Average rate on a 30-year mortgage in the US rises for 6th straight week | Hacker News Reader

Average rate on a 30-year mortgage in the US rises for 6th straight week

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13 pointspaulpauper13 comments

What is the context that determines whether or not people will consider a mortgage rate too high?

For instance from 1970 through 2007 mortgage rates were at or higher than they are now [1]. Aside from the '80s when they were 10-17% I don't recall people being overly concerned with 6-8% rates.

So what was it about the economy from the '90s through around 2008 that made those rates more acceptable than today's similar rates?

[1] https://www.freddiemac.com/pmms

> So what was it about the economy from the '90s through around 2008 that made those rates more acceptable than today's similar rates?

House prices were lower (...because people couldn't money as cheaply)

Ya, your rate was 10% but your house only cost $100k, at a salary of 40-50k that easily worked out. Now, we are in a lose-lose situation: rate goes up, mortgages are more expensive, but if rates go down, house prices explode so mortgages are still more expensive. Anything less than a surplus of housing is not going to lower or stabilize home prices.

Does mortgage rate affect housing affordability overall? I wouldn't think so. Seems like it would all be a marketing timing thing. Best situation seems like it would be to buy a house when rates are very high and then have them drop suddenly and refinance.

You don’t think the mortgage rate affects affordability ?

Let’s have 0% mortgage rates then

> Let’s have 0% mortgage rates then

Pretty sure that would result in infinity price houses.

So mortgage rate does have an effect on prices…

30 year fixes seem so alien to me, 2 or 5 years are the most common in the U.K.

Are there shorter interval fixes? Is it just a cultural thing where lifetime fix is the norm?

Lifetime fixed rate is more common especially after 2008 when floating rates contributed to crushing the US housing market. Even before 2008 fixed was more common. The fixed rate is why those in the US who have a ~3% rate from a few years ago are “stuck” as it is difficult to justify giving it up.

Makes total sense when owning a home is everything here but very few can afford a 5y mortgage against a $300k+ asset.

I believe they are talking about 2 or 5 year rate locks, not 2 or 5 year mortgage terms.

Most UK mortgages are 25 or 30 years, but they switch from a fixed rate to a variable rate after the first few years.

That sounds worst that you are binding into a contract that you have no idea how much you have to pay for so many years.

I wish they'd do away with compound interest. Why not some flat % like other loans? Maybe like 8-12% and I'm sure everyone wins.

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