.

[spdrun]

^^^

Exactly. Don’t know where the market will end up in 10-15 years, but it will probably oscillate quite a bit in the next five. Remember that inventory was crap/prices were also high in late 2009 through 2010.

[desmond]

[quote=bearishgurl]

Any mortgage brokers here, please feel free to correct me on this.[/quote]

Ha, like you would listen,,,,,,,,,,,,,,just kidding………………

[CA renter]

[quote=JohnAlt91941]

So who will be buying the homes that aren’t “lesser in size, in a lesser location or in lesser condition or all three”?

I say the same type folks that are buying them now, only the principle (price) will be lower to meet the lower borrowing levels (demand). People aren’t getting more house now due to lower interest rates, only more debt.

The sellers will be the ones sucking it up.[/quote]

Bingo!!!

Not sure why some people still can’t grasp the relationship between easy/cheap credit and price. Housing prices are not set by yesterday’s buyers, they are set by tomorrow’s buyers. If future buyers have access to less credit than today’s buyers, then prices will go down.

[The-Shoveler]

[quote=CA renter][quote=JohnAlt91941]

So who will be buying the homes that aren’t “lesser in size, in a lesser location or in lesser condition or all three”?

I say the same type folks that are buying them now, only the principle (price) will be lower to meet the lower borrowing levels (demand). People aren’t getting more house now due to lower interest rates, only more debt.

The sellers will be the ones sucking it up.[/quote]

Bingo!!!

Not sure why some people still can’t grasp the relationship between easy/cheap credit and price. Housing prices are not set by yesterday’s buyers, they are set by tomorrow’s buyers. If future buyers have access to less credit than today’s buyers, then prices will go down.[/quote]

And that will put us, maybe back in 2009 with cities going BK left and right and unemployment around 10%.

[CA renter]

That’s entirely possible, TS. Still, we can keep throwing money at this dead, over-extended economy (and it will require more and more money for less and less effect, IMHO), or we can let the system clear and get to a point from which we can have a healthy, sustainable economy that is better aligned with productive growth rather than the never-ending speculative asset trading that’s been the hallmark of our economy for the past decade or so.

[spdrun]

Good. I hope we do end up back in 2009. There’s a lot of pigfat to cut from cities. Example being, overpaid cops earning $150k plus per year including fake overtime should be kicked out the door after being given their service pistol with single bullet as a going away present and polite hint about what to do.

[CA renter]

And private contractors with lucrative contracts for overpriced, unnecessary work. I’d like to see those go first.

BTW, there is no such thing as “fake” overtime for cops.

[spdrun]

Sure there is — sitting in their cars playing with themselves while claiming to “direct” traffic at a construction site. Outright time fraud also exists at least locally to me.

[all]

[quote=bearishgurl] I would guess that many (most?) mortgage lenders don’t use MR and HOA monthly expense (BOTH can be exorbitant) when calculating monthly PITI in front end/back end ratios for qualification purposes.[/quote]

Guess again.

[patb]

If Interest rates rise, a lot of people will lose their butts.

[HLS]

[quote=bearishgurl]
Are some buyers today incurring too much debt for their families to realistically handle going forward? I would guess that many (most?) mortgage lenders don’t use MR and HOA monthly expense (BOTH can be exorbitant) when calculating monthly PITI in front end/back end ratios for qualification purposes.
Any mortgage brokers here, please feel free to correct me on this.[/quote]

Debt ratios are factored using ALL minimum monthly payments on a credit report + proposed mortgage payment INCLUDING principal, interest, taxes, insurance, HOA, (AND Mello Roos, which is normally included in the property taxes)

In general, the guidelines do not care how many dollars you owe, they only care about the minimum monthly payments that show on a credit report.

**MAJOR hassles can occur to this formula when:
a)There is an open large HELOC (on a refi) that has nothing drawn against it.
b) Large car payment that only has a few months left to pay
c)Student loans that are deferred
d)Debt that was co-signed for even though borrower does not make the payment

[Author]

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