I picked May 1, 2022 just to I picked May 1, 2022 just to have a specific date. But I’m wondering about when next springs buying season gets going.
The-Shoveler
September 24, 2021 @
9:13 AM
IMO the FED learned it’s IMO the FED learned it’s lesson from 2005-8.
They will keep rates low no matter what IMO,
It’s weird IMO almost like the 70’s when they tried to limit inflation with price fixing (all these shortages).
IMO China will not let their property markets crash and the Fed is trying to follow the same playbook.
But its just my opinion.
The-Shoveler
September 24, 2021 @
9:13 AM
dup dup
plm
September 24, 2021 @
11:56 AM
The way I understand it The way I understand it is:
Fed tapers the QE
Bond rates go higher drawing money back out of stocks/Reits
Stocks will underperform due to higher borrowing costs, expected higher corporate tax rates.
Growth slows down because companies can not grow as fast.
Covid is brought under control causing more inflation.
Fed raises rates to slow down inflation back to 2 percent.
Bond rates go even higher drawing more money out of stocks/Reits
Mortgage rates go up with Fed raising rates, causing housing appreciation to slow
Growth stocks will underperform more due to even higher borrowing costs.
So if this can be done slowly then things will be a nice orderly balance back to normality. And if not, then we get market crash/recession again.
Does that sound right?
XBoxBoy
April 29, 2022 @
9:08 AM
Boy looks like no one got Boy looks like no one got this one right! Today is the last day of trading before May 1 and 30yr mortgage is listed on Mortgage News Daily as 5.4%. While I thought interest rates would rise, I certainly didn’t expect them to rise so much so fast. Nor does it seem anyone else did!
an
April 29, 2022 @
9:50 AM
And yet, while interest has And yet, while interest has risen dramatically since September of 2021, so did price. If you bought a house in San Diego in September of 2021, you could sell today and pocket at least a couple of hundreds of thousands.
sdrealtor
April 29, 2022 @
10:57 AM
XBoxBoy wrote:Boy looks like [quote=XBoxBoy]Boy looks like no one got this one right! Today is the last day of trading before May 1 and 30yr mortgage is listed on Mortgage News Daily as 5.4%. While I thought interest rates would rise, I certainly didn’t expect them to rise so much so fast. Nor does it seem anyone else did![/quote]
I don’t think anyone did but mortgage rates always rise much faster than they fall. Aimloan still 4.875 for prime borrower. We are entering the end of an era where a 30 year fixed rate was the rule and back to where we were a couple decades ago where it will make a lot more sense to go with an adjustable or hybrid adjustable Loan. Lather rinse repeat
gzz
April 29, 2022 @
11:46 AM
Well SDR if we are entering a Well SDR if we are entering a new era of permanently high inflation and rates, a 30 year 5% could be something worth locking in.
However, I don’t think that is very likely.
I think mortgage rates are headed back down however.
The Fed only actually raised rates by .25 so far, yet mortgage rates increased by like 1.8. Lots of room for mortgage rates to fall back down as the economy cools, the fed backs off, and big investors get tired of losing money in overvalued equities and deprecating non-dollar bonds.
All of the political and demographic forces that caused the long term decline in rates remain in place. Covid, Ukraine, and China trade war caused a sudden fiscal explosion and inflation spike. This perfect storm will pass soon. The secular deflationary trends won’t.
sdrealtor
April 29, 2022 @
12:17 PM
Only of you are staying 20 Only of you are staying 20 years. For those staying 5-10 it makes sense no matter what happens
XBoxBoy
April 29, 2022 @
12:21 PM
gzz wrote:
All of the [quote=gzz]
All of the political and demographic forces that caused the long term decline in rates remain in place. Covid, Ukraine, and China trade war caused a sudden fiscal explosion and inflation spike. This perfect storm will pass soon. The secular deflationary trends won’t.[/quote]
I’m not so sure about that. Personally, I’ve thought for a while that the main reason inflation stayed so low for the last couple of decades is because of increasing globalization. For years we’ve brought more and more new workers into the economy, allowing corporations to keep their employment costs low. But the supply of rural poor that can move to urban centers and take factory jobs is finally starting to slow. Add to that more anti-globalization forces, and shipping jobs to foreign countries is becoming less attractive. And a key part of the inflation concerns we have now is rising wages. Unless globalization starts to accelerate again, I’m not so sure those secular deflationary forces are going to hang around.
gzz
April 29, 2022 @
1:25 PM
“ But the supply of rural “ But the supply of rural poor that can move to urban centers and take factory jobs is finally starting to slow.”
In China maybe they are down to a mere 300 million rural poor. Oh no!
Plenty more in Vietnam, India, Pakistan, Bangladesh, Indonesia, Egypt, and Central America. I mention these places because they have fairly stable governments and connections to global supply chains. Another billion of poor workers in Africa and interior Asia if you relax this condition.
gzz
April 29, 2022 @
1:48 PM
More seriously, I agree that More seriously, I agree that globalization is deflationary and de-rate-atory.
I think the globalization trend will also resume its prior trendline despite actual war and trade wars.
To take the case of energy, all over the world the formerly local and continental natural gas market is being globalized by construction of LNG terminals. There’s also now an undersea power cable from energy rich Norway to England, and more under construction.
XBoxBoy
April 29, 2022 @
3:31 PM
gzz wrote:
I think the [quote=gzz]
I think the globalization trend will also resume its prior trendline despite actual war and trade wars. [/quote]
I can see why you say that, but on the other hand it’s clear that politicians and the general public are becoming more anti-globalist. Will the forces of big business who profit from globalization win out or will the nationalistic politics win out? I’d hate to wager any meaningful money on that. It’s still a big unknown to me.
The-Shoveler
April 29, 2022 @
4:57 PM
IMO globalization is not dead IMO globalization is not dead yet but it soon will be.
(at least for important stuff)
gzz
April 29, 2022 @
5:12 PM
I disagree that globalization I disagree that globalization is unpopular. It is less popular than the Nafta Clinton Blair 1990s, but still popular. Macron just was re-elected big.
However, even if it were unpopular, elites and big corporations usually get what they want.
I’ll also note the GOP like big government when they are in charge. But the combo of Dem President and GOP Congress we will soon have again means real government spending may soon drop sharply.
As Treasury issuance craters, investors will pile into gse bonds and drive mortgage rates back down.
September 23, 2021 @ 3:04 PM
I picked May 1, 2022 just to
I picked May 1, 2022 just to have a specific date. But I’m wondering about when next springs buying season gets going.
September 24, 2021 @ 9:13 AM
IMO the FED learned it’s
IMO the FED learned it’s lesson from 2005-8.
They will keep rates low no matter what IMO,
It’s weird IMO almost like the 70’s when they tried to limit inflation with price fixing (all these shortages).
IMO China will not let their property markets crash and the Fed is trying to follow the same playbook.
But its just my opinion.
September 24, 2021 @ 9:13 AM
dup
dup
September 24, 2021 @ 11:56 AM
The way I understand it
The way I understand it is:
Fed tapers the QE
Bond rates go higher drawing money back out of stocks/Reits
Stocks will underperform due to higher borrowing costs, expected higher corporate tax rates.
Growth slows down because companies can not grow as fast.
Covid is brought under control causing more inflation.
Fed raises rates to slow down inflation back to 2 percent.
Bond rates go even higher drawing more money out of stocks/Reits
Mortgage rates go up with Fed raising rates, causing housing appreciation to slow
Growth stocks will underperform more due to even higher borrowing costs.
So if this can be done slowly then things will be a nice orderly balance back to normality. And if not, then we get market crash/recession again.
Does that sound right?
April 29, 2022 @ 9:08 AM
Boy looks like no one got
Boy looks like no one got this one right! Today is the last day of trading before May 1 and 30yr mortgage is listed on Mortgage News Daily as 5.4%. While I thought interest rates would rise, I certainly didn’t expect them to rise so much so fast. Nor does it seem anyone else did!
April 29, 2022 @ 9:50 AM
And yet, while interest has
And yet, while interest has risen dramatically since September of 2021, so did price. If you bought a house in San Diego in September of 2021, you could sell today and pocket at least a couple of hundreds of thousands.
April 29, 2022 @ 10:57 AM
XBoxBoy wrote:Boy looks like
[quote=XBoxBoy]Boy looks like no one got this one right! Today is the last day of trading before May 1 and 30yr mortgage is listed on Mortgage News Daily as 5.4%. While I thought interest rates would rise, I certainly didn’t expect them to rise so much so fast. Nor does it seem anyone else did![/quote]
I don’t think anyone did but mortgage rates always rise much faster than they fall. Aimloan still 4.875 for prime borrower. We are entering the end of an era where a 30 year fixed rate was the rule and back to where we were a couple decades ago where it will make a lot more sense to go with an adjustable or hybrid adjustable Loan. Lather rinse repeat
April 29, 2022 @ 11:46 AM
Well SDR if we are entering a
Well SDR if we are entering a new era of permanently high inflation and rates, a 30 year 5% could be something worth locking in.
However, I don’t think that is very likely.
I think mortgage rates are headed back down however.
The Fed only actually raised rates by .25 so far, yet mortgage rates increased by like 1.8. Lots of room for mortgage rates to fall back down as the economy cools, the fed backs off, and big investors get tired of losing money in overvalued equities and deprecating non-dollar bonds.
All of the political and demographic forces that caused the long term decline in rates remain in place. Covid, Ukraine, and China trade war caused a sudden fiscal explosion and inflation spike. This perfect storm will pass soon. The secular deflationary trends won’t.
April 29, 2022 @ 12:17 PM
Only of you are staying 20
Only of you are staying 20 years. For those staying 5-10 it makes sense no matter what happens
April 29, 2022 @ 12:21 PM
gzz wrote:
All of the
[quote=gzz]
All of the political and demographic forces that caused the long term decline in rates remain in place. Covid, Ukraine, and China trade war caused a sudden fiscal explosion and inflation spike. This perfect storm will pass soon. The secular deflationary trends won’t.[/quote]
I’m not so sure about that. Personally, I’ve thought for a while that the main reason inflation stayed so low for the last couple of decades is because of increasing globalization. For years we’ve brought more and more new workers into the economy, allowing corporations to keep their employment costs low. But the supply of rural poor that can move to urban centers and take factory jobs is finally starting to slow. Add to that more anti-globalization forces, and shipping jobs to foreign countries is becoming less attractive. And a key part of the inflation concerns we have now is rising wages. Unless globalization starts to accelerate again, I’m not so sure those secular deflationary forces are going to hang around.
April 29, 2022 @ 1:25 PM
“ But the supply of rural
“ But the supply of rural poor that can move to urban centers and take factory jobs is finally starting to slow.”
In China maybe they are down to a mere 300 million rural poor. Oh no!
Plenty more in Vietnam, India, Pakistan, Bangladesh, Indonesia, Egypt, and Central America. I mention these places because they have fairly stable governments and connections to global supply chains. Another billion of poor workers in Africa and interior Asia if you relax this condition.
April 29, 2022 @ 1:48 PM
More seriously, I agree that
More seriously, I agree that globalization is deflationary and de-rate-atory.
I think the globalization trend will also resume its prior trendline despite actual war and trade wars.
To take the case of energy, all over the world the formerly local and continental natural gas market is being globalized by construction of LNG terminals. There’s also now an undersea power cable from energy rich Norway to England, and more under construction.
April 29, 2022 @ 3:31 PM
gzz wrote:
I think the
[quote=gzz]
I think the globalization trend will also resume its prior trendline despite actual war and trade wars. [/quote]
I can see why you say that, but on the other hand it’s clear that politicians and the general public are becoming more anti-globalist. Will the forces of big business who profit from globalization win out or will the nationalistic politics win out? I’d hate to wager any meaningful money on that. It’s still a big unknown to me.
April 29, 2022 @ 4:57 PM
IMO globalization is not dead
IMO globalization is not dead yet but it soon will be.
(at least for important stuff)
April 29, 2022 @ 5:12 PM
I disagree that globalization
I disagree that globalization is unpopular. It is less popular than the Nafta Clinton Blair 1990s, but still popular. Macron just was re-elected big.
However, even if it were unpopular, elites and big corporations usually get what they want.
I’ll also note the GOP like big government when they are in charge. But the combo of Dem President and GOP Congress we will soon have again means real government spending may soon drop sharply.
As Treasury issuance craters, investors will pile into gse bonds and drive mortgage rates back down.