Author Topic: How low can we go? 30 yr fixed at 3.75% with no fees...  (Read 845673 times)

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Offline Liar Loan

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3465 on: May 25, 2022, 12:01:17 PM »
Purchase applications are down to late-2018 levels, which is the last time rates were at 5%.


Offline irvinehomeowner

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3466 on: May 25, 2022, 12:25:33 PM »
I've never "dissed" you.  To the contrary, I've given you mad props for your story of humble beginnings and I've also complimented your daughter for her savvy real estate moves.

Backhanded compliments.

You even started an Arizona thread to make an example of her decision to buy there until she told you that she wasn't even buying in the places your links/charts were using.

#stealthtrolling

The Arizona thread was started because we were already discussing the market there, but it was off topic for the thread where the conversation started.  Providing information about the Arizona bubble isn't making an example.  I also discuss the bubbles in crypto, bonds, and collectibles.  It's her choice what to do with that information, but most people are appreciative when others help them avoid losing money.

Denial modus operandi.
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Offline Liar Loan

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3467 on: June 08, 2022, 01:41:03 PM »
Despite the false claim by CalBears that rates don't matter to home purchasers, the purchase index is now down to 2016 levels.



And the refinance index is at it's lowest in 22 years!!


Offline Liar Loan

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3468 on: June 09, 2022, 08:42:39 AM »
Purchase applications are down 40% from the recent peak!!


Offline irvinehomeowner

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3469 on: June 09, 2022, 12:04:02 PM »
Once you go 3-car garage... your junk can never go back.
3CWG: 3-Car Wide Garage
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Offline Compressed-Village

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3470 on: June 09, 2022, 12:23:32 PM »
 LL, The ORACLE of Irvine.  :)

I hope he sent that check out my charity of choice is CHOC and St. Jude.

Post the paid check here instead of useless charts will be much more appreciated.

Thanks for the donations.

Offline Soylent Green Is People

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3471 on: June 10, 2022, 09:09:58 AM »
Yes, it's bad out there already, and with today's inflation report reaction it's tougher still. Example - I priced an Agency (strike 1), Non-Owner (strike 2), cash out (strike 3) refinance 30 year fixed rate with a 7 handle last week. Spicy!

In late 2021 I told my Realtor contacts that this mortgage market was a repeat of 2006-2007* and that this rate cycle will see a conforming loan rate in the low 7's. You could see the blood draining from their faces during those conversations. Might we see an 8 handle anytime soon? Who knows! With $6.00 gas, why wouldn't we expect 6.00 percent interest rates?

Hedge accordingly.

* 2006/2007 saw many lenders pull back their traditional mortgage options. Loan Buybacks were just beginning at that time. In rushed HELOC and "Alt-A" lending that while insanely profitable, it was like giving a pre-lit stick of dynamite to a toddler. We all know how that worked out. Today, HELOC's and "Non-QM" lending are all the rage. These loans are insanely profitable and keep the phones ringing for many mortgage bankers. The end result will still be the same. We should see a 2008-2009 repeat of housing problems in 2023-2024, although given we're now living in a consequence free America, the government will likely float non-paying renters or homeowners some kind of relief program.  This is experienced based opinion and not certain fact. Only time will tell.
My .02c

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Offline OCtoSV

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3472 on: June 10, 2022, 10:40:10 AM »
SGIP - thank you for sharing these deep industry insights. The vast majority of analysts I hear on my morning Bloomberg Surveillance pound the table that Powell's primary mission is to kill housing market inflation, and a 7 handle would do that. even if inventory doesn't balloon the buyer pool will be reduced by 90+% - which will induce massive price deflation. We will see higher gas prices until a Republican is elected POTUS, and TSMC and Samsung both have huge capacity crunches at the most advanced nodes which means huge inflation for semiconductors, where 100% PPV rates are routine now.

As always though jobs are the first order variable. Now that remote work is being phased out who are the key employers in OC and what are their outlooks and exposure to inflationary factors?

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Offline irvinehomeowner

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3473 on: June 10, 2022, 10:48:13 AM »
Thanks SGIP. I always appreciate your real loan industry posts.

With lending guidelines more stringent than 06/07... does that make a difference? Or I we going to see more relaxed lending make a comeback. I already hear ads on the radio for companies loaning out to no doc/low doc/self-employed situations.
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Offline Liar Loan

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3474 on: June 10, 2022, 11:25:00 AM »
LL, The ORACLE of Irvine.  :)

I hope he sent that check out my charity of choice is CHOC and St. Jude.

Post the paid check here instead of useless charts will be much more appreciated.

Thanks for the donations.

I like your style CV.  I was actually a patient at CHOC when I was small boy, so I would gladly donate to them. 

Keep the economic insights coming because there are still a lot of people here living in fairly tale land about what is really happening.

Offline Liar Loan

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3475 on: June 10, 2022, 11:54:18 AM »
Rates shot up over 1/4 percent today.  How soon until we hit 6%?


Offline morekaos

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3476 on: June 10, 2022, 12:21:02 PM »
Thank god. Just closed a 3% cash our refi with our credit union.  Checked this morning and same loan is at 3 5/8%.  Locked just before the rates Started to rise.  With inflation and tax benefits we are being paid to live on the water.

Wow, that same loan is now at 4 1/8 at the credit union....life is good!!

Now I’m bragging IHO!.. ;D ;D

Offline USCTrojanCPA

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3477 on: June 10, 2022, 01:58:53 PM »
Thank god. Just closed a 3% cash our refi with our credit union.  Checked this morning and same loan is at 3 5/8%.  Locked just before the rates Started to rise.  With inflation and tax benefits we are being paid to live on the water.

Wow, that same loan is now at 4 1/8 at the credit union....life is good!!

Now I’m bragging IHO!.. ;D ;D

And I was still about to lock in an interest rate of 3.875% for a 10 year ARM in late April on my purchase.
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Offline CalBears96

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3478 on: June 10, 2022, 02:07:47 PM »
Thank god. Just closed a 3% cash our refi with our credit union.  Checked this morning and same loan is at 3 5/8%.  Locked just before the rates Started to rise.  With inflation and tax benefits we are being paid to live on the water.

Wow, that same loan is now at 4 1/8 at the credit union....life is good!!

Now I’m bragging IHO!.. ;D ;D

And I was still about to lock in an interest rate of 3.875% for a 10 year ARM in late April on my purchase.

I'm glad I was able to lock back in March at 2.875% for 30 year fixed before mortgage rates jumped.

Offline Soylent Green Is People

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Re: How low can we go? 30 yr fixed at 3.75% with no fees...
« Reply #3479 on: June 10, 2022, 02:11:08 PM »
@OCtoSV - It's not a 7% rate that will crush housing. It's everyone locked in at 2x who will NEVER sell unless at the tip of a bayonet that continues to be the issue. We can't build ourselves out of this. Prices won't fall far enough (at least in Irvine) for a genuine affordable home price materializes. What remedy is a 7, 8, or 11 percent rate when it doesn't create the inventory needed? Prices will come down, but so much loose cash swashing around will mean investors and own to rent corporations will simply grab whatever comes to market. People bought homes when rates were very high relative to annual income (1978-1990) because prices were moderate. I'm thinking the Fed wants to kill the casino that stonks have become more than to impact the housing market - but that's for another thread.

We have too many FIRE employees, just like the last recession, so expect these sectors to suffer dearly. We're also running out of shiny new gadgets and sustainable tech innovations that have been keeping American's entertained with. When the next iPhone rolls out with minimal WOW other than it's $1,500 price tag, IMHO we've reached peak tech. One shouldn't wonder why Apple is talking subscription methods rather than ownership for their devices. Tech is not an unstoppable job creator - look at aerospace and defense employment, long thought to be a never ending growth and employment sector that collapsed in the 1990's recession. I'd expect tech companies to begin to scale back their workforce. Many are starting already.

@IrvineHomeowner - lending guidelines after the 2008-2011 recession were tight, but since around 2013 on, lending guidelines are now pretty loose. Yes, paperwork has mushroomed to the point where an Underwriter will ask for a borrower to document a $1.00 deposit on a bank statement (Yes, I've seen that happen) BUT they will still approve your loan with a 49.99 debt to income ratio! Dear reader - stare at your 2022 W-2 when you get a chance. Divide the gross income by 12, then by 2. Now look at your own net check. Imagine being allowed to spend 50% of your Gross Income off of that net check amount! YIKES!! That's a pretty wide latitude to accept as a reasonable risk decisioned mortgage.

Example: A $120k W2 gross is $10k per month and 50% is of course $5,000. A $10k per month income is about a $6,800 or so net check. This leaves after the house payment, utilities, and food a razor thin margin with no room for error. There have been plenty of Irvine area mortgages underwritten just like this putting many at risk of being 3-4 pay checks away from a notice of default.

At least this go around much of the wacky "No Ratio/No Income/No verif" lending has been off loaded to the private sector. Hedge Funds for the most part are the money sources behind the Non-QM lending not FNMA/FHLMC, Wells, Chase, BofA, or Citi as it was during the lasts crash. There still is terrific risk because many hedge funds are linked to companies with banking connections (Goldman Sachs for example) When the Hedgies begin to swirl in the bowl for their bad lending mistakes, they may pull a few brand named turds down the drain at the same time.

Bottom line - relaxed lending has been here for almost a decade. Those seeds sown during that time are now beginning to sprout and will bloom shortly during a high inflation environment.

It will be something to see how this is going to be handled as there isn't much room down the road to kick that can any further.

My .02c
« Last Edit: June 10, 2022, 02:16:20 PM by Soylent Green Is People »
My .02c

SGIP

 

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