Higher mortgage rates can be a good thing for buyers…

[5yearwaiter]

Folks,

I am not against to Bob’s theorey and moreover that is one kind of hidden dangerous theorey while we trying to invest or trying for dream home. I have no gurantee how we are assured for future price retain if you jump into “today’s San Diego high prices”. Whatever the possibility as per Bob, I still want to act as a critic i.e against Bob’s theorey and here are my few questions …

Hey Bob nothing personal- but just want to evaluate what else Fed can do these below in case of higher interest rates –

1) What if our Fed would increase higer interest rates in all other sectors but not housing or mortgage(may be it standardise a level say 6%) – what would be the situation if this happens?.

2) If any of those above said 3 plans off the track, still Fed can handle pressure in other areas(like small business etc) of finance by increasing interest rates but not to the mortgage exclusively who is trying to acquire or buy homes in US …

Well the academic interventionist chariman may try to deploy some more trick(may not be a worthy one) but poor Dreamers still wait… n wait… eventually this never stop nor yield any gains soon to home buyers and by that time we are in deep recession cum hyper inflation term…

I tend to agree your theorey, but I have lost my faith on these academic…brainers who can play any extent … whatever those unpredictable results in either way!!!

[Bob]

[quote=5yearwaiter]

1) What if our Fed would increase higer interest rates in all other sectors but not housing or mortgage(may be it standardise a level say 6%) – what would be the situation if this happens?.[/quote]

The Federal Reserve doesn’t set “mortgage rates”, but indirectly influences them by purchasing US securities in what Bernanke refers to as “quantitative easing”.

[quote]I tend to agree your theorey, but I have lost my faith on these academic…brainers who can play any extent … whatever those unpredictable results in either way!!! [/quote]

What I posted isn’t so much a “theory” as it is an educated prognostication on future trends based on current actions taken by the Feds.

As for your purchase, I wish you good luck, but don’t allow yourself to become part of the multiple bid warriors who are running around with their heads chopped off thinking they must buy now or lose out forever.

[Bob]

[quote=5yearwaiter]

1) What if our Fed would increase higer interest rates in all other sectors but not housing or mortgage(may be it standardise a level say 6%) – what would be the situation if this happens?.[/quote]

The Federal Reserve doesn’t set “mortgage rates”, but indirectly influences them by purchasing US securities in what Bernanke refers to as “quantitative easing”.

[quote]I tend to agree your theorey, but I have lost my faith on these academic…brainers who can play any extent … whatever those unpredictable results in either way!!! [/quote]

What I posted isn’t so much a “theory” as it is an educated prognostication on future trends based on current actions taken by the Feds.

As for your purchase, I wish you good luck, but don’t allow yourself to become part of the multiple bid warriors who are running around with their heads chopped off thinking they must buy now or lose out forever.

[Bob]

[quote=5yearwaiter]

1) What if our Fed would increase higer interest rates in all other sectors but not housing or mortgage(may be it standardise a level say 6%) – what would be the situation if this happens?.[/quote]

The Federal Reserve doesn’t set “mortgage rates”, but indirectly influences them by purchasing US securities in what Bernanke refers to as “quantitative easing”.

[quote]I tend to agree your theorey, but I have lost my faith on these academic…brainers who can play any extent … whatever those unpredictable results in either way!!! [/quote]

What I posted isn’t so much a “theory” as it is an educated prognostication on future trends based on current actions taken by the Feds.

As for your purchase, I wish you good luck, but don’t allow yourself to become part of the multiple bid warriors who are running around with their heads chopped off thinking they must buy now or lose out forever.

[Bob]

[quote=5yearwaiter]

1) What if our Fed would increase higer interest rates in all other sectors but not housing or mortgage(may be it standardise a level say 6%) – what would be the situation if this happens?.[/quote]

The Federal Reserve doesn’t set “mortgage rates”, but indirectly influences them by purchasing US securities in what Bernanke refers to as “quantitative easing”.

[quote]I tend to agree your theorey, but I have lost my faith on these academic…brainers who can play any extent … whatever those unpredictable results in either way!!! [/quote]

What I posted isn’t so much a “theory” as it is an educated prognostication on future trends based on current actions taken by the Feds.

As for your purchase, I wish you good luck, but don’t allow yourself to become part of the multiple bid warriors who are running around with their heads chopped off thinking they must buy now or lose out forever.

[Bob]

[quote=5yearwaiter]

1) What if our Fed would increase higer interest rates in all other sectors but not housing or mortgage(may be it standardise a level say 6%) – what would be the situation if this happens?.[/quote]

The Federal Reserve doesn’t set “mortgage rates”, but indirectly influences them by purchasing US securities in what Bernanke refers to as “quantitative easing”.

[quote]I tend to agree your theorey, but I have lost my faith on these academic…brainers who can play any extent … whatever those unpredictable results in either way!!! [/quote]

What I posted isn’t so much a “theory” as it is an educated prognostication on future trends based on current actions taken by the Feds.

As for your purchase, I wish you good luck, but don’t allow yourself to become part of the multiple bid warriors who are running around with their heads chopped off thinking they must buy now or lose out forever.

[DWCAP]

[quote=5yearwaiter]

1) What if our Fed would increase higer interest rates in all other sectors but not housing or mortgage(may be it standardise a level say 6%) – what would be the situation if this happens?.

[/quote]

If you mean the fed sets the rates, then who knows cause the fed doesnt do that, it just influences rates as bob said.

If you mean that the government (regardless of which branch) steps in and says that morgages cant go above 6% no matter what, then effective demand will plumet. Not becuase people wont want to buy, cause they will, but because lenders will not want to lend. It is basic supply and demand. If the price is fixed too low, then demand to buy houses will outstrip supply of loans and more and more marginal buyers will be unable to secure financing.

That is unless the government starts offering their own financing to replace what is lost, but then they will be directly competing with the banks and will unleash hell on the banking sector as loans become unprofitable for them. Sounds like a totally retarded plan to me, but then I wouldnt put it past some of the ‘winners’ we have ‘leading’ this country.

[DWCAP]

[quote=5yearwaiter]

1) What if our Fed would increase higer interest rates in all other sectors but not housing or mortgage(may be it standardise a level say 6%) – what would be the situation if this happens?.

[/quote]

If you mean the fed sets the rates, then who knows cause the fed doesnt do that, it just influences rates as bob said.

If you mean that the government (regardless of which branch) steps in and says that morgages cant go above 6% no matter what, then effective demand will plumet. Not becuase people wont want to buy, cause they will, but because lenders will not want to lend. It is basic supply and demand. If the price is fixed too low, then demand to buy houses will outstrip supply of loans and more and more marginal buyers will be unable to secure financing.

That is unless the government starts offering their own financing to replace what is lost, but then they will be directly competing with the banks and will unleash hell on the banking sector as loans become unprofitable for them. Sounds like a totally retarded plan to me, but then I wouldnt put it past some of the ‘winners’ we have ‘leading’ this country.

[DWCAP]

[quote=5yearwaiter]

1) What if our Fed would increase higer interest rates in all other sectors but not housing or mortgage(may be it standardise a level say 6%) – what would be the situation if this happens?.

[/quote]

If you mean the fed sets the rates, then who knows cause the fed doesnt do that, it just influences rates as bob said.

If you mean that the government (regardless of which branch) steps in and says that morgages cant go above 6% no matter what, then effective demand will plumet. Not becuase people wont want to buy, cause they will, but because lenders will not want to lend. It is basic supply and demand. If the price is fixed too low, then demand to buy houses will outstrip supply of loans and more and more marginal buyers will be unable to secure financing.

That is unless the government starts offering their own financing to replace what is lost, but then they will be directly competing with the banks and will unleash hell on the banking sector as loans become unprofitable for them. Sounds like a totally retarded plan to me, but then I wouldnt put it past some of the ‘winners’ we have ‘leading’ this country.

[DWCAP]

[quote=5yearwaiter]

1) What if our Fed would increase higer interest rates in all other sectors but not housing or mortgage(may be it standardise a level say 6%) – what would be the situation if this happens?.

[/quote]

If you mean the fed sets the rates, then who knows cause the fed doesnt do that, it just influences rates as bob said.

If you mean that the government (regardless of which branch) steps in and says that morgages cant go above 6% no matter what, then effective demand will plumet. Not becuase people wont want to buy, cause they will, but because lenders will not want to lend. It is basic supply and demand. If the price is fixed too low, then demand to buy houses will outstrip supply of loans and more and more marginal buyers will be unable to secure financing.

That is unless the government starts offering their own financing to replace what is lost, but then they will be directly competing with the banks and will unleash hell on the banking sector as loans become unprofitable for them. Sounds like a totally retarded plan to me, but then I wouldnt put it past some of the ‘winners’ we have ‘leading’ this country.

[DWCAP]

[quote=5yearwaiter]

1) What if our Fed would increase higer interest rates in all other sectors but not housing or mortgage(may be it standardise a level say 6%) – what would be the situation if this happens?.

[/quote]

If you mean the fed sets the rates, then who knows cause the fed doesnt do that, it just influences rates as bob said.

If you mean that the government (regardless of which branch) steps in and says that morgages cant go above 6% no matter what, then effective demand will plumet. Not becuase people wont want to buy, cause they will, but because lenders will not want to lend. It is basic supply and demand. If the price is fixed too low, then demand to buy houses will outstrip supply of loans and more and more marginal buyers will be unable to secure financing.

That is unless the government starts offering their own financing to replace what is lost, but then they will be directly competing with the banks and will unleash hell on the banking sector as loans become unprofitable for them. Sounds like a totally retarded plan to me, but then I wouldnt put it past some of the ‘winners’ we have ‘leading’ this country.

[SD Realtor]

I hear ya DW…

“That is unless the government starts offering their own financing.”

Are we really that far away from that statement being a reality? I would say that if the government did that, at least they would be able to make some money on the deal instead of just insuring all the crap they insure.

Change you can believe in!

[SD Realtor]

I hear ya DW…

“That is unless the government starts offering their own financing.”

Are we really that far away from that statement being a reality? I would say that if the government did that, at least they would be able to make some money on the deal instead of just insuring all the crap they insure.

Change you can believe in!

[SD Realtor]

I hear ya DW…

“That is unless the government starts offering their own financing.”

Are we really that far away from that statement being a reality? I would say that if the government did that, at least they would be able to make some money on the deal instead of just insuring all the crap they insure.

Change you can believe in!

[SD Realtor]

I hear ya DW…

“That is unless the government starts offering their own financing.”

Are we really that far away from that statement being a reality? I would say that if the government did that, at least they would be able to make some money on the deal instead of just insuring all the crap they insure.

Change you can believe in!

[Author]

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