Posted by HSH/WA on 9/13/13 5:16pm
Msg #484591

On the bright side

Right now BOs are staggering under the higher "unheard of" 4% rates, but like my wife says, that's still a damn good low rate. It still makes sense to buy at that rate. Once BOs get over the "shock" of rates moving up from all time lows, the market will pick up. In my experience BOs start to trickle in after a few months.

Reply by Shoshana/AZ on 9/13/13 5:21pm
Msg #484592

It's not the "shock" of the rates.

As the rates go higher, people get shut out of the housing market. The properties have higher values and higher interest rates. They simply cannot afford them.

Reply by MW/VA on 9/13/13 6:08pm
Msg #484609

I have to laugh when people refer to high rates at 4.75% &

higher. The first home I ever bought was in the 70's at 8 3/4%. In the 80's there were rates at 11, 12, 13, 14, and even 15%.
The real estate/mortgage market shifts. I've seen it many times. During the last few years when rates were low, it meant that people qualified for higher loans, and that drove prices up.
Higher rates usually drive housing prices down.
We need Harp3 to open up so more people qualify. Right now, lending is so tight that almost no one qualifies. It's been a good market for first time homebuyers, but not for anyone who had a property to sell.
These are just my views from what I've observed through the years.

Reply by jojo_MN on 9/14/13 1:46am
Msg #484639

Re: I have to laugh when people refer to high rates at 4.75% &

When I purchased my home in 1981, my interest rate was 21%. I even had very good credit at the time.

Reply by JanetK_CA on 9/15/13 5:23pm
Msg #484725

Re: I have to laugh when people refer to high rates at 4.75% &

I remember those awful interest rates, too. I had a pretty good job in the mid-80's, but all I could afford at the time was practically a closet with a long commute. I decided to keep renting (and walked to work!) I agree that current rates are still historically low. But it's all relative. When someone considers a refi, they're likely comparing only to what they have now.

As we know, there's a big chunk of people who have managed to lock in a very low interest rate and plan to stay where they are, with the same loan. Those are the folks who have kept us pretty busy during the bubble, and again over the past couple of years.

There's another chunk of people who couldn't refi because their property was underwater or they didn't have the income to qualify, perhaps after a job loss or because they had one of those "liar loans". And then there will always be some who will manage to sell or buy in the current market, even if they're investors - apparently more and more in the latter category. I have no idea what the numbers are in each group, but it'll be interesting, regardless.

Another big unknown (to me, at least) is how the economy will be impacted by the ongoing sequester and the looming debt ceiling battle, which could have horrendous repercussions if the government does shut down this time. I'm hoping that doesn't happen, but I suspect that there's a certain amount of paralysis within the lending communities and elsewhere waiting to see what happens. I wonder if that is partly why this slowdown was so abrupt and severe. Once this gets played out, things may settle down a bit, but I still don't expect them to go back to the way they were up until recently.

Reply by Lee/AR on 9/13/13 5:39pm
Msg #484596

You young'uns... the total cutoff is a whopping 12%

THEN it's just unaffordable. I was there when~~
We've been spoiled rotten with low rates for a long time now.

Reply by PegiT_MN on 9/13/13 9:34pm
Msg #484632

Re: You young'uns... the total cutoff is a whopping 12%

Yes but you forget that when interest rates were 12%.....houses only cost $22,000.00.

Reply by Lee/AR on 9/13/13 9:38pm
Msg #484633

No, didn't forget that part. Cheaper, yes, but not $22k

4-6 times that amount.

Reply by HSH/WA on 9/13/13 5:51pm
Msg #484602

"I coulda, woulda, shoulda."

Higher rates will eventually shut BOs out of the market, but the difference between 3.25 and 4.25 will not affect most except emotionally - "I coulda, woulda, shoulda." "Maybe we should wait to see if they come back down." "Jones got 3.25 and I want to beat them out."

Reply by Bear900/CA on 9/13/13 5:58pm
Msg #484605

Take today's rate and be a hero next year! n/m

Reply by CJ on 9/13/13 5:59pm
Msg #484606

My 2 cents.

It seems to me that the bulk of our work comes from people refinancing their primary residence for a lower rater. If the rate is not lower than what they have, then they have no reason to refinance. I signed a lot of people who said stuff like, "We just refinanced a year ago, but rates dropped, so our lender offered to refinance with no closing costs". Gee, who wouldn't jump on that? But who is going to budge now that rates are higher? People will still be buying and selling, and buyers will take whatever rate they are stuck with, but I think the refinacers are not playing any more.

Reply by Bear900/CA on 9/13/13 6:02pm
Msg #484608

That's worth at least a nickle. n/m

Reply by MW/VA on 9/13/13 6:11pm
Msg #484611

Much of my work over the last couple of years has been

"streamline" refi's--FHA or VA, where they can refi for a lower rate/lower payment without qualifying. Obviously, if rates go up that will cut down on the no. of people that will apply to.

Reply by MW/VA on 9/13/13 6:09pm
Msg #484610

All things are relative, as they say. I had a signing

for a couple last night that was refi'ing a VA loan. The new rates was 4.75% and they gave each other a high-five. I didn't pay attention to what their previous rate had been, but they did say it was going to save them about $300/mo.
While some people feel these rates are high, they're still a bargain for many.

Reply by NVLSlady/VA on 9/13/13 6:47pm
Msg #484618

Re: All things are relative, as they say. I had a signing

I agree. My parents have near perfect credit but refi'd to 5.25 some years back (they weren't sure what rate they had until I asked to see the stmt last week!).

I encouraged them to look at a 15 yr for the interest savings. They don't see any measurable tax savings now (not enough deductions). Probably others in their "shoes" that could refi for shorter term if they have a stable income.

Of course 'stable' is also relative. At least the boomers have retirement & SS (we 'kids' will be shacking up with them yet!)

Reply by MW/VA on 9/13/13 7:35pm
Msg #484626

I have another one tomorrow for 4.75. These are still

great rates. Heck, I just refinanced out of 6% about 8 months ago. ;-)