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submitted 1 year ago by MicroWave@lemmy.world to c/news@lemmy.world
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[-] DocMcStuffin@lemmy.world 12 points 1 year ago

Nearly 82% of home shoppers reported feeling “locked in” by their existing low-rate mortgage, according to Realtor.com, while around 1 in 7 homeowners without a selling plan cited their current low rate as their reason for remaining on the sidelines.

Isn't this one of the big problems right now? Most of the buying is coming from corporations who turn around and provide rentals at jacked up rates. Even if I wanted to sell now, I would have to settle for one of those rentals or put most of that money back into a new mortgage at an inflated cost and interest rate.

[-] qisope@lemmy.world 8 points 1 year ago

Absolutely, my current rate is 2.8% and there's no way I'm moving from that to deal with either of those options. Jumping from 2.8 to 6.8 could easily add $500 or more a month in interest payments for a lot of people.

[-] sadreality@kbin.social 3 points 1 year ago

People who live in their houses don't move because they chose to (save from being loaded) they moved because life events forcing their hand. Buying and selling houses is fool's errand in raising prices/low interest. Currently it is essentially taking a big L and will get worse for people who are forced to sell/move/buy.

[-] nobodyspecial@kbin.social 3 points 1 year ago

Even big corps can't make money on rentals. Not enough to bother with the risk. Higher property taxes, higher insurance, higher maintenance costs on one side, deadbeat friendly regulation and wages not keeping up with inflation resulting in not being able to pass the extra costs along to renters.

Starwood is the first REIT looking to sell 2000 of their 3200 homes, I expect more to follow especially if Fed hikes another 50-100 basis points. Why would anyone go for a < 3% return cash on cash from operating rentals if they can make 5-6% from loaning money to the government?

Normally you'd expect this to be good news, with falling demand making homes affordable. Not going to happen. The costs of building a home, between more expensive materials, tight labor and high cost of debt (builders take out unsecured loans to buy land/build the home) mean new homes are stupid priced, and that feeds into higher costs of older homes. Just like the insane car market post COVID shortages. Expect paralysis and continued housing shortages, not cheaper housing.

[-] douglasg14b@lemmy.world 1 points 1 year ago

Partially?

I feel like existing homeowners that feel stuck by their low interest rates are is a hellova better spot than someone trying to buy a home with existing interest rates....

[-] AFKBRBChocolate@lemmy.world 7 points 1 year ago

Our daughter is in another state getting her PhD. Her rent was getting jacked up so we decided to refinance our place, take some equity out, and buy a little place where she is so we can keep her rent what she can afford.

So we gave up our low interest rate for significantly higher one. We figured that the upside of interest rates being so high is that no one would be buying and we could get a low price on the new house, but things were only staying on the market for a couple days, and we ended up buying for slightly above asking price. Crazy times.

[-] MicroWave@lemmy.world 3 points 1 year ago

I wonder if it will ever be possible to buy at or below the asking price anymore.

[-] jaybirrd@lemmy.world 2 points 1 year ago

I think it essentially has to happen eventually, in a theoretical sense. The pendulum swings both ways. As far as I'm aware, one of the biggest issues currently is housing supply in a lot of areas which is keeping the prices high. When the supply eventually outpaces demand, it becomes a buyer's market where houses will begin selling for under asking price.

[-] sadreality@kbin.social 6 points 1 year ago

Pretty sure current rate is 7.25% for prime borrower... where is the CNN getting their numbers from?

[-] silverbax@lemmy.world 1 points 1 year ago

When I bought my first home in the late 90s, my interest rate was 7.75%.

[-] chronicledmonocle@lemmy.world 2 points 1 year ago

At least back then prices of homes matched wages.

[-] RGB3x3@lemmy.world 3 points 1 year ago

If nothing else, home prices at least matched the actual value of the homes. These days, you're lucky to find a shack for $300,000 in the south.

[-] silverbax@lemmy.world 0 points 1 year ago* (last edited 1 year ago)

Not really. We struggled for years to keep up with our payments, sometimes having scary conversations with our bank to try and work things out. When I was young in the 70s my father wasn't able to afford a house at all despite working two jobs, and having a college education because interest rates were just as high and wages just weren't there.
One thing I've learned is that in 20 or 30 years, young people will be claiming that things were easier now, but things have always been hard as hell. Minimum wage has never even been close to livable wage.

It reminds of a conversation I had in 1991 with an 89 year old neighbor who told me, "don't let anyone tell you about the 'good old days', things have always sucked."

[-] Lifecoach5000@lemmy.world 1 points 1 year ago

I bought my house in 2009 right after the bubble and my rate is still 6.25 😞

[-] sadreality@kbin.social 0 points 1 year ago
[-] solidgrue@lemmy.world 1 points 1 year ago

Because OP's probably not risky enough for the bank. Not worth their their time or money, even with closing costs guaranteed. They're looking for a higher LTV borrowers to steer into ARMs and variable interest programs so they can sell off the risk at a net profit.

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this post was submitted on 08 Jul 2023
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