rates moving up fast

[Reality]

[quote=SD Realtor]We may get some traction on the bear side. Rates are moving up quick. Prices tend to not react in lock step though but that indeed may knock some of the wind out of this rally. Of course if you are a buyer this hurts unless you are in cash. [/quote]

How will it hurt the buyers without cash? I know, higher interest rates, but like you write it helps with the “traction on the bear side”, meaning lower principle. There’s only so much buying power in the market and with the economy that’s only getting worse.

I’d rather get the low price than the low interest rate. You can refinance later.

[Coronita]

[quote=JohnAlt91941][quote=SD Realtor]We may get some traction on the bear side. Rates are moving up quick. Prices tend to not react in lock step though but that indeed may knock some of the wind out of this rally. Of course if you are a buyer this hurts unless you are in cash. [/quote]

How will it hurt the buyers without cash? I know, higher interest rates, but like you write it helps with the “traction on the bear side”, meaning lower principle. There’s only so much buying power in the market and with the economy that’s only getting worse.

I’d rather get the low price than the low interest rate. You can refinance later.
[/quote]

You really think you will be able to refinance at a lower rate in the forseeable future? I don’t see this happening…Historically, we’re at the lowest rates. Even if we creep up to say 6,7,8%, I don’t see how rates would suddenly come back down. It seems like the only direction for rates is up for a longer period of time.

I think a lot of the old adage sayings are going to be thrown out the windows. Similar to the outdated statement of it’s better to buy then rent…The statement “I can always refinance to a lower rate in the future” probably is going to be outdated, considering to take advantage of a rate lower than what you’d be able to get is probably way out there….like 15+ years…. Even then, at that point, what is the point of refinancing? Short of having a cash flow issue, you would be tacking on another 30 years of loan payments on top of an existing loan that you have already made payments to considerably for several years…I suppose you could switch to a 15 year loan, but again I doubt your 15 year loan rate will be much less than what you would be getting a 30 year loan in the short to mid term.

[Coronita]

[quote=JohnAlt91941][quote=SD Realtor]We may get some traction on the bear side. Rates are moving up quick. Prices tend to not react in lock step though but that indeed may knock some of the wind out of this rally. Of course if you are a buyer this hurts unless you are in cash. [/quote]

How will it hurt the buyers without cash? I know, higher interest rates, but like you write it helps with the “traction on the bear side”, meaning lower principle. There’s only so much buying power in the market and with the economy that’s only getting worse.

I’d rather get the low price than the low interest rate. You can refinance later.
[/quote]

You really think you will be able to refinance at a lower rate in the forseeable future? I don’t see this happening…Historically, we’re at the lowest rates. Even if we creep up to say 6,7,8%, I don’t see how rates would suddenly come back down. It seems like the only direction for rates is up for a longer period of time.

I think a lot of the old adage sayings are going to be thrown out the windows. Similar to the outdated statement of it’s better to buy then rent…The statement “I can always refinance to a lower rate in the future” probably is going to be outdated, considering to take advantage of a rate lower than what you’d be able to get is probably way out there….like 15+ years…. Even then, at that point, what is the point of refinancing? Short of having a cash flow issue, you would be tacking on another 30 years of loan payments on top of an existing loan that you have already made payments to considerably for several years…I suppose you could switch to a 15 year loan, but again I doubt your 15 year loan rate will be much less than what you would be getting a 30 year loan in the short to mid term.

[Coronita]

[quote=JohnAlt91941][quote=SD Realtor]We may get some traction on the bear side. Rates are moving up quick. Prices tend to not react in lock step though but that indeed may knock some of the wind out of this rally. Of course if you are a buyer this hurts unless you are in cash. [/quote]

How will it hurt the buyers without cash? I know, higher interest rates, but like you write it helps with the “traction on the bear side”, meaning lower principle. There’s only so much buying power in the market and with the economy that’s only getting worse.

I’d rather get the low price than the low interest rate. You can refinance later.
[/quote]

You really think you will be able to refinance at a lower rate in the forseeable future? I don’t see this happening…Historically, we’re at the lowest rates. Even if we creep up to say 6,7,8%, I don’t see how rates would suddenly come back down. It seems like the only direction for rates is up for a longer period of time.

I think a lot of the old adage sayings are going to be thrown out the windows. Similar to the outdated statement of it’s better to buy then rent…The statement “I can always refinance to a lower rate in the future” probably is going to be outdated, considering to take advantage of a rate lower than what you’d be able to get is probably way out there….like 15+ years…. Even then, at that point, what is the point of refinancing? Short of having a cash flow issue, you would be tacking on another 30 years of loan payments on top of an existing loan that you have already made payments to considerably for several years…I suppose you could switch to a 15 year loan, but again I doubt your 15 year loan rate will be much less than what you would be getting a 30 year loan in the short to mid term.

[Coronita]

[quote=JohnAlt91941][quote=SD Realtor]We may get some traction on the bear side. Rates are moving up quick. Prices tend to not react in lock step though but that indeed may knock some of the wind out of this rally. Of course if you are a buyer this hurts unless you are in cash. [/quote]

How will it hurt the buyers without cash? I know, higher interest rates, but like you write it helps with the “traction on the bear side”, meaning lower principle. There’s only so much buying power in the market and with the economy that’s only getting worse.

I’d rather get the low price than the low interest rate. You can refinance later.
[/quote]

You really think you will be able to refinance at a lower rate in the forseeable future? I don’t see this happening…Historically, we’re at the lowest rates. Even if we creep up to say 6,7,8%, I don’t see how rates would suddenly come back down. It seems like the only direction for rates is up for a longer period of time.

I think a lot of the old adage sayings are going to be thrown out the windows. Similar to the outdated statement of it’s better to buy then rent…The statement “I can always refinance to a lower rate in the future” probably is going to be outdated, considering to take advantage of a rate lower than what you’d be able to get is probably way out there….like 15+ years…. Even then, at that point, what is the point of refinancing? Short of having a cash flow issue, you would be tacking on another 30 years of loan payments on top of an existing loan that you have already made payments to considerably for several years…I suppose you could switch to a 15 year loan, but again I doubt your 15 year loan rate will be much less than what you would be getting a 30 year loan in the short to mid term.

[Coronita]

[quote=JohnAlt91941][quote=SD Realtor]We may get some traction on the bear side. Rates are moving up quick. Prices tend to not react in lock step though but that indeed may knock some of the wind out of this rally. Of course if you are a buyer this hurts unless you are in cash. [/quote]

How will it hurt the buyers without cash? I know, higher interest rates, but like you write it helps with the “traction on the bear side”, meaning lower principle. There’s only so much buying power in the market and with the economy that’s only getting worse.

I’d rather get the low price than the low interest rate. You can refinance later.
[/quote]

You really think you will be able to refinance at a lower rate in the forseeable future? I don’t see this happening…Historically, we’re at the lowest rates. Even if we creep up to say 6,7,8%, I don’t see how rates would suddenly come back down. It seems like the only direction for rates is up for a longer period of time.

I think a lot of the old adage sayings are going to be thrown out the windows. Similar to the outdated statement of it’s better to buy then rent…The statement “I can always refinance to a lower rate in the future” probably is going to be outdated, considering to take advantage of a rate lower than what you’d be able to get is probably way out there….like 15+ years…. Even then, at that point, what is the point of refinancing? Short of having a cash flow issue, you would be tacking on another 30 years of loan payments on top of an existing loan that you have already made payments to considerably for several years…I suppose you could switch to a 15 year loan, but again I doubt your 15 year loan rate will be much less than what you would be getting a 30 year loan in the short to mid term.

[DWCAP]

[quote=FormerSanDiegan]DWCAP –
This is a very short term effect and I would expect it to be followed by a slack in demand. Net effect would be a shift in demand forward by a month or two. Yes, there is pressure for those making offers now or in escrow to close before rates spike higher.

People who have been in the market and may have made several offers and have already made a decision to buy are the ones I refer to. Those who are planning to buy in 3-6 months or more in the future are probably more compelled to hold off because of a spike in rates.

Anyway, its just an opinion, based on anecdotal evidence and hearsay.

[/quote]

FSD, well written as usual. I agree.

[DWCAP]

[quote=FormerSanDiegan]DWCAP –
This is a very short term effect and I would expect it to be followed by a slack in demand. Net effect would be a shift in demand forward by a month or two. Yes, there is pressure for those making offers now or in escrow to close before rates spike higher.

People who have been in the market and may have made several offers and have already made a decision to buy are the ones I refer to. Those who are planning to buy in 3-6 months or more in the future are probably more compelled to hold off because of a spike in rates.

Anyway, its just an opinion, based on anecdotal evidence and hearsay.

[/quote]

FSD, well written as usual. I agree.

[DWCAP]

[quote=FormerSanDiegan]DWCAP –
This is a very short term effect and I would expect it to be followed by a slack in demand. Net effect would be a shift in demand forward by a month or two. Yes, there is pressure for those making offers now or in escrow to close before rates spike higher.

People who have been in the market and may have made several offers and have already made a decision to buy are the ones I refer to. Those who are planning to buy in 3-6 months or more in the future are probably more compelled to hold off because of a spike in rates.

Anyway, its just an opinion, based on anecdotal evidence and hearsay.

[/quote]

FSD, well written as usual. I agree.

[DWCAP]

[quote=FormerSanDiegan]DWCAP –
This is a very short term effect and I would expect it to be followed by a slack in demand. Net effect would be a shift in demand forward by a month or two. Yes, there is pressure for those making offers now or in escrow to close before rates spike higher.

People who have been in the market and may have made several offers and have already made a decision to buy are the ones I refer to. Those who are planning to buy in 3-6 months or more in the future are probably more compelled to hold off because of a spike in rates.

Anyway, its just an opinion, based on anecdotal evidence and hearsay.

[/quote]

FSD, well written as usual. I agree.

[DWCAP]

[quote=FormerSanDiegan]DWCAP –
This is a very short term effect and I would expect it to be followed by a slack in demand. Net effect would be a shift in demand forward by a month or two. Yes, there is pressure for those making offers now or in escrow to close before rates spike higher.

People who have been in the market and may have made several offers and have already made a decision to buy are the ones I refer to. Those who are planning to buy in 3-6 months or more in the future are probably more compelled to hold off because of a spike in rates.

Anyway, its just an opinion, based on anecdotal evidence and hearsay.

[/quote]

FSD, well written as usual. I agree.

[IONEGARM]

[quote=FormerSanDiegan]Sometimes a smallish, e.g. 1/2 point, increase in rates can create a sense of urgency to buy now versus later (short-term phenomenon) [/quote]

You see this when the FED is acting.. the punch is telegraphed on the news nightly and the masses confuse fed rates with mortgage interest rates so they rush and lock before the rates go up.

But when the bond market spikes and rate sheets go up with no notice.. the horse is already out of the barn and people who could have had 4.75% but wanted 4.5% are left out in the cold.

[IONEGARM]

[quote=FormerSanDiegan]Sometimes a smallish, e.g. 1/2 point, increase in rates can create a sense of urgency to buy now versus later (short-term phenomenon) [/quote]

You see this when the FED is acting.. the punch is telegraphed on the news nightly and the masses confuse fed rates with mortgage interest rates so they rush and lock before the rates go up.

But when the bond market spikes and rate sheets go up with no notice.. the horse is already out of the barn and people who could have had 4.75% but wanted 4.5% are left out in the cold.

[IONEGARM]

[quote=FormerSanDiegan]Sometimes a smallish, e.g. 1/2 point, increase in rates can create a sense of urgency to buy now versus later (short-term phenomenon) [/quote]

You see this when the FED is acting.. the punch is telegraphed on the news nightly and the masses confuse fed rates with mortgage interest rates so they rush and lock before the rates go up.

But when the bond market spikes and rate sheets go up with no notice.. the horse is already out of the barn and people who could have had 4.75% but wanted 4.5% are left out in the cold.

[IONEGARM]

[quote=FormerSanDiegan]Sometimes a smallish, e.g. 1/2 point, increase in rates can create a sense of urgency to buy now versus later (short-term phenomenon) [/quote]

You see this when the FED is acting.. the punch is telegraphed on the news nightly and the masses confuse fed rates with mortgage interest rates so they rush and lock before the rates go up.

But when the bond market spikes and rate sheets go up with no notice.. the horse is already out of the barn and people who could have had 4.75% but wanted 4.5% are left out in the cold.

[Author]

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