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smaulgld
2014 Mar 25, 6:02am
Same question as who will buy the houses as investors leave applies to mortgage backed securities and Treasury bonds
With the Fed buying 70-90% of the newly issued Tbonds, with Russia and China curtailing their purchases who will buy the bonds in the amounts and at the prices that the Fed currently buys them for.
Like houses they won't be bought unless the price comes down significantly (meaning the yield skyrockets) The US govt cant afford to pay higher rates and the economy can't withstand them
RentingForHalfTheCost
2014 Mar 25, 6:30am
The Fed is giving away cash by the truckloads! If you didn't get your cut, then tough. Mortgages are for the weak.
smaulgld
2014 Mar 25, 6:36am
Fed can't just print $4 trillion and walk away and think everything will be fine
Fed can't just print $4 trillion and walk away and think everything will be fine
Why not? It's just zeroes in a spreadsheet.
Bellingham Bill
2014 Mar 25, 7:33am
Fed can't just print $4 trillion and walk away and think everything will be fine
A little hair of the dog that bit us!
http://research.stlouisfed.org/fred2/series/MZM
shows money supply doubled 2000-2008
Bellingham Bill
2014 Mar 25, 7:34am
http://research.stlouisfed.org/fred2/series/WRMORTG
skyrocketing I tells ya!
4.4% is just a percent above inflation, therefore mortgages are still almost free money.
How much total interest is paid on a $500,000 loan in the first 10 years?
bubblesitter
2014 Mar 25, 8:49am
4.4% is just a percent above inflation, therefore mortgages are still almost free money.
Sure, if you are planning on taking out a loan and keep squating.
http://research.stlouisfed.org/fred2/series/WRMORTG
skyrocketing I tells ya!
Just a 30% jump in a year.... nothing to see here...
*
The 30% jump happened in less than 60 days,,,,9 months ago. Since, it appears rates have fallen. So, skyrocketing to a lower point than they were merely 9 months ago.
Nothingburger
You need to get some new material,,,,your banging the skin off that drum
Nothingburger
That's what I said...
nothing to see here...
a 30% jump is just lunch money for you guys....
My point(s) were that
- it happened nine months ago
- rates are lower now than they were 8 months ago
So why all the fuss over such a stale event?
Plenty of buyers use FHA. The rule changes in PMI would have had more of an affect than rates rising from 3.5-4.5,,,,especially because they were only 3.5 for a month or two,,,,prior to that drop, rates were even higher still than they are today
Bellingham Bill
2014 Mar 25, 9:11am
How much total interest is paid on a $500,000 loan in the first 10 years?
$480,000 borrowed at 4.3% has $190,000 in interest costs the first 10.
4.85% is $215,000.
The difference is $25,000 or $30 more per week after the MID is accounted for.
4.4% is just a percent above inflation, therefore mortgages are still almost free money.
only if wages rise 4.4%!
'inflation' does not necessarily mean 1970s price-wage spiral.
It could in fact come OUT of home values.
Why should they have? You need to widen your time horizon so you can filter out the noise. Rates are about half now, what they were when prices peaked in 2006. By your argument, shouldn't prices be twice as high as peak?
You're fooling yourself with noise with that condensed x and y axis.
Stretch the chart out to 30 yrs. Afterall, we are talking 30 yr morts here. Y
How much total interest is paid on a $500,000 loan in the first 10 years?
$480,000 borrowed at 4.3% has $190,000 in interest costs the first 10.
4.85% is $215,000.
The difference is $25,000 or $30 more per week after the MID is accounted for.
4.4% is just a percent above inflation, therefore mortgages are still almost free money.
only if wages rise 4.4%!
'inflation' does not necessarily mean 1970s price-wage spiral.
It could in fact come OUT of home values.
So, are mortgages almost free money??
Whatevs. Doesn't matter as rates aren't going anywhere but down.
Why do you think that? QE? I think rising rates are more likely, albeit slowly in the beginning.
Maybe the day will come again when mortgages are used to buy houses, but you'll need to go through an awful amount of stupid world money before that happens.
Go ahead and make mortgage rates 20%, it will make no difference.
http://investmentwatchblog.com/mortgage-rates-are-skyrocketing-and-it-is-only-going-to-get-worse-banks-are-beginning-to-realize-once-the-fed-is-out-there-is-no-secondary-market-for-mortgage-backed-securities/
#housing