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1
HeadSet
2022 Mar 12, 8:23am
HeadSet
2022 Mar 12, 8:23am
Al_Sharpton_for_President says
That would be good news. Around here banks are advertising mortgage rates around 3%.
he average lender is now definitively up and over 4.25%
That would be good news. Around here banks are advertising mortgage rates around 3%.
2
ForcedTQ
2022 Mar 12, 8:26am
HeadSet says
I heard recently (last week)that people with less than optimal credit rating were able to secure 15yr no fee refis for 2.99%.
Al_Sharpton_for_President sayshe average lender is now definitively up and over 4.25%
That would be good news. Around here banks are advertising mortgage rates around 3%.
I heard recently (last week)that people with less than optimal credit rating were able to secure 15yr no fee refis for 2.99%.
3
ForcedTQ
2022 Mar 12, 8:27am
ForcedTQ says
HeadSet saysClosings over the next two weeks.Al_Sharpton_for_President sayshe average lender is now definitively up and over 4.25%
That would be good news. Around here banks are advertising mortgage rates around 3%.
I heard recently (last week)that people with less than optimal credit rating were able to secure 15yr no fee refis for 2.99%.
4
mell
2022 Mar 12, 8:38am
That 3% we got looking pretty good now. Plus xinflation driving up values. 12% appreciation in less than a year. People still invading CA countryside from shitty cities
5
FortWayneAsNancyPelosiHaircut
2022 Mar 12, 10:04am
FortWayneAsNancyPelosiHaircut
2022 Mar 12, 10:04am
Remember when getting 8% felt like winning, that's going to come back I feel like. Housing prices will probably crater to make up for inflation and rates... who knows.
6
mell
2022 Mar 12, 10:10am
FortWayneAsNancyPelosiHaircut says
They will not let it go to 8% unless the Fed loses total control. The other thing is that there are plenty of boomers and older Gen xers retiring who have enough money to pay cash or significant money down. The downturn will start when millenials are expected to be in line for home buying but won't have the dough to do so. Not before. But at least they will have their gender studies degrees.
Remember when getting 8% felt like winning, that's going to come back I feel like. Housing prices will probably crater to make up for inflation and rates... who knows.
They will not let it go to 8% unless the Fed loses total control. The other thing is that there are plenty of boomers and older Gen xers retiring who have enough money to pay cash or significant money down. The downturn will start when millenials are expected to be in line for home buying but won't have the dough to do so. Not before. But at least they will have their gender studies degrees.
7
B.A.C.A.H.
2022 Mar 12, 10:16am
B.A.C.A.H.
2022 Mar 12, 10:16am
Yesterday my mom and I drove past a 50+ year old 1300 sq ft sh*tbox in her San Jose tract that sold recently for $1.48 M.
My mom told me my folks paid $20.2 K for their same-floorplan, same lot size home in that tract in 1968. I suppose it means my mom's home is worth $1.48 M. A simple calculation yielded a 7.9% CAGR.
My mom told me my folks paid $20.2 K for their same-floorplan, same lot size home in that tract in 1968. I suppose it means my mom's home is worth $1.48 M. A simple calculation yielded a 7.9% CAGR.
8
FortWayneHatesRealtors
2022 Mar 12, 7:04pm
mell says
I’ve finally met one young man with gender studies degree. Stupid man though, couldn’t even take a simple joke without getting offended.
FortWayneAsNancyPelosiHaircut saysRemember when getting 8% felt like winning, that's going to come back I feel like. Housing prices will probably crater to make up for inflation and rates... who knows.
They will not let it go to 8% unless the Fed loses total control. The other thing is that there are plenty of boomers and older Gen xers retiring who have enough money to pay cash or significant money down. The downturn will start when millenials are expected to be in line for home buying but won't have the dough to do so. Not before. But at least they will have their gender studies degrees.
I’ve finally met one young man with gender studies degree. Stupid man though, couldn’t even take a simple joke without getting offended.
9
zzyzzx
2022 Apr 7, 4:35am
zzyzzx
2022 Apr 7, 4:35am
When the fed stops buying MBS, then look for substantially higher mortgage rates. If the fed starts selling off MBS's, then mortgage rates will skyrocket. It's unclear how much this will affect interest rates in general vs just mortgage interest rates. IMO, it's unlikely that they will actually sell off any MBS since the balance naturally decreases over time even if the sell none.
11
Goran_K
2022 Apr 7, 6:55am
Goran_K
2022 Apr 7, 6:55am
BayArea says
Ahhh, back to the lovely days of 2009-2011. Back then everyone thought Dr. HousingBubble was the best website ever.
30yr mortgage fixed rates hit 5% this week.
Ahhh, back to the lovely days of 2009-2011. Back then everyone thought Dr. HousingBubble was the best website ever.
12
WookieMan
2022 Apr 7, 6:59am
WookieMan
2022 Apr 7, 6:59am
Rates don't matter to the average person, only to bankers and investors. You buy a payment and from there that dictates the housing prices.
Let's say two people make $100k. One has a 650 credit score and the other 800. The difference in interest between the two will be something like 20-30%. If the high score gets 4% and the low score gets 5%, that's literally a 20% difference, even with the same income.
As long as lender standards stay relatively strict, housing is going to be based on income and credit. Until income drops, I don't see housing prices dropping. Loans are solid now. They likely will flatline and in a few areas like IL or NJ they may drop. I'm building at probably the worst time but I kind of have fuck you money for my region (rural). Shit would need to be blasted on the fan for me to get into trouble.
Let's say two people make $100k. One has a 650 credit score and the other 800. The difference in interest between the two will be something like 20-30%. If the high score gets 4% and the low score gets 5%, that's literally a 20% difference, even with the same income.
As long as lender standards stay relatively strict, housing is going to be based on income and credit. Until income drops, I don't see housing prices dropping. Loans are solid now. They likely will flatline and in a few areas like IL or NJ they may drop. I'm building at probably the worst time but I kind of have fuck you money for my region (rural). Shit would need to be blasted on the fan for me to get into trouble.
14
WookieMan
2022 Apr 7, 7:37am
WookieMan
2022 Apr 7, 7:37am
zzyzzx says
I hope you're right. I think housing should take a break. Fundamentally I'm not seeing it. At least near me. There is absolutely zero reason housing prices should be up in IL. Yet they are.
No one is building shit here in IL besides in Chicago. And it's all condos and developments in yuppyville. Many are rentals as well and not sales when you see a new building. Prices keep going up. If the mortgages are solid, outside of an income collapse, housing should be solid for now.
WookieMan saysI don't see housing prices dropping.
Quoted for posterity.
I hope you're right. I think housing should take a break. Fundamentally I'm not seeing it. At least near me. There is absolutely zero reason housing prices should be up in IL. Yet they are.
No one is building shit here in IL besides in Chicago. And it's all condos and developments in yuppyville. Many are rentals as well and not sales when you see a new building. Prices keep going up. If the mortgages are solid, outside of an income collapse, housing should be solid for now.
15
Al_Sharpton_for_President
2022 Apr 7, 8:00am
Al_Sharpton_for_President
2022 Apr 7, 8:00am
WookieMan says
There is absolutely zero reason housing prices should be up in IL.WookieMan says
No one is building shit here in IL
16
zzyzzx
2022 Apr 7, 8:06am
zzyzzx
2022 Apr 7, 8:06am
WookieMan says
With as many people as their are fleeing the state, I doubt that much, if any, is needed.
No one is building shit here in IL
With as many people as their are fleeing the state, I doubt that much, if any, is needed.
17
Goran_K
2022 Apr 7, 8:11am
Goran_K
2022 Apr 7, 8:11am
Eight straight years of population decreases, I believe Illinois holds the current record of all 50 states.
edit: nvm, West Virginia is on year 9.
edit: nvm, West Virginia is on year 9.
18
GNL
2022 Apr 7, 8:51am
GNL
2022 Apr 7, 8:51am
WookieMan says
Those 2 sentences have no business being anywhere near each other.
There is absolutely zero reason housing prices should be up in IL. Yet they are.
No one is building shit here in IL
Those 2 sentences have no business being anywhere near each other.
19
Shaman
2022 Apr 7, 9:05am
Shaman
2022 Apr 7, 9:05am
Price gains are driven by too much money at the top, plus boomers buying extra properties as inflation hedges and/or downsizing or moving to other states to retire. These are cash deals and have nothing to do with mortgage rates.
The simple fact is that in any desirable location, any price drops will be immediately countered by cash offers from hedge funds and the independently wealthy.
The simple fact is that in any desirable location, any price drops will be immediately countered by cash offers from hedge funds and the independently wealthy.
20
stfu
2022 Apr 7, 10:01am
Are there any experts on Patnet who specialize in how to trade MBS action visa-vi NLY or AGNC? I loaded up in Spring 2020 because I love the dividends but got out after their share prices got close to Book Value. I don't really understand how rates effect their business model because I've seen arguments both ways (rising and falling MBS rates). I do love total return and it's hard not to like a 15% divi like we had back in 2020.
21
joshuatrio
2022 Apr 7, 2:52pm
joshuatrio
2022 Apr 7, 2:52pm
Today, the Denver Metro Association of Realtors® (DMAR) has released their data for March, and it appears to show a sea change in active inventory.
From the DMAR: DMAR Real Estate Market Trends Report
With a large increase in month-end active and new listings hitting the market, a slight seasonal shift will positively impact buyers who have started to feel fatigue in the residential market. At the same time, current homeowners continue their unprecedented growth in equity.
With a historically high average sales price of $705,812 and increased interest rates, many buyers who saw their potential monthly payments drastically increase received a sign of reprieve. Month-end active inventory went up 81.16 percent from February to March. The additional 995 new listings on the market at the end of the month also served to slightly aid the balance of supply and demand. While the percentage increase is substantially higher, having such low initial numbers yield a higher percent change. Along with the 43.57 percent increase in new listings, this will serve to help balance the accelerated price appreciation the market has recently seen.
“Earlier in the year, buyers offered six figures above the asking price while competing with dozens of offers,” commented Andrew Abrams, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “With the recently increased inventory, it is more common to compete with just a few offers. Although competition has loosened, the residential real estate market has always been slow to react to change. Even with only a few competitive offers, it’s become standard for buyers to come in very aggressively on offers, making the other offers start at an elevated price and terms. With record-high sales prices, interest rates increasing north of 4.5 percent and an average close-price-to-list-price ratio of 106.46 percent, the monthly mortgage of a traditional buyer has never been higher.”
emphasis added
DMAR reports total residential active inventory (detached and attached) was 2,221 at the end of March, up 81.2% from 1,226 at the end of February, and up 9.7% year-over-year from 1,921 in March 2021.
IMPORTANT: This is still low. Usually, in Denver, active inventory peaks in the summer at between 6,000 and 7,000 units.
New listings at 6,020, were up 43.6% from 4,193 in February, and up 5.5% from 5,706 in March 2021.
Closed sales were at 4,440, down 15.7% from 5,268 in March 2021.
I’ll have data on many more markets soon.
https://calculatedrisk.substack.com/p/denver-real-estate-activity-inventory?s=r&source=patrick.net
From the DMAR: DMAR Real Estate Market Trends Report
With a large increase in month-end active and new listings hitting the market, a slight seasonal shift will positively impact buyers who have started to feel fatigue in the residential market. At the same time, current homeowners continue their unprecedented growth in equity.
With a historically high average sales price of $705,812 and increased interest rates, many buyers who saw their potential monthly payments drastically increase received a sign of reprieve. Month-end active inventory went up 81.16 percent from February to March. The additional 995 new listings on the market at the end of the month also served to slightly aid the balance of supply and demand. While the percentage increase is substantially higher, having such low initial numbers yield a higher percent change. Along with the 43.57 percent increase in new listings, this will serve to help balance the accelerated price appreciation the market has recently seen.
“Earlier in the year, buyers offered six figures above the asking price while competing with dozens of offers,” commented Andrew Abrams, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “With the recently increased inventory, it is more common to compete with just a few offers. Although competition has loosened, the residential real estate market has always been slow to react to change. Even with only a few competitive offers, it’s become standard for buyers to come in very aggressively on offers, making the other offers start at an elevated price and terms. With record-high sales prices, interest rates increasing north of 4.5 percent and an average close-price-to-list-price ratio of 106.46 percent, the monthly mortgage of a traditional buyer has never been higher.”
emphasis added
DMAR reports total residential active inventory (detached and attached) was 2,221 at the end of March, up 81.2% from 1,226 at the end of February, and up 9.7% year-over-year from 1,921 in March 2021.
IMPORTANT: This is still low. Usually, in Denver, active inventory peaks in the summer at between 6,000 and 7,000 units.
New listings at 6,020, were up 43.6% from 4,193 in February, and up 5.5% from 5,706 in March 2021.
Closed sales were at 4,440, down 15.7% from 5,268 in March 2021.
I’ll have data on many more markets soon.
https://calculatedrisk.substack.com/p/denver-real-estate-activity-inventory?s=r&source=patrick.net
22
WookieMan
2022 Apr 7, 4:47pm
WookieMan
2022 Apr 7, 4:47pm
Denver is over saturated for sure. Mountain passes are HUGE infrastructure expenses. The traffic is pure shit going West on 70 or East into Denver from the mountains on the weekend. They need 6 lanes and probably 8 lanes preferably. That's billions. One of the reasons we didn't pull the trigger on moving out there.
23
joshuatrio
2022 Apr 7, 7:04pm
joshuatrio
2022 Apr 7, 7:04pm
Spoke with my brother in law who is a realtor.
He said the market is definitely softening from mutiple offers galore to just a few. He said things from January till now are night and day. He expects it to turn into a buyers market later this year.
He said the market is definitely softening from mutiple offers galore to just a few. He said things from January till now are night and day. He expects it to turn into a buyers market later this year.
24
WookieMan
2022 Apr 7, 7:36pm
WookieMan
2022 Apr 7, 7:36pm
joshuatrio says
It has to. Incomes will lag behind inflation. If your grocery and gas bill went from $300/mo to $500/mo, that's $200/mo less you can spend on a house. I don't see a crash, but I think many markets go sideways for a bit here. I think inventory starts to increase and maybe, maybe turns into a buyers market. People are fleeing IL, but no one is selling. Inventory is dick. If it's not a buyer's market here yet, I think housing values nationally will be pretty solid for a while.
He said things from January till now are night and day. He expects it to turn into a buyers market later this year.
It has to. Incomes will lag behind inflation. If your grocery and gas bill went from $300/mo to $500/mo, that's $200/mo less you can spend on a house. I don't see a crash, but I think many markets go sideways for a bit here. I think inventory starts to increase and maybe, maybe turns into a buyers market. People are fleeing IL, but no one is selling. Inventory is dick. If it's not a buyer's market here yet, I think housing values nationally will be pretty solid for a while.
25
GNL
2022 Apr 7, 8:02pm
GNL
2022 Apr 7, 8:02pm
joshuatrio says
Where? What part of the country?
Spoke with my brother in law who is a realtor.
He said the market is definitely softening from mutiple offers galore to just a few. He said things from January till now are night and day. He expects it to turn into a buyers market later this year.
Where? What part of the country?
27
Blue
2022 Apr 8, 12:36am
This https://www.redfin.com/CA/Cupertino/7552-Heatherwood-Dr-95014/home/1632086?source=patrick.net was LIST PRICE $2.998.000 SOLD PRICE $4.300.000 from my recent flier from sereno group.
Median Days on Market 6 daya on one of their sellers site https://www.thomaspetershomes.com/b/cupertino?source=patrick.net
Folks are still buying fast.
Median Days on Market 6 daya on one of their sellers site https://www.thomaspetershomes.com/b/cupertino?source=patrick.net
Folks are still buying fast.
28
joshuatrio
2022 Apr 8, 4:31am
joshuatrio
2022 Apr 8, 4:31am
WineHorror1 says
Coastal Delaware.
joshuatrio saysSpoke with my brother in law who is a realtor.
He said the market is definitely softening from mutiple offers galore to just a few. He said things from January till now are night and day. He expects it to turn into a buyers market later this year.
Where? What part of the country?
Coastal Delaware.
29
WookieMan
2022 Apr 8, 6:32am
WookieMan
2022 Apr 8, 6:32am
DooDahMan says
Yeah, but family or inlaws shouldn't bull shit you. Because I had a license and would occasionally do a deal for family, I was always blunt and generally accurate in hindsight. That's why I managed the Brokerage and didn't do sales. If you don't lie, you don't get a check. I can't live that way.
BayArea saysRealtors here say that it’s a great time to buy a house.
Ask anyone who works on commission and it is always a good time to buy or sell
Yeah, but family or inlaws shouldn't bull shit you. Because I had a license and would occasionally do a deal for family, I was always blunt and generally accurate in hindsight. That's why I managed the Brokerage and didn't do sales. If you don't lie, you don't get a check. I can't live that way.
31
B.A.C.A.H.
2022 Apr 8, 12:36pm
B.A.C.A.H.
2022 Apr 8, 12:36pm
DooDahMan says
Yeah. Like relatives and "friends" trying to sell annuities to folks they know.
primary source of bullshit
Yeah. Like relatives and "friends" trying to sell annuities to folks they know.
The problem is that all of those sources are simply reporting Freddie's survey headline. The bigger problem is that Freddie's survey headline often gives the wrong impression about where rates are and how they've been moving. This is a logical consequence of the methodology. Freddie sends the survey out on Monday, gets most of it's responses on Mon/Tue, and then reports "this week's mortgage rates" on Thursday.
The net effect is that the survey ends up comparing Mon/Tue rates to last week's Mon/Tue rates. Oftentimes, that doesn't matter. If rates aren't moving very much from day to day, the numbers will be relatively accurate as well as the week-over-week change. It's when volatility surges that the mixed signals show up. And volatility is surging!
Rates aren't merely changing a lot from day to day, they're changing multiple times per day in many recent occasions. This week's landscape was especially troublesome for the Freddie survey because Monday's rates were, by far, the lowest. In fact, after adjusting for the upfront points and the fact that many of Freddie's respondents probably didn't even look past last Friday's rate offerings before responding, the 3.85% headline isn't too terribly far from reality.
To be clear, rates are no longer anywhere close to that low. The average lender is now definitively up and over 4.25% for the first time since early 2019. In other words, today's rates are the highest in almost 3 years.
https://www.mortgagenewsdaily.com/markets/mortgage-rates-03102022?source=patrick.net