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People who bought with high mortgage rates will see a decline. They don't understand economics, don't care about the market, and are simply jumping into bidding wars that have resurfaced in Seattle. Owning a home with a 2.5% mortgage rate, layoffs will persist, and they are likely to extend to other sectors after the election. When the yield curve is positive, we may enter a recession. #mortgage #housing #recession
2025 is gonna be brutal for other sectors. I am seeing commercial real estate is going down hill like crazy
Itâs always what you not expect breaks. Commercial real estate owners have started pivoting.
Seems like bidding is back across all desirable areas?
Mostly because greedy agents are causing buyers to bid higher. Yes, witnessing many buyers attending showings; it's just that housing sentiment is still strong.
And people are willing to pay too
I dont understand how every tom, dick and harry with kids can afford a monthly mortgage of 15k on a 2.5M house at ~6.5% interest rates. Its bizarre.
Parents help
I dont think so. I personally know many who bought in 2023. Their parents arnt helping. They are all betting on rate reduction to refinance. With that logic, fedâs plan of bringing down inflation by increasing rates is never going to work. Lol. Everyone will just keep borrowing at higher rates and plan to refinance when it goes down. So the inflation and frenzy stays, so rates never go down, but people keep borrowing.. What kind of ridiculous cycle is this. It has to end somewhere.
Everyone knows when the yield curve uninverts unemployment ticks higher and prices fall. Always happens. Stocks, homes, anything on debt.
It's never going to uninvert. New normal.
If that occurs then the bond market will crash đ€Ą
I agree. Something doesnât add up. I just donât understand why housing is still so high? Even if I assuming that Fed will cut rates and 4.5 is terminal rate, the house price should have adjusted for that.
Housing responds slowly
Housing is usually delayed by 6-12 months. Its not exactly a liquid asset
The demand is still high and supply is low.
Everyone keeps saying that â demand and supply issue.. even Fed today told that this supply demand issue.. fed caused housing issue keeping rates lower demand was low in 2019 as well, but the Fed rate decrease and the shift to remote work changed everyone's perspective on homeownership. Now, rates are high, but the sentiment to own a home is still there for now. That sentiment will only break when we see major layoffs after the election.
Agree with Fed screwing up housing with ultra low interest. Now no one wants to sell their 3% mortgage. But, why do you think major layoffs post election. GDP growth is pretty solid.
I donât understand the point of this post When buying a house all that matters is 1) youâre buying a house you like and 2) youâre ok with the payment Whatever the yield curve is doing at the time should have no influence on someoneâs decision to buy If you end up getting foreclosed on that means you didnât plan properly and likely over leveraged Why would I care if my home drops in value? Iâm staying here for 10+ years & tomorrowsâs perceived value means nothing to me
Really? You know if your home price dropped it means you could have saved a lot of money and retire a bit earlier
And canât you say the opposite? If my home went up in value then I saved money by buying sooner? Also the more time spent waiting = more money spent on rent so itâs not entirely savings Again, all I care about is having a home I like with a monthly payment im comfortable with
Remember when people bought homes because they wanted to live in a home they enjoy?
Just curious but I bought at like 5% I think or maybe a little less. Rather buy than rent and can afford it. But the real thing is if we expect a drop in rates, canât I just refinance to get the lesser loan?
You can but you'll add about 12k to your princioal balance per 500k. It's not exactly a get out of jail free card, though it will pencil if the % is low enough (especially if you're carrying PMI).
An extra $12k in principal shouldnât make too much difference over 30 years or whatnot
I just had a stroke reading this. Whatâs the point youâre trying to make?
Macy's is testing an economics LLM
This is just my opinion; don't worry about what already happened. Try to focus on work and avoid getting laid off. Try to minimize your finances and have some emergency funds. We are in a tough economic times