Jump to content

2021 - Is inflation finally back in the conversation?


Reagan1k

Recommended Posts

Just now, Rex Kramer said:

 

Not sure yall are getting my crack at them. 

Oh, I am.  They(ZH) have been up their own ass forever.

My point is pretty much everyone said '23 would be a recession.  It wasn't...  some said it would happen in '24... it hasn't.  

 

Frankly I am absolutely stunned that 7plus % mortgages and 10 plus % auto loans haven't turbo fucked enough people to cause a recession.  IMPO profligate deficit government spending is what has kept economic numbers positive.   Is that good, or bad...we'll see.

  • Hook 'Em 1
  • Like 1
Link to comment
Share on other sites

12 minutes ago, Incredulity said:

Oh, I am.  They(ZH) have been up their own ass forever.

My point is pretty much everyone said '23 would be a recession.  It wasn't...  some said it would happen in '24... it hasn't.  

 

Frankly I am absolutely stunned that 7plus % mortgages and 10 plus % auto loans haven't turbo fucked enough people to cause a recession.  IMPO profligate deficit government spending is what has kept economic numbers positive.   Is that good, or bad...we'll see.

Can.  Road.  Kicked

Link to comment
Share on other sites

Oh, I am.  They(ZH) have been up their own ass forever.
My point is pretty much everyone said '23 would be a recession.  It wasn't...  some said it would happen in '24... it hasn't.  
 
Frankly I am absolutely stunned that 7plus % mortgages and 10 plus % auto loans haven't turbo fucked enough people to cause a recession.  IMPO profligate deficit government spending is what has kept economic numbers positive.   Is that good, or bad...we'll see.

Username
Link to comment
Share on other sites

Let's all not forget that ZH is owned by a former member of the Soviet-aligned Bulgarian Communist Party. He also runs a similar website in Bulgaria that frequently pushes conspiracy theories, anti-semitism, anti-LGBT, pro-Russia/anti-Ukrainian crap. Sound familiar? 

"Tyler Durden" is essentially his son, who is the primary editor of the site, which is pretty much his full time job, because he got barred by FINRA for insider trading and lost his career in investment banking.

  • Hook 'Em 1
  • Like 1
Link to comment
Share on other sites

13 minutes ago, G650 said:

Why?

Because the monthly payment on a $500 K 30 year mortgage at 3% is $2108

The monthly payment on a $500k 30 year mortgage at 7% is $3,326.51

 

What do you want to throw on there for taxes, maintenance and insurance/month?  $1500 sound reasonable?

 

That takes the 28% of gross housing cost "rule" from 90K income to 200K income.  

I would have speculated a change of that magnitude would have literally stopped home sales, at least in the lower and middle.  I know the song and dance has been buy now, eat the financing cost short term and refinance later.  Looks like that MAY work out given the Sept cut. 

 

 

 

 

 

 

Link to comment
Share on other sites

48 minutes ago, jimmyjazz said:

Were you expecting (or even desiring) a deflationary environment?

Yeah no kidding. This would be disastrous. 

3 minutes ago, Incredulity said:

Because the monthly payment on a $500 K 30 year mortgage at 3% is $2108

The monthly payment on a $500k 30 year mortgage at 7% is $3,326.51

 

What do you want to throw on there for taxes, maintenance and insurance/month?  $1500 sound reasonable?

 

That takes the 28% of gross housing cost "rule" from 90K income to 200K income.  

I would have speculated a change of that magnitude would have literally stopped home sales, at least in the lower and middle.  I know the song and dance has been buy now, eat the financing cost short term and refinance later.  Looks like that MAY work out given the Sept cut. 

 

 

 

 

 

 

Rates reset slowly for existing ARMs. Most smart people had fixed anyway from low ‘21 rates. I have a jumbo at 2.875%. I told my wife a few years ago we weren’t gonna move, probably ever. 

Link to comment
Share on other sites

Just now, Rex Kramer said:

Yeah no kidding. This would be disastrous. 

Rates reset slowly for existing ARMs. Most smart people had fixed anyway from low ‘21 rates. I have a jumbo at 2.875%. I told my wife a few years ago we weren’t gonna move, probably ever. 

I'm referencing the buying and selling.  Brokers, realtors, contractors of all types...

Link to comment
Share on other sites

1 minute ago, Incredulity said:

I'm referencing the buying and selling.  Brokers, realtors, contractors of all types...

Knowing rates will be coming down a lot further, I imagine transactions will be slim through the next 9-15 months, and then kinda explode. 

Link to comment
Share on other sites

19 minutes ago, Incredulity said:

Because the monthly payment on a $500 K 30 year mortgage at 3% is $2108

The monthly payment on a $500k 30 year mortgage at 7% is $3,326.51

 

What do you want to throw on there for taxes, maintenance and insurance/month?  $1500 sound reasonable?

 

That takes the 28% of gross housing cost "rule" from 90K income to 200K income.  

I would have speculated a change of that magnitude would have literally stopped home sales, at least in the lower and middle.  I know the song and dance has been buy now, eat the financing cost short term and refinance later.  Looks like that MAY work out given the Sept cut. 

 

 

 

 

 

 

That's all great, but how does that equate to anyone being turbo fucked? It's a nonsensical statement on myriad levels.

 

I build neighborhoods btw, people have asked me for years, well before Covid, what rates would stop the housing market. My WAG had always been 9%, I'd probably  say 10 now, but regardless, until the supply and demand mismatch resolves, which i probably won't live to see, the housing market will keep on trucking.

 

The essentially free money of the last 15 years has warped so many people. We smack dab in the middle of historic interest rates. And dropping.

  • Hook 'Em 2
Link to comment
Share on other sites

7 minutes ago, Rex Kramer said:

Knowing rates will be coming down a lot further, I imagine transactions will be slim through the next 9-15 months, and then kinda explode. 

The first wave will be streamlines - specifically FHA and VA.  Non-credit qualifying, no cash-out transactions.  Many will have HE loans subordinated behind them if applicable.  

The next wave will be the "blended yield" crowd.  First is low, second is higher - so they take a blended rate in the 5's to have a single payment.  Maybe take a little more cash out, etc.  

FHFA is about to green light a FNMA pilot with a few early adopters on title premium waivers as well.  80% LTV, a few other black-box AUS requirements, and the loans have no title premiums, similar to a PIW in lieu of an appraisal.  That will hook a few more people as well.  

  • Hook 'Em 1
Link to comment
Share on other sites

1 minute ago, G650 said:

but how does that equate to anyone being turbo fucked?

housing sales stop.....no income for mortgage guys, no income for realtors, title guys..... Cut your income in half for even six months is turbo fucked for the vast majority of Americans.

totally agree there is lag in low demand impacting trades/contractors and a housing shortage so obviously that's not as immediate as the financial end.     

 

4 minutes ago, G650 said:

The essentially free money of the last 15 years has warped so many people

totally agree.   

Link to comment
Share on other sites

2 minutes ago, Incredulity said:

housing sales stop.....no income for mortgage guys, no income for realtors, title guys..... Cut your income in half for even six months is turbo fucked for the vast majority of Americans.

totally agree there is lag in low demand impacting trades/contractors and a housing shortage so obviously that's not as immediate as the financial end.     

 

totally agree.   

Can confirm. 

Link to comment
Share on other sites

Just now, Incredulity said:

housing sales stop.....no income for mortgage guys, no income for realtors, title guys..... Cut your income in half for even six months is turbo fucked for the vast majority of Americans.

totally agree there is lag in low demand impacting trades/contractors and a housing shortage so obviously that's not as immediate as the financial end.     

 

totally agree.   

Shit ton of lenders have left the space - this much is true.  Especially on the individual broker, LO, RE agent side of the house.  That being said, the good ones are still around and lender have ramped back up on hiring biggly.  

This new premium waiver is going to impact low-margin, brick & mortar title companies as well, but not all of them.  Market's are changing, but with demand still high, it's not going anywhere soon.  

Link to comment
Share on other sites

1 hour ago, G650 said:

On what planet is 7% interest rates going to stop the housing market? I wouldn't have postulated that even in 2018.

Avg home price went from approx $350K in 2018 to $550K in 2023, with the majority of that run up being '20 and '21.  Mortgage rate bottomed out early 21 being cut in half.

What caused the absurd house price appreciation in 20 and 21?

 

Link to comment
Share on other sites

12 minutes ago, Incredulity said:

Avg home price went from approx $350K in 2018 to $550K in 2023, with the majority of that run up being '20 and '21.  Mortgage rate bottomed out early 21 being cut in half.

What caused the absurd house price appreciation in 20 and 21?

 

Low interest rates, Covid, Covid stimulus, and a housing shortage. Is this a serious question?

1 hour ago, G650 said:

Yeah, that's one thing I'm getting at. On what planet is 7% interest rates going to stop the housing market? I wouldn't have postulated that even in 2018.

On a planet in desperate need of a real estate correction, the one market sector that struggled with historically normal interest rates. 
If the real estate market can’t function at 7%, it’s non-functional. 15 years of stimulus was way too much.

Edited by Bozo_Casanova
Link to comment
Share on other sites

1 hour ago, Incredulity said:

Avg home price went from approx $350K in 2018 to $550K in 2023, with the majority of that run up being '20 and '21.  Mortgage rate bottomed out early 21 being cut in half.

What caused the absurd house price appreciation in 20 and 21?

 

Ok... Still not remotely answering what I'm asking. How are 7% rates turbo fucking anyone?

 

1 hour ago, Bozo_Casanova said:


If the real estate market can’t function at 7%, it’s non-functional. 15 years of stimulus was way too much.

I agree.

Link to comment
Share on other sites

On 9/26/2024 at 5:59 PM, Storm the Field said:

Let's all not forget that ZH is owned by a former member of the Soviet-aligned Bulgarian Communist Party. He also runs a similar website in Bulgaria that frequently pushes conspiracy theories, anti-semitism, anti-LGBT, pro-Russia/anti-Ukrainian crap. Sound familiar? 

"Tyler Durden" is essentially his son, who is the primary editor of the site, which is pretty much his full time job, because he got barred by FINRA for insider trading and lost his career in investment banking.

ZH is his/their full time job. It get insane traffic, im confident it outearns any career in banking below MD. 

Like a newspaper, it has a news side and an opinions side. The opinions side is very obviously anti-establishment for politics and doomer/bearish for finance.

The news side is basically just a squawk service (aka a newsfeed) for market events, and basically everybody uses their social media as a sounding box. Their account is followed by the entire bloomberg team, dan loeb, cliff asness, kyle bass, taleb, any active money manager on social media …

Link to comment
Share on other sites

4 hours ago, BabaYaga said:

80% LTV, a few other black-box AUS requirements, and the loans have no title premiums, similar to a PIW in lieu of an appraisal

That would be awesome but good luck getting a PIW right now.  Fannie and Freddie tightened eligibility requirements for automated underwriting software and I mostly can’t get borrowers to meet them, even with 30%-40% equity in purchase made 12 months ago.  

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.



×
×
  • Create New...