Home Mortgage Rates

Now is NOT the time to buy. Prices are through the roof and rates are steadily increasing. This bubble is gonna pop. Might be tomorrow, might be 6 months, might be a year. That will reduce the price, but with Inflation not coming down, I don't see rates going down any time soon.

How are you on cash (will factor into whether or not to buy points, among other things)? Do you have 20% cash for the down payment? How long do you envision staying in this new house?

If you plan on staying for at least 10 years, buying some points is likely going to net you value over that time period. Here's an online calculator that can help you figure out that timetable as to when you can expect gains:

LINK

You seem like you are in a decent financial position so I wouldn't stress out too much about min/maxing every detail of getting this loan, especially since you don't have the luxury of time and need to buy now. You can always re-fi your mortgage later if the situation changes. A conventional loan (unless you qualify for other unique loans like VA loans) is likely going to be where you land.

I would just shop around online for who can provide the best rate.

Just as an exercise I did an estimate of affordability for a house in Oxford MS with an asking price of about $750,000 in 2022 versus what that same house might have cost in 2020. Assuming the property appreciated around 30% in that time and the rate went from 2.8% to 6.8% we go from $1,906 per month to $3,911 per month.

That estimate also excluded property tax, hoa, and obviously also assumed a 20% down-payment on a 30 year fixed in both cases ($116,000 versus $150,000 down-payment).

If you were to assume people buy their homes based on budgeting concerns the effect of interest rates on purchasing power of buyers are massive. The monthly payments on a $580,000 home jump from $1,906 to $3,024 when mortgage rates jump from 2.8 to 6.8

Individual sellers won't willingly accept this problem until they see it as potential buyers. Home depreciation is generally a slower process than home appreciation - especially when the appreciation was triggered by lowered interest rates.

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Also, any mortgage brokers in Mississippi?

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My wife's licensed in MS. If you want shoot me an email and I'll get her in touch with you. rebbeertd at gmail dot com

Inventory has not been the variable affecting price. Interest rates have been.

IMO a buyer shouldn't buy anything close to current prices unless you get at least those concessions.

I agree most sellers are going to decline at this point. But in retrospect (as home prices depreciate over the next couple of years) I think they will wish they had accepted (typically walking away with a six figure profit).

Buyers are canceling purchases and postponing purchases. Not IMO because they suddenly got more wise about speculative appreciation, because many have been priced out of homes they could more easily afford when interest rates were 4 or more percentage points lower.

We'll see obviously. If you think people's salaries are going to significantly appreciate then I will change my mind because the percentage of income devoted to home costs would come back down closer to a normal ratio.

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This bubble is gonna pop

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Based on what information can you make this prediction?

Prices and rates are expected to continue to rise according to the experts. Now will be the best time to buy for years.

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In this environment a buyer should ask the seller for a lot of extras. Stuff like:

Closing costs
Buy down the maximum number of points
An extended (eg 3 year) home warranty
Fix (or provide cash allowance for) all findings on the home inspection

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I don't expect any traction when I make this point but... quoting people from zillow and redfin as if they were impartial experts is like asking Cathy Wood if she expects tech stocks to take a hit. Her business model requires people to buy the stuff.

The fed has commented pretty directly on their expectations of the housing market reset. Affordability has crashed. Income has been wildly outpaced by increasing costs of housing. In just the last six months the average costs of a mortgage have gone up another 50% (with the interest hikes). More interest hiking is planned.

I thought there was going to be a softer deflation or plateau in home values until the last month or two. Now I think there's going to be a bigger correction. We are entering (IMO already in by historical definitions) a recession. The employment numbers being reported appear to be also questionable at best because the numbers that they have chosen to use count a person who has multiple jobs as multiple jobs (transforming the gig economy into a pretend hiring boom rather than a reflection of people struggling to pay bills). We've also seen credit card bills escalate and personal savings degrade rapidly over the last 12 months.

These are bad indicators for the economy. The consumer is weaker and less able to pay. Forbearance is ending and foreclosures are going to progress over the next year. That was part of the deflation process last time and I don't see how that supply combined escalating buyer costs doesn't force prices downward.

Builders have collectively taken notice. Housing starts have rapidly decreased since April of this year. Why? Because as a group the collective willingness to risk capital on a start has decreased. That happened because they don't expect to make money building and selling as lower affordability decreases the pool of buyers and drives down both sales and profitability.

I don't expect this to be a liked opinion. I don't like it either. We're talking about this as a part of a lot of people having trouble making ends meet and having lower standards of living.

anyone that denies a crash at this point is either in denial or not paying attention. New builds will be the most impacted and set the market. I'm Phoenix- houses are being cut 50-100k daily. I own a home in HTX, the market never really got out of control there so not as big of cuts happening. low inventory means nothing if ppl can't afford it.

also, inventory is about to explode. Investors are already dumping assets and the foreclosure rate is about to grow. The past due 90 days for homeowners is already higher than it was in 2007---banks are just a bit more lenient and having to deal with the moratorium.