Anonymous wrote:“Rates are going to drop” says every realtor who wants or wanted you to buy. This was said to a neighbor in 2022 and look where we are.

In fairness realtors are in the service industry. They sell you a service. So they are salespeople. Any person with a high school degree or even less can search the net and find basic information about rate, the economy, the job market etc. and then with this information they can make an educated guess. The realtor is just a middle person (who I wish didn't exist) that "helps" you buy or sell.

Anonymous wrote:“Rates are going to drop” says every realtor who wants or wanted you to buy. This was said to a neighbor in 2022 and look where we are.

+1

I’m refinancing out of a heloc while keeping the purchase mortgage. The AVM range among various lenders has been ridiculous.

One lender has left the DC market.

This experience has given me new urgency to refi now (this month) rather than wait longer.

Inflation also ticked up. So while the fed may lower the short rate to address a softening job market, this may goose inflation; and even if it doesn’t, current inflation plus our debt burden may mean the 10 year doesn’t drop in step with the short rate, or even increases. No one knows what will happen, your best guess of where rates should be is today’s rate.

I’m holding out until after the Fed meeting

Our mortgage broker called us today telling us we could get down to 6.5% from 7.25% - investment properties that we bought in the spring. Then the paperwork came and it was 6 7/8 instead.

“Rates are going to drop” says every realtor who wants or wanted you to buy. This was said to a neighbor in 2022 and look where we are.

Anonymous wrote:

Anonymous wrote:We locked in a refinance rate today. 5.75 for 15 year. They might drop more or they won’t, but we’ll earn the closing costs back in 6 months.

I think you will be able to get lower than that soon.

DP here. The issue with refinancing is how long do you want to wait and miss out on lower interest rates now? And how much risk are you willing to take (in this volatile economy) that rates will significantly go down and not stay the same or rise?

At a certain point, the ROI is better to start paying 5.75% instead of 7% now, rather than hold the 7% in hopes of a future rate significantly lower than 5.75%.

Anonymous wrote:We locked in a refinance rate today. 5.75 for 15 year. They might drop more or they won’t, but we’ll earn the closing costs back in 6 months.

I think you will be able to get lower than that soon.

We locked in a refinance rate today. 5.75 for 15 year. They might drop more or they won’t, but we’ll earn the closing costs back in 6 months.

Anonymous wrote:While I hope mortgage rates go down so I can refinance, I don't think they will, despite the President doing everything he can to get the Fed to cut rates.

This because mortgage rates are tied more directly to the rate for 10-year T-Bills, which is set by the market, than to the short-term rate, which is set by the Fed.

I suppose the Fed could implement some sort of bond buying scheme to influence the 10 year T-Bill rate, like they've done in the recent past, or some other type of direct intervention into the mortgage market, but I suspect that is unlikely now because it will cause inflation.

My guess as an armchair economist is that demand for housing will weaken due to a weaker economy. If demand for housing is low, I don't see why rates will keep going up.

The biggest issue with those 65+ holding on to their homes. There are less and less cheaper alternatives when you retire. When these people do the math they realize they are better off staying put. And apt of them live in smaller and cheaper to maintain homes.

The other issue is family formation. People simply aren't getting married and having kids. Fertility rate is declining.

In my opinion around 2028, we will start seeing big drops in home prices. And further we will have an aging population ready to sell but less people willing to buy.

If you want to buy a house today buy a basic cheap house and view it as a shelter. It's baked into our mind as Americans that home prices will go up forever and it's a great investment vehicle. I don't know but with an aging population and declining fertility I would love for someone who is a real economist convince me that demand for housing will keep going up along with home values. Twh floor is yours...

While I hope mortgage rates go down so I can refinance, I don't think they will, despite the President doing everything he can to get the Fed to cut rates.

This because mortgage rates are tied more directly to the rate for 10-year T-Bills, which is set by the market, than to the short-term rate, which is set by the Fed.

I suppose the Fed could implement some sort of bond buying scheme to influence the 10 year T-Bill rate, like they've done in the recent past, or some other type of direct intervention into the mortgage market, but I suspect that is unlikely now because it will cause inflation.

Anonymous wrote:If anyone has the ability to reliably predict future interest rates, please let me know as I’ll shift all of my investments to them.

OP, nobody knows. Also, mortgage rates respond to many economic signals besides the federal funds rate so a reduction in fed funds rate doesn’t necessarily mean a direct reduction in retail mortgage rates.

If we didn't make educated guesses about daily things in our lives we wouldn't go anywhere.

Anonymous wrote:

Anonymous wrote:If anyone has the ability to reliably predict future interest rates, please let me know as I’ll shift all of my investments to them.

OP, nobody knows. Also, mortgage rates respond to many economic signals besides the federal funds rate so a reduction in fed funds rate doesn’t necessarily mean a direct reduction in retail mortgage rates.

+1 Look and see whether Trump has succeeded in firing Jerome Powell and Lisa Cook yet, and whether he's succeded in appointing incompetent hacks to replace them. That's your best predictor of whether rates will drop (and whether inflation will skyrocket).

He only needs to fire Lisa Cook to have a majority on the fed board, and she screwed up. I expect rates will drop, and I'll refinance if they do, but I'm not betting on it.

Anonymous wrote:If anyone has the ability to reliably predict future interest rates, please let me know as I’ll shift all of my investments to them.

OP, nobody knows. Also, mortgage rates respond to many economic signals besides the federal funds rate so a reduction in fed funds rate doesn’t necessarily mean a direct reduction in retail mortgage rates.

+1 Look and see whether Trump has succeeded in firing Jerome Powell and Lisa Cook yet, and whether he's succeded in appointing incompetent hacks to replace them. That's your best predictor of whether rates will drop (and whether inflation will skyrocket).