- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: “Rates will come down, just re-fi then.” Why do people keep saying this in today’s world?
Posted on 10/25/23 at 7:35 pm to Covingtontiger77
Posted on 10/25/23 at 7:35 pm to Covingtontiger77
Others have mentioned how the fed will crash everything then lower rates and buy bonds… but it’s really Pavlov’s Dog with the industry. I personally know plenty of mortgage brokers who have left the business in the past year or so, several who are hurting bad and about to leave if it doesn’t turn, and realtors aren’t doing much better. But over the past 15 years there was so much money here it just became a place for easy money that didn’t require knowledge of these things. Not trying to be a dick but it’s true.
0
Posted on 10/25/23 at 7:42 pm to Covingtontiger77
I think they will because politicians dont have the fortitude for it.
Our modern economy cannot handle sustained mortgage rates over 5% and debt sustainment rates much over 4% for any length of time.
Our modern economy cannot handle sustained mortgage rates over 5% and debt sustainment rates much over 4% for any length of time.
Posted on 10/25/23 at 7:43 pm to Covingtontiger77
If they go up and you're on the sidelines you're worse off.
If they go down at some point you really can refinance.
If they go down at some point you really can refinance.
Posted on 10/25/23 at 7:59 pm to lynxcat
Only other lever is to print money, cause USD to skyrocket, force foreign liquidation of treasuries, buy it all back cheap, inflate debt away and resume the next cyclical period.
Posted on 10/25/23 at 8:23 pm to Bestbank Tiger
quote:
If they go down at some point you really can refinance.
That depends on having the money up front to afford to refinance and assumes the value of the equity in hand is appealing enough for a lender to take on the new loan. That's unlikely in many if not most cases. Especially so for people buying recently or right now while most valuations are at all time highs.
jenga
People should remember the part about not being able to refinance unless the value has gone up from the last time. But they don't. And a large proportion of people who have been buying new homes from builders with a 2-3 year buy down rate are going to experience the same massive increase in monthly payments in 12-36 months that bankrupted lots of people 15 years ago.
Posted on 10/25/23 at 8:26 pm to Covingtontiger77
To think rates will "come down" within the next 5 years is asinine IMO.
Posted on 10/25/23 at 8:32 pm to Covingtontiger77
Is the question here why are salesmen making pitches that lead to more sales? Seems like a pretty obvious answer.
Posted on 10/25/23 at 8:39 pm to molsusports
quote:
People should remember the part about not being able to refinance unless the value has gone up from the last time. But they don't. And a large proportion of people who have been buying new homes from builders with a 2-3 year buy down rate are going to experience the same massive increase in monthly payments in 12-36 months that bankrupted lots of people 15 years ago.
If rates drop the comps will usually go up so you'll get the value.
Posted on 10/25/23 at 8:41 pm to Bestbank Tiger
quote:
If rates drop the comps will usually go up so you'll get the value.
Right now the only thing that forces the fed to rapidly lower rates is a major recession or other catastrophe. Neither of those options will likely be accompanied by increased home values.
Posted on 10/25/23 at 9:33 pm to Covingtontiger77
quote:
$34T debt
quote:
So tell me why do the rates have to “go down?”
You answered your own question. But the Fed only controls the short end.
Yield curve control is coming. The BTFP facility they set up in March when banks started going t!ts up is arguably a soft form of ycc.
Posted on 10/25/23 at 9:41 pm to TigerTatorTots
quote:Any bold predictions on rates over 5 years are asinine.
To think rates will "come down" within the next 5 years is asinine IMO.
Posted on 10/25/23 at 9:41 pm to molsusports
quote:Why can't people refi at an equal value?
People should remember the part about not being able to refinance unless the value has gone up from the last time.
Posted on 10/25/23 at 9:53 pm to Big Scrub TX
I would bet lots of money rates will be lower at some point next year than they are now. Election year, they will want to act like they saved the economy.
Posted on 10/25/23 at 10:06 pm to LSU1018
quote:Well, another problem is spreads are wider too. The commercial bank bid for mortgages and MBS is simply way lower than it was a year ago. e.g. AAA, non-QM is trading for 200bps over. That's insane to me. Basically, 7.5% for a AAA-rated security. Should be like 50bps max, IMO.
I would bet lots of money rates will be lower at some point next year than they are now. Election year, they will want to act like they saved the economy.
Posted on 10/25/23 at 10:15 pm to Big Scrub TX
In more risk off environments lenders tend to tighten lending standards (offer fever loans) and require more up front money to refinance. The typical person counting on the future ability to improve their finances by refinancing at lower rates in the future does not tend to be fluid enough to raise the money for refinancing.
The real value of the property generally speaking is the amount of money the seller can command when selling. The builders right now selling are doing "buy downs" costing a significant amount of the selling price. The buyer in that case is in possession of a mortgage already greater than the cash value of the house (before the realtors take their cuts and put the seller further underwater).
The buyer in possession of the new build with a buy down needs significant appreciation in base value as well as a significant drop in lender rates to be treading water (e.g able to pay for the privilege of refinancing for a similar monthly mortgage payment in the future).
The real value of the property generally speaking is the amount of money the seller can command when selling. The builders right now selling are doing "buy downs" costing a significant amount of the selling price. The buyer in that case is in possession of a mortgage already greater than the cash value of the house (before the realtors take their cuts and put the seller further underwater).
The buyer in possession of the new build with a buy down needs significant appreciation in base value as well as a significant drop in lender rates to be treading water (e.g able to pay for the privilege of refinancing for a similar monthly mortgage payment in the future).
Posted on 10/25/23 at 10:23 pm to XenScott
quote:
Rates will either come down or they won’t. Either way if you want to own a home, buy it. Rents will soon catch up to be just under what a mortgage would be. (They are very close here apples to apples.)
I just bought a house.
Was paying $1250 in rent.
Mortgage is just under $1700.
Landlord has a new tenant at my old house rental at $1575. Insane.
Posted on 10/26/23 at 1:05 am to molsusports
quote:Eh. The mortgage industry is basically in a panic at the step function down in business. If rates come in meaningfully (call it 200bps+), the I guarantee you they will find a way to refi anyone that isn't underwater.
In more risk off environments lenders tend to tighten lending standards (offer fever loans) and require more up front money to refinance. The typical person counting on the future ability to improve their finances by refinancing at lower rates in the future does not tend to be fluid enough to raise the money for refinancing.
quote:Yes, of course. If the LTV has only gone up, then of course it will be very difficult to refi.
The real value of the property generally speaking is the amount of money the seller can command when selling. The builders right now selling are doing "buy downs" costing a significant amount of the selling price. The buyer in that case is in possession of a mortgage already greater than the cash value of the house (before the realtors take their cuts and put the seller further underwater).
The buyer in possession of the new build with a buy down needs significant appreciation in base value as well as a significant drop in lender rates to be treading water (e.g able to pay for the privilege of refinancing for a similar monthly mortgage payment in the future).
Posted on 10/26/23 at 6:01 am to Covingtontiger77
quote:
So tell me why do the rates have to “go down?”
they don't, but conventional thinking is when the economy gets into trouble, the Fed will immediately bail it out. since the GFC, the entire gov and investing population has gotten high off low rates and they're addicted. these politicians are irresponsibly spending in the face of rising rates and anyone with any sense can foresee the danger in that.
so now we have these realtors (ex-bartenders and bottle service girls) that don't know anything about macro and have never experienced anything other than low rates, but will talk out their arse to hope to sell a house to someone who knows even less about economics and rates. it's copium.
Posted on 10/26/23 at 6:14 am to JimMorrison
quote:
so now we have these realtors (ex-bartenders and bottle service girls) that don't know anything about macro and have never experienced anything other than low rates, but will talk out their arse to hope to sell a house to someone who knows even less about economics and rates. it's copium.
Perfectly said.
Posted on 10/26/23 at 7:39 am to Covingtontiger77
Because inflation is coming down
Hedgefunds are in a short squeeze with their Bond positions
Every recesscion rates drop and values increase
And yeah if Rates do drop to even high 5s it will increase listings but bring up to 5mil new potential buyers. Still low inventory
So buying now at 7% with a deal and maybe lower price is better than 4% at a much higher value. If you can even get your offer accepted when rates drop
When that starts values will jump again
Theres 700k homes for sale. In 2008 there was 4mil
Population in 2008 was 300mil. Its now 330mil
Hedgefunds are in a short squeeze with their Bond positions
Every recesscion rates drop and values increase
And yeah if Rates do drop to even high 5s it will increase listings but bring up to 5mil new potential buyers. Still low inventory
So buying now at 7% with a deal and maybe lower price is better than 4% at a much higher value. If you can even get your offer accepted when rates drop
When that starts values will jump again
Theres 700k homes for sale. In 2008 there was 4mil
Population in 2008 was 300mil. Its now 330mil
Page 2 of 4
Popular
Back to top
Follow TigerDroppings for LSU Football News