Burn That Belly
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Surging Mortgage Rates Set Off Scramble to Buy Homes
- Thread starter Burn That Belly
- Start date
NEW -> Contingent Buyer Assistance Program
Some of my relatives were born in rural Nebraska, but have lived in CA for many years. I remember at a family party awhile back they were talking about how houses were still selling for $20k in the small town where they grew up. The houses may have gone up slightly since then, but I doubt the average house is breaking $100k even now.
Of course, there are no jobs besides farming, so the economic base comes from welfare. I think the town liquor store does pretty well..
Why don't you?
Show me the math where rise/fall in interest rates were *proportionately* related to rise/fall in housing prices. The one rule I've seen in housing prices in Irvine is they usually rise much faster than than they fall.
Waiting to buy a house because thinking that prices will drop when the interest rates go up is folly... just buy what you can afford and stop worrying about the peak/valley game.
Important points here is JOBs. Even if rates keep-on ratching upward, so long as economy continues to produce good wages and jobs abundant, interest rate will rise. When the pendulum shift to slow down purchasing goods and plenty of standing inventory then the recessions phase will taken place. Along with jobs loss.
There will be some slow down and consumers adjust to the new realities of taxes, which I think is healthy for much longer expansions. In the meantime, invest wisely and pick a place that you can see yourself in for several years.
Some say the FED was one of the many instrumental triggers that causes the housing crashed of 2008. Housing and the economy as a whole are cyclical. It has its ebb and rise which is natural process. The magnitude of the last crash was extreme severe because of ?Liar Loans? Nowadays banks has taken greater steps to stop the fools, from their own demise. Or aleast attempt to. This will slow down the hyper-mania of buying and a much healthier slow down vs. a crash. If ones looking for a great deal, which include me, I have high probability bet that it will never comes when you look for it in high desirable real estate markets.
What do *you* say? Stop regurgitating and start giving us your (and not obvious) opinions.
And actually, all the people who kept predicting a spectacular crash in Irvine claim they didn't think the Fed would go to the lengths they did to prevent the housing crisis.
As for the financial crisis... how is that on the Fed?
This is one of your Captain Obvious posts. We all know it's hard to find deals in high demand areas... but they can be found. Just trying to time it with interest rates isn't the best strategy.
As much as it pains me, I'm going to have to agree with IHO here. Not because Irvine is special, but because historically mortgage rates and home prices have ZERO correlation.
From 1980-1985 home prices were flat, yet mortgage rates went as high as 19%.
From 1991-1996 home prices dropped 20% in a gradual decline, yet mortgage rates were also declining from 10% down to 7%.
From 2003-2008 we had the largest housing bubble in history with 20%+ price increases per year, yet rates stayed mostly flat at 6% that entire time.
You can look at a comparison graph and say there could be *some* points of correlation... but then again, a broken clock is right twice a day.
And I have no issues agreeing with Liar Loan... big lots rule!!
You are right, timing it with with interest rate alone will not be a legitimate argument. Buying a home is an emotional commitment and process. So if rates goes up further and if I can afford it, so what, go on and buy it. I need a roof over my head until I hit The coffins.
Burn That Belly
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sgip
Well-known member
The Redfin data is backwards looking and not all that reflective of how rising rates may be impacting the market. It's often the case that buyers are rushing more to avoid being priced out than worried about mortgage affordability.
From what I'm seeing outside of Irvine are agents reducing prices, wondering why they are seeing homes on the market as long as they have been.
Within Irvine, a few of the calls I'm getting go like this:
Buyer - I just put a deposit down on a new home.
Me - Congrats. When will the house be done?
Buyer - oh, it fell out so it's supposed to be done in 61 days.
Me - Hmmmm. Builder say why?
Buyer. No, just that it's ready to go.
Interesting turn of events here. The next 2 months will tell us how the rest of the year will go IMHO.
SGIP
From what I'm seeing outside of Irvine are agents reducing prices, wondering why they are seeing homes on the market as long as they have been.
Within Irvine, a few of the calls I'm getting go like this:
Buyer - I just put a deposit down on a new home.
Me - Congrats. When will the house be done?
Buyer - oh, it fell out so it's supposed to be done in 61 days.
Me - Hmmmm. Builder say why?
Buyer. No, just that it's ready to go.
Interesting turn of events here. The next 2 months will tell us how the rest of the year will go IMHO.
SGIP
Burn That Belly
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Liar Loan
Well-known member
Burn That Belly said:
Some of my relatives were born in rural Nebraska, but have lived in CA for many years. I remember at a family party awhile back they were talking about how houses were still selling for $20k in the small town where they grew up. The houses may have gone up slightly since then, but I doubt the average house is breaking $100k even now.
Of course, there are no jobs besides farming, so the economic base comes from welfare. I think the town liquor store does pretty well..
irvinehomeowner
Well-known member
Sorry daedalus, I don't agree that prices will fall enough to offset rises in interest rates... esp not in areas where financing is not as widely used due to large or all cash down payments.
I've seen this sentiment since 2008 and I have yet to see a proportionate decrease/increase is prices related to interest rates. Rates have been between 4-5% for the last how many years... yet prices keep going up... so how is that math working?
I've seen this sentiment since 2008 and I have yet to see a proportionate decrease/increase is prices related to interest rates. Rates have been between 4-5% for the last how many years... yet prices keep going up... so how is that math working?
irvinehomeowner
Well-known member
eyephone said:
Why don't you?
Show me the math where rise/fall in interest rates were *proportionately* related to rise/fall in housing prices. The one rule I've seen in housing prices in Irvine is they usually rise much faster than than they fall.
Waiting to buy a house because thinking that prices will drop when the interest rates go up is folly... just buy what you can afford and stop worrying about the peak/valley game.
irvinebullhousing
Well-known member
Liar Loan said:
Important points here is JOBs. Even if rates keep-on ratching upward, so long as economy continues to produce good wages and jobs abundant, interest rate will rise. When the pendulum shift to slow down purchasing goods and plenty of standing inventory then the recessions phase will taken place. Along with jobs loss.
There will be some slow down and consumers adjust to the new realities of taxes, which I think is healthy for much longer expansions. In the meantime, invest wisely and pick a place that you can see yourself in for several years.
Irvinecommuter
New member
I see we are back to knife catching.
irvinebullhousing
Well-known member
eyephone said:
Some say the FED was one of the many instrumental triggers that causes the housing crashed of 2008. Housing and the economy as a whole are cyclical. It has its ebb and rise which is natural process. The magnitude of the last crash was extreme severe because of ?Liar Loans? Nowadays banks has taken greater steps to stop the fools, from their own demise. Or aleast attempt to. This will slow down the hyper-mania of buying and a much healthier slow down vs. a crash. If ones looking for a great deal, which include me, I have high probability bet that it will never comes when you look for it in high desirable real estate markets.
irvinehomeowner
Well-known member
Compressed-Village said:
What do *you* say? Stop regurgitating and start giving us your (and not obvious) opinions.
And actually, all the people who kept predicting a spectacular crash in Irvine claim they didn't think the Fed would go to the lengths they did to prevent the housing crisis.
As for the financial crisis... how is that on the Fed?
This is one of your Captain Obvious posts. We all know it's hard to find deals in high demand areas... but they can be found. Just trying to time it with interest rates isn't the best strategy.
Burn That Belly
New member
x
Liar Loan
Well-known member
irvinehomeowner said:
As much as it pains me, I'm going to have to agree with IHO here. Not because Irvine is special, but because historically mortgage rates and home prices have ZERO correlation.
From 1980-1985 home prices were flat, yet mortgage rates went as high as 19%.
From 1991-1996 home prices dropped 20% in a gradual decline, yet mortgage rates were also declining from 10% down to 7%.
From 2003-2008 we had the largest housing bubble in history with 20%+ price increases per year, yet rates stayed mostly flat at 6% that entire time.
irvinehomeowner
Well-known member
Liar Loan said:
You can look at a comparison graph and say there could be *some* points of correlation... but then again, a broken clock is right twice a day.
And I have no issues agreeing with Liar Loan... big lots rule!!
irvinebullhousing
Well-known member
irvinehomeowner said:
You are right, timing it with with interest rate alone will not be a legitimate argument. Buying a home is an emotional commitment and process. So if rates goes up further and if I can afford it, so what, go on and buy it. I need a roof over my head until I hit The coffins.
