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Posted on 7/11/22 at 3:12 pm to austiger
I'm a little surprised the conversation here hasn't mentioned the uptick of buyer cancellations or the fed involvement in the mortgage backed securities industry.
The rate of buyer cancelations was just reported at around 15% (which is high and increased substantially). Buyers often don't have to disclose the reason but talking heads with opinions talk about financing, buyer's remorse (price was too high), and expectations of depreciation as explanations.
If the federal government is really getting out of the business of buying mortgage backed securities then IMO the interest rates other lenders should offer will be higher and obviously mean reduced affordability and fewer potential buyers.
I think smart sellers anticipating these issues could still do well if they help the buyer out with closing costs and buying points for the mortgage but I think most markets no longer have enough demand at the desired selling prices to get what people selling between January and June were able to command (asking price or above with no concessions)
The rate of buyer cancelations was just reported at around 15% (which is high and increased substantially). Buyers often don't have to disclose the reason but talking heads with opinions talk about financing, buyer's remorse (price was too high), and expectations of depreciation as explanations.
If the federal government is really getting out of the business of buying mortgage backed securities then IMO the interest rates other lenders should offer will be higher and obviously mean reduced affordability and fewer potential buyers.
I think smart sellers anticipating these issues could still do well if they help the buyer out with closing costs and buying points for the mortgage but I think most markets no longer have enough demand at the desired selling prices to get what people selling between January and June were able to command (asking price or above with no concessions)
Posted on 7/11/22 at 3:27 pm to austiger
quote:
down 20% in Austin and will be down another 10-15% by October.
Austin is very much still a top 5 market in the country. Are you referring to asking prices being down 20% or existing home prices/equity in people’s homes?
Posted on 7/11/22 at 6:55 pm to Paul Allen
Still cracks me up that people think a 5.5% rate is high.
Posted on 7/11/22 at 8:08 pm to Im4datigers
Everything is relative. It is high based on recent years (obviously nothing like the early 80s).
Posted on 7/11/22 at 9:10 pm to 23parker
People are still asking for WAY too much. They've missed the party and need to come back to reality.
Posted on 7/11/22 at 11:16 pm to 23parker
quote:
screeching halt?
No. 2-3 offers instead of 15.
quote:
month
A sellers market is less than 3 months.
quote:
My current house is listed and not getting much attention even at a good price.
Probably location or condition or both. It's probably price.
Posted on 7/12/22 at 7:37 am to 23parker
Maybe this has been mentioned already, but it is really hard for current homeowners to move on from their low interest loans to new houses . I mean, didn’t everyone who owned a home in the last 10 years already refinance? My rate is like 2.85 which is only pretty good compared to a Lot of home owners.
Basically every current homeowner, unless downsizing, would have an extremely difficult time moving. Mortgage rates would be double for most current homeowners.
Basically every current homeowner, unless downsizing, would have an extremely difficult time moving. Mortgage rates would be double for most current homeowners.
Posted on 7/12/22 at 7:49 am to AndyJ
quote:
Maybe this has been mentioned already, but it is really hard for current homeowners to move on from their low interest loans to new houses
This is why there are no older starter homes for young people that are affordable. Why would somebody on fixed income move right now?
Posted on 7/12/22 at 8:27 am to AndyJ
quote:
Basically every current homeowner, unless downsizing, would have an extremely difficult time moving. Mortgage rates would be double for most current homeowners.
Yeah
There’s a churning going on. Older folks want to sell their larger homes to downsize. They typically do not want a mortgage and will pocket the price difference between the larger and smaller home.
The market isn’t really cooperating with that process as buyers of the larger homes generally require a mortgage so these older folks are having trouble selling at prices they’d hoped to get.
There’s still a few shoes to drop yet
Posted on 7/12/22 at 8:40 am to AndyJ
quote:
Basically every current homeowner, unless downsizing, would have an extremely difficult time moving. Mortgage rates would be double for most current homeowners.
There is the use case that someone took a mortgage at 3% in ~2019, but now they're able to make some insane 75-100% capital gain on the home if they sell.
So they sell, roll all proceeds into an upgraded home, and have to mortgage significantly less than their original first homes mortgage at 6%.
This could shake out to be no or low increase in their mortgage for a much better home.
This is what is happening right now for some, but I agree that the majority are staying put, especially as the tide turns.
Posted on 7/12/22 at 8:40 am to AndyJ
Agree, I have a 2% rate with 8 years left; I'm looking to move but that would be insane. I'll see where the market is in 6 months, may get a steal.
Posted on 7/12/22 at 1:23 pm to TMFBB21
quote:
As a mortgage lender, I tell people- date the rate, marry the house.
Of course you do!This post was edited on 7/12/22 at 1:28 pm
Posted on 7/12/22 at 4:58 pm to I Love Bama
I was right when I told this board when interest rates would begin climbing up and I know they will go down again in Q1 2023. This is not 2008. This is a supply and demand problem. Not enough supply to house the millennial generation. Rent is rising because people have to have a home. And unfortunately too many people didn't listen a year ago when they thought home prices would come down. Equity will not be as good in the future but still a gain. NOT 2008
And agree with many people - if you do not need to move, keep the low rate and pay down down the principle. Those that need to move. too many get scared by 5% interest rates and are missing the boat to sell their home and use the higher equity to buy the next one
And agree with many people - if you do not need to move, keep the low rate and pay down down the principle. Those that need to move. too many get scared by 5% interest rates and are missing the boat to sell their home and use the higher equity to buy the next one
Posted on 7/13/22 at 5:42 am to AndyJ
quote:
Maybe this has been mentioned already, but it is really hard for current homeowners to move on from their low interest loans to new houses . I mean, didn’t everyone who owned a home in the last 10 years already refinance? My rate is like 2.85 which is only pretty good compared to a Lot of home owners
This is what will keep inventory low and demand strong. Everyone is just thinking 5-6% is high due to recency bias of 3% rates, but in reality that 5%-6% rate is historically normal. No one will want to let go of their 2.5% mortgage unless they have to, especially not with inflation running at 8%. Between the rates and general instability in the economy, people are just hitting pause on buying a house. This is artificially suppressing demand. Once everything stabilizes, all those millennial buyers that wanted a home will be back in the house hunting process.
This post was edited on 7/13/22 at 5:55 am
Posted on 7/13/22 at 4:13 pm to themasterpater
So with the impending rate increase coming at the next fed meeting, is it in my favor to price this house more aggressively now to get ahead of it?
Posted on 7/13/22 at 4:14 pm to 23parker
Cut 10% off the top and let it ride.
Posted on 7/13/22 at 5:17 pm to 23parker
Your local market seems like the biggest factor. Do you have a useful real estate agent to advise you?
Locally I am surprised how many places have homes priced 50% above what their estimated value was in 2019. The idea of undercutting people by 10% in that kind of market is probably not bad.
You probably come out ahead in the long term if you lock in a profit while others hold the line wishing for what another neighbor extracted in March.
Locally I am surprised how many places have homes priced 50% above what their estimated value was in 2019. The idea of undercutting people by 10% in that kind of market is probably not bad.
You probably come out ahead in the long term if you lock in a profit while others hold the line wishing for what another neighbor extracted in March.
Posted on 7/13/22 at 8:31 pm to molsusports
Market is Old Metairie.
I already cut it by $10k last week, and didn’t pick up much interest.
Thinking another $5-10k cut in hopes to lock in the still good profit before next rate increases.
I already cut it by $10k last week, and didn’t pick up much interest.
Thinking another $5-10k cut in hopes to lock in the still good profit before next rate increases.
Posted on 7/13/22 at 8:37 pm to TMFBB21
quote:
I was right when I told this board when interest rates would begin climbing up
Was anyone saying they wouldn't be going up?
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