tag:blogger.com,1999:blog-11027528911364475.post6815402766774067510..comments2024-02-18T21:10:05.205-08:00Comments on EconomPic: The Importance of Mortgage RatesJakehttp://www.blogger.com/profile/07946497592651234440noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-11027528911364475.post-42690259808386841862010-09-05T23:19:12.761-07:002010-09-05T23:19:12.761-07:00A well written post !
משכנתאA well written post !<br /><br /><a href="http://www.financialzone.co.il/mortgage.html" rel="nofollow">משכנתא</a>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-50266904543483808832010-08-31T23:39:08.930-07:002010-08-31T23:39:08.930-07:00The theme of your blog is very beautiful and the a...The theme of your blog is very beautiful and the article is written very well, I will continue to focus on your article.Mortgage Notehttp://www.seascapecapital.com/noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-5105651272382289082010-08-26T04:54:55.242-07:002010-08-26T04:54:55.242-07:00Cant believe that Im the first one to digg this? A...Cant believe that Im the first one to digg this? Anyway, I did. Thanks for this awesome information.<br /><br /><a href="http://moneynewsonline.co.uk/" rel="nofollow">money</a>Unknownhttps://www.blogger.com/profile/06517445313588013917noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-27405976029085904952010-08-24T13:50:06.981-07:002010-08-24T13:50:06.981-07:00If you have the cash, you are purely trying to arb...If you have the cash, you are purely trying to arb to subsidized mortgage rate. I'm not worried about you when you try to move in 5 years.Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-84406949776069216902010-08-24T12:36:03.377-07:002010-08-24T12:36:03.377-07:00What about working out the "dividend" th...What about working out the "dividend" that comes from a house paid off. Such as paying off a 30 year in 10 years and staying another five. You can treat those extra five years as from payments saved as income, which can be quite a lot of cash in your pocket if you are careful. For instance, 5 years * 2000 payment is 120k. If you have a 300k loan @ 4.5% or so and pay off early (hitting the lottery?) would these numbers work out more in your favor assuming the same interest rate hike and drop in price? Maybe I'm not quite making myself clear, I hope I am. Basically, does the money saved from prepayment offset the loss in value? If so, how much, and how long would you have to stay in the house afterwards in order to get that benefit?Unknownhttps://www.blogger.com/profile/03345704299950744289noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-85300149876184672092010-08-24T10:43:58.089-07:002010-08-24T10:43:58.089-07:00the Fed and our economic gurus created the housing...the Fed and our economic gurus created the housing bubble by continually attempting to stimulate demand through low rates, at great cost to the few "savers" and pensioners in the economy. <br /><br />and somehow "we can't understate the importance of low rates?" how bout trying a different play from the playbook and create some incentives for Americans to save and invest in something more productive than shelter (which we have in abundance)?????Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-25140810843709504362010-08-24T10:16:36.693-07:002010-08-24T10:16:36.693-07:00Last point (I'll save the rest for a post). In...Last point (I'll save the rest for a post). In the past rising rise (and higher monthly payments) were offset in part by inflation and higher wages. What happens this time if rates rise, but wages don't follow. Is that my baseline? No, but not unlikely.Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-80154419512670845022010-08-24T10:10:35.195-07:002010-08-24T10:10:35.195-07:00There was also not a bubble that was being popped ...There was also not a bubble that was being popped or subsidized mortgage rates being used to keep the bubble from completely collapsing. My argument is a 'what if' as we are in unprecedented times.Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-689440817598861142010-08-24T08:14:00.144-07:002010-08-24T08:14:00.144-07:00Instead of that chart you created showing what hap...Instead of that chart you created showing what happens with monthly payments, why not take historical data on what really happened to home prices?<br /><br />If you did, you will find out that in nominal terms, home prices DID NOT go down when interest rates spiked in the early 1980s<br /><br />http://seattlebubble.com/blog/wp-content/uploads/2010/02/KC-Home-Price_1950-2009-nominal.png<br /><br />This is just King Co. (Seattle), but if you graph national data, you will see the same thing - rising interest rates did not lower home prices in nominal terms.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-31437329831228673842010-08-24T06:56:29.278-07:002010-08-24T06:56:29.278-07:00What I want to know is how much of a percentage of...What I want to know is how much of a percentage of median income a mortgage payment for a cookie cutter 4 bedroom 2.5 bath home has changed. I assume it's gone down, since houses have gotten bigger but most people still are current on their mortgages...<br /><br />Anyone know the particular metric I'm looking for?Jhttps://www.blogger.com/profile/18116121761413049785noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-67118949983089808102010-08-23T13:42:55.916-07:002010-08-23T13:42:55.916-07:00not if the price of a home declines due to rising ...not if the price of a home declines due to rising interest rates (thus monthly payment remain the same). in this example, you do not want prices to go down even if trading up to a higher priced home.<br /><br />why? because you lose equity value on the home you sell and monthly payments don't change for the home you buy, even though it is cheaper. <br /><br />taking your extreme example. at today's interest rates, montly payments:<br /><br />$100k mortgage: $500 / month<br />$1mm mortgage: $5000 / month<br /><br />home prices drop 10% (assuming that is what you meant vs 90%) because mortgage rates rise to 5.32% (monthly payments on a $90k loan at 5.32% = a $100k loan at 4.4% = ~$500).<br /><br />1) $100k home is now worth $90k (you lose $10k) <br />2) your monthly payment on a new $1mm mortgage is still $5000 / month (i.e. you don't get the benefit of the price decline because the decline was due to rising rates)<br /><br />in a move to a similarly priced home, this is even worse. assuming you move from a $1mm house to an identical house.<br /><br />1) you lose $100k equity<br />2) your monthly payments are the same<br /><br />why? leverage. if you do not take out a loan there is no difference (and in the extreme case a benefit). the issue is the only thing propping up the housing market is subsidized financing for this leverage....Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-53752849656813312212010-08-23T12:48:31.847-07:002010-08-23T12:48:31.847-07:00If you're planning to swap out your house afte...If you're planning to swap out your house after a couple of years for a bigger house, wouldn't you want house prices to come down? <br /><br />Yes, you'd lose money when you sell your old house, but you'd save even more money on the larger house, whose price also went down.<br /><br />An extreme example is to compare a $ 100,000 and a $ 1,000,000 home. Right now the price difference would be $ 900,000 if you wanted to trade up. However, if both homes then declined by 90 % in price, the price difference would shrink to $ 90,000.Anonymousnoreply@blogger.com