Mortgage Rates & The Housing Market

The late 80s and 90s is when borrowing (credit card debt) became a thing …

living within their means ?? – not so sure for the average person

If you have a large amount of equity in your home or it is paid off in full … probably a good time to find a good estate lawyer and build a trust.

Otherwise it just may return to the state via expensive elder care.

I came into the world with nothing and i’ll leave with nothing.

My friend just bought a house. Put 25% down, has good credit, good debt to income ratio and a ton of paid off assets. Best they could give him was 6%

My wife and I often bring up how fortunate we were that we were ready to buy 7 years ago and not in today’s market

crappie55369 wrote:

My friend just bought a house. Put 25% down, has good credit, good debt to income ratio and a ton of paid off assets. Best they could give him was 6%

My wife and I often bring up how fortunate we were that we were ready to buy 7 years ago and not in today’s market

That was me a about 45 days ago. Best I could get was 5.25% with a high credit score, 25% down, and literally no other debt.

The good news is that I made a boat load of money on the sale of my previous house.

Just went to a graduation party in a new development in the east metro. They are slapping up houses as fast as they can build them.

Spoke to a realtor at the party and asked if demand was cooling off. She said that rather than cooling off demand, rising rates and prices have people in a hurry to buy so they can beat rate increases.

She also said that with employment levels so high and companies having to pay higher wages and big bonuses to retain employees so a lot of “upgrade” buyers are in the market. They now have the cash and want bigger, better, etc and don’t care that they are buying into a high market. They have the cash and want what they want now.

TheFamousGrouse wrote:

Just went to a graduation party in a new development in the east metro. They are slapping up houses as fast as they can build them.

Spoke to a realtor at the party and asked if demand was cooling off. She said that rather than cooling off demand, rising rates and prices have people in a hurry to buy so they can beat rate increases.

She also said that with employment levels so high and companies having to pay higher wages and big bonuses to retain employees so a lot of “upgrade” buyers are in the market. They now have the cash and want bigger, better, etc and don’t care that they are buying into a high market. They have the cash and want what they want now.

It’s going to be interesting to see how the market lands. New Construction is a long process, and homes built now were in process for a year if not longer so it’s a pretty inelastic market. Most of the realtors I talk to have a similar sentiment as yours stated, but that it is still a lot slower than the last couple years. Mortgage Lenders are saying it’s super slow. But they are coming off a 5 year run of probably the busiest time in their industries history with historic interest rate lows having nearly everyone either buying/selling or refi’ing their forever homes. Most home buyers I talk to are getting accepted on their first 1 or 2 offers now, as opposed to 3-8 offers the last 2 years. Demand is still outstripping supply, and hopefully that will settle into a more manageable ratio, and not fall off a cliff.

Things are slowing a bit at my side gig with the local lumberyard. I think we are at a point with more unknowns (or opinions) than ever before in the industry. Things could go quite a few different ways with the buying, selling, and building markets.

There’s the doom and gloom angle for the economy that is often the favorite to discus, there’s the faction of people who think the Fed will thread the needle with interest rates and cool things off just enough, then there’s also the opinion that there’s such a housing shortage that projects will continue no matter what happens to the economy.

I was curious to see what building costs were like now so I looked at the lumber prices trading on the commodity market and its down significantly well over 50% since March. That is total tanking.

I’m seeing houses sit on the market for a few weeks now rather then a few hours. The couple realtors we know personally said it’s starting to slow down but could be short lived.

Bearcat89 wrote:

I’m seeing houses sit on the market for a few weeks now rather then a few hours. The couple realtors we know personally said it’s starting to slow down but could be short lived.

I said this a month or so back about the market in the St Cloud area (mainly Sartell) and was told by people here I was nuts or “that’s because no one wants to live there”. Guess it was just a leading indicator of what was to come for the Twin Cities.

CaptainMusky wrote:

I was curious to see what building costs were like now so I looked at the lumber prices trading on the commodity market and its down significantly well over 50% since March. That is total tanking.

Lumber has come down quite a bit and looks to fall more…but it’s still not as low as it got at the end of last summer when it was down under $400 per 1000 board feet.

buckybadger wrote:

Lumber has come down quite a bit and looks to fall more…but it’s still not as low as it got at the end of last summer when it was down under $400 per 1000 board feet.

I didnt realize it had gotten that low. Its crazy looking at the history of the price over the course of many years it really only had wild swings the past couple.

CaptainMusky wrote:

I was curious to see what building costs were like now so I looked at the lumber prices trading on the commodity market and its down significantly well over 50% since March. That is total tanking.

Yes lumber prices are down. The problem is windows, doors, millwork, insulation, flooring, labor, etc. has all gone up with the question when will the products be delivered? We built our house last summer and the suppliers and builders I talked to all said many customers were going to wait. Talked to a couple of the same builders this spring and said we made a smart move by building last year. 1st time I think I hit it right! We really had no choice as we had sold our house and were living at the cabin. The FW said she could not live there permanently.

mxskeeter wrote:

Yes lumber prices are down. The problem is windows, doors, millwork, insulation, flooring, labor, etc. has all gone up with the question when will the products be delivered? We built our house last summer and the suppliers and builders I talked to all said many customers were going to wait. Talked to a couple of the same builders this spring and said we made a smart move by building last year. 1st time I think I hit it right!

Its nice when a plan actually works out. My wife and I have been talking about building. We are going to by a friend’s lot that has a pole shed on it and then build a house. We are thinking in a few years so not in any hurry. Would like to buy the lot first so I have more room at my current house for all the toys. The next door neighbor to this lot is a contractor and we told him we wanted him to build it. He said “wait”.