It is widely speculated that we may have Another Rate hike on wednesday , Mar 15th.
Labor force participation increased too. I think that’s more important than unemployment rate.
Fed tightening is faster than people thought. Will this slow the economy too much?
But inflation seems to be going up, even in Europe.
Maybe it’s the right thing to do to control inflation preemptively
Yes, they are doing it preemptively, impact will be seen soon. Personally not affected as I locked with 30 fixed rate.
We will see the pinch in mortgage and real estate.
It’ll only be 0.25%. They are going very, very slow by historic standards. Inflation has increased some but is still lower than normal.
0.25% not much impact, may be even hasten the buying.
Last year, DEC 19, 2016, it was 3.625% I closed Rifi loan with WFC.
This is not about 0.25%, FED commitment to increase 3 this year and 3 next year, totally 1.5%. The current fixed mortgage is around 4.625% now for 30 years.
On any case, we will see 30 year fixing jumping back to appx 6% or 6.5% by end of next year.
If you believe the forecast. They were supposed to hike 3 or 4 times last year? We got one. If they do that many hikes, it’ll be because the economy is roaring. Higher rates won’t deter buyers if wages go up enough to justify the rate increases.
Last year was election year, they stopped hiking to avoid issues with election. If you listen recent Yellen’s testimony to congress, she was urging rate hike 3 times this year and 3 next year.
If they need to maintain 3 hikes/year, they are forced to raise rate in March 15th. If they skip this chance, then it becomes two this year which FED is not interested.
Yes, they do it as economy is roaring, and they do it preempt as inflation is near 2%.
Higher rate do not deter strong buyer, but not weak one. Weak one will be permanently out of the market as they are not eligible, esp for those who seeks home less than 1 M in Santa Clara.
By end of next year, mortgage will be 6% or 6.5%. Economy will be doing fine with lot of employments, but individuals suffer as eligibility is reduced.
That’s a good plan. Weak buyer shouldn’t own a house as it can cause future deep decline.
Here “Weak” is comparative. One who has 20% is weaker compared to one who has 40% down payment.
One of my friends was looking less than 800k home. He was bidding last four or five years and competition is high at this range in bay area.
He was sad today telling me that he is priced out permanently with 5% mortgage rate as he did not grab a home when rate was 3.5% range !
Most likely, hiking rate increases rental home seekers.
That’s what I’m hoping for. I want to raise rent
Rent started flattening or going down 1 year ago. Number of Home sales have been average or even below average. Is the population increase slowing or even flattening?
Rate increase will hurt BA market more since our affordability is already stretched. I think the high end market will flatten or decline. Middle and low end will do better as people are forced to buy homes under their previous standard
Someone posted the data. Bay Area is losing Americans and gaining foreigners. If there’s a pause or stop in foreigners, then Bay Area population will decline.
If population flattens and even decline, Bay Area could follow the steps of NYC. It’ll remain a high cost area with slow appreciation.
Yes, indeed a lot of determined buyers. Multiple offers everywhere.
At the end of year many won’t be eligible. Market will be affected…
I was told we could get a 15% down mortgage now with no mortgage insurance. That actually increases our buying ability quite a bit over 4 years ago.
Really? I wonder if they increase the DTI ratio too…
But rate maybe higher.
In other forum, someone said that it would be better to have mortgage insurance than higher rate since mortgage insurance would be gone as soon as your equity reached 20% but rate would stay same (in case you get fixed rate mortage). Not sure if this is fair and accurate statement, though.
Even wells fargo gives 10% down payment option without PMI. Yes, the PMI cost will be inside some 0.125% or 0.25% rate hike. When writing an offer, my friend gave 20% down payment, but well fargo suggested that he is approved 20% as well as 10% down payment loan for 30 year fixed and my friend accepted 10% as he likes to hold 10% cash at his hand. IIRC, it was for condo loan less than 417k.