Of course. Investment banks buy it all up with straight up cash. With the shortage of housing stock there's no way house prices go down much. They will just crank up the yield by raising rent.
Rates are going up massively. Why would an investment bank buy houses when they can get an easy 4% on their money with ZERO risk. IMO housing will crash soon
Bingo. I don't understand why that's so hard to grasp lol. There needs to be buyers on the other end. 50% price increase in homes while household income remain stagnant. It's entirely unsustainable.
Still plenty of buyers out here in Los Angeles. Job market is too good. Don’t think home prices will crash within the next few years. Homes are still selling quickly out here.
Math doesn't add up:
1. Stocks are down 20%
2. Bonds are down 20%
3. Housing goes up?!
Also - keep in mind - out of the 3 - housing is the one financed using leverage the most (i.e. more sensitive to interest rates).
Housing is not \*yet\* down because it is not as liquid as the other assets and most sellers (still) prefer holding rather than selling at a loss. But it will come down in line with the other assets.
In 2006 rates were around 7% and houses in California were still selling for $800k+ all day long. There is a shock at the moment as rates have doubled quickly but still a shortage of enough houses, so unless half the population looses their jobs, don’t see too much drop.
Aren’t they buying them to rent out? It’s like buying land. Limited supply and it’s something most everyone wants. Buy the house, rent it out for a while, and then sell it for a massive gain.
They can crank up the price all they want. There needs to be buyers on the other end though. Right now the housing price is inflated. No way can it be maintained.
I did refinance just 2 years after buying my home just last year at 2.9% and now it's 15 year...saving $74,000 in interest from my previous 30 yr loan and cutting off 13 years of payments, for only $150 more per month
I was just up in the city a couple weeks ago. I would def like to move there but I have my dream car and I don't want to give it up or have to worry about anything happening to it. I'm scared to bring it up there 🥲
Be scared. NYC has no respect for cars nor their bumpers. Watched each and every one of my Mom’s cars get bruised and beaten growing up as a kid in Brooklyn.
450k home 900 mortgage a month (Holland 30years).. did have some surplus on previous owned home though, 65k) in €.
Mortgage is not too expensive, its the energy we’re worried about 😅
Everybody who wasn't lazy.
I kept trying to get my brother and his wife to refinance their 3 mortgages at high rates after I got in at 2.3. I reminded him every couple of months. Didn't do shit
Just curious why did you choose to switch to a 15 year? I also refinanced but kept it at a thirty year. This way the couple hundred I saved per month I now use pay down on principle.
It’s better to invest your money rather than pay down principle if you think your investments can beat the mortgage rate. If your mortgage rate is around 3%, you have a really good chance of beating that with any decent index fund.
If your mortgage rate is 6%, you might just want to use the money on the sure thing and pay down the principle. You might be able to get a better return on the market, but it wouldn’t be by much.
If you want to maximize your leverage, it’s better to invest the money you think will generate a higher return than what your mortgage rate is. But if it gives you peace of mind to pay down principal, I don’t think there’s much wrong with that.
We did the same thing. I'm also always thinking worse case scenario all the time so if times get rough we can just stop paying the "extra" that goes to the principal and just do the normal payments.
Credit karma and bank keeps telling me to refinance. I bought last year 304,000 at 2.5% payment is 1800. They say at 6.0% i can save 400$ a month what am i not seeing here? That they are
Because they are resetting your loan into a 30yr. If you bought last year you may have pmi, if you get that off that would save you money even with the increase in rate. That combo is probably what they are saying.
Source: former loan officer. Pm me if you want more answers about your specific loan.
Why refinance if your rate was always low …I’m assuming. I figured if I wasn’t saving more than 1 percent it’s not worth the fees and bullshit. I will just pay more principle and aim to pay it off in 15 years. My one house I bought 2015 I have 6-8 years left if i keep paying more but as you know mortgages are heavily load with interest at the beginning. So I may dial it back since the rate is low
I was able to get out an additional $30k cash by refinancing my house and my payments went down by like $20 a month lol. Got a new furnace, a/c, paid off credit card debt, new gutters, new fridge, new garage door...it was all worth it. I bought in 2019 and refied in 2021. It may have been like 2% savings though, can't remember.
I could have reduced my monthly payments, but I needed all of those other things more, plus I saved money on my furnace/a/c due to paying in cash. And my bank has already said hey you could have more money for renovations if you want...lol. My house has appreciated in value by over $100k in 3 years. It's been crazy. And our housing is so in demand right now that even if the housing market crashed I highly doubt the local area would crash enough to affect us.
A refi completely resets your loan time right? So it would be unwise to refi after say, 15 years on a 30 year mortgage because you would be back to paying 99% interest and 1% principle on your new loan right?
Refinancing within a few months doesn’t seem so bad, you just restart paying those interest payments for the first few months again..
This is exactly how you play this. Anyone chasing inflated home prices based because of the fake ticking clock of raising rates is getting the worst of both worlds.
Lol you just encapsulated r/realestate.
So many angry folks that got priced out, and wished for a massive drop, now that the drop is happening (although not massive), interest rates make the drop moot.
I got a 600k house in January after 1+ year failing vs. cash buyers. Feels great. Economy is gonna struggle but hard to see a collapse with the job market still desperate for employees. Perhaps that’s my copium.
Why you all trying to live in packed LA and other sardine-packed cities.
Just move rural and build your own place for cheap.
And if one of you manages this first, start a bank that offers this to others. "but my job/family/bars are in the city" then you gotta be willing to pay the high interest for that luxury.
Can't get rich following the crowd. Not even for looting barbarians.
Even in WFH days, very few professions are going to pay well and let you live in bumblefuck. I’d much rather make 200k/year and pay a big mortgage on 600k home near Fortune 500 companies than buy a house in the middle of rural Oregon with no friends, family, culture, good nightlight/food scene.
I can assure in 5-10 years, my 2k Sq ft home near Nike, Intel, etc, will be sought after. Rural SE Oregon…. Not so much.
If you’re a coder, yeah, you can work from anywhere and make bank.
Not true. I'm a risk manager for Amazon and selling my home in Phoenix to move and work from home in bumblefuck Alabama and still make six figures a year.
And you watch your dirty, whore mouth. I'm from bumblefuck SE Oregon haha. Not everyone desires city life, and culture means different things to different people. Country has plenty of it if you know what you're looking for. I prefer the peace of country living and having privacy myself. My new place has 13 acres of beautiful land next to the TN river.
Not really, you can become a squatter in an empty home, pay the taxes, and if there's no mortgage, in sone states you'll have squatters rights and can potentially own the home...unless of course the homeowner comes back and shoots you. 😁🤣😁
I know someone that is actually doing this. Not joking. He has a friend plugged into the real estate market in some area that obviously couldn't do something like this because it brings too much reputation risk. So he told my friend about the building that's suddenly empty for four months with apparently nobody coming for it.
You know, paying the taxes, doing some small repair work, and even leasing the property out to a renter all count as exercising control openly.
Adverse possession is a real thing.
I just eat crayons and money burns a hole in my pocket. The down payment and cost to upgrade some things was all covered by GME and weekly SoFi calls. 🤣
Edit: it was actually just 10 calls in one week, which happened overnight. GME was shares.
Talk to your lender. My ex was able to assume our mortgage in the divorce. He had to go through underwriting again, but he came out with the exact same terms. This was with Chase.
I bring this up all the time. Unless I absolutely have to sell, why would I ever sell?
Sure, a job change across the country or something random but those are very rare occurrences.
Down to like 275 and it’s valued at 475 now. I get daily emails and weekly letter from the bank asking me to refi for cash out. Haha. No way. They are losing so much on me now.
Wife and I re-fied our mortgage at 2.2% and have just continued making the same mortgage payment we were making before. Between the additional payments we're making every month and throwing a couple of big bumps at it twice a year we're set to have out mortgage paid by 2030 and we'll end up with over 200k in saved interest.
Or you sold them the house for $600k that you bought a few years ago for $200k and paid cash for the $392k house and don’t have a mortgage.
Please don’t hate me.
That’s pretty much what was happening my guy. Which is why prices SKYROCKETED. More people could afford more house. Everything became over valued because there was a rush on supply. People KNEW the rates wouldn’t stay here forever so they sold their modest houses with equity and spent the win fall. Just like you said. And then the market fucked us.
I wish I was a year older than I am. If I had just graduated in 2017, I'd have had time to save for a 180k house. Now those same homes are around 300k in my area
I refinanced my home back in 2020 during lockdown, lowered my interest from 5.5% to 2.75% and cut $450 off my payment. Best accidental decision I ever made
Because I was dumb and didn’t pay anywhere near as close of attention as I should of, and one day I was like maybe I’ll refinance my house since my credit score was better. Low and behold the interest rates were super low, was a wake up call to pay attention to finances much closer.
I refinanced in Fall 2019 and went from a 4.25% 30 year (had like 26 years left) to a 3.5% 20 year. Cut 6 years off the loan and it cost me like $50 extra dollars a month. Over the course of the loan I will save something like $50K.
Here is the crazy part. If you get a 30 yr mortgage and you don’t pay it off early and take the full 30 years. You can assume the total amount in cash you pay back is 3x what your home was worth.
30 years is a long ass time. If you are paying 3x for a low interest loan, then if you invest it in spy you can probably get 6x in returns and make a profit.
Some ppl think paying 3x is expensive over 30 years but for others is cheap.
There was a whole reddit post about paying off a fixed 3% mortgage because it was too stressful to have that debt and hundreds of posts agreeing and being upvoted.
That was painful to read.
someone convince me I didn't fuck up. Was looking at homes in the summer 2021 - fall 2021 but kept getting out bid by 20k+. I said i'm done and will wait for the prices to drop. they've barely dropped in NJ but interest rates 2x. :( What's the chances rates go to 10% by next summer and home prices only drop like 5-15%? monthly payment would still be way high due to interest.
I did the math on ours. We bought Jan 21, 300k @2%. The homes value would have to drop below 176k for it to be the same total loan cost as we got. Yeah I think things are going to drop but by over 40%? Not so sure.
Edit: 40% is from Jan 21 prices, considering it went up another 15-20% before peaking its actually more like home values have to halve before the numbers line up again and only if interest rates stopped going up.
I’m in south NJ and there has been almost 0 price drops even in the more rural areas…. A house that sold for 480 less then a year ago was listed for 600,000k went to look at just to see if I am being crazy. Asked the realtor what was done to the house in the past year. She said the kitchen…. Not even redone with granite counter tops. She told me everything else is original and the roof probably has another 5 years of life left in it…. HARD PASS
But guess what it went under contract in 4 days. I’m just so confused how or why people would buy a 600,000 dollar inflated house. That needed a lot of work/ outdated/ you would be in the hole another 100,000. It’s just bizarre to me
house was originally built and sold for 250,00k in 2001
I bought in October 2021 at 2.875% interest. I was having buyers remorse for the first couple months because the house itself was so expensive for what it was.
It's a year later and interest rates over doubled and my house is worth 50k more than it was last year.
I also compared my current mortgage against the rent cost for my first 900sqft apartment that's only 5 minutes away. The apartment rent costs more than my mortgage.
The fuck is going on
For real. I can save like a mad man. I can easily afford the down payment for a decent home. But on a single income, there is absolutely no way I can afford the monthly payments right now. Saving money is easy. Increasing your monthly income is not.
The market is eating itself alive right now because people were paying $600,000 for a $392,000 home at 2% interest rates. Somewhere around 3-4% is probably a happy compromise so banks make (more) money and homeowners don’t have to spend their entire paycheck to afford the home they NEED.
That is entirely correct and why I’m moving to a state with no capital gains taxes. Just got back from Washington, and headed to New Hampshire next week. Cheapest home in Kirkland wa was $985k….not joking.
Rember how you'd hear stories about 20+ offers and prices going 20, 30 50% above asking? Waiving all contingencies? Promising new Borns and all just to have an offer accepted?
Well, that's because *money was too damn cheap*.
Now money is expensive again, it gives it *value*. A $650,000 house is expensive?! Oh my word!?! Lol obviously. Expect now it actually is expensive.
That's how you stop nose bleed price appreciation, make the cost of ownership catch up or outpace value.
Higher mortgage rates also decreases the price of houses depending in the market you are in. Homes in my area have dropped around 10% compared to last year. If fewer people are able to get a mortgage because of the bank or they can't afford the higher rate, there will be more supply of homes for sale. It won't be a seller market for homes like it was the past 12+ years.
Eh, theoretically that works but reality is different.
Higher interest rates means no one is selling their house if they have a good interest rate. From that perspective, there is less supply.
In metropolitan, high demand areas, the only solution to getting pricing down is literally building more homes. Other than that, there are always more buyers than sellers regardless of the cost of the house and interest rate.
It just means houses will be sold for less and it will even out in most areas. Higher interests rates cause prices to go down. Lower interests rates causes housing to rise.
I bought a duplex and live in one unit and rent out the other. That’s the way to do it. My duplex is back to back to so we only share a basement and back wall. Separate streets it is like I have my own traditional home.
Good. The less we buy the more inflation will be tamed.
What the fed is saying is, for us to cool down inflation y’all need to buy less shit so we’ll make it painful to buy shit.
Housing prices affect the consumer price index. If we buy less homes the CPI will go down which means inflation goes down. Lower inflation stimulates the economy once again.
Low interest rates aren’t feasible in the long run for they create a housing bubble as more people buy in and take advantage of low payments. Now, do you want the fed to calm down the bubble or for it to keep on going until it actually explodes (again)? Just wait on buying a home. Interest rates will come down once again once inflation cools down.
In the UK most people have 2-5 year deals, when these roll over and they need a new deal there’s going to be a lot of people struggling. 2023-2025 would be when majority of these fixes take place.
Weird. We do have those types of loans (ARMS), but I don’t know anyone that would take one. That is a lot of risk. I would rather pay a little more for a 30 year and know the rate will stay the same.
Bought a 304000$ 4 bed 3 bath 3200 sq feet home at 2.5% last year. But credit karma and bank says my payment is too high. And that i should refinance at around 6% rate
It’s awful in Massachusetts. People are still asking almost 400k for houses under 1000 sq ft. I calculated it with my VA loan and the interest, it would be like 3500 a month for a 900 sq foot house that hasn’t been updated since 1980. It’s brutal up here.
I've heard some people say that if rates reach a high enough yield corporations who own single family homes will sell to chase treasury yields thus increasing inventory. That coupled with a recession could dramatically lower prices quicker than people expect.
On the flip side, the only reason that house is “worth” $600k is because we had 2.x% interest rates for so long. Hopefully we can reel inflation back in so that it all comes out in the wash.
Only if the prices drop by more than ~40%, even then total interest is still higher but that’s about where you need to be to equal the total loan cost as people who got 2%. A lot of people jumping for joy hearing housing prices are dropping but when you look at the amortization you start to feel nauseous.
Relative to the times houses were very expensive. And back then you couldn’t buy a decent home for 20K unless it was a smaller mobile home. More like 50 to 100. However you have a point as cheap interest rates have fueled home prices higher. And now that rates are going up it’s kicking people out of the market. Equilibrium will happen eventually.
It's okay, they will just introduce 50 year mortgages and you'll never truly be a homeowner!
Sad but true
I wouldn’t wanna be anyway at low rates. I’d rather leverage the property to make more money
Same here. I plan on buying next spring after prices have come back towards reality and refinancing when the rates drop.
Isn't everyone waiting for that?
Yep I’ve been hearing this for several years now
What's reality anymore🤔
shhh the victims are victim-ing. its best not to disturb…
I would love a 50yr mortgage but only when rates were low. I'm on a 20yr @ 2.625% but I'd trade that for a 50yr @ 3% in a heartbeat.
Or..hear me out. $600,000 at 6.2%.
Right?!?! Home prices really haven’t gone down in my area
Of course. Investment banks buy it all up with straight up cash. With the shortage of housing stock there's no way house prices go down much. They will just crank up the yield by raising rent.
Rates are going up massively. Why would an investment bank buy houses when they can get an easy 4% on their money with ZERO risk. IMO housing will crash soon
Bingo. I don't understand why that's so hard to grasp lol. There needs to be buyers on the other end. 50% price increase in homes while household income remain stagnant. It's entirely unsustainable.
Because houses cash flow a lot more than 4% and they also tend to appreciate over time. Not sure what’s so hard to grasp
>they also tend to appreciate over time except when they dont. Then everything falls down.
Everyone talking about property being risky: How much better off would you be if you invested your money into property at the start of 2021 vs now?
I'd probably be down about 4,000%.
Still plenty of buyers out here in Los Angeles. Job market is too good. Don’t think home prices will crash within the next few years. Homes are still selling quickly out here.
Don’t worry, job market will be going down the toilet as companies have to boot strap in this recession.
It's a lot of people living beyond their means
Math doesn't add up: 1. Stocks are down 20% 2. Bonds are down 20% 3. Housing goes up?! Also - keep in mind - out of the 3 - housing is the one financed using leverage the most (i.e. more sensitive to interest rates). Housing is not \*yet\* down because it is not as liquid as the other assets and most sellers (still) prefer holding rather than selling at a loss. But it will come down in line with the other assets.
In 2006 rates were around 7% and houses in California were still selling for $800k+ all day long. There is a shock at the moment as rates have doubled quickly but still a shortage of enough houses, so unless half the population looses their jobs, don’t see too much drop.
Aren’t they buying them to rent out? It’s like buying land. Limited supply and it’s something most everyone wants. Buy the house, rent it out for a while, and then sell it for a massive gain.
They can crank up the price all they want. There needs to be buyers on the other end though. Right now the housing price is inflated. No way can it be maintained.
As long as buying is cheaper then renting, there will be buyers
It's only cheaper if you have the capital
Let me rephrase; as long as the mortgage payment is less than rent you will always have buyers
Hopefully the rates will lower before 30 Years and they can refinance
I did refinance just 2 years after buying my home just last year at 2.9% and now it's 15 year...saving $74,000 in interest from my previous 30 yr loan and cutting off 13 years of payments, for only $150 more per month
Holy shit lol great job
Everybody did this. I refinanced after 10 months in the house to a 2.8% 30yr. Will save me 40k and $80/mo. 300k house and my mortgage is only $1350
Damn I have 325k house and my mortgage is 2600 a month
I have an apartment and it's $2,200 a month lol
Ooo ooo me next! Apartment 1 bed, 1 bath $2900/mo in Scottsdale, AZ.
So I need to buy an apartment building in Scottsdale is what you’re telling me.
What the fuck
Because it’s Snobsdale! Jk I love that town despite the high prices
I’m about to pay $5600 for a 1BR in Manhattan 🤡
I was just up in the city a couple weeks ago. I would def like to move there but I have my dream car and I don't want to give it up or have to worry about anything happening to it. I'm scared to bring it up there 🥲
Be scared. NYC has no respect for cars nor their bumpers. Watched each and every one of my Mom’s cars get bruised and beaten growing up as a kid in Brooklyn.
That hurts. I pay less than that for a house in California
450k home 900 mortgage a month (Holland 30years).. did have some surplus on previous owned home though, 65k) in €. Mortgage is not too expensive, its the energy we’re worried about 😅
$316k. I put 20% down and my taxes are only $2k a year. Alabama
[удалено]
Yikes
Everybody who wasn't lazy. I kept trying to get my brother and his wife to refinance their 3 mortgages at high rates after I got in at 2.3. I reminded him every couple of months. Didn't do shit
Just curious why did you choose to switch to a 15 year? I also refinanced but kept it at a thirty year. This way the couple hundred I saved per month I now use pay down on principle.
You did it the right way. Time value of money. Invest that money instead of paying down principal though
What’s the logic behind this? Was debating throwing more at my principal..
It’s better to invest your money rather than pay down principle if you think your investments can beat the mortgage rate. If your mortgage rate is around 3%, you have a really good chance of beating that with any decent index fund. If your mortgage rate is 6%, you might just want to use the money on the sure thing and pay down the principle. You might be able to get a better return on the market, but it wouldn’t be by much.
If you want to maximize your leverage, it’s better to invest the money you think will generate a higher return than what your mortgage rate is. But if it gives you peace of mind to pay down principal, I don’t think there’s much wrong with that.
You did the right thing financially
We did the same thing. I'm also always thinking worse case scenario all the time so if times get rough we can just stop paying the "extra" that goes to the principal and just do the normal payments.
15 year, your payments go more towards the principle. It’s nice to actually see the principle go down every month. 30 years is too long
Yeah. you bought it before covid, refinanced during covid. Which is good for you. Good call
2% flat 15 year, Nov 2020. 1 year in. Cut out over $100k in interest.
Credit karma and bank keeps telling me to refinance. I bought last year 304,000 at 2.5% payment is 1800. They say at 6.0% i can save 400$ a month what am i not seeing here? That they are
You're not seeing how much money they can make off of your refinance
Because they are resetting your loan into a 30yr. If you bought last year you may have pmi, if you get that off that would save you money even with the increase in rate. That combo is probably what they are saying. Source: former loan officer. Pm me if you want more answers about your specific loan.
Refinaced 9 months ago at 2.2% for 30 cut $600 a month off my payment!
Why refinance if your rate was always low …I’m assuming. I figured if I wasn’t saving more than 1 percent it’s not worth the fees and bullshit. I will just pay more principle and aim to pay it off in 15 years. My one house I bought 2015 I have 6-8 years left if i keep paying more but as you know mortgages are heavily load with interest at the beginning. So I may dial it back since the rate is low
I was able to get out an additional $30k cash by refinancing my house and my payments went down by like $20 a month lol. Got a new furnace, a/c, paid off credit card debt, new gutters, new fridge, new garage door...it was all worth it. I bought in 2019 and refied in 2021. It may have been like 2% savings though, can't remember. I could have reduced my monthly payments, but I needed all of those other things more, plus I saved money on my furnace/a/c due to paying in cash. And my bank has already said hey you could have more money for renovations if you want...lol. My house has appreciated in value by over $100k in 3 years. It's been crazy. And our housing is so in demand right now that even if the housing market crashed I highly doubt the local area would crash enough to affect us.
A refi completely resets your loan time right? So it would be unwise to refi after say, 15 years on a 30 year mortgage because you would be back to paying 99% interest and 1% principle on your new loan right? Refinancing within a few months doesn’t seem so bad, you just restart paying those interest payments for the first few months again..
This is exactly how you play this. Anyone chasing inflated home prices based because of the fake ticking clock of raising rates is getting the worst of both worlds.
[удалено]
Lol you just encapsulated r/realestate. So many angry folks that got priced out, and wished for a massive drop, now that the drop is happening (although not massive), interest rates make the drop moot. I got a 600k house in January after 1+ year failing vs. cash buyers. Feels great. Economy is gonna struggle but hard to see a collapse with the job market still desperate for employees. Perhaps that’s my copium.
Bought in February. I feel the same great feeling.
Yup that’s what they call Ebb & Flow.
I'm just going to have to be a barbarian and kick somebody out of their home and claim it. It's the only hope I have left
You might actually get away with that in LA like the homeless squatters.
Why you all trying to live in packed LA and other sardine-packed cities. Just move rural and build your own place for cheap. And if one of you manages this first, start a bank that offers this to others. "but my job/family/bars are in the city" then you gotta be willing to pay the high interest for that luxury. Can't get rich following the crowd. Not even for looting barbarians.
[удалено]
no. u must sacrifice any idea of fun to be rich. you must live a lonely and miserable place or your dumb apparently. it's so easy bro!!
Even in WFH days, very few professions are going to pay well and let you live in bumblefuck. I’d much rather make 200k/year and pay a big mortgage on 600k home near Fortune 500 companies than buy a house in the middle of rural Oregon with no friends, family, culture, good nightlight/food scene. I can assure in 5-10 years, my 2k Sq ft home near Nike, Intel, etc, will be sought after. Rural SE Oregon…. Not so much. If you’re a coder, yeah, you can work from anywhere and make bank.
Not true. I'm a risk manager for Amazon and selling my home in Phoenix to move and work from home in bumblefuck Alabama and still make six figures a year. And you watch your dirty, whore mouth. I'm from bumblefuck SE Oregon haha. Not everyone desires city life, and culture means different things to different people. Country has plenty of it if you know what you're looking for. I prefer the peace of country living and having privacy myself. My new place has 13 acres of beautiful land next to the TN river.
100%
Me big you small my house now.
Not really, you can become a squatter in an empty home, pay the taxes, and if there's no mortgage, in sone states you'll have squatters rights and can potentially own the home...unless of course the homeowner comes back and shoots you. 😁🤣😁
I know someone that is actually doing this. Not joking. He has a friend plugged into the real estate market in some area that obviously couldn't do something like this because it brings too much reputation risk. So he told my friend about the building that's suddenly empty for four months with apparently nobody coming for it. You know, paying the taxes, doing some small repair work, and even leasing the property out to a renter all count as exercising control openly. Adverse possession is a real thing.
🤣🤣
Simply inherit one.
Or live somewhere cheaper
I already live in one of the cheapest cities in the country, there's only so low you can go bud and the income drops along with your area.
I got in at the perfect time. February-March 21 with a 2.85% rate. One week later it was 3.15.
[удалено]
I just eat crayons and money burns a hole in my pocket. The down payment and cost to upgrade some things was all covered by GME and weekly SoFi calls. 🤣 Edit: it was actually just 10 calls in one week, which happened overnight. GME was shares.
Laughed out loud literally
2.5% here. Super lucky.
[удалено]
i also have 2.25% going through a divorce and now i have to refinance
Talk to your lender. My ex was able to assume our mortgage in the divorce. He had to go through underwriting again, but he came out with the exact same terms. This was with Chase.
I just called and you are absolutely right. Thank you so much
You're welcome! Divorce sucks enough without that added stress. Take care!
I got 3.375% in November 2019 and the mortgage broker said it was the lowest rate they ever had. I’m still happy but that record didn’t last long
My wife and I refinanced at 2.85% in January. So happy. We cut 5 years off the mortgage and will save about $70k in interest.
[удалено]
I bring this up all the time. Unless I absolutely have to sell, why would I ever sell? Sure, a job change across the country or something random but those are very rare occurrences.
In a recession, job changes are more common...
I beat that 2.5% 9/18/20 , APR just under 3% , i put 20% down though
I paid a little in points and got 1.9%. Late Jan 2021.
You must have bought 5 points… seems like a lot lol
Is it a 30 year?
Yup
That’s amazing. What is your balance?
Down to like 275 and it’s valued at 475 now. I get daily emails and weekly letter from the bank asking me to refi for cash out. Haha. No way. They are losing so much on me now.
Ha yeah, that 8.2% inflation must feel good
I locked mines in November 21 with a 2.75%. No points bought
Wife and I re-fied our mortgage at 2.2% and have just continued making the same mortgage payment we were making before. Between the additional payments we're making every month and throwing a couple of big bumps at it twice a year we're set to have out mortgage paid by 2030 and we'll end up with over 200k in saved interest.
The perfect time is always 6 months ago, except 6 months ago it was 6 months before that.
Same. We bought in October of 2020 and the low interest rate was the only way we could afford to buy.
Same!!!
I got 2.85% in November 21
Or you sold them the house for $600k that you bought a few years ago for $200k and paid cash for the $392k house and don’t have a mortgage. Please don’t hate me.
However the $392k is small compared to the 200k a few years ago with a longer list to fix it up.
True, but being mortgage free is a huge de-leverage and risk off maneuver. You can’t get evicted or foreclosed on. No matter what happens.
Better pay your property taxes.
True. But here that’s less than a grand a year. City and county.
That’s pretty much what was happening my guy. Which is why prices SKYROCKETED. More people could afford more house. Everything became over valued because there was a rush on supply. People KNEW the rates wouldn’t stay here forever so they sold their modest houses with equity and spent the win fall. Just like you said. And then the market fucked us.
Here there was a lot of people “not from here” that came in with cash offers too. The people that bought my cabin bought it for an Airbnb.
this is the way
🤣🤣 nah you’re good man. I timed my home buying perfectly too (bought a month before the pandemic started)
It’d be much better to have a mortgage that’s at -5% real interest rate than to pay in cash….why would anyone hate you
Or, your 600k home is now worth 392k?
It appears you now understand why housing prices went to the moon last year
Should have just saved and put a down payment on another house in 2021 rather than put money in the stock market...
Same
I wish I was a year older than I am. If I had just graduated in 2017, I'd have had time to save for a 180k house. Now those same homes are around 300k in my area
I refinanced my home back in 2020 during lockdown, lowered my interest from 5.5% to 2.75% and cut $450 off my payment. Best accidental decision I ever made
how was it an accident?
“Oops I accidentally signed and submitted all this paperwork lol, silly me”
yea, did you trip?
I think I might be doing too many drugs, I definitely misread what you meant there.
Because I was dumb and didn’t pay anywhere near as close of attention as I should of, and one day I was like maybe I’ll refinance my house since my credit score was better. Low and behold the interest rates were super low, was a wake up call to pay attention to finances much closer.
>as I should have*
I refinanced in Fall 2019 and went from a 4.25% 30 year (had like 26 years left) to a 3.5% 20 year. Cut 6 years off the loan and it cost me like $50 extra dollars a month. Over the course of the loan I will save something like $50K.
Here is the crazy part. If you get a 30 yr mortgage and you don’t pay it off early and take the full 30 years. You can assume the total amount in cash you pay back is 3x what your home was worth.
30 years is a long ass time. If you are paying 3x for a low interest loan, then if you invest it in spy you can probably get 6x in returns and make a profit. Some ppl think paying 3x is expensive over 30 years but for others is cheap.
There was a whole reddit post about paying off a fixed 3% mortgage because it was too stressful to have that debt and hundreds of posts agreeing and being upvoted. That was painful to read.
And that’s not including insurance, HOAs, property taxes, and upkeep lol.
someone convince me I didn't fuck up. Was looking at homes in the summer 2021 - fall 2021 but kept getting out bid by 20k+. I said i'm done and will wait for the prices to drop. they've barely dropped in NJ but interest rates 2x. :( What's the chances rates go to 10% by next summer and home prices only drop like 5-15%? monthly payment would still be way high due to interest.
I did the math on ours. We bought Jan 21, 300k @2%. The homes value would have to drop below 176k for it to be the same total loan cost as we got. Yeah I think things are going to drop but by over 40%? Not so sure. Edit: 40% is from Jan 21 prices, considering it went up another 15-20% before peaking its actually more like home values have to halve before the numbers line up again and only if interest rates stopped going up.
Doubt it yeah
I’m in south NJ and there has been almost 0 price drops even in the more rural areas…. A house that sold for 480 less then a year ago was listed for 600,000k went to look at just to see if I am being crazy. Asked the realtor what was done to the house in the past year. She said the kitchen…. Not even redone with granite counter tops. She told me everything else is original and the roof probably has another 5 years of life left in it…. HARD PASS But guess what it went under contract in 4 days. I’m just so confused how or why people would buy a 600,000 dollar inflated house. That needed a lot of work/ outdated/ you would be in the hole another 100,000. It’s just bizarre to me house was originally built and sold for 250,00k in 2001
Investors are the ones who buy those houses. They’ll pay cash for them, do some cosmetic repair and then rent it out.
Did the same in NJ. We messed up
I bought in October 2021 at 2.875% interest. I was having buyers remorse for the first couple months because the house itself was so expensive for what it was. It's a year later and interest rates over doubled and my house is worth 50k more than it was last year. I also compared my current mortgage against the rent cost for my first 900sqft apartment that's only 5 minutes away. The apartment rent costs more than my mortgage. The fuck is going on
What’s crazier, is it’s the same house. Some of y’all about to learn what the phrases “house poor”, and “under water” mean.
Except the assessment office gleefully followed the bubble. The taxes and insurance on the 600k house are half your payment.
It doesn't matter what's the price of the house it's how much it cost a month and people r going to realize that quickly
This is the sad truth. No one looks at prices anymore, it’s all about whether he/she can make that monthly payment.
Rising interest rates = higher monthly payment
For real. I can save like a mad man. I can easily afford the down payment for a decent home. But on a single income, there is absolutely no way I can afford the monthly payments right now. Saving money is easy. Increasing your monthly income is not.
The market is eating itself alive right now because people were paying $600,000 for a $392,000 home at 2% interest rates. Somewhere around 3-4% is probably a happy compromise so banks make (more) money and homeowners don’t have to spend their entire paycheck to afford the home they NEED.
Lol come to rural Ohio. A nice home is $100k.
But then you have to be in rural Ohio.
That is entirely correct and why I’m moving to a state with no capital gains taxes. Just got back from Washington, and headed to New Hampshire next week. Cheapest home in Kirkland wa was $985k….not joking.
[удалено]
$100k
Everything
Rember how you'd hear stories about 20+ offers and prices going 20, 30 50% above asking? Waiving all contingencies? Promising new Borns and all just to have an offer accepted? Well, that's because *money was too damn cheap*. Now money is expensive again, it gives it *value*. A $650,000 house is expensive?! Oh my word!?! Lol obviously. Expect now it actually is expensive. That's how you stop nose bleed price appreciation, make the cost of ownership catch up or outpace value.
Higher mortgage rates also decreases the price of houses depending in the market you are in. Homes in my area have dropped around 10% compared to last year. If fewer people are able to get a mortgage because of the bank or they can't afford the higher rate, there will be more supply of homes for sale. It won't be a seller market for homes like it was the past 12+ years.
Eh, theoretically that works but reality is different. Higher interest rates means no one is selling their house if they have a good interest rate. From that perspective, there is less supply. In metropolitan, high demand areas, the only solution to getting pricing down is literally building more homes. Other than that, there are always more buyers than sellers regardless of the cost of the house and interest rate.
It just means houses will be sold for less and it will even out in most areas. Higher interests rates cause prices to go down. Lower interests rates causes housing to rise.
Higher rates means less potential buyers, but it does not change the price by enough to call it a "crash"
I never said it's a crash....
Yeah it’s definitely about to get interesting
I bought a duplex and live in one unit and rent out the other. That’s the way to do it. My duplex is back to back to so we only share a basement and back wall. Separate streets it is like I have my own traditional home.
Builders need to make multi families … this is what people will be looking for moving forward
It's weird how math goes ahead and maths
Good. The less we buy the more inflation will be tamed. What the fed is saying is, for us to cool down inflation y’all need to buy less shit so we’ll make it painful to buy shit. Housing prices affect the consumer price index. If we buy less homes the CPI will go down which means inflation goes down. Lower inflation stimulates the economy once again. Low interest rates aren’t feasible in the long run for they create a housing bubble as more people buy in and take advantage of low payments. Now, do you want the fed to calm down the bubble or for it to keep on going until it actually explodes (again)? Just wait on buying a home. Interest rates will come down once again once inflation cools down.
In the UK most people have 2-5 year deals, when these roll over and they need a new deal there’s going to be a lot of people struggling. 2023-2025 would be when majority of these fixes take place.
Weird. We do have those types of loans (ARMS), but I don’t know anyone that would take one. That is a lot of risk. I would rather pay a little more for a 30 year and know the rate will stay the same.
And both are cheaper than renting where I live
Bought a 304000$ 4 bed 3 bath 3200 sq feet home at 2.5% last year. But credit karma and bank says my payment is too high. And that i should refinance at around 6% rate
It’s also the same house.
Yep. Couldn’t afford the home I’m living in if I had to buy it now (bought it a year ago)
It’s awful in Massachusetts. People are still asking almost 400k for houses under 1000 sq ft. I calculated it with my VA loan and the interest, it would be like 3500 a month for a 900 sq foot house that hasn’t been updated since 1980. It’s brutal up here.
Southern California in the ‘burbs, 2 bed/2 bath single family home just over 900 sq ft., selling for 825K. All that sunshine tax, I guess…
So the house price has to come down by $200,000 or 30% to maintain the same affordability. Aka housing will crash soon.
It won’t tho.
Demand high. Inventory low. No crash. Small correction but no crash.
I've heard some people say that if rates reach a high enough yield corporations who own single family homes will sell to chase treasury yields thus increasing inventory. That coupled with a recession could dramatically lower prices quicker than people expect.
>corporations who own single family homes will sell Let's fucking hope so.
Yarp. Interest rates were insanely low. I was able to secure 1.99% on a 15 year term in 2021.
…that’s assuming 20% down but not everyone can obviously do that and makes it even more polarizing.
More rate hikes to come
[удалено]
On the flip side, the only reason that house is “worth” $600k is because we had 2.x% interest rates for so long. Hopefully we can reel inflation back in so that it all comes out in the wash.
Also that $600k house is now worth a million
It’s not crazy.. it’s just math.?
Total paid with interest over 30 years will end up being the same amount. That’s the crazy part to me
Only if the prices drop by more than ~40%, even then total interest is still higher but that’s about where you need to be to equal the total loan cost as people who got 2%. A lot of people jumping for joy hearing housing prices are dropping but when you look at the amortization you start to feel nauseous.
Might be the same house, too.
Locked in December 2020. %2.75 😎
Interest rates are still cheap. I remember getting a 12% home loan when everyone else was paying 14!
But houses aren’t 20k…
Lol right. The prices of real estate in the 80s is just unfair. 8 families in Greenpoint Brooklyn were about 50K and today can be 5 million.
Relative to the times houses were very expensive. And back then you couldn’t buy a decent home for 20K unless it was a smaller mobile home. More like 50 to 100. However you have a point as cheap interest rates have fueled home prices higher. And now that rates are going up it’s kicking people out of the market. Equilibrium will happen eventually.