7% interest rate?!

[Mackenzie Click-Mickelson]

Say it louder for people in the back!

The single-family home was perfected in New England 375 years ago. The center-hall colonial is the pinnacle of form and function. Four rooms downstairs. Kitchen, dining, living, office. Four bedrooms upstairs. Symmetrical and clean, five windows over four windows. The design scales and works just as well at 1,800 square feet as it does at 5,000 square feet.

We put a partial wall that helps separate the kitchen from the great room, we changed the load-bearing pillars to shorter walls. You can do things that offer separation without being enclosed separate spaces. And optimum space utilization isn't solved by boxing everything back in anymore than having a wide open plan.






Our house would be a dark, depressing area if that dining room was fully enclosed as a lot of light streams in from it. Our kitchen is already slightly darker by way of the wall separating and the trees in the backyard.

 

[tvguy]

You sound bitter..why?

Well, we have the freedom to decide how to spend our money. And yes it may be bitter or judgmental for others looking at a situation that you have opted to spend a bunch of your money on car, then complain what you CAN'T afford, because of it.
Yes, I judge when I drive by the line of cars at the food bank giveaways and see people who have opted to buy the $80,000 car instead of the $30,000 car and then struggle to put food on the table.

 

[tvguy]

Early 2023 will be a terrible time to buy a house. Wait until late 2023/2024.

Renew your lease. See if you can do a 6 month rather than 12 month one and reevaluate the housing market next fall.

Remember that refinancing is NOT free. And interest rates will stay high for likely a couple years so you will need to be able to comfortably afford the payments for awhile.

Well, like I think has been mentioned above, at least here, rents are more out of wack than mortgage rates. People like my daughter found they couldn't afford to rent, and that is why they bought.

 

[Mackenzie Click-Mickelson]

Well, we have the freedom to decide how to spend our money. And yes it may be bitter or judgmental for others looking at a situation that you have opted to spend a bunch of your money on car, then complain what you CAN'T afford, because of it.
Yes, I judge when I drive by the line of cars at the food bank giveaways and see people who have opted to buy the $80,000 car instead of the $30,000 car and then struggle to put food on the table.

That actually had nothing to do with why I even asked about bitter. It was the several times they said they were a "boomer" and what they ate. It gave off the "I walked 10 miles up and down a hill in 7 feet of snow and while you're at it get off my lawn" vibe and I didn't know why they seemed to ooze that bitterness repeatedly through the several comments hence why I asked.

 

[DLgal]

Well, like I think has been mentioned above, at least here, rents are more out of wack than mortgage rates. People like my daughter found they couldn't afford to rent, and that is why they bought.

Rent is a temporary expense if you are in the market to buy a home. At 7% with current home prices, buying is more expensive almost everywhere right now. This is why rents are also going up.

 

[MrsCobraBubbles]

Early 2023 will be a terrible time to buy a house. Wait until late 2023/2024.

Renew your lease. See if you can do a 6 month rather than 12 month one and reevaluate the housing market next fall.

Remember that refinancing is NOT free. And interest rates will stay high for likely a couple years so you will need to be able to comfortably afford the payments for awhile.

ugh, there are so many reasons why i want out of this apartment that the thought of staying here longer than March makes me so frustrated! But I don't want to make a bad financial decision either, just feel like I'm between a rock and a hard place. I'm only looking at places where my mortgage would be the same as the rent I'm currently paying, and prices are definitely starting to come down here, but I am a little concerned about going upside down on this house given the current market.

 

[DLgal]

ugh, there are so many reasons why i want out of this apartment that the thought of staying here longer than March makes me so frustrated! But I don't want to make a bad financial decision either, just feel like I'm between a rock and a hard place. I'm only looking at places where my mortgage would be the same as the rent I'm currently paying, and prices are definitely starting to come down here, but I am a little concerned about going upside down on this house given the current market.

Yeah, when the rent vs buy costs are so close, you have to also consider home MAINTENANCE costs as well, which usually tips you in favor of continuing to rent. No one ever bought a house and bragged about how cheap it was to maintain.

I get wanting to move out of a place. We are kind of at that point with our current rental house, but it's SO much cheaper than market rate that we are sticking it out a year or 2 more while we wait for the home prices to come back down to reality over here. There is no way I'm doubling our housing payment every month AND budgeting extra for home maintenance on top of that.

 

[MrsCobraBubbles]

first mortgage 16% would have killed for 7%. People today are spoiled, yes I am a "Boomer"

it's been an eye-opener to hear about all these high mortgage rates, I guess the 6.something I was quoted isn't that bad after all!

 

[CaptainAmerica]

first mortgage 16% would have killed for 7%. People today are spoiled, yes I am a "Boomer"

I'm at 2.25% ayooooooo.

(And I bought my house right at the start of covid when sellers were panicked that the market would crash and then the opposite happened.)

 

[tvguy]

Rent is a temporary expense if you are in the market to buy a home. At 7% with current home prices, buying is more expensive almost everywhere right now. This is why rents are also going up.

Well, I can't say almost everywhere, but a house payment still is about 40% less here than the rent for the same property. Remember, renters ARE making a house payment, the landlord's, and covering all the landlord's expenses, and leaving them a profit.
The big problem here is foreign investors in the past 10 years are snapped up houses and turned them into rentals. Allegedly ONE company now owns 1,200 houses in my county.

 

[mefordis]

Very true.....just did a quick calculation for a 600K home. In order to have the same payment at 7% that a buyer would have had just a year ago at 3%....the value of the home would need to drop down to 380K. That's a 37% drop. And this is why I'm not completely buying the idea that the housing market isn't in for a pretty big drop. I know inventory is in short supply, but I just don't see how we don't see at least a 20% drop in many parts of the country....higher in areas that had a huge increase in prices during the pandemic.

But....the only mortgage we ever had was with our first home, a jumbo mortgage at 7.125% in 2000. We were in our early 30s, newly married and we wanted to buy a house. So people will always sell and buy homes. But I also suspect that a lot of people are going to feel handcuffed to their existing homes with very low mortgage rates.

That's me. I'm handcuffed to my 2.625% interest rate. We were looking into moving into a bigger house but decided to just stay and renovate, turning our ranch into a two story.

 

[tvguy]

Yeah, when the rent vs buy costs are so close, you have to also consider home MAINTENANCE costs as well, which usually tips you in favor of continuing to rent. No one ever bought a house and bragged about how cheap it was to maintain.

I get wanting to move out of a place. We are kind of at that point with our current rental house, but it's SO much cheaper than market rate that we are sticking it out a year or 2 more while we wait for the home prices to come back down to reality over here. There is no way I'm doubling our housing payment every month AND budgeting extra for home maintenance on top of that.

My daughter got hit with huge maintenance costs this year. New HVAC system. to the tune of $11,000. Still factoring that it, cheaper than renting by a few thousand for the year.

 

[DCLMP]

Say it louder for people in the back!

The single-family home was perfected in New England 375 years ago. The center-hall colonial is the pinnacle of form and function. Four rooms downstairs. Kitchen, dining, living, office. Four bedrooms upstairs. Symmetrical and clean, five windows over four windows. The design scales and works just as well at 1,800 square feet as it does at 5,000 square feet.

meh. I like my one story home. Lower ac bills.

 

[Colleen27]

Well, I can't say almost everywhere, but a house payment still is about 40% less here than the rent for the same property. Remember, renters ARE making a house payment, the landlord's, and covering all the landlord's expenses, and leaving them a profit.
The big problem here is foreign investors in the past 10 years are snapped up houses and turned them into rentals. Allegedly ONE company now owns 1,200 houses in my county.

Yeah, if ownership was more expensive than renting investors wouldn't be snapping up properties en masse the way they are. They're doing it because the rent they can charge more than covers the cost of purchase + repairs. And while higher interest rates drive up ownership costs for those who need a mortgage, a significant chunk of investor purchases are cash.

 

[DLgal]

Well, I can't say almost everywhere, but a house payment still is about 40% less here than the rent for the same property. Remember, renters ARE making a house payment, the landlord's, and covering all the landlord's expenses, and leaving them a profit.
The big problem here is foreign investors in the past 10 years are snapped up houses and turned them into rentals. Allegedly ONE company now owns 1,200 houses in my county.

It's the opposite here. Rent is 100% cheaper than buying an equivalent home. At least in our city.

 

[dvcgirl67]

That's me. I'm handcuffed to my 2.625% interest rate. We were looking into moving into a bigger house but decided to just stay and renovate, turning our ranch into a two story.

Smart move....it'll be a very long time until we see a number that low again....if ever.

 

[DCLMP]

It's the opposite here. Rent is 100% cheaper than buying an equivalent home. At least in our city.

Same here. Renting a home is going to be cheaper.

 

[Lumpy1106]

first mortgage 16% would have killed for 7%. People today are spoiled, yes I am a "Boomer"

We bought our first home in '94 and got 7.2% interest rate as part of a 1st time home buyer plan. We were thrilled because interest rates were double-digit at the time. Of course, we had to pay PMI since we were 1'st time home buyers - there's your scam right there. we pretty quickly figured out how to pay down the principal so we could get rid of the PMI. Still, making someone pay additional because they are a supposed risk to not keep up with payments is a division by zero that should make your head explode.

If I were a 1st time buyer right now I would not be so concerned with the interest rate. They control the interest rate to control inflation. Home prices should come down accordingly. That's going to put some people upside-down on their mortgages (paying more in mortgage than the house is worth) but it's an opportunity for you. Buy when the prices drop, interest rate be damned. You will have lots of opportunity to refinance down the road.

 

[DLgal]

Yeah, if ownership was more expensive than renting investors wouldn't be snapping up properties en masse the way they are. They're doing it because the rent they can charge more than covers the cost of purchase + repairs. And while higher interest rates drive up ownership costs for those who need a mortgage, a significant chunk of investor purchases are cash.

Many landlords use these homes as cash shelters, especially the foreign all cash buyers. You arent paying their mortgage, you are helping them avoid taxarion in China (usually). Other "investment" landlords put down a significant amount of cash down and then get interest only loans. The monthly cash flow pays the interest of the loan, they pocket the rest and rely on appreciation of the home over time. Then they sell the home for a profit.

I wish housing wasn't treated as an investment in this country. That's the entire reason why the market is the way it is.

 

[DLgal]

We bought our first home in '94 and got 7.2% interest rate as part of a 1st time home buyer plan. Of course, we had to pay PMI since we were 1'st time home buyers - there's your scam right there. we pretty quickly figured out how to pay down the principal so we could get rid of the PMI. Still, making someone pay additional because they are a supposed risk to not keep up with payments is a division by zero that should make your head explode.

If I were a 1st time buyer right now I would not be so concerned with the interest rate. They control the interest rate to control inflation. Home prices should come down accordingly. That's going to put some people upside-down on their mortgages (paying more in mortgage than the house is worth) but it's an opportunity for you. Buy when the prices drop, interest rate be damned. You will have lots of opportunity to refinance down the road.

This is our plan. We just need prices to come down about 20%.