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Started By
Message
re: Buyers Backing Out On Homes Due To New Rates
Posted on 3/31/22 at 12:53 pm to Catchfalaya
Posted on 3/31/22 at 12:53 pm to Catchfalaya
I'm in North Alabama, in what has been a Booming economy with Redstone Arsenal, and Cummings Research Park, which is the 2nd largest technological research park in the US, and 4th largest in the WORLD. The Research & Development community Thrives here, and we have had a Booming economy.....people from all over the world flock here for High Paying jobs !
That being said, I have several friends who are in the Real Estate profession, and their business has been Killed in the last month. Their closings have gone down over 80% IN the last month. To the tune of closing on 20-25 homes per month for the last 3-4 years, to closings this month in the 4-5 range.
The Federal Reserve (which is not even a Government agency) raising interest has killed the market here, and them (the FR) saying there are more rate hikes coming has absolutely KILLED the market here.
You have to realize, the majority of folks buying houses here are a Highly educated group of people, and they can see the writing on the wall. The US is fixing to enter a recession that has not been seen since the 1930's......shite's about to get real, and these people see it.
The biggest thing that can turn this around is a Red Wave in the midterm elections, and that will be only a temporary fix. The Liberal Agenda is poised to completely destroy this once great Republic within the next 10 years......if it takes that long
That being said, I have several friends who are in the Real Estate profession, and their business has been Killed in the last month. Their closings have gone down over 80% IN the last month. To the tune of closing on 20-25 homes per month for the last 3-4 years, to closings this month in the 4-5 range.
The Federal Reserve (which is not even a Government agency) raising interest has killed the market here, and them (the FR) saying there are more rate hikes coming has absolutely KILLED the market here.
You have to realize, the majority of folks buying houses here are a Highly educated group of people, and they can see the writing on the wall. The US is fixing to enter a recession that has not been seen since the 1930's......shite's about to get real, and these people see it.
The biggest thing that can turn this around is a Red Wave in the midterm elections, and that will be only a temporary fix. The Liberal Agenda is poised to completely destroy this once great Republic within the next 10 years......if it takes that long
5
Posted on 3/31/22 at 12:53 pm to ChexMix
4.8% is just the start. By end of April it could be near 6%. Couple that with unprecedented inflation the housing market may go into hibernation.
Posted on 3/31/22 at 12:57 pm to Catchfalaya
quote:
Realtor here. Just had two buyers this week back out on purchases due to rising rates. Have another buyer still in the hunt but has to look for a lower value home because his DTI is to high for the price range he was searching in.
Steve Cortes of War Room fame said the median home ($430k) monthly mortgage payment went up $500 in one year due to rising rates on a 30 year mortgage, I’m assuming 10% down or maybe less. I don’t follow mortgage rates, does that sound right?
Posted on 3/31/22 at 12:59 pm to ChexMix
quote:
you mean rates that were available in 2015? Yup. People acting like 4.8 is a disaster
It's not the rate that's the main issue, it's the ever higher rates with home prices still rapidly appreciating at least at the moment.
My townhome was worth about $230k back in 2015 with those kind of rates.
Now it's worth about $420k with the same rates in 2022
It's up over 6% in the last month. Meanwhile rates rose about a full percent in the meantime.
This post was edited on 3/31/22 at 1:00 pm
Posted on 3/31/22 at 12:59 pm to scurvydawg
quote:
I refinanced in Dec 2020 at 1.75% rate / 1.95% APR.
Saves me $1000/month which I then apply that towards principal.
Why are you bragging about paying off a historically low interest rate loan early?
You are literally ending a very good thing sooner than it needs to be ended, thus you aren’t reaping nearly the maximum benefits of it.
Posted on 3/31/22 at 1:00 pm to Catchfalaya
Good.
It’s been a market of bull shite for way too long now.
It’s been a market of bull shite for way too long now.
Posted on 3/31/22 at 1:01 pm to LSUnation78
quote:
ETA: but dont expect the tax man or your home owner’s to be as quick to draw down value of your property as they were to hit you every year it went up.
Which is what pisses me off...
I've watched 2 bedroom homes in our neighborhood skyrocket from 250k to 600k in 2.5 years. Unbelievable. Some of those homes couldn't sell before that. Now investor are buying, fixing and flipping, still with their profit. I don't understand where this money has come from. WuFlu lock-downs made the local market jump to a price I can't come close to affording.
Posted on 3/31/22 at 1:03 pm to Catchfalaya
That’s kinda the point right?
Time for housing costs to drop.
Time for housing costs to drop.
Posted on 3/31/22 at 1:04 pm to Catchfalaya
Sounds like buyers are trying to buy way too much house if a 1% increase in rates is causing them to have to back out
Posted on 3/31/22 at 1:04 pm to MikeBRLA
quote:
Why are you bragging about paying off a historically low interest rate loan early?
You are literally ending a very good thing sooner than it needs to be ended, thus you aren’t reaping nearly the maximum benefits of it.
Whilein general I agree in some situations chunking off the mortgage isnt a bad idea even in low interest rate environments with 1 being if you're about to retire and want to free up the cash flow. Also, when sometimes people get close to seeing their house pay off you just get that itch to get rid of it in a year or two or something if you can (Even if say there's 5-10-15 years left on it). I get it. Peace of mind sometimes doesnt have a value to it.
This post was edited on 3/31/22 at 1:06 pm
Posted on 3/31/22 at 1:06 pm to scurvydawg
Just bought 80 acres. 6.4 for 30 year
5.1 best I can get for 15 year
Everyone one said it’s going up and up fast
5.1 best I can get for 15 year
Everyone one said it’s going up and up fast
This post was edited on 3/31/22 at 1:08 pm
Posted on 3/31/22 at 1:07 pm to LSUnation78
quote:
Theres a whole generation who has never heard of 9% mortgages. But that was the norm for my parents generation.
I’d pay 15% if I could buy my childhood home for what my parents bought it at
Posted on 3/31/22 at 1:08 pm to Catchfalaya
My first mortgage circa 2004 was 6.25% and I was glad to get it. I refinanced my forever home at 2% a couple summers back.
This post was edited on 3/31/22 at 1:12 pm
Posted on 3/31/22 at 1:09 pm to Catchfalaya
I am in the position that my wife and I have decided to relocate our family out of Louisiana. My new job won't start until July. Would you try and sell now to still get the absolute most bang for you buck or try and ride it out and risk losing buyers whose top end may be our list price?
Posted on 3/31/22 at 1:09 pm to Catchfalaya
quote:
Just had two buyers this week back out on purchases due to rising rates. Have another buyer still in the hunt but has to look for a lower value home because his DTI is to high for the price range he was searching in.
DR Horton and DSLD about to be sitting on some vacant homes for awhile, here in BR.
Posted on 3/31/22 at 1:10 pm to TigerTatorTots
quote:
Sounds like buyers are trying to buy way too much house if a 1% increase in rates is causing them to have to back out
Again not just about rate increase but home values continually skyrockting as well.
Mathematical example...say you were comfortable purchasing a $350k home with 5% down at start of month with a 4% rate. Your mortgage alone would have been under $1,600 a month. Now that $350k home is worth about $370k end of month (our houses are up about 6% or more in last month here), and now you have to settle for a 5% rate. So if you put down the same $17,500 on a $370k house, and mortgage that at 5%, your mortgage payment would NOW be almost $1,900 a month.
So that's a $300/mo change over the last month just from the home appreciation and interest rate hike. throw in your taxes will be higher, your insurance will be higher, it adds up pretty quick.
This post was edited on 3/31/22 at 1:13 pm
Posted on 3/31/22 at 1:11 pm to GWM
quote:
I'm in North Alabama, in what has been a Booming economy with Redstone Arsenal, and Cummings Research Park, which is the 2nd largest technological research park in the US, and 4th largest in the WORLD. The Research & Development community Thrives here, and we have had a Booming economy.....people from all over the world flock here for High Paying jobs !
That being said, I have several friends who are in the Real Estate profession, and their business has been Killed in the last month. Their closings have gone down over 80% IN the last month. To the tune of closing on 20-25 homes per month for the last 3-4 years, to closings this month in the 4-5 range.
The Federal Reserve (which is not even a Government agency) raising interest has killed the market here, and them (the FR) saying there are more rate hikes coming has absolutely KILLED the market here.
You have to realize, the majority of folks buying houses here are a Highly educated group of people, and they can see the writing on the wall. The US is fixing to enter a recession that has not been seen since the 1930's......shite's about to get real, and these people see it.
The biggest thing that can turn this around is a Red Wave in the midterm elections, and that will be only a temporary fix. The Liberal Agenda is poised to completely destroy this once great Republic within the next 10 years......if it takes that long
100%
many here in Texas don't see that we're in trouble here as well.. They think we're immune to it because we don't have "state income taxes" and "oil and gas will save us" BS... we are so close to becoming a Blue state because Abbott is a shite show. would not surprise me in the least if Beto were to beat Abbot in Nov... He almost beat Cruz in the Senate a few years ago and we've had about half a million come from California and New York. (and they aren't the republican ones leaving the state) it's the Silicon Valley libs that are being transferred here...
Not to mention the illegals and their kids. The illegal students outnumber the legal students in almost every inner city school and the VAST majority have the IQ of a door knob... Trump was 100% right on one thing. The VAST majority of people crossing the border are not good people, many of the younger ones are pure evil and have the education of a 3 year old...deadly combination.
Im actually researching several places to go.. North Alabama was one of them...
Posted on 3/31/22 at 1:13 pm to teke184
quote:
Rates don’t lock until you are X number of days out from the transaction.
With as fluid as inflation is right now and the inevitable bullshite delaying a closing, I bet you don’t have an idea of a likely rate until a few days before closing.
My mortgage is thru Third Federal.
They are about 4.5% currently for 30 year.
They offer another 0.5% lower for having a savings account or checking account with them.
They will waive mortgage insurance requirements for only 15% down (instead of typical 20% down).
They will LOCK rates for 6 months currently with approved credit check.
Best of luck to all buying a home. You're still better off buying than renting, Millennials.
Posted on 3/31/22 at 1:14 pm to TigerFan55555
quote:
Im actually researching several places to go.. North Alabama was one of them
If you're not buying in Madison Co or East Limestone/Athens, you can find stuff that is very reasonable, at least compared to most places.
Posted on 3/31/22 at 1:16 pm to Catchfalaya
quote:
Realtor here. Just had two buyers this week back out on purchases due to rising rates. Have another buyer still in the hunt but has to look for a lower value home because his DTI is to high for the price range he was searching in.
It sucks for the market, but it's been too hot for too long and COVID made raising rates even more of a touchy subject than normal. This is a bit like the debt in the longer it goes on without being addressed, the worse it will be when it finally happens.
I made a meme like this sometime around Spring 2020 because I knew it was inevitable (and then doubly so when President Doofus took the election in later 2020).
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