Home › Forums › Financial Markets/Economics › interest rates in the USA v other advanced economies
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JPJones.
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December 20, 2018 at 1:41 PM #811353December 31, 2018 at 10:37 AM #811489
gzz
ParticipantRates fall again today below 2.7% for the 10 year. Lowest since January 2018. Market now predicts no fed raises in 2019 and one rate cut in 2020.
We are now 0.4 to 0.55% below the highest rates from May and Oct/early Nov. Time to think about a refi for anyone who purchased then.
December 31, 2018 at 12:22 PM #811490spdrun
ParticipantYear-end last-minute portfolio balancing… let’s see what happens when the reality of the government shutdown, bear market, and flat yield curve start hitting next year. This should be amusing to watch — Happy New Year!
All it takes to transform a “good” economy to a “bad” one is a bit of confidence loss, and that’s coming…
January 1, 2019 at 1:56 PM #811495ParticipantNot a bear market yet by the standard 20% decline measure. We got really close though.
I see stocks and RE both performing in the mid single digits in 2019.
For US stocks, weak profit growth is the negative, low valuations and lack of better alternative investments is the positive.
The Trump tax cut was a large, single, permanent boost to corporate profits. Valuations just don’t reflect that giant boost to profits anymore.
I was a bystander to both the mid-year bull market and subsequent sharp fall as I was 0% in stocks. So this isn’t my motivated thinking.
Regarding consumer confidence, Americans really get a mental boost from low gas prices. Our Cal gas tax obscures this. But in much of the USA, gas is in the $1.70-$2.00 range.
January 1, 2019 at 2:31 PM #811496ParticipantS&P and NASDAQ both cracked 20% down last week. NASDAQ was down closer to 24% in fact. Let those bears ROOOOAAAAAAARRRR BABY!
January 3, 2019 at 6:36 PM #811502FlyerInHi
Guest[quote=gzz]Flyer, why do you think a downturn is more likely than another bubble?
[/quote]gzz… I’m interested in your thinking of another housing bubble. What do you think of secondary markets like Phoenix?
We could have a recession without much RE decreases, especially in areas that have not recovered to peak yet. You seem convinced real estate will just power through any downturn.
The thing about real estate is that it’s all about location and it’s not easy to find good locations. Out of chance, I identified a good location for some apartments and waiting may not give me a better location.
January 4, 2019 at 8:41 AM #811503The-Shoveler
ParticipantThe last recession was an exception IMO,
Mostly recessions do not affect home prices much except in hyper local situations directly affected by the downturn.
Sometimes it even causes housing to go up because interest rates generally are lowered once the downturn is detected and people are looking for anything to put their money into that is not a stock LOL.
January 4, 2019 at 12:07 PM #811504GuestI identified a property that is already down 7% from last year compared to exact same comp. I might be able to negotiate down 10%.
I’m ok if the next recession drops it another 10%. But I will mad at myself if I lose 30%.
It’s an apartment building and I will remodel the units one at a time. And location is important.Rents are high now in the top 10 cities. I’m thinking rents will continue to be high as urbanization and urban/rural bifurcation continue while construction doesn’t keep up with population growth.
But who knows? What if the next financial crisis is worse than the last one? Combine that with hard Brexit and the collapse of China. China, with the Fed, but more than the Fed, saved the world by increasing money supply.
May 30, 2019 at 6:24 PM #812633ParticipantUpdate: new figures are listed 2nd.
USA 2.86 2.18
Canada 2.06 1.55
Germany 0.25 -0.18
UK 1.26 0.90
France 0.73 0.23
Spain 1.40 0.76
Holland 0.41 0.01
Switzerland -0.24 -0.49
Japan 0.02 -0.09
Australia 2.44 1.48
New Zealand 2.45 1.70
Hong Kong 2.03 1.37
South Korea 2.00 1.74Seems to be that loaning money to high income California residents with 30% or more down payments at 3% is a great deal. Let’s go 3% 30 year mortgages!
The Swiss yield curve by the way bottoms out at the 2 to 4 year range, where interest rates are below -0.8%.
The Swiss 50-year rate is 0.153%, meaning whoever gets your bond when you’re dead in 2069 will have earned less than 8% in compounded interest over those 50 years.
August 1, 2019 at 11:13 AM #813113ParticipantUS 10 year bond rates just hit a 33-month low! This is the rate that ties closest to mortgage rates.
Swiss 10 year rates have hit an all time world record low of -.77. Boggles the mind, give the government 1000 francs, and after ten years it will return 920 of them.
Even if San Diego real estate only yields 4% long term (I think it is well higher), that is more than double what you get investing in bonds, and the real estate is taxed at a lower rate the entire way.
There’s no guarantee we’ll ever get another real estate bubble, but the amount of money on the sidelines making 1.8%, 1%, 0%, -0.5% is gigantic.
We’ve got nearly all the ingredients: tight inventory, low mortgage rates, booming economy, growing population. Memories of losing money 2007-2010 are getting hazy… or non existent for the post 1995 birth cohort.
August 1, 2019 at 2:29 PM #813114scaredyclassic
Participant[quote=gzz]US 10 year bond rates just hit a 33-month low! This is the rate that ties closest to mortgage rates.
Swiss 10 year rates have hit an all time world record low of -.77. Boggles the mind, give the government 1000 francs, and after ten years it will return 920 of them.
Even if San Diego real estate only yields 4% long term (I think it is well higher), that is more than double what you get investing in bonds, and the real estate is taxed at a lower rate the entire way.
There’s no guarantee we’ll ever get another real estate bubble, but the amount of money on the sidelines making 1.8%, 1%, 0%, -0.5% is gigantic.
We’ve got nearly all the ingredients: tight inventory, low mortgage rates, booming economy, growing population. Memories of losing money 2007-2010 are getting hazy… or non existent for the post 1995 birth cohort.[/quote]
The argument against gold is it produces nothing. But at least its not a guaranteed loss.
August 12, 2019 at 8:52 PM #813186Guest[quote=gzz]
We’ve got nearly all the ingredients: tight inventory, low mortgage rates, booming economy, growing population. Memories of losing money 2007-2010 are getting hazy… or non existent for the post 1995 birth cohort.[/quote]
There’s for you gzzz. I think there will be plenty of liquidity. That’s why I have stuck to adjustable rate mortgages — why go fixed and play the refinance game? I don’t see runaway inflation
Real estate will do well especially at the low end in in urban centres because there not enough building to meet demand. I rent out my units within days because they are beautiful, even though I ask above market rents.
August 14, 2019 at 10:09 AM #813200ParticipantMore all time record low rates broke today in the USA and the rest of the world.
Check out the second graph here:
We are paying less and less to service mortgage debt. A return to the levels of 15 years ago would mean trillions of dollars flooding into our tight RE markets.
August 14, 2019 at 11:00 AM #813201ParticipantRecessions don’t work that way, though — personal and corporate spending/borrowing tends to tighten at least at first.
August 14, 2019 at 12:34 PM #813202Guest[quote=spdrun]Recessions don’t work that way, though — personal and corporate spending/borrowing tends to tighten at least at first.[/quote]
Yeah, I agree. .
Lower rates don’t mean households go out and borrow immediately especially during periods of economic anxiety.
Some.real estate deals are cash only. Like condos in communities witth low owner occupancy.
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