Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.

[Anonymous]

Anonymous wrote:
2.9 rate.

Lender begging me to refi or home equity. It’s like free money … got em by the shorthairs.

The FED will give in to inflation. 12 years of zero fund rates has the entire financial system misallocated and the current normal rates are unsustainable. The whole economy has been built over a long period of time on zero percent rates and now inflation plus the FED has kicked out the only leg it’s been standing on. It’s all a domino effect starting with the dot com recession thru 911 … the wars .. Covid hysteria . Here we are. What’s coming is not chill.

How can you guys be so effin stupid? Serious question. Do you walk around with your hands over your eyes and ears, singing la...la..la...?

Fed Chair Powell calls inflation ‘too high’ and warns that ‘we are prepared to raise rates further’

https://www.cnbc.com/2023/08/25/fed-chair-powell-calls-inflation-too-high-and-warns-that-we-are-prepared-to-raise-rates-further.html

“Two percent is and will remain our inflation target,” he said

[Anonymous]

Anonymous wrote:Yes higher mortgage rates hurt, but not as much as some articles (or posts) would have you believe. You have to do the math for your own situation.

Household A: Locked in 2.5% on a $750K mortgage (monthly pmt $2963). That means interest expenses in the first five year of mortgage are roughly $18K / year. Adding the SALT deduction of $10K, they can deduct $28K come tax time (or just take the equivalent $27.7K standard deduction).

Household B: in current market, gets 7% rate on same $750K mortgage (monthly pmt $4989). That mean deducible yearly interest expense of roughly $51.5K. With SALT, that's $61.5K deductible, an increase of $33.5K in deductible expenses for tax savings of $13.4K (assuming 40% combined fed/state marginal tax rate), or $1117 per month. That reduces the effective after tax monthly payment to $3872 when compared to household A's mortgage. That's equivalent to a 4.66% mortgage rate (after tax).

So, relative to the 2.5% mortgage, still a big jump, but not as big as the hype would have you believe.

Per above poster claiming a $50K raise would be required: to handle that difference, you'd need an extra $3872 - $2963 = $909 per month, or $10908 annual after tax increase in income, which means a gross salary increase of roughly $18K before taxes are taken out (again assuming 40% combined marginal rate). Any price increase component should be ignored: it has presumably also increased the equity in your existing home. For someone making $300K, that's a roughly 6% raise, so it shouldn't be that big of a factor (assuming folks won't go through the trouble of a job change for small raises).

TLDR: do the math for your own situation, it may be a lot milder than the Sturm und Drang online would have you believe.

The problem is house A would be totally reasonable for someone bringing home 10k a month, but not house B.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
2.9 rate.

Lender begging me to refi or home equity. It’s like free money … got em by the shorthairs.

The FED will give in to inflation. 12 years of zero fund rates has the entire financial system misallocated and the current normal rates are unsustainable. The whole economy has been built over a long period of time on zero percent rates and now inflation plus the FED has kicked out the only leg it’s been standing on. It’s all a domino effect starting with the dot com recession thru 911 … the wars .. Covid hysteria . Here we are. What’s coming is not chill.

How can you guys be so effin stupid? Serious question. Do you walk around with your hands over your eyes and ears, singing la...la..la...?

Fed Chair Powell calls inflation ‘too high’ and warns that ‘we are prepared to raise rates further’

https://www.cnbc.com/2023/08/25/fed-chair-powell-calls-inflation-too-high-and-warns-that-we-are-prepared-to-raise-rates-further.html

“Two percent is and will remain our inflation target,” he said

Lolz. Explain to me how the government is going to pay 5 percent debt service on 33 trillion? It’s 2.5 times the defense budget. It’s all a head fake with a short timeline.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
2.9 rate.

Lender begging me to refi or home equity. It’s like free money … got em by the shorthairs.

The FED will give in to inflation. 12 years of zero fund rates has the entire financial system misallocated and the current normal rates are unsustainable. The whole economy has been built over a long period of time on zero percent rates and now inflation plus the FED has kicked out the only leg it’s been standing on. It’s all a domino effect starting with the dot com recession thru 911 … the wars .. Covid hysteria . Here we are. What’s coming is not chill.

How can you guys be so effin stupid? Serious question. Do you walk around with your hands over your eyes and ears, singing la...la..la...?

Fed Chair Powell calls inflation ‘too high’ and warns that ‘we are prepared to raise rates further’

https://www.cnbc.com/2023/08/25/fed-chair-powell-calls-inflation-too-high-and-warns-that-we-are-prepared-to-raise-rates-further.html

“Two percent is and will remain our inflation target,” he said

Lolz. Explain to me how the government is going to pay 5 percent debt service on 33 trillion? It’s 2.5 times the defense budget. It’s all a head fake with a short timeline.

War and Recession.

[Anonymous]

Re: existing low-interest rate mortgages, why can mortgage companies not allow existing mortgage holders to apply their loan (amount and interest rate) to another property for a fee? At least the mortgage companies would make some extra dollars from these transactions. It could even be a fairly steep fee. The housing gridlock could be broken.

[Anonymous]

Anonymous wrote:I'm never moving out of my starter house at a 2.2% mortgage. We just get used to making do with less space.

Same for us! It is a 3 BR townhouse but we only have two kids so we make it work. I am a maniac about getting rid of things and clearing clutter. This house will be our forever home until the kids are out of school.

[Anonymous]

Our rate is low after refinancing in early 2021 in order to do renovations (cashing out) and rolling in a previous HELOC...but the property taxes hurt. Our monthly payment has gone up $400/month in 2 years because of the increases in property/home values. This only helps us if we sell - which we aren't going to do because we can't afford a move up.

[Anonymous]

I don’t understand the mindset of living in a house you don’t want anymore just because you got a good deal on it. Eventually housing prices will have to come down because as has been pointed out here, higher interest rates puts many houses out of reach for a lot of potential homebuyers. And of course renting is still an option.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
2.9 rate.

Lender begging me to refi or home equity. It’s like free money … got em by the shorthairs.

The FED will give in to inflation. 12 years of zero fund rates has the entire financial system misallocated and the current normal rates are unsustainable. The whole economy has been built over a long period of time on zero percent rates and now inflation plus the FED has kicked out the only leg it’s been standing on. It’s all a domino effect starting with the dot com recession thru 911 … the wars .. Covid hysteria . Here we are. What’s coming is not chill.

How can you guys be so effin stupid? Serious question. Do you walk around with your hands over your eyes and ears, singing la...la..la...?

Fed Chair Powell calls inflation ‘too high’ and warns that ‘we are prepared to raise rates further’

https://www.cnbc.com/2023/08/25/fed-chair-powell-calls-inflation-too-high-and-warns-that-we-are-prepared-to-raise-rates-further.html

“Two percent is and will remain our inflation target,” he said

Lolz. Explain to me how the government is going to pay 5 percent debt service on 33 trillion? It’s 2.5 times the defense budget. It’s all a head fake with a short timeline.

War and Recession.

So. The FED will give in to stagflation and start back up the printing presses to pay interest on the debt, pay for decreasing government revenues and increased social bailouts and Ww3 with Russia and China. What a disaster since Trump left.

[Anonymous]

Anonymous wrote:I don’t understand the mindset of living in a house you don’t want anymore just because you got a good deal on it. Eventually housing prices will have to come down because as has been pointed out here, higher interest rates puts many houses out of reach for a lot of potential homebuyers. And of course renting is still an option.

If house prices drop how are governments going to handle the drastic cut in revenue? Commercial properties are already collapsing in value. Tax rates on houses will explode if prices drop… they have homeowners by the short hairs.

[Anonymous]

Anonymous wrote:We don’t love our house but we have 2.75% mortgage rate. Going to do some remodeling and stay put

Same.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Gotta be tough for a company to get anyone to move for a job at this point.

I did the math today. To maintain my same quality of home, given price increases and mortgage rates, I'd need about a $50K increase in annual income before taxes.

And yet the Biden RTO thread is full of people insisting there are people lining up to take federal jobs in DC and refilling vacant positions is no problem!

I already live here and would happily take your job. There’s a deep well of me.

Now if you want to get people to move to Austin, TX? YOU have a problem.

What sort of job are you looking for? My agency has been hiring a lot.

[Anonymous]

Anonymous wrote:I don’t understand the mindset of living in a house you don’t want anymore just because you got a good deal on it. Eventually housing prices will have to come down because as has been pointed out here, higher interest rates puts many houses out of reach for a lot of potential homebuyers. And of course renting is still an option.

Really? We can’t afford anything better. What’s so hard to understand? And honestly my parents became house poor when they upgraded to a bigger house, so that experience has stayed with me somewhat.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don’t understand the mindset of living in a house you don’t want anymore just because you got a good deal on it. Eventually housing prices will have to come down because as has been pointed out here, higher interest rates puts many houses out of reach for a lot of potential homebuyers. And of course renting is still an option.

Really? We can’t afford anything better. What’s so hard to understand? And honestly my parents became house poor when they upgraded to a bigger house, so that experience has stayed with me somewhat.

It's called living within your means. My parents carried two mortgages during a housing recession after moving us to a better house and being house poor caused a terrible strain on the family for several years even with renters. Made an indelible mark on me never to let the wants override the needs.

[Anonymous]

Anonymous wrote:I don’t understand the mindset of living in a house you don’t want anymore just because you got a good deal on it. Eventually housing prices will have to come down because as has been pointed out here, higher interest rates puts many houses out of reach for a lot of potential homebuyers. And of course renting is still an option.

We are shopping in the $2MM price range and there is competition and bidding wars. Those prices aren’t coming down and someone is fighting to pay the $12-13k mo mortgage out there. There are no homes for sale so why would anyone drop their prices?