Feels like market is hitting a wall

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Only a month or two left before student loan repayments restart. I expect to see a bigger shift in the market once that happens. And if spring season is a dud next year, that could impact prices

The people buying million dollar houses aren't concerned about their student loan repayments.

Tell that to the new lawyer, doctor, or PE associate. They have the cash flow for a home, doesn’t mean they aren’t cornered about their student loan payment.

People straight out of grad school aren't buying houses, they are renting. Always have, always will. I rented for 15 years before I bought a place at age 36. People have always had student loan payments, this is not a new thing. I don't know why Gen Z and Millennials think that they are so special and are the only people who have had to deal with this. Grow up and stop playing the victim.

Lots of people have SL’s and are paying on them for 10+ years due to high balances. Especially in this area where having a graduate degree is more common. Hardly “straight out of grad school.” And you have people who did undergrad and then went to grad school a little later in life and are now paying student loans in their 40s/50s too. I don’t think the student loan payments restarting is going to make a huge difference in the market ultimately, but it is going to be a concern for some people and you’d be surprised at their ages, it’s not just early-mid 30s Millennials.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There's no inventory. People with 2-4 percent rates are not gonna sell and take on an 8 percent rate mortgage unless they absolutely have to, and the rates are scaring away potential first-time buyers (unless they are rich enough to pay cash). The market is essentially frozen.

Buyers can always refinance later....

But no one knows when later will be and *for me* the idea of moving and losing a ton of disposable income for ~10 years until rates go down and we can refinance isn’t prudent, especially with young kids. In an ideal world we would move to a bigger home in NW but there is no way we could justify losing our current interest rate for 600-1000 more sqft. Our house works for us - it’s smaller than what we want - but the space more or less fits our needs and paying a premium for more space seems stupid/wasteful.

You already HAVE a house, what about those trying to buy their first house they have saved up for. It's really sad for those people.

[Anonymous]

Anonymous wrote:Yes I’m getting this vibe. I am not in the market and not paying that close attention. But I have noticed some houses sitting when 2 weeks ago (still the summer market), they went under contract right away.

yep I feel this way too -- and i've been following this (read: looking for a house) for a couple years. this year seems a bit different. we'll see if anything actually changes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There's no inventory. People with 2-4 percent rates are not gonna sell and take on an 8 percent rate mortgage unless they absolutely have to, and the rates are scaring away potential first-time buyers (unless they are rich enough to pay cash). The market is essentially frozen.

Buyers can always refinance later....

But no one knows when later will be and *for me* the idea of moving and losing a ton of disposable income for ~10 years until rates go down and we can refinance isn’t prudent, especially with young kids. In an ideal world we would move to a bigger home in NW but there is no way we could justify losing our current interest rate for 600-1000 more sqft. Our house works for us - it’s smaller than what we want - but the space more or less fits our needs and paying a premium for more space seems stupid/wasteful.

You already HAVE a house, what about those trying to buy their first house they have saved up for. It's really sad for those people.

They need to drive until they qualify.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There's no inventory. People with 2-4 percent rates are not gonna sell and take on an 8 percent rate mortgage unless they absolutely have to, and the rates are scaring away potential first-time buyers (unless they are rich enough to pay cash). The market is essentially frozen.

Buyers can always refinance later....

But no one knows when later will be and *for me* the idea of moving and losing a ton of disposable income for ~10 years until rates go down and we can refinance isn’t prudent, especially with young kids. In an ideal world we would move to a bigger home in NW but there is no way we could justify losing our current interest rate for 600-1000 more sqft. Our house works for us - it’s smaller than what we want - but the space more or less fits our needs and paying a premium for more space seems stupid/wasteful.

You already HAVE a house, what about those trying to buy their first house they have saved up for. It's really sad for those people.

They need to drive until they qualify.

Hence the $800k homes in the exurbs! Lol.

[Anonymous]

It definitely seems like houses are sitting longer. Hopefully, the market is finally correcting. Good houses priced well are still selling, but too many people still want too much for their homes.

[Anonymous]

Anonymous wrote:Higher rates make it way easier for first time Buyers.

Looked I saved up for my first home in the 1990s and bought Dec 1999. The high interest rates allowed me to save up in money markets, savings accounts, investment grade bond funds etc quickly and with low risk. Home prices were stable. I save up from 1992-1999 and put 40 percent down.

If rates with 8 for rest of decade on mortgages will be great. Just park cash in bank and earn 6-7 percent risk feee till 2030 then buy

Risk-free returns are taxed as income. That means a measly 4% after-tax return for a downpayment to grow. How exciting!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There's no inventory. People with 2-4 percent rates are not gonna sell and take on an 8 percent rate mortgage unless they absolutely have to, and the rates are scaring away potential first-time buyers (unless they are rich enough to pay cash). The market is essentially frozen.

Buyers can always refinance later....

It is unlikely that rates will ever be below 3% again. We just got spoiled over the last few years. Looking at historic mortgage rates. 5% - 7% is not unreasonable.

Back in 1995 "experts" were telling us "we'll never see rates lower than 7%...."

No, they weren’t saying that. It wasn’t wasn’t discussed, because there was no expectation that rates would ever be that low. The only time in the 20th Century that rates were as low as they have been recently was during WWII (not even during most of the Great Depression). In 1995, we were just thrilled that interest rates were in single digits. The Fed has made a mess, and has learned their lesson. What about this chart makes you think that 3% rates are “normal?”

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There's no inventory. People with 2-4 percent rates are not gonna sell and take on an 8 percent rate mortgage unless they absolutely have to, and the rates are scaring away potential first-time buyers (unless they are rich enough to pay cash). The market is essentially frozen.

Buyers can always refinance later....

It is unlikely that rates will ever be below 3% again. We just got spoiled over the last few years. Looking at historic mortgage rates. 5% - 7% is not unreasonable.

I don't believe this. With the amount of Federal debt outstanding, the interest obligations on said debt increase exponentially as rates continue to increase. We will eventually end up like Japan, with yield curve control implemented by their central bank as a buyer of last resort.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There's no inventory. People with 2-4 percent rates are not gonna sell and take on an 8 percent rate mortgage unless they absolutely have to, and the rates are scaring away potential first-time buyers (unless they are rich enough to pay cash). The market is essentially frozen.

Buyers can always refinance later....

It is unlikely that rates will ever be below 3% again. We just got spoiled over the last few years. Looking at historic mortgage rates. 5% - 7% is not unreasonable.

I don't believe this. With the amount of Federal debt outstanding, the interest obligations on said debt increase exponentially as rates continue to increase. We will eventually end up like Japan, with yield curve control implemented by their central bank as a buyer of last resort.

This.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Only a month or two left before student loan repayments restart. I expect to see a bigger shift in the market once that happens. And if spring season is a dud next year, that could impact prices

The people buying million dollar houses aren't concerned about their student loan repayments.

Tell that to the new lawyer, doctor, or PE associate. They have the cash flow for a home, doesn’t mean they aren’t cornered about their student loan payment.

They knew this when they signed the docs for their loans. Pay what you owe, build it into your budget. One would think and assume all of these "lawyers, doctors and PE associates" have the basic knowledge to understand this.

Exactly. They will "built it into [their] budget" by deferring home purchases because suddenly they can only afford $2K-$3K less per month. Economists are predicting a slowdown in consumer spending beginning in October because of student loan payments.

Who is paying $3000/month in student loans?

Married couples. My husband and I paid a little over 2k/month combined for student loans from lawschool. We knew people who had higher debt loads too.

This was a number of years ago, but I can't imagine that's not still the case for many new grads.

And when did you buy a house? Did you wait until your loans were paid down a bit or did you just jump right and buy something you couldn't afford?

[Anonymous]

Anonymous wrote:It definitely seems like houses are sitting longer. Hopefully, the market is finally correcting. Good houses priced well are still selling, but too many people still want too much for their homes.

It's August, dipshit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There's no inventory. People with 2-4 percent rates are not gonna sell and take on an 8 percent rate mortgage unless they absolutely have to, and the rates are scaring away potential first-time buyers (unless they are rich enough to pay cash). The market is essentially frozen.

Buyers can always refinance later....

But no one knows when later will be and *for me* the idea of moving and losing a ton of disposable income for ~10 years until rates go down and we can refinance isn’t prudent, especially with young kids. In an ideal world we would move to a bigger home in NW but there is no way we could justify losing our current interest rate for 600-1000 more sqft. Our house works for us - it’s smaller than what we want - but the space more or less fits our needs and paying a premium for more space seems stupid/wasteful.

You already HAVE a house, what about those trying to buy their first house they have saved up for. It's really sad for those people.

They can rent another year or two. I really wanted a house in 2006, I waited until 2009.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Only a month or two left before student loan repayments restart. I expect to see a bigger shift in the market once that happens. And if spring season is a dud next year, that could impact prices

The people buying million dollar houses aren't concerned about their student loan repayments.

Tell that to the new lawyer, doctor, or PE associate. They have the cash flow for a home, doesn’t mean they aren’t cornered about their student loan payment.

People straight out of grad school aren't buying houses, they are renting. Always have, always will. I rented for 15 years before I bought a place at age 36. People have always had student loan payments, this is not a new thing. I don't know why Gen Z and Millennials think that they are so special and are the only people who have had to deal with this. Grow up and stop playing the victim.

Lots of people have SL’s and are paying on them for 10+ years due to high balances. Especially in this area where having a graduate degree is more common. Hardly “straight out of grad school.” And you have people who did undergrad and then went to grad school a little later in life and are now paying student loans in their 40s/50s too. I don’t think the student loan payments restarting is going to make a huge difference in the market ultimately, but it is going to be a concern for some people and you’d be surprised at their ages, it’s not just early-mid 30s Millennials.

I'm sorry I don't feel the least bit bad for people who haven't been paying back loans they took out for the past several years. Especially not the professionals whose income kept getting higher and higher. Those people had no reason to stop paying their loans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There's no inventory. People with 2-4 percent rates are not gonna sell and take on an 8 percent rate mortgage unless they absolutely have to, and the rates are scaring away potential first-time buyers (unless they are rich enough to pay cash). The market is essentially frozen.

Buyers can always refinance later....

But no one knows when later will be and *for me* the idea of moving and losing a ton of disposable income for ~10 years until rates go down and we can refinance isn’t prudent, especially with young kids. In an ideal world we would move to a bigger home in NW but there is no way we could justify losing our current interest rate for 600-1000 more sqft. Our house works for us - it’s smaller than what we want - but the space more or less fits our needs and paying a premium for more space seems stupid/wasteful.

You already HAVE a house, what about those trying to buy their first house they have saved up for. It's really sad for those people.

They can rent another year or two. I really wanted a house in 2006, I waited until 2009.

I suppose that in 2006 people weren't required to learn basic math skills in high school either. My how times have changed.

Let's do some basic math then. For an $800K house at a 3-percent mortgage rate, principal and interest for a 30-year loan with 20% down ($160K) are a total of roughly $2700 a month.

In order to keep the $2700 monthly payment for principal and interest for the $800K house, at a 7-percent mortgage rate, the borrower has to put 50% down, or a total of $400K. This means that the borrower has to increase the downpayment by $240K.

Are you saying that it takes most households only 1 to 2 years to save $240K? I know math is sooooo hard isn't it?