When would be next housing Bottom?

so when is the next housing crash?
I guess the word "crash" is subject to interpretation, but it's not looking good out there.

Home prices see biggest annual drop in over a decade: Redfin

Home prices in March saw the biggest annual drop since 2012 as pending home sales continue to abate, according to a new report.

Pandemic hotspots and expensive coastal housing markets are cooling quite quickly because home prices, which overheated in recent years, are "coming back down to earth after many buyers were priced out."


... Redfin real estate agent Shauna Pendleton noticed a particular slowdown in activity in March right after the collapse of Silicon Valley Bank.

"That killed the buyer momentum that had been building and brought us right back to where we were last year when mortgage rates shot up," Pendleton said. "There’s this fear that everything will crash."

She added: "There are bank failures, inflation, recession fears, mortgage-rate volatility, a war in Ukraine, spy balloons — some people are wondering if they should pull their money out of the bank and park it in a safe rather than spend it on a new home."

 
It's all dependent on jobs. AWS had a massacre yesterday so there are ~10K people from the sales org newly wondering if they'll need to sell. Meanwhile with only 20 properties for sales (mostly higher end) in my zip code of 40K people a 3/2.5 up the street hitting the market this weekend will draw multiple bids in the ~$1K/sq ft range.
 
I am curious if people who have taken out loans that have an ARM for say 5-7-10 years with a fixed rate and then floating will be in trouble when the fixed rate is over now that rates are much higher? And if so would this have a substantial impact on inventory and then home prices?
 
I am curious if people who have taken out loans that have an ARM for say 5-7-10 years with a fixed rate and then floating will be in trouble when the fixed rate is over now that rates are much higher? And if so would this have a substantial impact on inventory and then home prices?
Depends on when they took out these ARMS. If they did it prior to the jump in interest rates, they probably already refi'd into fixed (or they should have).

If they used an ARM during the Great Rate Hike... then they still have a few more years to see where rates are going. What I've found is that if you have the proper finances, you can always get yourself into a better product by either using another ARM or even a 15-year term.
 
I am curious if people who have taken out loans that have an ARM for say 5-7-10 years with a fixed rate and then floating will be in trouble when the fixed rate is over now that rates are much higher? And if so would this have a substantial impact on inventory and then home prices?
Well, anyone who had taken out ARM loans did it in 2021 because that's when the rates were the lowest, so they won't float until 2026 at the earliest for a 5-year ARM. Let's not even talk about 7 or 10 years.
 
Even though the ARMs taken out in 2021 might not float until 2026, some people still might be a bit on edge.. but like others here, my guess is that rates will come down before then.
I don't think it will have a substantial impact on inventory and home prices in Irvine.
 
Even though the ARMs taken out in 2021 might not float until 2026, some people still might be a bit on edge.. but like others here, my guess is that rates will come down before then.
I don't think it will have a substantial impact on inventory and home prices in Irvine.
It definitely will come down before then.

Martin thinks that the Fed will start cutting rates beginning of next year. I don't think it will be that soon. I think the earliest will be middle of next year. Even Powell himself said 1-2 years, so that means the Fed WILL start cutting as soon as middle of next year or middle of 2025 at the latest. So by 2026, the rates would have come down a bit.

Also ARM rates has absolutely nothing to do with mortgage rates. Once ARM starts floating, it will be

Rate = Index + Margin

Index used to be LIBOR (London Interbank Offered Rate), but some lenders have switched to Refinitiv 1-year rate.
Margin is usually 2.25%
 
The fed is doing its best to predict future rates but looking at predictions based on current data is meaningless. One should take those predictions with a grain of salt. Anything can occur between now and the targeted timeframes and completely change.
 
I am curious if people who have taken out loans that have an ARM for say 5-7-10 years with a fixed rate and then floating will be in trouble when the fixed rate is over now that rates are much higher? And if so would this have a substantial impact on inventory and then home prices?
According to this chart, ARMs are not a significant part of the market in the US. It'll be interesting to see what happens in these other countries.
 
According to the forever renters that have been waiting for the bottom since 1985; "Any day now you dumb bagholder.."
 
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