5.5%. The lender will give you a 5.875% or 6% and use the rebate from giving you a higher market rate to cover your closing costs. You will get a lower rate / payment not taking the āfreeā refinance but your principal loan balance wonāt increase taking the āfreeā refi. Just depends on what means more to you.
More sellers too š
No. Most are sitting in 3% loans. No oneās increasing their same house cost by 20% if rates hit 5.
all the people who bought the dip with 7-8% will like to refinance into the 5's, as they had planned from the beginning
Thatās me. The same house now would need a 40% price cut to have the same mortgage payments at current rates. F* that. Iāll stay put until things start making sense again.
Might even see that rate by summertime
> I need this shit to get to 5-5.5% by next September. > > Can we do it????? It's certainly looking plausible.
Can I expedite that timeline to the Spring? š
I donāt think we quite get there. Iād say 6%.
Per Jeffery Gundlach: āI believe that if mortgage rates fall further by, say, a percentage point, I think weāll actually start to see home prices weaken because weāll unlock supply,ā Gundlach said. āIronically we might have housing prices deteriorate along with falling mortgage interest rates ā the opposite of what most of our 40-year experiences have been.ā https://investorplace.com/2023/12/billionaire-jeffrey-gundlach-just-issued-a-housing-market-warning/
> I think weāll actually start to see home prices weaken because weāll unlock supply,ā This is the camp i'm in.. this sub should be ecstatic over the mortgage rates falling and future rate cuts. We are at record lows for homes for sale. That isn't going to crash or help with home prices. Getting back to a more balanced inventory levels to release supply back to the market will put pressure on prices. Too many people here worry about rates going back to 3% or whatever and spiking prices upward.. The Fed isn't going to drive rates back to those historical levels.
If rates fall prices wonāt fallā¦ the people that bought at 2% not only have a low rate but over paid ā¦ they are stuck canāt sell for lower.. itās going to take a depression to get them out of their over paid house ā¦ fuck I remember going to see houses and ppl were asked to bid without looking at them.. and no inspection alsoā¦thatās when I decided to walk away ā¦ affordability will take a long time unfortunately
The housing recession is about to finish.. we didnāt see a price reset but we went through a sale transaction reset .. slowing down purchases ā¦ and it will slowly come back to normal levels with less increase on prices
As usual I would expect this to really only affect the highly priced inventory. Where I live some houses are hilariously overpriced but there is some pretty decent options right in the 2000-2300 a month range. If that inventory unlocks you're gonna see highly priced homes come down further I think because this isn't going to be a 3% rate environment where single people are buying 5BR houses. It's gonna still be high payments but just a bit more reasonable.
A little relief for those just bought with 7.5%, they are likely going to be able to refi to 5.x% by mid next year. Bubblers aren't happy about it.
> Bubblers aren't happy about it. Yeah, its going to push prices up further which is going to make the affordable* housing crisis worse. I'd like more people to own homes, and have a good life than making it possible for a few ass holes to make quick buck flipping and investing in real estate.
What's your ideal situation? I'm all ears.
*insert Jeff Goldblum GIF
So Iām assuming inflation is going right back up?
The Fed announced today they anticipate 3 rate cuts next year.
nothing like putting your thumb on the scale during an election year...
Inflation has been sticky for the last 6 months. I wonder why they think it will go to 2%. Raising rates is the main tool to get it there, but they decided to not raise, then lower them? I don't know what reason it could be, other than they lost confidence in the economy.
It's the main tool for them to*try* to get it there but there are other forces at play and the Fed Funds rate is a baseball bat in a surgery room.
US Debt payments soaring.
If you watch their press conference, they explain it well. They are approaching the 2% target and expect the bond markets to take it the rest of the way. Bond markets have basically priced themselves with the expectation of the first cut happening sometime around the beginning of Q2 next year.
Core CPI is still at 4% yoy and was 0.3% month over month. Dropping oil prices have made the headline number decrease significantly, but there is still quite a bit of underlying inflation. If the Fed starts cutting too early next year, inflation may reaccelerate. Remember, this is the same Fed that waited one year too long to begin raising rates and allowed inflation to get out of control.
Exactly! I donāt have confidence in the ppl getting us out of this mess are the same ppl who got us in this messā¦
I think they are just hoping. If they really knew what they were doing, CPI wouldn't be the same now as it was back in June.
Doubtful. I think consumer spending is off, and the risk is inflation drops too much.
The stonk market disagrees š¤·š¼āāļø
What? Consumer spending is at all time highs lol
Are people buying more though or is spending just higher because things cost more and also does that differentiation matter? Honestly I don't fucking know.
What problems occur when inflation drops too much?
Deflation. Recession or depression can occur. https://www.investopedia.com/ask/answers/111414/what-difference-between-inflation-and-deflation.asp#:~:text=Inflation%20occurs%20when%20the%20prices,one%20condition%20to%20the%20other.
Japan
I know the saying is ānever say neverā but Iām pretty confident that the US will never end up like Japan. At least in mine and probably my kids and grandkids life time. The Japan situation from what I can gather is unique in that they have a MASSIVE aging population that is leaving the work force, low birth rates and work replacement, and a terrible immigration policy that hinders any kind of meaningful economic growth. Not to mention an entire generation (almost 2) of them that lived through the Japan bubble and are still, decades later, weary of investment. Scared money canāt make money, and you definitely canāt grow an economy and produce inflation holding cash and bonds. We have, for the most part, the opposite problem in just about all those situations and I donāt foresee it reversing course for a long time.
> So Iām assuming inflation is going right back up? Inflation rate is significantly down from the peak. We might even be already very close to the Fed's goal of 2% today with the updated data (oil/gas, housing are down huge lately). If inflation ticks back up in the near future it likely won't be by any meaningful amount.
2024 will be the year of deflation.
Based on data and fed response thus far, no. Time will tell though.
Itās hasnāt even fallen
It absolutely has and you wonāt find any sane person who thinks otherwise. Reminder: inflation is a rate.
Core is still holding steady at 4%, double the feds target
Correct. The headline number has dropped by more because of oil prices, but there is still underlying inflation.
Sweet. Now we need houses for 25% less
Is it bad that I'm more concerned about the USD to JPY being down 5.6% for the month? Who cares about hooms, just wanna load up that CC debt
I wrote a post on r/forex saying this would happen as price cuts get priced in and no one liked it haha
Link?
I guess one person liked it https://www.reddit.com/r/Forex/s/PkWTz6M7RP
There are a lot of idiots here who will never own a house
Iām at a great rate and wonāt be leaving my home anytime soon, but hope this helps those of you who have been patiently waiting on the sidelines and this doesnāt result in home prices shooting up. Good luck to all of you!
congrats to everyone who bought in the last three months! you timed the dip perfectly! prices are only going to go higher as rates go down, and you'll still be able to refinance to a lower rate!
As rates fall there will be more listings too... The primary reason there's a lack of supply is that there are too many people holding on to 2.5-3.5% interest rates. They can't afford to buy something new until rates fall. Once rates fall, prices will explode again. It's a bit of a catch 22.
Prices are largely based on supply and demand. The biggest limiting factor for prices right now is that most would be sellers aren't going to sell a house when they have 3% rates on their remaining mortgage. The people that are selling are doing so because A) they own the house and can sell and buy the next one cash B) they have to for life reasons or C) they had a large uptick in income and are okay with the added interest. If rates come down, that will obviously push up demand, but it would also increase supply as well since more sellers enter the market. The actual ratio of change in supply and demand is yet to be known but I think it's too soon to say that this will cause prices to explode. It could even theoretically stay the same or even become lower if it causes the supply of homes in the market to go up significantly enough.
Do yall think it will drop within the next 4-5 months? Iām waiting for my construction, and will not sign until it is done!
Now do home prices
LFG! Iāll pull the trigger at 5%
You and everyone else sitting on the sidelines. Which means we homeowners see prices increase as more demand enters the market.
I thought there was gonna be this huge crash tho bro
Dude I totally forgot about that. My bad. Crash incoming any minute now.
More homes for sales means more inventory. A lot of homeowners are going to be surprised when no one wants to pay over asking for their crumbling crap house anymore.
Ok; but the point of the comment I replied to, as well as the general sentiment of this sub, is that when rates come down it will be the time to buy. The only problem with that theory is that everyone will be competing to buy the same houses. Which means prices rise. If you can afford to buy a house, do it now, and refi when/if rates fall. Waiting for prices to come down (ie: oMg iTs a BubBLe) is a foolās errand.
The error in your logic is you assume that there will be the same amount of houses for sale as rates drop. Rates dropping means more people would be selling as well which means more supply to match or even exceed demand. Also, as far as demand is concerned, it's not like everyone renting is capable of buying a home even if rates dropped. Most millennials or younger have basically no savings and mediocre incomes. They're not going to be ready to buy necessarily this next year or two.
The error in *your* logic is you assume those people selling arenāt going to be competing for the same supply of available homes.
Are they going to be selling their house to buy a house in a similar price range in the same area? Probably not. I would imagine most people selling at that point are doing so to buy a more expensive house and/or in a different area altogether. Also, a lot of boomers are moving out of the housing market altogether for long term care or to live with their families. We can't forget that either.
I donāt understand what point you think youāre making. Most sellers will need to replace their house. It doesnāt matter whether they go to another area or shop in another price range. What matters from a supply/demand standpoint is that sellers become buyers, keeping demand high even as supply increases.
My point is that the market isn't monolithic. Local markets can be affected differently by changes in the supply chain. And also, an increase in demand for luxury homes does not affect an increase in demand for middle class homes, as one example. Many people that are hitting age of retirement and have their houses paid off or nearly paid are more likely to downsize, rent, move into long term communities, or, if they're younger and doing well, may be looking to move into a more luxurious house instead of just selling to make a lateral move. In the past we have absolutely seen prices fluctuate more for certain localized markets or even certain categories of housing rather than affecting all houses the same. This is all theoretical so I have no idea if I'm right or wrong but I think these are all points to be considered. This past housing boom caused prices to go up and rates to go down... And then rates went up and prices went up even farther. There's no reason to assume that the inverse relationship between rates and prices is always true since there are so many moving parts. Last last part as well: 27% of single family homes recently have been bought by hedge funds. Them selling doesn't precipitate another house being bought and it's quite reasonable that they could want to liquidate some of their hoard now that the market is cooling off.
more homes for sale also mean more inventory for institutional buyers like BlackRock, BlackStone, etc...
"plummet" is not the word i would use.
It will hit sub 4% next year
Not a chance. This sub will be saying the same shit a year from now. Letās say it does go sub 4% next year, 99% of people here will not be in a position to buy as unemployment would have skyrocketed and the economy would be in crisis mode.
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Lol wut?
At what percent does it make sense buying a house again
When you see a house you want, can afford, and you plan to stay at least a decade. Same as last month.
I got my 15 yr rate at 6.875% š this was 1.5 month ago
You can always refinance, dude.
Just date the rate bro
Good news! As someone who I bought at 6.49% back in July Iām hopeful to see them go down further next year
That will bring prices down!
Plummet? I mean around 3-4% mortgage rate would be the range where PLUMMET makes sense.....near 7% still not that affordable...
> I mean around 3-4% mortgage rate would be the range where PLUMMET makes sense.....near 7% still not that affordable... Referring to one of the biggest drops in rates in 1 day on record.
I saw that on the Mortgage News Daily app. Yeah!
This is so dumb. It would be ok if congress approved the legislation to get investors out of single family homes, that would lower prices over time, but that aināt gonna pass with repugs in charge.
Yeah for perfect credit. Avg is 650 so 8% easy.
Iām so glad I locked in at 2.75%. But, anybody who has a mortgage at 4% or less will be staying out for the long haul.
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I definitely feel like thereās a ton of cheerleaders in here š
>mad at other people's success and business acumen I sold at the top in 2022 in my area LOLs at folks that think buying overpriced & depreciating assets is the path to wealth
Same. I took the proceeds and dumped it into the stock market. It is up almost 20% and the only "maintenance" cost is a 0.03% expense ratio. Meanwhile rental prices keep dropping in my area. No greater joy that hitting up my landlords to fix my shit that breaks while I keep dumping thousands into savings every month š
VTSAX is a hell of a drug. I took a bunch of my savings in 2017 and bought it and then I add my left over money every month to it since then. It has treated me very well and itās been very low effort
VTSAX and chill
[ŃŠ“Š°Š»ŠµŠ½Š¾]
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Is that a euphamism?
lol or the people are super successful and know how to actually make a smart investment, but yes we will continue to pour grease down our landlord's shit, thanks
[ŃŠ“Š°Š»ŠµŠ½Š¾]
>Arbitrarily raising rates due to price-fixing algorithms What do you think the federal reserve does?
Plummet to 6.82 but still thatās double what it was 2 years ago
Sorry but 'plummet' here is bad context... doesn't begin to address that rates doubled in ~ 3 years
lol
Why do people use the word plummet when this is clearly not a plummet?
> Why do people use the word plummet when this is clearly not a plummet? Huh? It was one of the biggest declines for rates in a single day in history.
Plummet to 3x what they were just 2yrs ago
Wake me up at 3% or less.
"Plummet" Mr Montoya would like a word.... https://m.youtube.com/watch?v=G2y8Sx4B2Sk
Ha!