Posted on 10/05/2023 7:49:09 PM PDT by lasereye
Mortgage rates jumped again this week — remaining at a 23-year high and increasing the likelihood that rates could soon hit 8%.
The rate on the average 30-year fixed mortgage increased to 7.49% from 7.31% the previous week, according to Freddie Mac, following the yield of the 10-year Treasury, which spiked to a 16-year high this week. Rates are at their highest point since December 2000 for a second week in a row, with few signs of softening.
Steeper rates continue to smother homebuyer demand, forcing the price-conscious to the sidelines. Meanwhile, those still on the hunt leaned on lower-rate options, eager to lock in before rates surge higher.
"At the beginning of the year, it was widely expected that mortgage rates would fall to around 6% by the end of 2023. However, now the question is whether rates will hit 8% this year," Lisa Sturtevant, chief economist at Bright MLS, a real estate data provider, said in an emailed statement. "The gap between the yield on the 10-year Treasury and the rate on a 30-year fixed rate mortgage has been around 3 percentage points, so as the Treasury yield approaches 5%, an 8% mortgage rate does not seem unlikely."
As rates surged to a 23-year high, demand for home purchases experienced its worst week in nearly three decades.
Demand for mortgage applications to purchase a home fell 6% last week to its lowest point since 1996, according to the Mortgage Bankers Association (MBA) survey for the week ending Sept. 29. Overall, purchase demand was 22% lower than the same week a year ago.
"Mortgage applications ground to a halt," Joel Kan, MBA’s chief economist, said in a press statement. "The rapid rise in rates pushed an increasing number of potential homebuyers out of the market."
(Excerpt) Read more at finance.yahoo.com ...
In the 70’s as time moved on we were thrilled to have ONLY an 8% rate... it could happen again.
“In the 70’s as time moved on we were thrilled to have ONLY an 8% rate... it could happen again.”
Bought my first house in ‘87 at 11%. I thought I got a real deal when I refinanced at 8%.
Why should mortgage rates come down, when federal government keeps spending more with borrowed money every year?
How many Billions already spent in Ukraine with borrowed money? And what did American taxpayers or voters gain with that spending with borrowed money?
Why United States wants to play world police? Was the fiasco in Vietnam not enough? How about the fiasco in Iraq? How about the fiasco in Afghanistan? Next fiasco is happening right in front of our eyes in Ukraine.
Add up all the Billions spent in Vietnam, Korea, Iraq, Afghanistan & Ukraine. How exactly United States has benefited from all those Trillions spent with borrowed money?
Vietnam is still communist, N Korea is still in power, Iraq has ISIS, Afghanistan still has Al Qaeda, and Ukraine is unlivable.
Rates were over 8% for about 15 years, as I recall, if not longer. If you had a loan that cheap it had value as an assumable loan.
What was the cost of your house vs your income in the 70’s?
Yeah, I remember that time. Here’s what we can tell today’s new buyers - 8% rate might be the best rate for years - they can always refinance if rates go down .
Yes!
Identical story here!
Yea, Banks got rid of those assumable loans...
You can take over payments, but bank finds out, they can call the loan due in full instantly....
Unlike politicians, banks learn from the past.
The economy is teetering .
Once it goes down , rates will go down .
Same here. I remember I was so jealous of my parents 5% rate.
Higher interest rates haven’t seemed to slow down the blue state locusts from moving out of their s-holes and into idaho. New houses going up everywhere.
If economy goes down, politicians and Biden will accelerate spending just like they did during pandemic.
Ditto in my town in Florida in St John’s county. So many new homes here in last 18 months.
I’ve got a 2.875% assumable loan not looking to sell for a few years but don’t think I’ll have much trouble when I do...
The difference is in the cost of the house. You could buy a nice house for $40,000 in the mid 70’s. A similar house now is 8 or more times that.
Rental rates also skyrocketing. Yet somehow I see an increasing number of renters moving in. Wandering around town all day, nothing to do. Must have a rich uncle or something.
BidenDepression 2023 / Spring, 2024
In 1995, my mortgage rate was 7.5% and it went past 8%.
My first mortgage in 1997 was 7.625, but that was during a small housing bust in CA. The original owners paid 202k from the builder in 1990. Seven years later we bought it from them for 172k. At that interest rate we would not have qualified had the house had even stayed even at 202k. No idea how first time buyers can afford let alone qualify now when my humble 1800 sq foot home is now supposedly Zillow worth 757k ,up almost 5k in the last month.
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