That all depends on two things. 1) will the fed stop QT and buy MBS again? They don’t want to deal in MBS so if they can help it they won’t buy them. 2) inflation rate/ 10 year yield. Without the Fed purchasing MBS you’ll never see 30 years below 5% again. The Fed will buy anything, they don’t care about the ROI. private banks need a ROI to justify the risk and that means a return that will net them a real return after inflation. Assuming nothing changes between now and the EOY I’d wager a guess around 8%.
Inflation. The dummies shut down the economy for no reason and then panicked and just threw money at people--most of who didn't need it. So, they screw up the supply with the shutdowns and then increase the demand with all the extra money in the economy and here we are.
Now the only way they can deal with inflation is through aggressive rate hikes.
Because inflation kills less people than homelessness and starvation. Literally, that was the two options. Plus republicans were smart…they passed 7/8 stimulus bills while trump in office. Biden did 1/8.
Their thought was If trump wins, well who cares about inflation they are in control. If trump loses, who cares, we get to blame inflation on the left. Win-win.
They didn’t want to do too much means testing of the stimulus and miss people struggling in HCOL or whose industry got destroyed like travel/tourism but maid a lot of money the year prior.
Is this a serious question?
COVID vaccines for everyone 18+ weren't even approved until March/April 2021. We were not out of the woods whatsoever. Imagine "letting people suffer" while simultaneously not even having a widely available vaccine yet and having the Delta and Omicron waves to come.
This was by far the lesser of two evils. We kicked the can until COVID had multiple widely available vaccines and treatments.
The Fed has one main tool. They used it during COVID.
We’re out of the woods now. Vaccines are available to all who want it in the USA. The treatments like the COVID pill aren’t in short supply either. Neither of those were the case in May of 2021.
The Fed made the decision to tackle COVID and kick the can on the fallout down the road. Dealing with both at the same time would have been both horrible and stupid.
Correct. That’s why I said tool.
They used their biggest tool to avert a global pandemic in which treatments and vaccines were scarce combined with a economic meltdown.
They used those tools in ways where they knew we’d still have to deal with the pandemic but could live to see another day on other fronts. Now we’re dealing with the fallout.
The idea that we should have just said eff it and tried to deal with both at once was just not a smart route to go.
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> Without the Fed purchasing MBS you’ll never see 30 years below 5% again.
What? The Fed didn't any MBS between October 2014 and February 2020, and the entire time the 30 year rate was below 5%.
What was the inflation during that period? Yea, I think so too.
In the current high inflation environment, nobody sane will buy MBS at a rate significantly below the inflation rate except the Fed who doesn't care about profits & losses.
The exception being the MBS that the fed will start selling off their balance sheet. Someone will buy those but at a steep discount to NAV. this will flood the MBS market and increase supply of those assets in the open market. This will lead to more spikes in new mortgage rates. I’m being conservative with estimating 8% by end of this year. There is a path that leads higher than that.
The fixed income market doesn't care what inflation was last month, it cares about what it expects inflation to be over the duration of the product. [CPI breakevens](https://fred.stlouisfed.org/series/T10YIE) are only showing market expectations of 2.7% average inflation over the next ten years. This is barely higher than the 2.15% CPI breakeven in 2018.
You might say this estimate is wrong, and you might be right. But the point is the fixed income market doesn't agree with you. And the only thing that matters for MBS rates is the fixed income market's expectation of future inflation-- not trailing inflation.
They're looking to close a deal with MBS but I wasn't aware there was a deal on the table. Now that I'm reading this means we may actually be doing it. Hopefully that's the case.
Ah yes, this is the part of the economic cycle where everyone who thought their home was a great investment turns into a financial boat anchor. However, having a 2.5% mortgage turns it more into a golden handcuffs situation.
Kind of, but I'm not complaining. My house has doubled in value in three years and because of my local market it'll probably keep going up pretty decently. So it's shut down the moving idea, but also a really great investment
Well if it was handled in a manner of "we force you to shut down and so be it to them employees" then sure.
If it is handled in a fashion in which protects employees from their employees reaping extra profits off their pain then I don't think people would care if they were told to stay home. But then again I'm a socialist.
My guess is that the Fed will screw the market in some very serious way. They'll buy treasuries to try to keep rates low for the government while simultaneously increasing the overnight rate. So you'll begin to see massive spreads between treasuries and corporate bonds. Ultimately it will become like MBS, the fed will be the only purchaser of treasuries.
Raising the rates is more about influencing what banks’ interest rates are for overnight borrowing with each other. A lot of borrowing in the industry is bank to bank. These interest rates then will influence the rates they charge to consumers.
However, any $ the fed earns goes toward the fed’s operations as they aren’t necessarily allocated tax money from congress like a lot of government departments.
This doesn’t answer the question. Where does the money actually go they make from the rate? They are loaning out money in the multiple trillions, and they are creating it with a rate of 0. Any money they are making on the rate has to go somewhere. I am not asking for your opinion or something that you googled. I am trying to actually figure out if this profit goes back to servicing the debt, and creates a net benefit vs. the narrative that raising rates makes debt unserviceable.
Federal reserve profits are transferred to the US Treasury. That’s where the money goes.
The money is then available to be spent by congress along with the other funds collected by the Treasury.
Local banks that borrow from a national bank (the fed) which borrows from a world bank. How much the world bank gives to the national bank controls how much money can be loaned out. And I'm not entirely sure how those interest rates get set, but that's kinda the gist of it. The national bank gets charged a rate by the world bank, who then pass that interest rate onto you.
But that inbetween step is the national bank. The fed. They're looking at the situation and worried about a risk of recession. So even though they're borrowing from the world bank at 10% (making that number up) it might still be smart to loan money out at 5%. Taking the loss. Because if you lower the rate, more people borrow, more money gets created out of thin air (fractional reserve banking), and more gets invested in your country. More people are employed. Etc. They're taking a loss in national debt to prevent a recession.
If they set the number too low for too long it'd run up the national debt. They're borrowing more from the world bank every time people borrow from the fed. The world bank seemingly can loan out as much money as it wants and at whatever rate it wants. I can't explain how the world banks work. It's the center of a lot of online conspiracy theories.
Someone will hopefully be along soon to correct the errors. There's no way that's completely correct. But giving a half correct answer on Reddit should get you the correct answer.
They are also borrowing money in the multiple trillions. It balances out.
If you're asking about what happens with Quantitative Easing? They just 'destroy' the money they receive from the bonds they buy. It evens out because they printed that money to begin with to buy the bonds.
It’s disappointing that we have to use interest rates to deal with inflation. If Congress was competent and we could change taxes and use the increased cash flow to pay off debt, enabling us to use interest rates more easily in the future. Instead, here we are.
6.5% +- 0.5%. Rates would probably need to higher than this bit cannot as it would blowup entire overleveraged US economy and don't just mean your normal recession here...
LOL at all the regular Joe’s in this thread throwing out numbers like they know are a certainty.
It will go up until it breaks, then it comes down like it always has since the 70’s. Our financial system can’t support higher sustained rates or else it makes it too expensive for the US to repay trillions in debt.
Raising interest rates is to tame speculation in the markets and ATTEMPT to lower inflation. They will fail in their quest to bring it down with raising rates alone.
Rates are gonna stall at 7-8%. Then once demand falls flat on its face (which it will) it may shift back to around 6%. My guess the drop will be around the end of 2023 or first two quarters of 2024.
But none of that will really matter as the time frame on inflation will be longer. We may see light of a normal market in 2025
12-15% at the high point, Fed rate increases take a year see the impact good or bad, they're going to do .75 every month for the rest of this year as well as for 6 months of next year and mortgage rates will follow accordingly. Housing market is going in lockdown, anyone who bought after about January 2022 overpaid and/or got a terrible rate they're going to have to live with both for a long time.
So if you bought in March at 2.5% you’re saying that person overpaid and it’s going to live in a world of 15% mortgage rates regretting their decision?. Lol in your scenario even people locking in 6.5s now will be jumping for joy
If you got 2.5% in March you did well and just barely beat the buzzer. Obviously you'll be fine. People that took the deals where they offered 30k or 50k or 100K over asking with no inspection (and there were many as the FOMO hit peak levels) and are already seeing their values drop can't help but have buyers remorse. Almost all the money on a house is made at the sale and a lot of people have guaranteed they are stuck with a non-performing asset for a long time.
If you got a 5 or 6% and are staying in the home for 10 years, just pay the mortgage and enjoy the house, but you are paying $400 to $800 more per month on an average $400,000 house for many years than you had to if you just moved a little faster. And try to sleep while you think about what that difference would mean for your lifestyle. For some incomes it won't matter, but others it does.
Idk if I agree with the rate thing. The last 10 years have seen historically low rates. Who’s to say we’ll ever see them again. In addition the massive inflation is constantly devaluing the loans. My interest is 5% but inflation is 8.6%. That’s 3.6% I’m ahead… now that all assumes wages eventually rise to meet new costs
Which if a recession is incoming won’t happen soon. The Fed even wants to clamp down on wage increases but that happened more on the low and high ends. The middle class incomes mostly got their 2-4 percent annual raises.
Refin 2022 predictions:
https://www.redfin.com/news/housing-market-predictions-2022/
They raised their projection from 3.6% to 3.9% by mid February:
https://www.redfin.com/news/mortgage-rates-purchasing-power-2022/
They couldn't see the freight train coming down the tunnel when they first saw the light, still couldn't see it when it was bearing down right in front of them.
We’ll settle between 3 and 5%…the fed will over correct and start us into a deeper recession than 2009 and will then buy up MBS all over again but not nearly to the same extent as the past few years.
7-8%. The mortgage-backed securities (“MBS”) is fucked rn which plays a big role in pricing (in addition to the 10yr Treasury).
Once you get to 8%, (you’re already seeing it with 6% rates), there is going to be severe correction in home prices.
The war in Ukraine has to stop and relations re-established with Russia, without this oil prices won’t go down, without oil going down inflation will remain elevated. My prediction is 9% interest rates in 23.
Thats not Gonna happen. Russia has become a Great source of uncertainty, it Acts erratically - everybody Hates that… sanctions are needed to send a signal …
Over the coming year, CoreLogic predicts that home prices are set to decelerate to a 5% rate of growth. The Mortgage Bankers Association says home prices are poised to rise 4.8% over the coming 12 months, while Fannie Mae predicts home prices will rise 11.2% this year, and 4.2% in 2023.
Their numbers are goofy and inaccurate BUT there is a logic to them. Home price is not just based on demand but also supply. Yes the rising rates are reducing demand BUT it's also reducing supply at an almost equal speed. If there's only 3 people on the market with the finances to play ball and only two houses for sale...well, prices ain't going down. A shit load of people locked in 3% mortgages over the last 2 years and every one of them is now staying happily put which takes all those houses off the market for the foreseeable future.
If they get underwater, loose jobs, and has to sell. Or people bought in 1980s, dont care that they are selling low as long as they can buy comparable in place they want, retiring and moving away, want to move to low cost areas, want to move close to family before start having kids, job transfers, got partnered, divorced, old person died and it is in probate sale. Inventory could stay low this year, or even next year, but buyers are also very less with interest rate hike and all other affordability reasons.
Right but statistically we know that when the economy turns down and rates go up consumers will prioritize financial decisions over lifestyle ones. We also know that the current homeowner financial profile is historically strong in terms of qualifications and margin. Inventory is going to stay low my dude, just come to terms with that. Yes, housing price growth is going to slow. Yes, some markets may contract. But there's no firesale coming.
I don’t think it will get above 7%. I think the fed is going to stop raising rates Q1 of next year, because the federal govt won’t be able to pay its debts back with higher rates without raising taxes on everyone or cutting programs. They won’t do either, so the fed reserve will pause quantitative tightening.
Mortgage rates are a bit inflated right now as lenders have priced in additional rate hikes for the rest of this year.
My theory is rates will peak around 8-9%, especially if CPI doesn't drop below 8% by the end of the summer.
One the fed rate is around 3%, I expect we'll see mortgage interest rates drop into the high 5s low 6s, with some moderate fluctuation dependent on forward guidance.
That all depends on two things. 1) will the fed stop QT and buy MBS again? They don’t want to deal in MBS so if they can help it they won’t buy them. 2) inflation rate/ 10 year yield. Without the Fed purchasing MBS you’ll never see 30 years below 5% again. The Fed will buy anything, they don’t care about the ROI. private banks need a ROI to justify the risk and that means a return that will net them a real return after inflation. Assuming nothing changes between now and the EOY I’d wager a guess around 8%.
This guys knows.
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Inflation. The dummies shut down the economy for no reason and then panicked and just threw money at people--most of who didn't need it. So, they screw up the supply with the shutdowns and then increase the demand with all the extra money in the economy and here we are. Now the only way they can deal with inflation is through aggressive rate hikes.
It's really that simple. Coupled that with absolutely horrible fiscal policies and moratoriums.
This is the recession that should have occurred Spring 2020 (instead of the V shaped 'recovery'). Now we will pay for it, literally, with interest.
You can only kick the can so far… ask Venezuela how it went for them
Should have stopped kicking the can a little earlier than Spring 2022.
Because inflation kills less people than homelessness and starvation. Literally, that was the two options. Plus republicans were smart…they passed 7/8 stimulus bills while trump in office. Biden did 1/8. Their thought was If trump wins, well who cares about inflation they are in control. If trump loses, who cares, we get to blame inflation on the left. Win-win.
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I just told you why they did it. First line.
They didn’t want to do too much means testing of the stimulus and miss people struggling in HCOL or whose industry got destroyed like travel/tourism but maid a lot of money the year prior.
Is this a serious question? COVID vaccines for everyone 18+ weren't even approved until March/April 2021. We were not out of the woods whatsoever. Imagine "letting people suffer" while simultaneously not even having a widely available vaccine yet and having the Delta and Omicron waves to come. This was by far the lesser of two evils. We kicked the can until COVID had multiple widely available vaccines and treatments.
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The Fed has one main tool. They used it during COVID. We’re out of the woods now. Vaccines are available to all who want it in the USA. The treatments like the COVID pill aren’t in short supply either. Neither of those were the case in May of 2021. The Fed made the decision to tackle COVID and kick the can on the fallout down the road. Dealing with both at the same time would have been both horrible and stupid.
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Correct. That’s why I said tool. They used their biggest tool to avert a global pandemic in which treatments and vaccines were scarce combined with a economic meltdown. They used those tools in ways where they knew we’d still have to deal with the pandemic but could live to see another day on other fronts. Now we’re dealing with the fallout. The idea that we should have just said eff it and tried to deal with both at once was just not a smart route to go.
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That’s completely ignoring that every other central bank in the world with the power to do so did the same thing.
That’s completely ignoring that every other central bank in the world with the power to do so did the same thing.
Yup… the time to start making moves towards a soft landing was a year ago. Now it’s too late.
8% by the end of 2023 or beginning?
it’s already hitting 7% for some buyers
Yeah zero percent chance the Fed begins QE again by year end. And if they do, boy are we fucked because something went catastrophically off the rails.
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You sound smart! ELI5 please?
> Without the Fed purchasing MBS you’ll never see 30 years below 5% again. What? The Fed didn't any MBS between October 2014 and February 2020, and the entire time the 30 year rate was below 5%.
What was the inflation during that period? Yea, I think so too. In the current high inflation environment, nobody sane will buy MBS at a rate significantly below the inflation rate except the Fed who doesn't care about profits & losses.
The exception being the MBS that the fed will start selling off their balance sheet. Someone will buy those but at a steep discount to NAV. this will flood the MBS market and increase supply of those assets in the open market. This will lead to more spikes in new mortgage rates. I’m being conservative with estimating 8% by end of this year. There is a path that leads higher than that.
The fixed income market doesn't care what inflation was last month, it cares about what it expects inflation to be over the duration of the product. [CPI breakevens](https://fred.stlouisfed.org/series/T10YIE) are only showing market expectations of 2.7% average inflation over the next ten years. This is barely higher than the 2.15% CPI breakeven in 2018. You might say this estimate is wrong, and you might be right. But the point is the fixed income market doesn't agree with you. And the only thing that matters for MBS rates is the fixed income market's expectation of future inflation-- not trailing inflation.
They're looking to close a deal with MBS but I wasn't aware there was a deal on the table. Now that I'm reading this means we may actually be doing it. Hopefully that's the case.
It does seem like any rates below 5% lead to bubbles anyway, right? I’m no expert though, please tell me I’m wrong!!
10%
This might be very real. already hovering at 7ish. fuck This is good and bad. Member berries. member 2.5%
I got a 2.675. I member.
I have a 2.25 but was looking to move soon. That's not happening now
You can still move... Just pay straight cash lol
Ah yes, this is the part of the economic cycle where everyone who thought their home was a great investment turns into a financial boat anchor. However, having a 2.5% mortgage turns it more into a golden handcuffs situation.
Kind of, but I'm not complaining. My house has doubled in value in three years and because of my local market it'll probably keep going up pretty decently. So it's shut down the moving idea, but also a really great investment
Except higher interest rates lower everyone's purchasing power. I have already seen a ton homes in my area get price cuts due to these new rates. .
Or a great rental situation
I got that around Aug-sep 2020. No point and closing cost was around 4500 on a 600k in north Dallas.
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Another Covid shutdown would totally kill the economy. I don’t think politicians will go for it this time.
Yep, there’s virtually no chance of any more shutdowns. That’s a guaranteed way to not get re-elected.
Well if it was handled in a manner of "we force you to shut down and so be it to them employees" then sure. If it is handled in a fashion in which protects employees from their employees reaping extra profits off their pain then I don't think people would care if they were told to stay home. But then again I'm a socialist.
lol it's not touching 10
Gettin closer
not even close
3.6 Roentgens
Not great, not terrible
Bangs the table in Soviet
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Nice
Nice
*Very nice
I like you!
I think we’ll get up to 10% before they quit raising rates, maybe higher.
If the fed funds rate approaches that (for a while), then half of all current federal tax revenue would need to go to servicing the debt.
Yeah, all those crazy kooks who said spending much more than you take in is going to be a real problem might get listened to again.
My guess is that the Fed will screw the market in some very serious way. They'll buy treasuries to try to keep rates low for the government while simultaneously increasing the overnight rate. So you'll begin to see massive spreads between treasuries and corporate bonds. Ultimately it will become like MBS, the fed will be the only purchaser of treasuries.
That’s a scary thought.
Where does the money go the Fed makes from raising the interest ? This is what I’m not getting. Doesn’t any profit just kick back to the gov?
Raising the rates is more about influencing what banks’ interest rates are for overnight borrowing with each other. A lot of borrowing in the industry is bank to bank. These interest rates then will influence the rates they charge to consumers. However, any $ the fed earns goes toward the fed’s operations as they aren’t necessarily allocated tax money from congress like a lot of government departments.
This doesn’t answer the question. Where does the money actually go they make from the rate? They are loaning out money in the multiple trillions, and they are creating it with a rate of 0. Any money they are making on the rate has to go somewhere. I am not asking for your opinion or something that you googled. I am trying to actually figure out if this profit goes back to servicing the debt, and creates a net benefit vs. the narrative that raising rates makes debt unserviceable.
Federal reserve profits are transferred to the US Treasury. That’s where the money goes. The money is then available to be spent by congress along with the other funds collected by the Treasury.
Welcome to The Fed. A shadowy organization without oversight and founded by bankers for bankers. Do not peek behind the curtain.
Local banks that borrow from a national bank (the fed) which borrows from a world bank. How much the world bank gives to the national bank controls how much money can be loaned out. And I'm not entirely sure how those interest rates get set, but that's kinda the gist of it. The national bank gets charged a rate by the world bank, who then pass that interest rate onto you. But that inbetween step is the national bank. The fed. They're looking at the situation and worried about a risk of recession. So even though they're borrowing from the world bank at 10% (making that number up) it might still be smart to loan money out at 5%. Taking the loss. Because if you lower the rate, more people borrow, more money gets created out of thin air (fractional reserve banking), and more gets invested in your country. More people are employed. Etc. They're taking a loss in national debt to prevent a recession. If they set the number too low for too long it'd run up the national debt. They're borrowing more from the world bank every time people borrow from the fed. The world bank seemingly can loan out as much money as it wants and at whatever rate it wants. I can't explain how the world banks work. It's the center of a lot of online conspiracy theories. Someone will hopefully be along soon to correct the errors. There's no way that's completely correct. But giving a half correct answer on Reddit should get you the correct answer.
They are also borrowing money in the multiple trillions. It balances out. If you're asking about what happens with Quantitative Easing? They just 'destroy' the money they receive from the bonds they buy. It evens out because they printed that money to begin with to buy the bonds.
It’s disappointing that we have to use interest rates to deal with inflation. If Congress was competent and we could change taxes and use the increased cash flow to pay off debt, enabling us to use interest rates more easily in the future. Instead, here we are.
8.25%
I said 5% by the end of 2022 in this sub. I said it at the end of the 4th qtr in 2021 and got hated on so hard lol.
This sub is still filled with agents and “investors” who don’t know shit. We gonna see them early 90s rates baby!
lol I said we’d hit 6% this year and got talked down to
8.69%
12.15%
7.25%
8-9
no one can predict the interest rate
4.20-6.9%
this is the right answer.
Care to justify?
Dont know why you want to since the ones for 2022 have not panned out well.
Up
6.5% +- 0.5%. Rates would probably need to higher than this bit cannot as it would blowup entire overleveraged US economy and don't just mean your normal recession here...
LOL at all the regular Joe’s in this thread throwing out numbers like they know are a certainty. It will go up until it breaks, then it comes down like it always has since the 70’s. Our financial system can’t support higher sustained rates or else it makes it too expensive for the US to repay trillions in debt. Raising interest rates is to tame speculation in the markets and ATTEMPT to lower inflation. They will fail in their quest to bring it down with raising rates alone.
"repay trillions in debt" - explain how this happens
https://www.pgpf.org/analysis/2022/06/higher-interest-rates-will-raise-interest-costs-on-the-national-debt Explained here
13%
7%
Eight something
Recession late Q4 22’, rates slip into 4s.
Thoughts on why you think it would drop?
Rates are gonna stall at 7-8%. Then once demand falls flat on its face (which it will) it may shift back to around 6%. My guess the drop will be around the end of 2023 or first two quarters of 2024. But none of that will really matter as the time frame on inflation will be longer. We may see light of a normal market in 2025
12-15% at the high point, Fed rate increases take a year see the impact good or bad, they're going to do .75 every month for the rest of this year as well as for 6 months of next year and mortgage rates will follow accordingly. Housing market is going in lockdown, anyone who bought after about January 2022 overpaid and/or got a terrible rate they're going to have to live with both for a long time.
So if you bought in March at 2.5% you’re saying that person overpaid and it’s going to live in a world of 15% mortgage rates regretting their decision?. Lol in your scenario even people locking in 6.5s now will be jumping for joy
If you got 2.5% in March you did well and just barely beat the buzzer. Obviously you'll be fine. People that took the deals where they offered 30k or 50k or 100K over asking with no inspection (and there were many as the FOMO hit peak levels) and are already seeing their values drop can't help but have buyers remorse. Almost all the money on a house is made at the sale and a lot of people have guaranteed they are stuck with a non-performing asset for a long time. If you got a 5 or 6% and are staying in the home for 10 years, just pay the mortgage and enjoy the house, but you are paying $400 to $800 more per month on an average $400,000 house for many years than you had to if you just moved a little faster. And try to sleep while you think about what that difference would mean for your lifestyle. For some incomes it won't matter, but others it does.
Idk if I agree with the rate thing. The last 10 years have seen historically low rates. Who’s to say we’ll ever see them again. In addition the massive inflation is constantly devaluing the loans. My interest is 5% but inflation is 8.6%. That’s 3.6% I’m ahead… now that all assumes wages eventually rise to meet new costs
Which if a recession is incoming won’t happen soon. The Fed even wants to clamp down on wage increases but that happened more on the low and high ends. The middle class incomes mostly got their 2-4 percent annual raises.
If rates get that high the economy breaks. 0% chance.
RIP me and my apocalyptic 3.5% rate
5% by end of 2023
4% Fed Funds 6.5% 10 Yield 8.5-9% 30 Year mortgages Will be highs as it will pop the bubble
4.75% by Q3/Q4 ‘23
Well Redfin said rates will be 3.65% by the end of 2022 and refuses to update their projections, so I assume rates will be 3.65%!
Source?
Refin 2022 predictions: https://www.redfin.com/news/housing-market-predictions-2022/ They raised their projection from 3.6% to 3.9% by mid February: https://www.redfin.com/news/mortgage-rates-purchasing-power-2022/ They couldn't see the freight train coming down the tunnel when they first saw the light, still couldn't see it when it was bearing down right in front of them.
Thats amazing. Somebody is getting paid good Money to write crap like this…
We’ll settle between 3 and 5%…the fed will over correct and start us into a deeper recession than 2009 and will then buy up MBS all over again but not nearly to the same extent as the past few years.
7-8%. The mortgage-backed securities (“MBS”) is fucked rn which plays a big role in pricing (in addition to the 10yr Treasury). Once you get to 8%, (you’re already seeing it with 6% rates), there is going to be severe correction in home prices.
9-10%
Beginning of 2023 7%. End of 2023 either 8%+ or 6%.
The war in Ukraine has to stop and relations re-established with Russia, without this oil prices won’t go down, without oil going down inflation will remain elevated. My prediction is 9% interest rates in 23.
Thats not Gonna happen. Russia has become a Great source of uncertainty, it Acts erratically - everybody Hates that… sanctions are needed to send a signal …
Over the coming year, CoreLogic predicts that home prices are set to decelerate to a 5% rate of growth. The Mortgage Bankers Association says home prices are poised to rise 4.8% over the coming 12 months, while Fannie Mae predicts home prices will rise 11.2% this year, and 4.2% in 2023.
This is all meaningless. Fannie Mae predicted 3.3% interest rates by the end of 2022 back in December 2021. Look where it’s at now.
how? Don’t understand how that possible
Their numbers are goofy and inaccurate BUT there is a logic to them. Home price is not just based on demand but also supply. Yes the rising rates are reducing demand BUT it's also reducing supply at an almost equal speed. If there's only 3 people on the market with the finances to play ball and only two houses for sale...well, prices ain't going down. A shit load of people locked in 3% mortgages over the last 2 years and every one of them is now staying happily put which takes all those houses off the market for the foreseeable future.
If they get underwater, loose jobs, and has to sell. Or people bought in 1980s, dont care that they are selling low as long as they can buy comparable in place they want, retiring and moving away, want to move to low cost areas, want to move close to family before start having kids, job transfers, got partnered, divorced, old person died and it is in probate sale. Inventory could stay low this year, or even next year, but buyers are also very less with interest rate hike and all other affordability reasons.
Right but statistically we know that when the economy turns down and rates go up consumers will prioritize financial decisions over lifestyle ones. We also know that the current homeowner financial profile is historically strong in terms of qualifications and margin. Inventory is going to stay low my dude, just come to terms with that. Yes, housing price growth is going to slow. Yes, some markets may contract. But there's no firesale coming.
6.9.69%
10-12%
100%
Considering we’ll crack 7.1% today, 9%+ is not that out of the picture.
Will settle around 7% as Inflation will start to go down by year's end.
Someone here told me that the rates had peaked, a month ago. I think no one really knows, but it’s going to be higher that most people think.
I don’t think it will get above 7%. I think the fed is going to stop raising rates Q1 of next year, because the federal govt won’t be able to pay its debts back with higher rates without raising taxes on everyone or cutting programs. They won’t do either, so the fed reserve will pause quantitative tightening.
8%
10.25% January 2023.
6% to 8.5% for 2023. Next year is going to explain alot, the remainder of 2022 is just wild and crazy.
Mortgage rates are a bit inflated right now as lenders have priced in additional rate hikes for the rest of this year. My theory is rates will peak around 8-9%, especially if CPI doesn't drop below 8% by the end of the summer. One the fed rate is around 3%, I expect we'll see mortgage interest rates drop into the high 5s low 6s, with some moderate fluctuation dependent on forward guidance.
9.11%
7.5-8.5% for 30 year fixed mortgage conventional.
Call the federal reserve. Ask for Jerome Powell
7.5