Congratulations to the Dow hitting 40,0000
Comments
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Actually the Fed rates don't dictate mortgage rates. The risk free rate of return does, which is widely accepted as the ten year T-bill (for now). We went over the fact a couple of weeks ago that fed rates and T-bill rates aren't always connected, depending on demand. See Obama's term where banks just bought t-bills at 3.5% using ~0% fed funds rates and didn't loan it out to the general economy and we still had ~5.5% mortgage rates. Keep working on this finance thing, you'll get it when you are in your 40's maybe.
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You guys are talking about IRs and home equity to a child who rents an apartment in South Lake Union 2 blocks from the bar he plays shuffleboard at.
just FYI -
The Fed determines mortgage rates.
LOL
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He'd need to I'm betting his love life is nonexistent. With women anyway.
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Actually, it's upon you to read what is written, I didn't have an issue understanding what he said.
Slow down and stop trying to win everything and gotcha everyone and quit being an ass.
It's a discussion not a competition!
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Reply @Bob_C
New builds in some states far outstrip demand(Nevada) while others(Cali) still have restricted supply propping prices up.
Then you have weird demographics with boomers snatching up larger and larger empty nests instead of downsizing or buying entry-level rentals and pricing out young couples.
A shrinking population but we just added millions of illegals.
Lotta confounding variables doing weird stuff. When recessions hit everything correlates to -1 though so I'd bet on prices going down. Regional differences will be massive though.
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The indicators are all over the place as you said. Conventional methods of pulling levers won’t clean this up. Central planning gone wrong. Who could have predicted this.
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Sounds like an economy on fire.
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Kid thinks if you bought a house for $600,000 and it’s worth $1,000,000 now on Zillow you have an extra $400,000 in equity.
Fascinating naïveté.
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For the record, housing supply was massively short prior to the record low rates. Golden handcuffs for 75% of homeowners are clearly a massive drag on supply, though. If rates drop under 6, and closer to 5, people will start selling again. Right now selling out of that low of a rate only makes sense if you have to move for work, divorce, or someone died.
Wildcard in this is many people with the locked in low rates have a lot of equity and can HELOC in to a new home and keep the current place as a rental. Could also continue to keep supply low.
I don't see the market shifting much until a lot of people who bought in the last 5 years lose their jobs and can't pay the mortgage. Only issue there is those people also have a lot of equity and can pull a second mortgage or to float until they find work.
I also heard recently that Fannie or Freddie are about to make some rules changes to allow more people to pull second mortgages at lower rates. I can't remember the exact mechanics of it, but it basically sounded like another driver of inflation waiting to happen.
Local to WA, I think the state's inability to enact meaningful condo liability reform is a huge problem. People won't stop building apartments and shift to condos until those laws are fixed. That's a huge gap in the first time buyer market.
