New 30 year mortgages hit 5.99% last week, after Powell's speech in Jackson Hole. Housing starts have already dropped by over 20% and this will not help.

https://www.forbes.com/advisor/mortgages/mortgage-rates-09-01-22/

Today, the average rate for the benchmark 30-year fixed mortgage fell to 5.99% from 6.03% yesterday. One week ago, the 30-year fixed was 5.96%. The 52-week high is 6.11%.

On a 30-year fixed mortgage, the APR is 6.01%, higher than it was last week. APR, or annual percentage rate, includes a loan’s interest rate and a loan’s finance charges. It’s the all-in cost of your loan.

At an interest rate of 5.99%, a 30-year fixed mortgage would cost $599 per month in principal and interest (taxes and fees not included) per $100,000, according to the Forbes Advisor mortgage calculator. In total interest, you’d pay $115,607 over the life of the loan.

Ouch!

Double what it was from when that azz hat took over.

I expect most building construction will be put on hold for 1-2 years until interest rates come down. It's a cycle that repeats again and again. I'm hoping things slow enough that materials come back down to earth.

I mentioned this in another thread the other day, but my neighbor and I got some new home bids recently. What was a $350k home build in 2019/2020 is now being bid at $480-$530k. And interest rates are nearly double. So a $1,100-$1,200 mortgage becomes a $2,200 mortgage for the same home, 2-3 years later. That's not sustainable.

Wholesale lumber costs are already pretty much at pre-covidiocy prices. There is still a large shortage of housing, and the demand will continue to support building. I expect the interest rate is going to hit the McMansion industry very hard, and we already see that in the drop in new single family housing starts. We actually saw an increase in multi-family building over the last quarter, and that makes sense to me. Rents for apartments have shot out of sight, and the cost of construction per unit makes renting apartments financially a VERY attractive proposition.

I guess the lumber prices will start going down some if the demand goes down.

It’s the Night before Darwin …

And All the F’ck Tards who hate Orange want “Red”

With Vision of Stimulus Checks Bouncing in their
Air Pockets …

Yes it’s the Night before Darwin

I see Dead People all the time

They just don’t know their Dead ..

Yes It’s the Night Before Darwin …

When we got 6.25% in 1998 we thought it was a damn good rate. Now everyone is buying 2X more house than they need and that $120K house is going for $320K and screaming about 6% being too high.

Locked in a 30 year at 2.85% a little over a year ago, better to be lucky than good I guess.....

I borrowed from my Grandad in 1984. Put it in escrow at 10%. Banks would have been 12% to 13% on real estate. Grandad was getting about 8% on his CDs. It was a winner for both of us.

New vehicle 82 was 17% from the dealer's bank, for a young man with short, but good credit history.

No, you did not see 72 or 84 month auto loans at those rates.

My new purchase was refinanced quickly through the credit union at work.

But, yes, it could get a whole hell of a lot worse.

You guys have short memories. The rate on this house in '95 was around 7%. I remember a number of people having to pay 10%. Thank goodness I was able to pay it off in '07.

Yes, at 6%, mortgage rates are still in historic lows, but will that lower the cost of a new home? I’m guessing not for a while. I think I’ll hunker down where I’m at for a while, and thats not a bad thing, thankfully.

We bought our house 10 years ago and we paid $400,000. We locked in at the time at 4% for 30 years. I told my wife that we’d never refinance because the rates would never drop below 3.75% anyway. Earlier this year I refinanced with no fees and no equity being withdrawn and locked in at 3%. It dropped our monthly payment by almost $1,000 and we have a 30 year at 3%. The house is now valued at $1.1 million. We’ve had a number of people and agents wanting us to sell but we are not willing to sell right now since we’re taking care of my mother in law. It’ll keep going up so I don’t worry about it until I’m ready to sell. When that day comes I’ll be thrilled taking the money and running out of this state as fast as I can.

During the Jimmy Carter years mortgage rates were in the high teens.

I seen bank statement from my grand parents when we cleaned out her house. At one time she had couple hundred grand thru different banks around town in 5year CDs at 13%. She was also playing the 3 and 6 mo CD switcharoo game at up to 18%. Crazy.

While I agree that home costs are to the moon right now, I don't think that's slowing building. At least not around here. Hell, anywhere there is enough open land a builder is jamming a house in it.

6% is not that high really. A lot higher than it has been. But it isn't bad. It is though, when you're buying more than you can reasonable afford.

Would it be the end of the world if Little Johnny had to share bedroom and a bathroom with Little Jimmy? Probably not. People are going to have to stop buying a 4800 SF home that stretches the budget and buy a 2500 SF home that doesn't.

Still waiting for prices to cool down.

No, it's not. Especially when families are having trouble just putting food on the table.

The DC Uniparty does not care. They're eating caviar and ice cream.

Need to be swinging from a rope.

Houses being finished now have had their construction and take out loans set in the 3% era, not the current 6% era.

6% is entirely reasonable, but it's double what we had for a long, LONG time. Forever, in the mind of the younger generations who have never seen anything different. Nothing down, virtually no interest, and 10-30% annual appreciation -- buy all you can! 6% and virtually no appreciation for a decade will be a big shock.

Average house size being built today is over 2,800 square feet, compared to 1,000 in 1960. Many of the current generations would "struggle a bit" trying to adapt to five kids in a 1,000 square foot home.....

6% was a deal not to many years ago.
gonna need that extra 1k a month to cover your property taxes since its now valued at 1.1 mil

If what you were paying a month wasnt an issue for you, I'd probably have done a 15 year fixed and keep the monthly payments the sameish, probably a little less.

Interest rates are going to go higher too. Record levels in fact. We all knew that. The prices on houses and property values are going to go down big time as well. Those of you that don't think this is going to happen are clueless.. This is nothing we didn't know about. Current administration is the direct cause of this, inflation and the recession.. Even though they say we are at 0% inflation, thus we are not in a recession.. Stupid fuggs...

Does anyone else think that he shouldn't have given his speech in such a luxurious place?

I remember i got 5.75 in 2006 when buying my first house and that was about as low as you could get then. My mom reminded me what hers was during the Carter years.

Bought our last home in 2019, 3.75 for 30, i finally got off my butt when I saw those rates get around 2% and refinanced. I had to put a little down to keep the payments the same but I'm at a 15 year fixed now.


Problem is, folks want that 400k house, but now they can only afford that 250k house, and hurts their feelings. But they have no problem dropping 2k a month for a 2 bedroom apartment. That's what a decent apartment goes for around here.

I know someone who just built a million dollar home, and his buck from last season that is has been ready since May is still not picked up, doesnt have the extra 600 bucks to pay the taxidermist. They want everyone to think they are high cotton, but in reality, they are having a hard time making ends meet due to their choices.

The county I just moved from is getting in on upping appraisels while things are hot, buddys house just got appraised at 600k from the 400k it was last year. Folks are appealing left and right, but I dont know what leg they have to stand on. Looking at comps they have no arguement right now.

You reckon the county is gonna drop them back to 400k when things crash....if they do I bet they take their sweet time doing it.

I remember in the late 70s when mortgages were 22%

Don’t forget to add in the cost of the solar panels on the roof.

Mortgage rate in the first part of the year of 1980.
It was 14.75

Ask me how I know

Dave

When they dropped down to around 12%, I took the plunge.

It appears people have plenty of money to buy whatever they want. People are still buying new trucks faster than the automakers can build them, and they cost more than our house.

I think there are plenty of people like that around!

Bought our first house in 1976, 30 yr @ 7.25% - 2nd house in 1980, 30 yr ARM @ 13% to 18% max - 3rd house in 1983, 30 yr @ 9.25% - 4th house in 1994, 30 yr @ 9% - current house in 2002, 30 yr @ 6.25%, refinanced in 2012 to 15 yr @ 3% and stupidly(?) paid it off in March 2020. Each home cost more than the previous one, but we had good jobs, had a budget and stuck to it. Retired since January 2018 and still have a budget.

Interest rates) go up, they go down, just keeps everybody guessing. Make a budget and stick to it, adjusting as necessary. More difficult these days but it can be done. Many folks don't or can't tell the difference between 'want' and 'need'.

If Joey dumps another couple trillion of "free money" into the system...

Inflation jacks up even further...

And Powell counters with more rate increases.

BASIC BASIC STUFF...

Free money is EXACTLY inflation...

The poor and middle will get hurt the most...

Inflation Reduction Act... my ass.

When I was in college (late 1970's- early 80's) I recall rates were in the high teens like 17-18%. Wasn't pursuing a loan at the time, but I was wondering how folks could afford to borrow $100 K and get by. I was wishing, however, that I had some cash to deposit as CD were great money makers.

I paid 9% on my first mortgage in the early 70`s with 20% down.Paid it off in 10 years.

No its just that they think they can "afford" the payment on their ridiculous 6 or 7 year auto loan with a minimal or no down payment. Might be a slap in the face come year 4 or 5 when they realize they still owe considerably more than the current value of their no longer "new" truck! What they gonna do then, roll the remaining payments into an even more ridiculous loan for a new vehicle, or drive it till its paid off with nothing new about it and not worth much at all, especially anticipating the "green" push by then?

Alot of idiots are in for a rude awakening when this housing bubble inevitably bursts and they come to find out that the house they just had to have by offering $50-$75k over the already inflated price in this market leaves them with little or negative equity should they decide to sell in a few years due to a need to trim expenses etc.

There's nothing at all that is sustainable about this whole economic situation.

If things don't change soon, things are going to really come apart & the only way we are going to get change, if even then, is when the AzzwHole in Chief leaves the WH & the Demons no long control Congress.

But with fixed elections, I fear that we are in for a long, rough ride.

Conserve your resources...............

MM