Whats the Likelihood of mortgage rates dropping to upper 5s for a 30 yr loan within

i know that there is no crystal ball..just thought someone here might work in that field...

if they dont come down i may just buy anyway and refinance at a later time. we are getting to the age where a townhouse just isnt what we need.

i love our townhouse but we need a single level..

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i love our townhouse but we need a single level..

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Absolutely. My parents f'd up royally because they stayed in their 5000 sf house on Lake Oconee until they literally couldn't use the upstairs. My sisters and I tried to get them to sell in '04, and they wouldn't, because real estate was going up too fast. They tried to put it on the market in '08, and we all know how that turned out. Couldn't sell it.

They finally sold it in '17 for half their original asking price. Sucks.

Sell your current home and buy your forever home as early as you can, because my parents waited too long and then when they sold, they were 80 years old and not getting around as well as they used to. They struggled making friends in their new neighborhood, because they just aren't active, anymore. It's not just about the house, but you want to be able to enjoy your new neighborhood and meet friends while you are still active.

Just a lesson I learned from watching my parents make a huge mistake.

97%

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But what was the price as compared to a theoretical sale in 2004

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Less than half. They thought they priced it to sell after the bubble burst, but they were on a niche of lakefront homes in Reynolds Plantation on Lake Oconee. Nothing sold there for years.

Their neighbor bought a house for $2M and sold it for $425K, just to get rid of it.

Something has to give, there's currently 535 homes for sale in our suburb north east DFW with a population of 67,000.

My neighbor's house has been listed for 2 months and has had one look.

Five years ago every listing was having 25-30 per day - or more

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Why did housing prices on Lake Oconee tank?

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Housing bubble burst. Mercer Reynolds turned 40,000 acres of hunting land into 10 miles of lakefront property, when he sold the land to TVA so they could build a dam. A good lakefront lot was going for a million plus back in the early 2000s.

The people living in Reynolds Plantation were either well-to-do folks who could afford a 2 million dollar home, but couldn't afford to lose money on it, or folks who were crazy rich and owned multiple homes all over the country. My parents were the former.

The people like my parents didn't want to commit to buying a house on Lake Oconee. The crazy rich people were building their dream home and not buying a pre-owned home. On top of that, Lake Oconee is an hour and a half outside of Atlanta, in the boonies, so the market for people looking to buy out there is kind of limited, anyway - very expensive houses in the middle of nowhere.

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Whats the Likelihood of mortgage rates dropping to upper 5s for a 30 yr loan within 3 years?

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Mortgage rates are set via MBS (Mortgage-Backed Securities). These are bundles of mortgages sold to investors, who earn interest from homeowners’ mortgage payments. Lenders set mortgage rates based on the yields investors expect from MBS. If MBS yields rise (because investors demand higher returns), lenders charge higher mortgage rates to cover the cost.

MBS and the 10yr are nearly perfect competitors, so they generally rise and fall within ~1% of one another (with MBS usually being the lag). When the Fed raises rates, it makes the 10yr more attractive as the returns go up thus also pushing up MBS rates which push up mortgage rates.

The Fed raises and lowers rates to keep the economy going as steadily as possible. If the economy is good, they will either raise rates to keep it from overheating or hold rates steady. If the economy is struggling, they'll cut rates to spur economic growth.

This is all foundational understanding to say "it's going to depend on what the economy will be like within 3 years".

We're very likely to be in a recession before the year is out (we may already be). If not, it will be the first time since moving from the Gold Standard that the inverted yield curve will have failed to predict a recession (it uninverted back in September, recessions usually happen within 6-18 months, but more often from 6-12 months, after an uninversion). Since leaving the Gold Standard, recessions average ~10 months.

If we don't get a recession and Unemployment and Inflation continue at current levels throughout the period, there is a low (but not impossible) chance we see rates get that low. It could happen, but the chances are not in your favor.

If we get a recession, rates will go down as the Fed attempts to spur growth (balanced against the potential return of inflation). Recessions since going off the Gold Standard have averaged ~10.5 months. This means multiple cuts would be likely during the period. The more cuts, the more likely we would be to see rates drop consistently to the level you're wanting.

There's no real magic method of determining economics so far out as the chaos of both micro and macro economics prevents this. The best you can do is simply keep up with economics to guess what may be happening in the next few months (rather than trying to guess in years).

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A lot of the homes there were second homes and people let them foreclose during 2008 to 2011ish. One of my good friends parents bought a home that originally sold for 1.4 million for $600,000 in Reynolds Plantation back in 2010. It needed a little work as the previous owners took all the appliances, light fixtures, and other stuff out of it before they let it get to foreclosure. I think they put about $100k in it after they bought it but that house now is likely close to 3 million dollars so they are way ahead. You could get insane deals there during recession if you had the liquidity.

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But this is precisely what makes it hard for me to understand/believe that homes in 2004 sold in 2017 for half price.

ETA: the anecdote you cite isn't obscure at all. It was played out many times in the post-crisis years. When someone asked "why did prices tank", I don't think they were talking about the crisis. I think they meant much later - like 2017.

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know that there is no crystal ball..just thought someone here might work in that field...

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The worst person to ask about mortgage rate predictions is someone who sells mortgages.