Where will mortgage rates go in the next 1-2 years?

[Anonymous]

We need to move for schools in the next 1-2 years (private is not an option, in bound school is a disaster). We can reasonably afford our target suburban areas at 5-6.5% rates, but will be stretched if rates go higher than that. Do you think rates will stay at 7% or higher?

[Anonymous]

Let me whip out my crystal ball and tell you with certainty.

These posts are so annoying.

[Anonymous]

Anonymous wrote:We need to move for schools in the next 1-2 years (private is not an option, in bound school is a disaster). We can reasonably afford our target suburban areas at 5-6.5% rates, but will be stretched if rates go higher than that. Do you think rates will stay at 7% or higher?

Lock in now, you can always re-fi if it goes down.

[Anonymous]

Anonymous wrote:We need to move for schools in the next 1-2 years (private is not an option, in bound school is a disaster). We can reasonably afford our target suburban areas at 5-6.5% rates, but will be stretched if rates go higher than that. Do you think rates will stay at 7% or higher?

Work out a deal in which either you or the seller buys down/pays points to reduce the fixed interest rate OR consider a variable rate mortgage.

[Anonymous]

They will go back to where they were before the pandemic, about 3-4%

[Anonymous]

Anonymous wrote:They will go back to where they were before the pandemic, about 3-4%

One can hope, but the Fed did take a bit of an aggressive stance today so rates are likely to continue to increase in the near future. Not sure that rates would come down that far any time in the next few years.

[Anonymous]

Anonymous wrote:They will go back to where they were before the pandemic, about 3-4%

No way. They will be 5-5.5 for years. Inflation is much harder to get out of than into. They have to take those trillions out of the economy with taxes or a recession to get back to 2%, and at the same time the debt is so high their only hope is to inflate it away. I don’t buy form a second that they are racing to a 2% target. They gotta get rid of some of that debt first and that means high interest for a longer time and increased taxes. With the supply side problems on housing compounding the problem by keeping demand high.

[Anonymous]

If 2 million are unemployed like Powell hopes rates will be in the 1-3% range.

[Anonymous]

Anonymous wrote:

Anonymous wrote:They will go back to where they were before the pandemic, about 3-4%

No way. They will be 5-5.5 for years. Inflation is much harder to get out of than into. They have to take those trillions out of the economy with taxes or a recession to get back to 2%, and at the same time the debt is so high their only hope is to inflate it away. I don’t buy form a second that they are racing to a 2% target. They gotta get rid of some of that debt first and that means high interest for a longer time and increased taxes. With the supply side problems on housing compounding the problem by keeping demand high.

I can handle a 5-5.5 rate, but the 30 year mortgage is averaging near 7% today and the Fed is going to raise rates again and again in the near future. So how quickly do we think we're getting back to a 5-5.5% rate in the next couple of years, or may we not even see 5.5% rates in the next couple of years?

[Anonymous]

Anonymous wrote:If 2 million are unemployed like Powell hopes rates will be in the 1-3% range.

No way. Not for another 50-100 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:They will go back to where they were before the pandemic, about 3-4%

No way. They will be 5-5.5 for years. Inflation is much harder to get out of than into. They have to take those trillions out of the economy with taxes or a recession to get back to 2%, and at the same time the debt is so high their only hope is to inflate it away. I don’t buy form a second that they are racing to a 2% target. They gotta get rid of some of that debt first and that means high interest for a longer time and increased taxes. With the supply side problems on housing compounding the problem by keeping demand high.

I can handle a 5-5.5 rate, but the 30 year mortgage is averaging near 7% today and the Fed is going to raise rates again and again in the near future. So how quickly do we think we're getting back to a 5-5.5% rate in the next couple of years, or may we not even see 5.5% rates in the next couple of years?

The modal interest rate was historically about 7% for like 40 years. I’d expect at least that for the next year or two and then slowly down to 5.5 over 3-5y.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:They will go back to where they were before the pandemic, about 3-4%

No way. They will be 5-5.5 for years. Inflation is much harder to get out of than into. They have to take those trillions out of the economy with taxes or a recession to get back to 2%, and at the same time the debt is so high their only hope is to inflate it away. I don’t buy form a second that they are racing to a 2% target. They gotta get rid of some of that debt first and that means high interest for a longer time and increased taxes. With the supply side problems on housing compounding the problem by keeping demand high.

I can handle a 5-5.5 rate, but the 30 year mortgage is averaging near 7% today and the Fed is going to raise rates again and again in the near future. So how quickly do we think we're getting back to a 5-5.5% rate in the next couple of years, or may we not even see 5.5% rates in the next couple of years?

Nobody knows. If they did, they'd be rich. The 5s seem like a natural settling point if the economy cools off, but that's just a guess.

[Anonymous]

From the time interest rates started soaring in the 1970s (starting at the high 6s) to the time they next day their original level in the high 6s took 20 YEARS. The anomaly is what happened the last 15 years.

[Anonymous]

^next saw

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:They will go back to where they were before the pandemic, about 3-4%

No way. They will be 5-5.5 for years. Inflation is much harder to get out of than into. They have to take those trillions out of the economy with taxes or a recession to get back to 2%, and at the same time the debt is so high their only hope is to inflate it away. I don’t buy form a second that they are racing to a 2% target. They gotta get rid of some of that debt first and that means high interest for a longer time and increased taxes. With the supply side problems on housing compounding the problem by keeping demand high.

I can handle a 5-5.5 rate, but the 30 year mortgage is averaging near 7% today and the Fed is going to raise rates again and again in the near future. So how quickly do we think we're getting back to a 5-5.5% rate in the next couple of years, or may we not even see 5.5% rates in the next couple of years?

The modal interest rate was historically about 7% for like 40 years. I’d expect at least that for the next year or two and then slowly down to 5.5 over 3-5y.

Agreed. Powell's statement today means 7% 30Y rates by year-end.

Gotta get worse before it gets better. 5% with 2.5 years, maybe sub 4% within 5 years.

Look folks - Baby Boomer retirements are inherently inflationary. We are not adding workers fast enough, immigration pathways are not opened.