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re: Mortgage demand falls to lowest level in 22 years amid rising rates, slowing home sales
Posted on 6/8/22 at 3:01 pm to computerguy
Posted on 6/8/22 at 3:01 pm to computerguy
quote:
rents have skyrocketed in proportion to the housing prices so renting would be a very painful option
This. I was informed a month ago that my rent was increasing by 40%. No longer made sense to rent and forced us into the housing market 1-2 years earlier than planned.
Just made an offer that I would’ve never dreamed to pay on a home but felt damn lucky to have it accepted. Houses around here are averaging only days on the market.
This post was edited on 6/8/22 at 3:02 pm
Posted on 6/8/22 at 4:18 pm to hall59tiger
Really does depend where you live. I’m in the FL Panhandle and people are still scooping up $1mm+ properties here like its going out of style.
However, we have a lot of cash buyers.
However, we have a lot of cash buyers.
Posted on 6/8/22 at 5:01 pm to RJSambola
Knocking off PMI could also be a good financial reason to pay a little extra.
Posted on 6/8/22 at 5:10 pm to NC_Tigah
quote:
But, the second consideration is tax deductibility. Given that, the 2.5% cost actually plays out at a 1.25%-2.0% rate.
With increased standard deduction the mortgage interest deduction is of little or no value to many borrowers.
Posted on 6/8/22 at 6:02 pm to BayouBengal23
quote:
Can you explain the reasoning behind never paying more than the minimum note?
I can make more money overall by investing instead of paying off the mortgage early. I just need to beat an annualized 2.25% return over 30 years (more like 1.7% since I deduct my mortgage interest).
Hell, 1 year treasuries are paying 2.29% now. I could put extra payments to that and I'm already coming out ahead and not have money locked up in the house or at risk in the stock market.
Posted on 6/8/22 at 6:16 pm to gpburdell
quote:
I just need to beat an annualized 2.25% return over 30 years (more like 1.7% since I deduct my mortgage interest).
Do you donate a lot to a church/other causes or own a business? Or own a very expensive house? With the increase in standard deduction 4 years ago or so, I doubt more than 5% of people benefit from itemizing deductions over taking the standard deduction.
Posted on 6/8/22 at 6:18 pm to SlidellCajun
quote:
Any idea what price range those decreases came from?
I was wrong. It wasn’t 60 of the 80 listed but 60 of the houses on the market decreased asking price.
200-300 had 14
300-400 had 16
400-400 had 12
500-600 had 6
600-700 had 2
Posted on 6/8/22 at 6:22 pm to SlidellCajun
quote:
Any idea what price range those decreases came from?
From what I’ve seen, it’s typically people who start their listing at an overly inflated price ($700k house listed for $875). Everything under 400k is either grossly overpriced (like a $200k property listed for $350, because why they hell not) or gets snatched up in 2 days if reasonably priced (often still over asking price or other concessions like waiving inspection). I think we are still about two months away from legitimate price reductions.
Posted on 6/8/22 at 6:48 pm to shutterspeed
quote:
This. I was informed a month ago that my rent was increasing by 40%. No longer made sense to rent and forced us into the housing market 1-2 years earlier than planned.
You’re in a better spot than me. I sold my home in 2016 and have rented since. My rent has gone for $800 - $1600. Now, I’ve changed apartments and cities but the fact remains that I’m paying $1600 rent. I’m finally in a position to buy a home again but these prices are just out of my budget. Something has to change for me to be able to be a content homeowner again.
This post was edited on 6/8/22 at 6:51 pm
Posted on 6/8/22 at 6:54 pm to Ric Flair
quote:
Do you donate a lot to a church/other causes or own a business? Or own a very expensive house? With the increase in standard deduction 4 years ago or so, I doubt more than 5% of people benefit from itemizing deductions over taking the standard deduction.
I'm single and the standard deduction is 12.9k. I paid 21k in mortgage interest and property taxes last year. Though that will drop a few thousand due to refinancing last year. Also I donate to church and to GT.
Posted on 6/8/22 at 7:02 pm to BayouBengal23
quote:
Can you explain the reasoning behind never paying more than the minimum note?
Always thought it’d be a good idea to pay off early!
At 2.5% Just your yearly cost of living raise at work will surpass the interest you pay on this loan.
The reason you pay off a loan early is to avoid the high interest you will pay over time. esp.. at the early years of the loan.
2.5% is low interest ... not high.
credit cards, car payments, personal loans etc.. will always be higher than 2.5
This post was edited on 6/8/22 at 7:06 pm
Posted on 6/8/22 at 7:06 pm to gpburdell
I’m guessing single and divorced/never married and not fresh out of college, given the amount of interest paid.
Posted on 6/8/22 at 9:25 pm to supadave3
Good luck to you out there. I've never seen anything like this housing and car market.
Posted on 6/8/22 at 10:58 pm to boogiewoogie1978
quote:
Mortgage demand falls to lowest level in 22 years amid rising rates, slowing home sales
You forgot (well, it’s unlikely you forgot), or neglected, to put a very important reason. Lack of inventory is also a major part of the reason for the drop.
Posted on 6/8/22 at 11:03 pm to RJSambola
quote:
At 2.5% you should be able to exceed that in a variety of investment options.
Can you explain where you put money for the last six months and got a 2.5% return? I assume you have a ton in commodities if you are up. I know I wish I had paid extra on my note for the last seven months instead of losing 25% in 401k contributions and 18% in other investments. Such a categorical statement is not always accurate.
If I were closer to retirement I definitely would have wished I had put more toward paying even 2.5% mortgage v. investing it.
This post was edited on 6/8/22 at 11:05 pm
Posted on 6/8/22 at 11:18 pm to go ta hell ole miss
quote:
Can you explain where you put money for the last six months and got a 2.5% return?
I think you need to widen your lens a bit. He’s not talking about a short period of time (like for instance the past 6 months). He’s referring to beating that on average on an annual basis for the life of the mortgage. Should be pretty easy…
This post was edited on 6/8/22 at 11:18 pm
Posted on 6/9/22 at 8:21 am to hall59tiger
Inventory is very low by me but houses sell fast when they hit the market.
The low inventory is indicative of the high rates as people would rather just hold onto what they have than move and accept a higher rate.
The low inventory is indicative of the high rates as people would rather just hold onto what they have than move and accept a higher rate.
Posted on 6/9/22 at 8:43 am to go ta hell ole miss
quote:That is a short term trader view. Mortgage is long term - 30 years. Sure there are periods of time during that 30 years where it would have been more prudent to pay extra on a mortgage but barely anyone can time a market good enough to actually benefit from that strategy. Over the course of the mortgage you and damn near gauranteed to exceed 2.5% annual returns if you invest in damn near any traditional investment
Can you explain where you put money for the last six months and got a 2.5% return?
Posted on 6/9/22 at 8:45 am to SlidellCajun
quote:
Inventory is very low by me but houses sell fast when they hit the market. The low inventory is indicative of the high rates as people would rather just hold onto what they have than move and accept a higher rate.
Inventory is going to remain low, due to this exact reason, until people are forced to move. Inflation and the crash of a few industries in the next year or so (automotive, mortgage, real estate, retail, remote work changes) will eventually affect the housing market.
The camel’s back is not broke yet but we are only a couple straws away from getting there.
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