Insanity. People have often purchased homes/properties which they could barely afford during “normal” times. Then the values became so overinflated…now it’s costing them an additional 100%- 300% (more in interest) just to use the banks money!
I hope I’m wrong, and things don’t get as ugly as I anticipate. Many households are going to be in a world of hurt.
People are crazy. A broker I know has people getting approved at 7-8% and they saying they going to refinance after. Who knows when rates coming down.
Hm,
My Websterbank still has lower rates than indicated in the article without points.
And on top of that Jumbo rates are lower than Conventional and with current prices it’s a lot easier to find a house in Jumbo price range in NYC suburbs than in conventional mortgage prices.
It’s shocking to people who have mostly observed the historically-irregular low rates for the past 13-14 years.
But current mortgage rates are roughly in line with the long-term average.
While rates are now relatively “normal,” in general real home prices are not. That will slowly work itself out also.
That’s an average from a recurring Freddie Mac survey of what its lenders are currently charging, so it’s sort of like the DJIA is to stocks. Just because Dow is up 2% doesn’t mean Boeing is. 
That is very true; if you were look at the trendline over the past few decades, today’s rates would fall very near. It would just be a large pill to swallow knowing one could’ve had a mortgage for significantly cheaper, just a couple of years ago. However, we all know the old saying… hindsight is 20/20.
I would anticipate that to happen as well, as it almost give has to give at some point. I think many consumers have already been priced out of the market, or significantly reduced (in terms of purchasing power). That $600k home which they could once “afford” ( i.e. not starve to death in attempt at keeping the monthly afloat) is no longer attainable.
Jumbo ARMs still below 5% even for 10 years fixed ones which is a lot lower than 6% for conventional mortgages…
Many consumers have always been priced out the market, and many always will be. 
If you’re willing to reprioritize certain things (how much home you want/need, discretionary expenses) it can make a lot of difference, especially on a first home.
My signatures on the loan papers for my first place don’t look like mine because my hands were shaking so badly when I signed.
But I reprioritized / sacrificed some things, my career went in the right direction, and I ended up paying it off in < 15 years.
There’s a house in my community that is going on sale for what people were listing houses for back in the spring. Interest rates have increased at least 2% since then, so I’ll be shocked if they get the price they’re asking. Like this house doesn’t even have a garage and 1 less bedroom but is listed at a price that a home WITH a garage and extra bedroom was going for 4-5 months ago. They may be in for a rude awakening.
Takes time for that to settle in on Real Estate as far as I see. We got our apartment in 2012 where I thought was bottom for prices while the actual crash was in 2009. It could be same.
I see houses sitting on market for 3 months now without any price reductions while some discount price within 15 days.
One thing going in their favor is that homes in our community don’t come up for sale that often, and the school system is top-rated (blue ribbon, etc). I guess all it would take is 1 buyer that really, really wants to move into our neighborhood and they may still get full asking.
This is a purposeful listing strategy that seems to be becoming more common.
Among the reasons, a lot of disillusioned shoppers have this filter on one or more of their listing subscriptions on sites like Redfin.
So there’s little downside to pricing above market for a couple of weeks.
If it sells, great.
If it doesn’t, the property then gets exposure to hundreds or thousands of people who are aching to hear about price drops.
And 3 price drops in 6 weeks suggest a motivated seller, and a low-traffic/interest listing.
Sounds like a perfect place for HUD housing as some plans call for.
Now that mortgage rates are at 6%, who’s still looking to buy in this market?
I don’t know these people, but in my area (Stamford, CT), there isn’t that much inventory for decent size houses with decent backyards - so thus far, I see houses still going under contract fairly quickly.
I’m in active pre-contemplation to come off the sidelines, been watching regional inventory levels. Rates don’t scare me, the mortgages on my first house were 5.75% and 8%.
I’m surprised purchase mortgages are only down 29% - I expect this will drop quite a bit more the next couple of months as all the desperate folks who haven’t been able to win an offer the past few years finally get their house.
The rate on my first house back in 2011 was at 4.25%.
The initial rate on my current house back in 2019 was at 3.75%. I was able to refi 2 years ago to 2.625%. These were all 30 year fixed rate mortgages.
I guess I’m pretty lucky that I am not looking to buy any property in this current market.
