Interest rates

[Tenacious E]

My oh my how they have changed. I knew that they had gone up, but I didn't really have a reason to look before. Essentially, we have a HELOC that I am looking to convert to a straight HEL. Even with impeccable credit, and a small loan relative to the equity in the house, Rocket Mortgage was pitching me 10.3% on a 15 year, which was weird, because US Bank pitched me 7.69% Not sure why there is such a huge disparity, other than we already have the HELOC with US Bank and maybe there is some kind of savings built in there. Either way, the rates I was being quoted were rather shocking. csb.

 

[Pete Malloy]

 

[Funky Bunch]

This is HORT. What are loans again?

 

[CharYoteHawk]

This was inevitable going all the way back to the 2008 recovery. It was just a matter of "when." Flooding bank accounts with cash over the few years, mixed with the populace's inability to save, created the "when."

 

[Kelsers]

My oh my how they have changed. I knew that they had gone up, but I didn't really have a reason to look before. Essentially, we have a HELOC that I am looking to convert to a straight HEL. Even with impeccable credit, and a small loan relative to the equity in the house, Rocket Mortgage was pitching me 10.3% on a 15 year, which was weird, because US Bank pitched me 7.69% Not sure why there is such a huge disparity, other than we already have the HELOC with US Bank and maybe there is some kind of savings built in there. Either way, the rates I was being quoted were rather shocking. csb.

5.8% in IOWA

 

[SWIowahawks]

We got locked into our HELOC at 4.5% for two years. Up from 2.75% from two years ago.

 

[Tenacious E]

5.8% in IOWA

Not from two places I got quotes. At least not for a second position mortgage, even if there is ample equity. If you are a mortgage broker and can hook me up with 5.8%, shoot me a DM.

 

[Kelsers]

Not from two places I got quotes. At least not for a second position mortgage, even if there is ample equity. If you are a mortgage broker and can hook me up with 5.8%, shoot me a DM.

I got a 7-year balloon at 6.2% in November, and a friend of mine just got 5.8%, not sure of the term.

 

[OutbackBowl2017]

BoA has a great HELOC rate if you have investments with Merrill Lynch. Of course your mortgage will be with BoA as well.

 

[WisestIowan]

I got a 7-year balloon at 6.2% in November, and a friend of mine just got 5.8%, not sure of the term.

Why would you choose a balloon note?

 

[QChawks]

It was badly needed, housing market was out of hand. People way overspending on mortgages due to high demand and cheap rates.

 

[anon_b29nm7v7dwp6r]

Nationally, mortgage rates have fallen below 6% now for the first time since October.

 

[NoleATL]

This is HORT. What are loans again?

Clearly you don't belong here. Loans are the vehicle by which rich people use other people's money while earning more money on their own money in investments.

 

[Tenacious E]

Nationally, mortgage rates have fallen below 6% now for the first time since October.

I wonder if they will continue to fall back down a bit more, or if they will spike once the demand increases in the spring/summer when most people house shop…

 

[NoleATL]

Principal and interest payment on a $500k mortgage with 20% down (30-year):
@ 3.11% it'd be $2,138 (i.e. Dec. 2021)
@ 7.37% it'd be $3,452 (i.e. Oct. 2022)
@ 5.99% it'd be $2,995 (i.e. today)

Another way to put this, people who were just barely qualified for a $500k house in 2021, are now only qualified for $375,000.

 

[Tenacious E]

Principal and interest payment on a $500k mortgage with 20% down (30-year):
@ 3.11% it'd be $2,138 (i.e. Dec. 2021)
@ 7.37% it'd be $3,452 (i.e. Oct. 2022)
@ 5.99% it'd be $2,995 (i.e. today)

Another way to put this, people who were just barely qualified for a $500k house in 2021, are now only qualified for $375,000.

The thought of an extra $15k per year in interest for the same physical thing is gross to think about.

 

[TunzaHawk]

The thought of an extra $15k per year in interest for the same physical thing is gross to think about.

It’s also gross to think about how much of house people think they need today. Way larger than previous generations. Grosser yet is first time house buyers thinking they have to have a new home.

 

[RileyHawk]

We were all spoiled with such incredibly low interest rates. They are much more reasonable now.

 

[NoleATL]

We were all spoiled with such incredibly low interest rates. They are much more reasonable now.

The interesting part is housing prices went up in part because of the low rates. So, will people just get accustomed to buying 25% less house for the same money or will prices come down to meet that? And, all those people who bought at the higher price/lower rates when its time to sell? Interesting times.

 

[Tenacious E]

The interesting part is housing prices went up in part because of the low rates. So, will people just get accustomed to buying 25% less house for the same money or will prices come down to meet that? And, all those people who bought at the higher price/lower rates when its time to sell? Interesting times.

I would guess in macro economic terms, the demand curve moves left, and housing prices will recede. While the air comes out of the ball, people will buy less house for the same money they were willing to spend, or simply not move at all.

 

[abby97]

We were all spoiled with such incredibly low interest rates. They are much more reasonable now.

I suppose we were spoiled with low fuel and grocery prices as well and they are much more reasonable now.

 

[Tenacious E]

I suppose we were spoiled with low fuel and grocery prices as well and they are much more reasonable now.

I have been here 20+ years - this is first like I have ever awarded you.

 

[RileyHawk]

I suppose we were spoiled with low fuel and grocery prices as well and they are much more reasonable now.

We were with fuel prices and still are. Food less so but it still applies.

 

[Tenacious E]

We were with fuel prices and still are. Food less so but it still applies.

Explain how we are spoiled with fuel prices.

 

[RileyHawk]

Explain how we are spoiled with fuel prices.

The real price is held down rather than being at true market levels like Europe and other areas.

 

[Tenacious E]

The real price is held down rather than being at true market levels like Europe and other areas.

"Real price" and "true market levels"? Gasoline in Europe is expensive because of higher taxes and lower supply. We have greater supply and lower taxes (whether that is prudent is another matter). Our market price is lower due to supply, and prices at the pump are not as inflated due to lower taxes. That is not holding down the real price of gas.

 

[RileyHawk]

"Real price" and "true market levels"? Gasoline in Europe is expensive because of higher taxes and lower supply. We have greater supply and lower taxes (whether that is prudent is another matter). Our market price is lower due to supply, and prices at the pump are not as inflated due to lower taxes. That is not holding down the real price of gas.

The oil industry is heavily subsidized.

 

[Tenacious E]

The oil industry is heavily subsidized.

Fair point, but aren’t other (not all) oil industries subsidized if not owned by the state altogether?

 

[RileyHawk]

Fair point, but aren’t other (not all) oil industries subsidized if not owned by the state altogether?

Some are, like farmers, which impact that pricing as well. But certainly not all industries.

 

[Tenacious E]

Some are, like farmers, which impact that pricing as well. But certainly not all industries.

Enough oil subsidies from all kinds of nations so that it impacts prices around the globe, a lot.

Reforming global fossil fuel subsidies: How the United States can restart international cooperation

Johannes Urpelainen and Elisha George discuss fossil fuel subsidies, their effect on the climate crisis, and the United States' role in reforming these subsidies in the Biden era.

www.brookings.edu

Value of fossil-fuel subsidies by fuel in the top 25 countries, 2019 – Charts – Data & Statistics - IEA

Value of fossil-fuel subsidies by fuel in the top 25 countries, 2019 - Chart and data by the International Energy Agency.

www.iea.org

 

[cfbfan23]

The oil industry is heavily subsidized.

Agriculture, Technology, Education, Movie/TV production, Professional Sports and Housing are some other areas that are subsidized.

 

[RileyHawk]

Agriculture, Technology, Education, Movie/TV production, Professional Sports and Housing are some other areas that are subsidized.

Sure, but most are not at nearly the level of energy and Ag.

 

[bhawk24bob]

We'll have blips where things stabilize like we had for a couple months at the end of last year, but supply isn't going to meet demand in urban areas and their immediate suburbs. We've created a situation where it doesn't make any financial sense to sell a house even if you're going to move.....just rent it

 

[anon_b29nm7v7dwp6r]

I would guess in macro economic terms, the demand curve moves left, and housing prices will recede. While the air comes out of the ball, people will buy less house for the same money they were willing to spend, or simply not move at all.

Yep- I know we locked in ours at 30 years, sub 3% at a decent price and we have decided we are essentially not moving unless we leave the state or our dream property becomes available.

 

[hydro2.0]

Just paid off my HELOC after 3 years. Feels good

 

[Pete Malloy]

Principal and interest payment on a $500k mortgage with 20% down (30-year):
@ 3.11% it'd be $2,138 (i.e. Dec. 2021)
@ 7.37% it'd be $3,452 (i.e. Oct. 2022)
@ 5.99% it'd be $2,995 (i.e. today)

Another way to put this, people who were just barely qualified for a $500k house in 2021, are now only qualified for $375,000.

 

[joelbc1]

We were all spoiled with such incredibly low interest rates. They are much more reasonable now.

Cheap money allowed many here to lose their way to reality....and sadly, cheap money has enabled a generation of whiners and cry-babies. The “cheap money days” from about 2005-2020, truly may have been “ the good ol’ days” many here have heard their elders speak about,.

 

[joelbc1]

The oil industry is heavily subsidized.

As is the domestic Ag / food industry...

 

[Tenacious E]

Cheap money allowed many here to lose their way to reality....and sadly, cheap money has enabled a generation of whiners and cry-babies. The “cheap money days” from about 2005-2020, truly may have been “ the good ol’ days” many here have heard their elders speak about,.

Counterpoint is that a decade+ of low interest rates permitted a good chunk of people to purchase a home and upgrade it relatively interest "free," and now there is the next group of home buyers who are getting whacked. Yes, middle aged/old people like me are "whining" about interest rates, but I'll be fine - I have reaped a nice bounty. It is the younger generation(s) for whom home ownership is out of reach, at least for longer than it was for me.

 

[Pete Malloy]

Counterpoint is that a decade+ of low interest rates permitted a good chunk of people to purchases a home and upgrade it relatively interest "free," and now there is the next group of home buyers who are getting whacked. Yes, middle aged/old people like me are "whining" about interest rates, but I'll be fine - I have reaped a nice bounty. It is the younger generation(s) for whom home ownership is out of reach, at least for longer than it was for me.

Just an observation but many of the younger generation want to start out in a brand new home rather than something older they can actually afford and move out and up as years go by.