Wow in reading this thread I just had a minor epiphany. All the rate drops are doing is creating more wealth for those who don’t need it.
Its like watching boiling water, where one group of molecules has enough energy to separate from the main body and keep rising while the rest are left in the pot.
You see these low rates are only available to the most secure borrowers. Meaning those with lots of equity. Those without cannot qualify and are stuck with the higher prices creating even more incentive to walk away. This is for two reasons.
One nothing the govt is doing will keep home prices from reverting. There isn’t enough volume, people are scared and its thankfully going to stay that way.
Two those who can lock in and refi at a low rate have two great options. One they can keep the house which is now cheaper to maintain or rent it out for even less than the competition, as their cost basis is lower.
The problem with this scenario is its horribly unstable. Take the top 15% of homeowners (number pulled out of ass) and give them much more stability leaving the the other 85% completely fucked, I’d love an explanation of how that helps us form a bottom or even encourages would be home buyers to buy.
