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Huckleberry
ParticipantI agree with the above statements. If these two GSE’s fail, mortgage rates, qualification standards, and down payments are going to skyrocket.
The buyer pool will all but completely dry up and the seller pool will grow substantially increasing inventory to astronomical levels, exponential from where they are now.
Well, if nothing else all of the coastal communities will be substantially cheaper!
ParticipantI agree with the above statements. If these two GSE’s fail, mortgage rates, qualification standards, and down payments are going to skyrocket.
The buyer pool will all but completely dry up and the seller pool will grow substantially increasing inventory to astronomical levels, exponential from where they are now.
Well, if nothing else all of the coastal communities will be substantially cheaper!
ParticipantI agree with the above statements. If these two GSE’s fail, mortgage rates, qualification standards, and down payments are going to skyrocket.
The buyer pool will all but completely dry up and the seller pool will grow substantially increasing inventory to astronomical levels, exponential from where they are now.
Well, if nothing else all of the coastal communities will be substantially cheaper!
ParticipantLooking at esmith’s blog I notice that there aren’t any data related to coastal communities.
Does anyone know where we can get stats/charts for those areas?
ParticipantLooking at esmith’s blog I notice that there aren’t any data related to coastal communities.
Does anyone know where we can get stats/charts for those areas?
ParticipantLooking at esmith’s blog I notice that there aren’t any data related to coastal communities.
Does anyone know where we can get stats/charts for those areas?
ParticipantLooking at esmith’s blog I notice that there aren’t any data related to coastal communities.
Does anyone know where we can get stats/charts for those areas?
ParticipantLooking at esmith’s blog I notice that there aren’t any data related to coastal communities.
Does anyone know where we can get stats/charts for those areas?
June 24, 2008 at 1:41 PM in reply to: Which is preferable: lower interest rates or lower prices? #227876ParticipantExcerpt from a Mr. Mortgage newsletter.
Now bond yields and mortgage rates are soaring, which is an affordability wild-card housing prices can’t handle. Most analysts and economists make their housing predictions based upon an average 30-year fixed rate over many years or the present rates, both of which are historically low and have been since 2003 (see chart below). Turning around this trade, with inflation levels that make owning Treasuries a money-losing proposition and rate overseas leading the way, maybe next to impossible. Rates are going up and arguably have been far too low for far too long.
In the past month, rates on a 30-yr fixed mortgage at no points have soared from 6% to 6.75%. When rates rise, affordability falls. Every .25% increase in mortgage rates takes away approximately 2.5% in purchasing power. Therefore, roughly 7.5% of purchasing power has evaporated in the past month. This, of course, varies from individual to individual, but assumes a household with a steady income buying at the maximum allowable debt-to-income ratios, which is typical.
People are focusing so much on the loss of loan programs and tightening of guidelines and have completely forgotten about one of the most basic of housing affordability factors, mortgage rates. This is, unless they plan to pay cash.
If rates climb back to levels last seen in 2000 and 2001 (7.5% to 8.5%), an additional 7.5%-12.5% purchasing power could evaporate. In the past, mortgage rates were a leading indicator for home prices and the health of the housing market in general. Now, that the days of free money and ‘heartbeat loans’ are over, ‘old-school’ factors like employment, income levels, interest rates, consumer sentiment and the health of the broader economy will have a significant influence once again.
Average 30-yr Rates at No Points
Today’s Rate 6.750%
YTD 2008 6.375%
2007 6.750%
2006 6.750%
2005 6.250%
2004 6.250%
2003 6.250%
2002 7.000%June 24, 2008 at 1:41 PM in reply to: Which is preferable: lower interest rates or lower prices? #227993ParticipantExcerpt from a Mr. Mortgage newsletter.
Now bond yields and mortgage rates are soaring, which is an affordability wild-card housing prices can’t handle. Most analysts and economists make their housing predictions based upon an average 30-year fixed rate over many years or the present rates, both of which are historically low and have been since 2003 (see chart below). Turning around this trade, with inflation levels that make owning Treasuries a money-losing proposition and rate overseas leading the way, maybe next to impossible. Rates are going up and arguably have been far too low for far too long.
In the past month, rates on a 30-yr fixed mortgage at no points have soared from 6% to 6.75%. When rates rise, affordability falls. Every .25% increase in mortgage rates takes away approximately 2.5% in purchasing power. Therefore, roughly 7.5% of purchasing power has evaporated in the past month. This, of course, varies from individual to individual, but assumes a household with a steady income buying at the maximum allowable debt-to-income ratios, which is typical.
People are focusing so much on the loss of loan programs and tightening of guidelines and have completely forgotten about one of the most basic of housing affordability factors, mortgage rates. This is, unless they plan to pay cash.
If rates climb back to levels last seen in 2000 and 2001 (7.5% to 8.5%), an additional 7.5%-12.5% purchasing power could evaporate. In the past, mortgage rates were a leading indicator for home prices and the health of the housing market in general. Now, that the days of free money and ‘heartbeat loans’ are over, ‘old-school’ factors like employment, income levels, interest rates, consumer sentiment and the health of the broader economy will have a significant influence once again.
Average 30-yr Rates at No Points
Today’s Rate 6.750%
YTD 2008 6.375%
2007 6.750%
2006 6.750%
2005 6.250%
2004 6.250%
2003 6.250%
2002 7.000%June 24, 2008 at 1:41 PM in reply to: Which is preferable: lower interest rates or lower prices? #228005ParticipantExcerpt from a Mr. Mortgage newsletter.
Now bond yields and mortgage rates are soaring, which is an affordability wild-card housing prices can’t handle. Most analysts and economists make their housing predictions based upon an average 30-year fixed rate over many years or the present rates, both of which are historically low and have been since 2003 (see chart below). Turning around this trade, with inflation levels that make owning Treasuries a money-losing proposition and rate overseas leading the way, maybe next to impossible. Rates are going up and arguably have been far too low for far too long.
In the past month, rates on a 30-yr fixed mortgage at no points have soared from 6% to 6.75%. When rates rise, affordability falls. Every .25% increase in mortgage rates takes away approximately 2.5% in purchasing power. Therefore, roughly 7.5% of purchasing power has evaporated in the past month. This, of course, varies from individual to individual, but assumes a household with a steady income buying at the maximum allowable debt-to-income ratios, which is typical.
People are focusing so much on the loss of loan programs and tightening of guidelines and have completely forgotten about one of the most basic of housing affordability factors, mortgage rates. This is, unless they plan to pay cash.
If rates climb back to levels last seen in 2000 and 2001 (7.5% to 8.5%), an additional 7.5%-12.5% purchasing power could evaporate. In the past, mortgage rates were a leading indicator for home prices and the health of the housing market in general. Now, that the days of free money and ‘heartbeat loans’ are over, ‘old-school’ factors like employment, income levels, interest rates, consumer sentiment and the health of the broader economy will have a significant influence once again.
Average 30-yr Rates at No Points
Today’s Rate 6.750%
YTD 2008 6.375%
2007 6.750%
2006 6.750%
2005 6.250%
2004 6.250%
2003 6.250%
2002 7.000%June 24, 2008 at 1:41 PM in reply to: Which is preferable: lower interest rates or lower prices? #228039ParticipantExcerpt from a Mr. Mortgage newsletter.
Now bond yields and mortgage rates are soaring, which is an affordability wild-card housing prices can’t handle. Most analysts and economists make their housing predictions based upon an average 30-year fixed rate over many years or the present rates, both of which are historically low and have been since 2003 (see chart below). Turning around this trade, with inflation levels that make owning Treasuries a money-losing proposition and rate overseas leading the way, maybe next to impossible. Rates are going up and arguably have been far too low for far too long.
In the past month, rates on a 30-yr fixed mortgage at no points have soared from 6% to 6.75%. When rates rise, affordability falls. Every .25% increase in mortgage rates takes away approximately 2.5% in purchasing power. Therefore, roughly 7.5% of purchasing power has evaporated in the past month. This, of course, varies from individual to individual, but assumes a household with a steady income buying at the maximum allowable debt-to-income ratios, which is typical.
People are focusing so much on the loss of loan programs and tightening of guidelines and have completely forgotten about one of the most basic of housing affordability factors, mortgage rates. This is, unless they plan to pay cash.
If rates climb back to levels last seen in 2000 and 2001 (7.5% to 8.5%), an additional 7.5%-12.5% purchasing power could evaporate. In the past, mortgage rates were a leading indicator for home prices and the health of the housing market in general. Now, that the days of free money and ‘heartbeat loans’ are over, ‘old-school’ factors like employment, income levels, interest rates, consumer sentiment and the health of the broader economy will have a significant influence once again.
Average 30-yr Rates at No Points
Today’s Rate 6.750%
YTD 2008 6.375%
2007 6.750%
2006 6.750%
2005 6.250%
2004 6.250%
2003 6.250%
2002 7.000%June 24, 2008 at 1:41 PM in reply to: Which is preferable: lower interest rates or lower prices? #228055ParticipantExcerpt from a Mr. Mortgage newsletter.
Now bond yields and mortgage rates are soaring, which is an affordability wild-card housing prices can’t handle. Most analysts and economists make their housing predictions based upon an average 30-year fixed rate over many years or the present rates, both of which are historically low and have been since 2003 (see chart below). Turning around this trade, with inflation levels that make owning Treasuries a money-losing proposition and rate overseas leading the way, maybe next to impossible. Rates are going up and arguably have been far too low for far too long.
In the past month, rates on a 30-yr fixed mortgage at no points have soared from 6% to 6.75%. When rates rise, affordability falls. Every .25% increase in mortgage rates takes away approximately 2.5% in purchasing power. Therefore, roughly 7.5% of purchasing power has evaporated in the past month. This, of course, varies from individual to individual, but assumes a household with a steady income buying at the maximum allowable debt-to-income ratios, which is typical.
People are focusing so much on the loss of loan programs and tightening of guidelines and have completely forgotten about one of the most basic of housing affordability factors, mortgage rates. This is, unless they plan to pay cash.
If rates climb back to levels last seen in 2000 and 2001 (7.5% to 8.5%), an additional 7.5%-12.5% purchasing power could evaporate. In the past, mortgage rates were a leading indicator for home prices and the health of the housing market in general. Now, that the days of free money and ‘heartbeat loans’ are over, ‘old-school’ factors like employment, income levels, interest rates, consumer sentiment and the health of the broader economy will have a significant influence once again.
Average 30-yr Rates at No Points
Today’s Rate 6.750%
YTD 2008 6.375%
2007 6.750%
2006 6.750%
2005 6.250%
2004 6.250%
2003 6.250%
2002 7.000%ParticipantI can’t find any threads where this was discussed in the past.
I have even used the search tool, to no avail.
Does anyone have any idea how to find discussion threads related to this subject matter on this site?
If not, I’ll assume it hasn’t been discussed…
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