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Old 09-26-2022, 11:44am   #1
Onebadcad
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Default Mortgage Rates

It is going to get A LOT WORSE, before it starts getting better.

Today, Fannie / Freddie, 30-year fixed is 6.875%, FHA and VA about the same.


10-year Treasury is at 3.90%, up 18 basis points today.

I predict we will be over 8.000% by Thanksgiving, we will definitely see 10.000+% before rates start falling.

The increase in mortgage rates will CRUSH the housing market, it already has, and then the rest of the economy will crater.

This will get much, much worse:

1) the fed raising the discount rate every six weeks has done nothing in the past nine months except hurt the economy

2) it will do nothing quickly, long-term, 18+ months, will work, as it will cra
ter economy, but the cost to the average person will be very severe

3) unemployment numbers are UTTER BS, how many people are not being counted, what is participation rate, AND those working are not keeping up with inflation, they buy less, or they do not buy

4) GDP will continue to decrease, unemployment will skyrocket, retailers will get crushed--walmart and target will get payback for their wokeness, as their employee costs with benefits and transportation costs will put ALL STORES in the negative

5) unemployment will increase greatly as retailers shut down, most do not have the deep pockets as walmart, expect to see many store closings and bankruptcies, due to increasing costs and decreasing revenues

6) consumers, at least those not on the taxpayer teat, have already amended their spending, they only buy what they need AND eat out less--restaurants will have a much higher fail rate than retailers, fedex gave the warning shot, they are down 43% in nine months

7) not all is bad, you can get your student loans forgiven, illegals will get free housing & food & clothes & cell phones & team mexico futbol polos, and manchin's supporters will get a huge return on investment

8) and best of all, that $50+T National Debt we will have by 2025 is just a number, it will not affect your income tax, cap gains, real estate values, retirement, social security and medicare--at least depends joe said so
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Old 09-26-2022, 11:52am   #2
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Quote:
Originally Posted by Onebadcad View Post
It is going to get A LOT WORSE, before it starts getting better.

Today, Fannie / Freddie, 30-year fixed is 6.875%, FHA and VA about the same.


10-year Treasury is at 3.90%, up 18 basis points today.

I predict we will be over 8.000% by Thanksgiving, we will definitely see 10.000+% before rates start falling.

The increase in mortgage rates will CRUSH the housing market, it already has, and then the rest of the economy will crater.

This will get much, much worse:

1) the fed raising the discount rate every six weeks has done nothing in the past nine months except hurt the economy

2) it will do nothing quickly, long-term, 18+ months, will work, as it will cra
ter economy, but the cost to the average person will be very severe

3) unemployment numbers are UTTER BS, how many people are not being counted, what is participation rate, AND those working are not keeping up with inflation, they buy less, or they do not buy

4) GDP will continue to decrease, unemployment will skyrocket, retailers will get crushed--walmart and target will get payback for their wokeness, as their employee costs with benefits and transportation costs will put ALL STORES in the negative

5) unemployment will increase greatly as retailers shut down, most do not have the deep pockets as walmart, expect to see many store closings and bankruptcies, due to increasing costs and decreasing revenues

6) consumers, at least those not on the taxpayer teat, have already amended their spending, they only buy what they need AND eat out less--restaurants will have a much higher fail rate than retailers, fedex gave the warning shot, they are down 43% in nine months

7) not all is bad, you can get your student loans forgiven, illegals will get free housing & food & clothes & cell phones & team mexico futbol polos, and manchin's supporters will get a huge return on investment

8) and best of all, that $50+T National Debt we will have by 2025 is just a number, it will not affect your income tax, cap gains, real estate values, retirement, social security and medicare--at least depends joe said so
Sounds like a rehash of the Jimmy Carter years!
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Old 09-26-2022, 11:53am   #3
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I agree with most of that...

Unemployment numbers are way off from actual numbers. Employers are slashing jobs and just not hiring.. That's gonna hurt more than anything.
I'm not sticking my neck out for any loan right now, i have 500 outstanding at most at any given time.

What I see as a plus...
Those of us that can budget and know how to save(or at least pay off stuff) will have bargains galore coming up. Pawn shops will be getting alot of business.
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Old 09-26-2022, 12:06pm   #4
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https://www.reuters.com/world/uk/uk-...il-2022-09-26/

https://www.bloomberg.com/news/artic...ets-in-turmoil

https://www.reuters.com/world/uk/uks...rs-2022-09-26/

https://www.ft.com/content/a549fabb-...7-7128b7b04b76



Market chaos forces UK lenders to pull mortgage products


It is falling apart as we speak
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Old 09-26-2022, 12:21pm   #5
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Quote:
Originally Posted by Onebadcad View Post
It is going to get A LOT WORSE, before it starts getting better.

Today, Fannie / Freddie, 30-year fixed is 6.875%, FHA and VA about the same.
Just be glad it's not the 1980s with double-digit mortgage rates.
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Old 09-26-2022, 12:24pm   #6
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All transitory.
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Old 09-26-2022, 12:27pm   #7
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All transitory.
So were the 2% rates .... It's all about timing
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Old 09-26-2022, 12:32pm   #8
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Quote:
Originally Posted by 6spdC6 View Post
Sounds like a rehash of the Jimmy Carter years!
I agree, I was not yet 18 at the time, so not much mattered other than at what store could I buy beer at without an ID check.

There are many much greater issues today vs. then:

1) the carter disaster years were 1978 - 1981, a time long ago, many things are different today

2)The economy thenwas much smaller, GDP in 1978 was $2.4T, 2021 was $24.0T, you cannot apply the same strategy and expect the same results

3) USA population in 1978 was 222m, today is it 50% more people, again, very different parameters

4) printing money and spending on BS is a big part of problem

5) Supply Chain Issue, not solved yet, may never be solved as too many profiting from it, you destory pricing when consumers have no options, they must pay more for the products they want

6) Bigger problem with Supply Chain Issue, you chose NOT TO BUY as no one likes being gored, this slows and kills economy over time

Things that can be distorted by the current socialist administration are on their last broken leg, average intellingence consumer will begin to figure out that this is with us for a minimum of 18 months, they will tighten their budgets and stopped buying all 'wants', and then the second crater will open up and swallow us whole!!
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Old 09-26-2022, 12:39pm   #9
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Quote:
Originally Posted by dvarapala View Post
Just be glad it's not the 1980s with double-digit mortgage rates.
That will happen, not sure how soon.

Fannie / Freddie 30-year rates were 2.625% in DEC 2021.
Today we are at 6.875%, will be over 7.00% tomorrow, as 10-year Treasury still climbing at 3,900%, up 20 BPS today, cannot recall seeing such a huge swing in one session.

You could see 10.000+% by EOY, you could see over 12.000% before it starts falling.

Home unit sales are down, list prices are being cut by all sellers.
The new housing industry is DONE, no one except cash buyers and those relocating to another state will be looking at these.
Those in contracts will get denied by underwriting due to excessive debt-ratios due to the rising rates, many who may still qualify will walk from their deposits as they cannot budget for $1,000+/month higher payment than was estimated when they entered contract--many signed contracts that leave them open for builder liabiility if they cancel contract.
New home builders, and their subs, will get hammered, no way to stop the avalanche.
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Old 09-26-2022, 12:46pm   #10
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i'm glad i got Dad's house sold last year.....
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Old 09-26-2022, 12:46pm   #11
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I have seen many new housing contracts in the past 24 months, a new clause added to most contracts state the builder determines the final contract price, as may increase from date of contract due to market pricing for materials and labor.

Also, I have not seen, but have been told, a buyer walking away from a contract due to their budgeting, obviously loses 100% of their earnest money / down payment, and MAY also be pursued for the differential in the contract price vs. final sales price to another party.
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Old 09-26-2022, 12:52pm   #12
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#FJB
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Old 09-26-2022, 1:30pm   #13
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Democrats doing what Democrats do best.
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Old 09-26-2022, 1:36pm   #14
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Quote:
Originally Posted by Rodnok1 View Post
I agree with most of that...

Unemployment numbers are way off from actual numbers. Employers are slashing jobs and just not hiring.. That's gonna hurt more than anything.
I'm not sticking my neck out for any loan right now, i have 500 outstanding at most at any given time.

What I see as a plus...
Those of us that can budget and know how to save(or at least pay off stuff) will have bargains galore coming up. Pawn shops will be getting alot of business.

I know there will be a dividing line just as there was in the Great Depression. Those below the line sold everything cheap to survive, those above, bought every cheap thing to expand their footprint and assets.

I only hope I am above wherever that line is. I'd like to get a nice $5,000.00 C5
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Old 09-26-2022, 2:24pm   #15
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Quote:
Originally Posted by dvarapala View Post
Just be glad it's not the 1980s with double-digit mortgage rates.
It will be soon
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Old 09-26-2022, 2:41pm   #16
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8.0% rates by Thanksgiving will make for a pretty bleak Christmas throughout key sectors of the economy.

And as bad as it portends here, the decline of the £ makes things seem rosy by comparison.

British Lenders Pull Mortgage Deals With UK Markets in Turmoil
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Old 09-26-2022, 2:51pm   #17
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Quote:
Originally Posted by aerovette View Post
I only hope I am above wherever that line is. I'd like to get a nice $5,000.00 C5
I've never been comfortable with debt, but when we bought new cars in 2020/2021, I actually financed part of them at 1.89% & 2.09% for 60 months, figuring it would be a long time until we see money that cheap again.
Plan was to sit on cash and be ready when shit hit the fan.

Sitting on cash sucks, seeing it devalued every day.

I go back and forth over what I should be doing right now.
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Old 09-26-2022, 3:45pm   #18
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Mortgage - WTF is that?
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Old 09-26-2022, 3:46pm   #19
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I’m sitting on a big pile of cash waiting for “blood in the streets” but also stuck in miners down over 35%. Ouch!

Hard to predict what central planners will do in the future but they only have two choices, restart QE or don’t and both will result in a financial crisis of biblical proportions. Either a deflationary death spiral or hyperinflation or both.

Ludwig Von Mises pointed this out many decades ago but apparently most authorities didn’t care because they figured it would be someone else’s problem?

“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”

— Ludwig von Mises

Social fallout is going to be nuts.
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Old 09-26-2022, 4:18pm   #20
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Quote:
Originally Posted by Rob View Post
So were the 2% rates .... It's all about timing
I feel like a genius when my wife and I intentionally refinanced a 30 year with an adjustable rate that we were forced into by a family member's failure processing our previous mortgage. Old rate was on a 7/23 adjustable with a rate of 3.375%.

We switched to a 15 year at 2.675%. Being a 15 year, obviously payments per month went way up, but well within the monthly budget. On the old loan, our mortgage payment would have already increased $500-600/mo. and climbing with however many more rate hikes there are.

Bullet dodged!
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