House Interest Rates Rising!

http://www.usatoday.com/story/money/2013/06/27/mortgage-rates-6-27/2463333/

Almost 4.5 percent now. I really don't see why they are raising this so high and so fast. I love how these articles always say how low it is, even now. But what they don't say is how much home prices have jumped. In Oregon most homes go for 200,000 and up and that isn't even for a medium sized house. Sure there are always sellers who are trying to unload or a bank property. Also property taxes are way too much here as well. It never ends.

Comments

  • pilgrimtexpilgrimtex Posts: 429
    phobicsquirrel:
    http://www.usatoday.com/story/money/2013/06/27/mortgage-rates-6-27/2463333/

    Almost 4.5 percent now. I really don't see why they are raising this so high and so fast. I love how these articles always say how low it is, even now. But what they don't say is how much home prices have jumped. In Oregon most homes go for 200,000 and up and that isn't even for a medium sized house. Sure there are always sellers who are trying to unload or a bank property. Also property taxes are way too much here as well. It never ends.

    We got room for you here in Texas my friend.
  • stephen_hannibalstephen_hannibal Posts: 4,317
    Horrible news. Fiance and I are looking at purchasing.
  • kuzi16kuzi16 Posts: 14,616 ✭✭✭✭
    stephen_hannibal:
    Horrible news. Fiance and I are looking at purchasing.
    be glad you didnt buy in the early 80s when the rates were around 14 - 16%

    4.5 is higher than before, but it still isnt a bad rate. dont let it get you down.

    heck... when i was buying my house 4.5 would have been the best rate around.

    at 4.5%, my rate (a bit higher than that) still isnt low enough to make a refinance worth it after closing costs fees and what not especially since we dont want to be in the house for more than 6 or so more years.

    4.5 may kinda suck comparatively but it still is far from "crazy" or "really bad"
  • jgibvjgibv John G.Posts: 9,262 ✭✭✭✭✭
    If you consider where the rates were six months ago, they really couldn't go any lower ...
    So yes, they're climbing back up slightly, but they had to go somewhere ...

    You have to remember too .... summer is the time when people want to move. So lots of houses are going on the market now and the demand is high --- since people want to move before "the kids" go back to school in the fall.

    I wouldn't expect rates to go much higher, at least not for another year or two .... and I'd bet you they drop back down next winter.

    Bernanke has said "the Fed does not expect to start raising its key interest rate until probably the first half of 2015."


    * I have a new address as of 3/24/18 *

  • bbass2bbass2 Posts: 1,064 ✭✭
    I'm not in the business but it certainly seems to be picking up in our area. We've been trying to sell ours on and off for the past two years. Took it off early last fall then relisted in Spring and had it under contract within two months. The agent said there is a drastic difference in the market in the last 6 months. That supply and demand was great for selling, but stinks for buying. Oh and moving sucks.
  • phobicsquirrelphobicsquirrel Posts: 7,349
    kuzi16:
    stephen_hannibal:
    Horrible news. Fiance and I are looking at purchasing.
    be glad you didnt buy in the early 80s when the rates were around 14 - 16%

    4.5 is higher than before, but it still isnt a bad rate. dont let it get you down.

    heck... when i was buying my house 4.5 would have been the best rate around.

    at 4.5%, my rate (a bit higher than that) still isnt low enough to make a refinance worth it after closing costs fees and what not especially since we dont want to be in the house for more than 6 or so more years.

    4.5 may kinda suck comparatively but it still is far from "crazy" or "really bad"
    Yeah that is high, but houses were much lower as per price than they are today. And if you look at wage rates they were higher then as well. Basically I think it is BS that interest rates for homes are higher than 1.5 or maybe even 2. Banks make a killing off of these rates. However they get to get money from the govt for pennies on the dollar and never pass that on to us. That in truth is wrong.

    You are right that 4.5 is much better than 7 or 8 percent. I remember when my friend in high school got a new house. it was I think 300k or so and though I don't know the exact IR his parents paid with their income it was affordable. Now this was in the late '90s. Today the same houses in that area are up 150k or more, even up to 200k more. That is not right. Plus property taxes have more than doubled too. All of this while wages are going down, and jobs are harder to get and don't pay as much as they use too. Sure 4.5 is not bad but they will only go up. I bought my house at 3.25 and got lucky on that cuz when I started looking it was 3.5. I'm thankful I got in when I did but my house was bought for under 100k than what I paid for. My house was made in the late '70's, so it has seen almost a 150k or more bump through the decades. The people who bought my house before the crash paid something like 259k or something like that. And I'm sure the IR was above 5 percent.
  • kuzi16kuzi16 Posts: 14,616 ✭✭✭✭
    banks arent making a killing when inflation is involved. they have to make a profit at some point and when you factor inflation in they have to make that money faster than it is losing value.
    with the fed pumping billions every month to artificially prop up an otherwise volatile and unsure stock market, inflation is inevitable. rates will climb. its a matter of time, and many economists believe it is sooner than most think.

    this is the nature of the beast when markets are artificially tampered with.


    of course, if you think the interest rates are too high, you can always take action on your own by not buying a house at that rate. if it isnt worth it to you then dont do it.
    rent, pay a larger sum of cash for a down, or just pay off the place you live in now at a way faster rate than you payment plan (all extra payments go to principal thus eliminating the compounding interest on the money you paid off). its all about what is worth it to you, life choices, and how much you are (or are not) willing to give up.

    historically speaking 4.5 is still lower than almost any time in history. complaining about it seems kinda over reactionary. i mean there has not been a time in the last 50+ years where rates have been this low. In the 90s when your friend bought that house with an "affordable interest rate" the average was about 7.5 with the prime being somewhere between 6% and 8.5% depending on the year


    prime rate right now is 3.25 btw.

    interest rates will go up thats true, and it does make home ownership a bit more expensive, but i just dont think it has reached the point of sucking yet.
    not even close actually.
  • VulchorVulchor FloridaPosts: 4,799 ✭✭✭
    paraphrased....and certainly the way the banks and govt feel.....shut up squirrel, lube up, and take it up the poop chute like everyone else does and just be happy your not homeless or being attacked by terrorists.
  • YankeeManYankeeMan Posts: 2,215 ✭✭✭✭
    I agree with Kuzi. My mortgage rate on my house in Ithaca, NY was 8.5%. I was lucky to get a mortgage in NC for 3.75%.

    The bad news is that it is a two year ARM, which means they look at the rates next March at our two year mark. For the majority of our first two years the rates were below 3%, now they're going up!

    I'm not happy, but it beats the hell out of 8.5%! Soooo... Phobic, just grab your ankles.
  • perkinkeperkinke Posts: 1,575 ✭✭✭
    phobicsquirrel:
    kuzi16:
    stephen_hannibal:
    Horrible news. Fiance and I are looking at purchasing.
    be glad you didnt buy in the early 80s when the rates were around 14 - 16%

    4.5 is higher than before, but it still isnt a bad rate. dont let it get you down.

    heck... when i was buying my house 4.5 would have been the best rate around.

    at 4.5%, my rate (a bit higher than that) still isnt low enough to make a refinance worth it after closing costs fees and what not especially since we dont want to be in the house for more than 6 or so more years.

    4.5 may kinda suck comparatively but it still is far from "crazy" or "really bad"
    Yeah that is high, but houses were much lower as per price than they are today. And if you look at wage rates they were higher then as well. Basically I think it is BS that interest rates for homes are higher than 1.5 or maybe even 2. Banks make a killing off of these rates. However they get to get money from the govt for pennies on the dollar and never pass that on to us. That in truth is wrong.

    You are right that 4.5 is much better than 7 or 8 percent. I remember when my friend in high school got a new house. it was I think 300k or so and though I don't know the exact IR his parents paid with their income it was affordable. Now this was in the late '90s. Today the same houses in that area are up 150k or more, even up to 200k more. That is not right. Plus property taxes have more than doubled too. All of this while wages are going down, and jobs are harder to get and don't pay as much as they use too. Sure 4.5 is not bad but they will only go up. I bought my house at 3.25 and got lucky on that cuz when I started looking it was 3.5. I'm thankful I got in when I did but my house was bought for under 100k than what I paid for. My house was made in the late '70's, so it has seen almost a 150k or more bump through the decades. The people who bought my house before the crash paid something like 259k or something like that. And I'm sure the IR was above 5 percent.

    One thing to keep in mind too though is that home prices are relative to where you live. Our towns (Portland and Corvallis, and to a slightly lesser extent Salem) are bubbles in Oregon. I go across the river to Albany and housing prices drop almost 20% in many instances for more house or property. Even Eugene is lower, southern and Eastern Oregon are still pretty depressed. Urban areas are always more expensive, the recession and the Measure 37 (created an avenue around land use and zoning laws) effects temporarily lowered housing prices in the metro areas and kind of reset our expectations. I agree that housing costs in Portland and Corvallis are much too high, Portland due to population pressure and Corvallis due to arrogance and selfishness, but I'm not surprised.
  • phobicsquirrelphobicsquirrel Posts: 7,349
    perkinke:
    phobicsquirrel:
    kuzi16:
    stephen_hannibal:
    Horrible news. Fiance and I are looking at purchasing.
    be glad you didnt buy in the early 80s when the rates were around 14 - 16%

    4.5 is higher than before, but it still isnt a bad rate. dont let it get you down.

    heck... when i was buying my house 4.5 would have been the best rate around.

    at 4.5%, my rate (a bit higher than that) still isnt low enough to make a refinance worth it after closing costs fees and what not especially since we dont want to be in the house for more than 6 or so more years.

    4.5 may kinda suck comparatively but it still is far from "crazy" or "really bad"
    Yeah that is high, but houses were much lower as per price than they are today. And if you look at wage rates they were higher then as well. Basically I think it is BS that interest rates for homes are higher than 1.5 or maybe even 2. Banks make a killing off of these rates. However they get to get money from the govt for pennies on the dollar and never pass that on to us. That in truth is wrong.

    You are right that 4.5 is much better than 7 or 8 percent. I remember when my friend in high school got a new house. it was I think 300k or so and though I don't know the exact IR his parents paid with their income it was affordable. Now this was in the late '90s. Today the same houses in that area are up 150k or more, even up to 200k more. That is not right. Plus property taxes have more than doubled too. All of this while wages are going down, and jobs are harder to get and don't pay as much as they use too. Sure 4.5 is not bad but they will only go up. I bought my house at 3.25 and got lucky on that cuz when I started looking it was 3.5. I'm thankful I got in when I did but my house was bought for under 100k than what I paid for. My house was made in the late '70's, so it has seen almost a 150k or more bump through the decades. The people who bought my house before the crash paid something like 259k or something like that. And I'm sure the IR was above 5 percent.

    One thing to keep in mind too though is that home prices are relative to where you live. Our towns (Portland and Corvallis, and to a slightly lesser extent Salem) are bubbles in Oregon. I go across the river to Albany and housing prices drop almost 20% in many instances for more house or property. Even Eugene is lower, southern and Eastern Oregon are still pretty depressed. Urban areas are always more expensive, the recession and the Measure 37 (created an avenue around land use and zoning laws) effects temporarily lowered housing prices in the metro areas and kind of reset our expectations. I agree that housing costs in Portland and Corvallis are much too high, Portland due to population pressure and Corvallis due to arrogance and selfishness, but I'm not surprised.
    Well there ya go. Nice to see another oregon poster on here.

    Kuzi, all I was saying that the IR isn't the real issue so much IMO, it's that and the price of homes. Sure it depends on the area that one lives or what have you but really it doesn't matter if 4.5 is near record low, the price of the home is the real issue. And saying just don't buy one at that rate isn't an answer. I mean I guess it is but it's a weak one. Also renting has skyrocketed in my area to the point of it more expensive to rent than to buy a lot of the times. That in itself is wrong.

  • phobicsquirrelphobicsquirrel Posts: 7,349
    Vulchor:
    paraphrased....and certainly the way the banks and govt feel.....shut up squirrel, lube up, and take it up the poop chute like everyone else does and just be happy your not homeless or being attacked by terrorists.
    lol
  • kuzi16kuzi16 Posts: 14,616 ✭✭✭✭
    phobicsquirrel:
    Kuzi, all I was saying that the IR isn't the real issue so much IMO, it's that and the price of homes. Sure it depends on the area that one lives or what have you but really it doesn't matter if 4.5 is near record low, the price of the home is the real issue.

    i can see that. too many people view owning as a status symbol where in reality it isnt. this attitude drives the price up. it also persuades people to make bad decisions instead of being responsible.

    since the housing crash rent has gone through the roof.

    if you can afford a house now i would say go for it. still a buyers market.
  • perkinkeperkinke Posts: 1,575 ✭✭✭
    I have always been a little puzzled by government pushing home ownership so heavily. I understand the perceived stability it can provide, but if you're looking at it from a purely revenue standpoint having higher rates of rental is better because governments get the taxes from the property itself, then from the income it provides as well, business license fees and i don't believe the interest form a mortgage on income property can be deducted from income taxes, but I'm not certain about that.
  • beatnicbeatnic Posts: 4,133
    Its a buyers market and the interest rate is 4.5%. What more could you want? Put down 20%, buy it. Then pay your note on a 4 week schedule and you'll own the thing in 15 years.
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