Anonymous
09/03/2023 12:57
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
But what if there’s more inflation?
May be, may be not.
The answer to that depends on your evaluation of whether the current (or future) morons in the White House or at the Fed have the will and ability to print more dollars, devaluing them.
Yes = more inflation.
No = deflation.
Our economy is 2/3 dependent on consumer spending. Unless incomes rise (ha!) with (or higher than) inflation, consumer spending WILL go down. That's the recession and deflation part. The rest 1/3 of the economy can keep spending all they want, it won't do zilch.
The government is increasing spending and consumption faster than its subjects are tightening their belts. Directly in contrast to the FED goals. Total dysfunction from the swamp as it stokes WW3 to avoid embarrassment and ridicule as it heads for its prepared bunkers.
They won't be for too long. The bond markets have woken up after...40 years. The govt still has to be able to SELL their paper, and the only buyer of last resort is the Fed, and they...can't/won't be able to buy it and offload it at any sane interest rates. Neither will private/overseas bidders.
The US govt is *ucked as well. They have NO choice but to cut spending. If the current administration won't do it, they'll topple and a different one will. It's a cycle, we've been there before (but so long ago that people have forgotten), and we'll be there again.
There was pain that time, and there will be pain this time.
Why can't the Fed just buy and hold? They already have some trillion on their balance sheet, what's a few trillion more? I think they will have to in order to keep interest expense down.
Or another option is yield curve control similar to what they did with the huge post WW2 debt.
The problem with cutting spending is that nobody will agree to cut spending for their pet project.
Anonymous
09/03/2023 12:49
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
Your real estate agent IS right (surprisingly!).
Assuming you sell your house today and net $500K (not unusual at all), you could put that in a HY savings account and get ~$2K/mo interest, without touching your principal and without any carrying costs. You've just locked in your profit.
I'm sure your argument is going to be, but we need a place to stay! You're right, you do. Now, do the math one more time in terms of hanging on to your house, vs realizing your profits today (assuming you can sell, with today's market) and renting something lower cost (no, it won't be the same kind of house that you're selling, that's stupid) for a while. If you're not willing to do that, that's fine, others will be, because they can do the math as well.
Prices are set at the margin. A few sales in a neighborhood (up or down) set the prices for the whole neighborhood. You want to sell, when nobody's selling, not when everybody's heading for the exit.
Actually, almost no one will be willing to do this, as it is quite risky for effectively no financial benefit.
Explain.
Can't explain, can you?
Transaction costs alone will take an enormous amount of that after tax interest income. You haven't even estimated the cost of renting a comparable home. Oh wait, you want people to sell their homes and live in a tiny apartment. So you aren't even starting from a common baseline.
Anonymous
09/03/2023 12:28
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
Your real estate agent IS right (surprisingly!).
Assuming you sell your house today and net $500K (not unusual at all), you could put that in a HY savings account and get ~$2K/mo interest, without touching your principal and without any carrying costs. You've just locked in your profit.
I'm sure your argument is going to be, but we need a place to stay! You're right, you do. Now, do the math one more time in terms of hanging on to your house, vs realizing your profits today (assuming you can sell, with today's market) and renting something lower cost (no, it won't be the same kind of house that you're selling, that's stupid) for a while. If you're not willing to do that, that's fine, others will be, because they can do the math as well.
Prices are set at the margin. A few sales in a neighborhood (up or down) set the prices for the whole neighborhood. You want to sell, when nobody's selling, not when everybody's heading for the exit.
Actually, almost no one will be willing to do this, as it is quite risky for effectively no financial benefit.
Explain.
Can't explain, can you?
So you make $25k yearly on a 5% CD with 500K principal.
Simple math.
Uh Oh! Tax time arrives.
Now you have to pay a high tax rate on your $25K interest earned.
Ever heard of something called inflation?
That's why I said...math. I know it's hard, but...
You'd much rather let the value of your current home erode away (Hint: That's what high interest rates do) AND keep paying the carrying costs with ding ding...tax paid dollars. The SALT deduction is only $10K, ONLY your mortgage interest is deductible (unto $750K), not your property taxes, home owners insurance, HOA (if applicable) etc. All of those are paid with post-tax dollars.
You wanna do that? Be my guest.
There's a reason the residential RE market is at a standstill. That's what high interest rates do, they swing the pendulum in favor of savors, vs borrowers, who gain in a low interest rate environment.
Anonymous
09/03/2023 12:05
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
Your real estate agent IS right (surprisingly!).
Assuming you sell your house today and net $500K (not unusual at all), you could put that in a HY savings account and get ~$2K/mo interest, without touching your principal and without any carrying costs. You've just locked in your profit.
I'm sure your argument is going to be, but we need a place to stay! You're right, you do. Now, do the math one more time in terms of hanging on to your house, vs realizing your profits today (assuming you can sell, with today's market) and renting something lower cost (no, it won't be the same kind of house that you're selling, that's stupid) for a while. If you're not willing to do that, that's fine, others will be, because they can do the math as well.
Prices are set at the margin. A few sales in a neighborhood (up or down) set the prices for the whole neighborhood. You want to sell, when nobody's selling, not when everybody's heading for the exit.
Actually, almost no one will be willing to do this, as it is quite risky for effectively no financial benefit.
Explain.
Can't explain, can you?
So you make $25k yearly on a 5% CD with 500K principal.
Simple math.
Uh Oh! Tax time arrives.
Now you have to pay a high tax rate on your $25K interest earned.
Ever heard of something called inflation?
Anonymous
09/03/2023 11:49
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
Your real estate agent IS right (surprisingly!).
Assuming you sell your house today and net $500K (not unusual at all), you could put that in a HY savings account and get ~$2K/mo interest, without touching your principal and without any carrying costs. You've just locked in your profit.
I'm sure your argument is going to be, but we need a place to stay! You're right, you do. Now, do the math one more time in terms of hanging on to your house, vs realizing your profits today (assuming you can sell, with today's market) and renting something lower cost (no, it won't be the same kind of house that you're selling, that's stupid) for a while. If you're not willing to do that, that's fine, others will be, because they can do the math as well.
Prices are set at the margin. A few sales in a neighborhood (up or down) set the prices for the whole neighborhood. You want to sell, when nobody's selling, not when everybody's heading for the exit.
Actually, almost no one will be willing to do this, as it is quite risky for effectively no financial benefit.
Explain.
Can't explain, can you?
Anonymous
09/03/2023 11:02
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
Your real estate agent IS right (surprisingly!).
Assuming you sell your house today and net $500K (not unusual at all), you could put that in a HY savings account and get ~$2K/mo interest, without touching your principal and without any carrying costs. You've just locked in your profit.
I'm sure your argument is going to be, but we need a place to stay! You're right, you do. Now, do the math one more time in terms of hanging on to your house, vs realizing your profits today (assuming you can sell, with today's market) and renting something lower cost (no, it won't be the same kind of house that you're selling, that's stupid) for a while. If you're not willing to do that, that's fine, others will be, because they can do the math as well.
Prices are set at the margin. A few sales in a neighborhood (up or down) set the prices for the whole neighborhood. You want to sell, when nobody's selling, not when everybody's heading for the exit.
Actually, almost no one will be willing to do this, as it is quite risky for effectively no financial benefit.
Explain.
Anonymous
09/03/2023 09:35
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
Your real estate agent IS right (surprisingly!).
Assuming you sell your house today and net $500K (not unusual at all), you could put that in a HY savings account and get ~$2K/mo interest, without touching your principal and without any carrying costs. You've just locked in your profit.
I'm sure your argument is going to be, but we need a place to stay! You're right, you do. Now, do the math one more time in terms of hanging on to your house, vs realizing your profits today (assuming you can sell, with today's market) and renting something lower cost (no, it won't be the same kind of house that you're selling, that's stupid) for a while. If you're not willing to do that, that's fine, others will be, because they can do the math as well.
Prices are set at the margin. A few sales in a neighborhood (up or down) set the prices for the whole neighborhood. You want to sell, when nobody's selling, not when everybody's heading for the exit.
Actually, almost no one will be willing to do this, as it is quite risky for effectively no financial benefit.
+1
Team bad math rolls deep here.
Anonymous
09/03/2023 09:27
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
Your real estate agent IS right (surprisingly!).
Assuming you sell your house today and net $500K (not unusual at all), you could put that in a HY savings account and get ~$2K/mo interest, without touching your principal and without any carrying costs. You've just locked in your profit.
I'm sure your argument is going to be, but we need a place to stay! You're right, you do. Now, do the math one more time in terms of hanging on to your house, vs realizing your profits today (assuming you can sell, with today's market) and renting something lower cost (no, it won't be the same kind of house that you're selling, that's stupid) for a while. If you're not willing to do that, that's fine, others will be, because they can do the math as well.
Prices are set at the margin. A few sales in a neighborhood (up or down) set the prices for the whole neighborhood. You want to sell, when nobody's selling, not when everybody's heading for the exit.
Actually, almost no one will be willing to do this, as it is quite risky for effectively no financial benefit.
Anonymous
09/03/2023 09:13
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
But what if there’s more inflation?
May be, may be not.
The answer to that depends on your evaluation of whether the current (or future) morons in the White House or at the Fed have the will and ability to print more dollars, devaluing them.
Yes = more inflation.
No = deflation.
Our economy is 2/3 dependent on consumer spending. Unless incomes rise (ha!) with (or higher than) inflation, consumer spending WILL go down. That's the recession and deflation part. The rest 1/3 of the economy can keep spending all they want, it won't do zilch.
The government is increasing spending and consumption faster than its subjects are tightening their belts. Directly in contrast to the FED goals. Total dysfunction from the swamp as it stokes WW3 to avoid embarrassment and ridicule as it heads for its prepared bunkers.
They won't be for too long. The bond markets have woken up after...40 years. The govt still has to be able to SELL their paper, and the only buyer of last resort is the Fed, and they...can't/won't be able to buy it and offload it at any sane interest rates. Neither will private/overseas bidders.
The US govt is *ucked as well. They have NO choice but to cut spending. If the current administration won't do it, they'll topple and a different one will. It's a cycle, we've been there before (but so long ago that people have forgotten), and we'll be there again.
There was pain that time, and there will be pain this time.
It’s almost like Trump drove the swamp to crazy that he tricked them into cheating themselves into the woodchipper. Meanwhile he looks Golden.
Anonymous
09/03/2023 09:10
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
But what if there’s more inflation?
May be, may be not.
The answer to that depends on your evaluation of whether the current (or future) morons in the White House or at the Fed have the will and ability to print more dollars, devaluing them.
Yes = more inflation.
No = deflation.
Our economy is 2/3 dependent on consumer spending. Unless incomes rise (ha!) with (or higher than) inflation, consumer spending WILL go down. That's the recession and deflation part. The rest 1/3 of the economy can keep spending all they want, it won't do zilch.
The government is increasing spending and consumption faster than its subjects are tightening their belts. Directly in contrast to the FED goals. Total dysfunction from the swamp as it stokes WW3 to avoid embarrassment and ridicule as it heads for its prepared bunkers.
They won't be for too long. The bond markets have woken up after...40 years. The govt still has to be able to SELL their paper, and the only buyer of last resort is the Fed, and they...can't/won't be able to buy it and offload it at any sane interest rates. Neither will private/overseas bidders.
The US govt is *ucked as well. They have NO choice but to cut spending. If the current administration won't do it, they'll topple and a different one will. It's a cycle, we've been there before (but so long ago that people have forgotten), and we'll be there again.
There was pain that time, and there will be pain this time.
When is the last time the government spent less money than the year before ?
Anonymous
09/03/2023 09:07
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
But what if there’s more inflation?
May be, may be not.
The answer to that depends on your evaluation of whether the current (or future) morons in the White House or at the Fed have the will and ability to print more dollars, devaluing them.
Yes = more inflation.
No = deflation.
Our economy is 2/3 dependent on consumer spending. Unless incomes rise (ha!) with (or higher than) inflation, consumer spending WILL go down. That's the recession and deflation part. The rest 1/3 of the economy can keep spending all they want, it won't do zilch.
The government is increasing spending and consumption faster than its subjects are tightening their belts. Directly in contrast to the FED goals. Total dysfunction from the swamp as it stokes WW3 to avoid embarrassment and ridicule as it heads for its prepared bunkers.
They won't be for too long. The bond markets have woken up after...40 years. The govt still has to be able to SELL their paper, and the only buyer of last resort is the Fed, and they...can't/won't be able to buy it and offload it at any sane interest rates. Neither will private/overseas bidders.
The US govt is *ucked as well. They have NO choice but to cut spending. If the current administration won't do it, they'll topple and a different one will. It's a cycle, we've been there before (but so long ago that people have forgotten), and we'll be there again.
There was pain that time, and there will be pain this time.
Anonymous
09/03/2023 08:51
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
But what if there’s more inflation?
May be, may be not.
The answer to that depends on your evaluation of whether the current (or future) morons in the White House or at the Fed have the will and ability to print more dollars, devaluing them.
Yes = more inflation.
No = deflation.
Our economy is 2/3 dependent on consumer spending. Unless incomes rise (ha!) with (or higher than) inflation, consumer spending WILL go down. That's the recession and deflation part. The rest 1/3 of the economy can keep spending all they want, it won't do zilch.
The government is increasing spending and consumption faster than its subjects are tightening their belts. Directly in contrast to the FED goals. Total dysfunction from the swamp as it stokes WW3 to avoid embarrassment and ridicule as it heads for its prepared bunkers.
Anonymous
09/03/2023 08:01
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
But what if there’s more inflation?
May be, may be not.
The answer to that depends on your evaluation of whether the current (or future) morons in the White House or at the Fed have the will and ability to print more dollars, devaluing them.
Yes = more inflation.
No = deflation.
Our economy is 2/3 dependent on consumer spending. Unless incomes rise (ha!) with (or higher than) inflation, consumer spending WILL go down. That's the recession and deflation part. The rest 1/3 of the economy can keep spending all they want, it won't do zilch.
Anonymous
09/03/2023 07:48
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
Your real estate agent IS right (surprisingly!).
Assuming you sell your house today and net $500K (not unusual at all), you could put that in a HY savings account and get ~$2K/mo interest, without touching your principal and without any carrying costs. You've just locked in your profit.
I'm sure your argument is going to be, but we need a place to stay! You're right, you do. Now, do the math one more time in terms of hanging on to your house, vs realizing your profits today (assuming you can sell, with today's market) and renting something lower cost (no, it won't be the same kind of house that you're selling, that's stupid) for a while. If you're not willing to do that, that's fine, others will be, because they can do the math as well.
Prices are set at the margin. A few sales in a neighborhood (up or down) set the prices for the whole neighborhood. You want to sell, when nobody's selling, not when everybody's heading for the exit.
Anonymous
09/03/2023 07:42
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Yep we are the older people everyone likes to blame at the moment. 3000 sq ft house in a good school district, almost paid off. more house than we need or want and we would love to downsize, but the way prices are, a smaller house would be more than we paid for our original house and with a mortgage would actually cost more than we are paying at the moment. we don't want to stay put, but it doesn't make any sense to move.
+1 this is us too. Real estate agent keeps pushing to sell house and take the cash but buying something now is more expensive. Renting a smaller place for more then our carrying costs to wait out the market also seems to not be a good move.
But what if there’s more inflation?