30-year mortgage rate surges to 6.28%, up from 5.5% just a week ago | Hacker News Reader

30-year mortgage rate surges to 6.28%, up from 5.5% just a week ago

cnbc.com

48 pointsbluedino21 comments

this jump may have just put us out of being homeowners in California, even with a full 20% down in cash. wow.

the issue we're seeing locally in Sacramento (your market may vary) is that there's still a lot of Bay Area WFH salaries moving our way that outbid us, and the house flippers are most definitely still in the market. Our local salaries in healthcare haven't been adjusted, and at this point, we're basically screwed. :/ I can't pull another $100k out of a hat.

you'd think the cost of money going up so sharply might cause home prices to decrease, but I suppose this effect will take time to materialize.

Dirt is so very sticky over a period of a moving 7-year average because it is our era's store of wealth gold semi-equivalent compared to back when gold backed currencies. Equities are our silver semi-equivalent compared to back when we had a bi-metal backing. What really backs currencies today is far more complex, but that's a gist.

If it wasn't, then you wouldn't have so many companies whose financial "ballast" so-to-speak driven largely by dirt, like McDonald's as a famous example but this is far more prevalent in business than you'd think if you haven't been around lots of businesses.

Stack on all the structural advantages conferred to real estate asset characterization and outright subsidies, and it isn't surprising that dirt pricing follows more of a subsidized pricing behavior than an open market with rapid value and price discovery.

Dirt will be largely irrelevant in the age of AI. the gold standard had to be abandoned. Real estate standard will have to be abandoned as well. May take some time though.

CEO of OpenAI, Sam Altman, still thinks land will be valuable. https://mobile.twitter.com/sama/status/1371893244636717058?l...

I think a federal us property tax makes sense. In fact the rest of the world needs real estate property taxes similar to us states. But taking equity as a tax makes no sense, that’s communism. capitalist governments just take the profits without the burden of running the company. If government owns the company, there is no tax, as the employees are then paid by the government (a negative tax). All government employees have a negative effective tax rate equal to their take home income.

The Earth is humanity's treasure and you argue that some stupid AI is going to replace it? Hello we already have advanced natural intelligences called humans.

Not the whole earth. Just the imbalance between parts of the earth. Location just isn’t as important when you communicate at light speed. real estate values are entirely based on location.

Look up the Redfin et al layoffs, the housing market has cooled off tremendously (anecdata: the house for sale on my block had a sold sign under it that is now gone, still on the market a month later; earlier things weren't lasting a week).

However, there's always a delay as sellers refuse to admit what's happening, and so supplies grown and sales plummet until the prices adjust.

Bad news: the monthly payments may remain the same.

Continue to collect cash and keep an eye out.

that might be just what we do. at least our current situation is a decent one. fortunately.

This is actually a great time to buy house. You are not going to have bidding wars and take your time. For now, swallow the pill for 6% rate but know that this will come down in next 2-3 years as Ukraine war wraps up and supply chain stabilizes. You can then simply refinance at 3%.

That is hugely optimistic. Rates could just as easily be 8% in 2-3 years

We thought about that but the rate jumps + California prices quickly put things out of reach.

Prices will drop in a few months as supply has to find demand. In the end everyone just buys how much monthly payments they can afford.

As someone in the market for a home and willing to pay all cash, I’m looking forward to this.

Right?

Haha, where's your "cash" sitting? I'm in the same boat, but mine is in equities, which have already lost 25% of their value since January, and there's probably more pain to come.

Of course I could have kept this cash in a bank or under the mattress, but not only would I have missed out on massive gains over the last few years in the stock market, I'd also now be losing 10% per year to inflation.

There is just no refuge in our modern financialized economy - we're all forced into the casino.

Good point. Partially in my old house and partially in a bond (so I think I’m safe there).

Yes, just remember though house prices don't track the mortgage rate immediately. I personally would not buy a house in the next 6 months, as I think prices will trend down.

6.25% was the rate I got in early 2007 a bit before the recession hit. For a few years before that they had been in the 5-6% range. Before that, from around 2002 back to the mid '70s they had always been above 6%. Averaged a little over 7.5% in the '90s, 10% in the second half of the '80s, from 10% to 18.5% in the first half of the '80s.

This is actually really refreshing to hear (as someone who is not at all comfortable with the huge amount of debt friends and family get into.)

Unsurprising really. It seems like a mortgage gets you the best roi pf any conservative investment right now when you adjust for inflation.

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