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Higher interest rates crush mortgage application volume, down 9.4%

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posted on Dec, 8 2016 @ 09:39 AM
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I'm not surprised. I'm currently making what a lot of people would consider decent money and I'm not even putting buying a house on the table. To expensive. Not worth the investment. I'd rather pay rent and not have to worry about all the other added costs and ever increasing tax rates and lower yields on returns and even losing equity in the long run.

Thus... I am part of generation own nothing, no job, no retirement yadda yadda.

It was my grandmothers generation who had fantastic pension plans and were able to afford mortgages on beautiful homes in the mountains on 1 factory position... the same machine operator job that I have now... still paid the same amount of money it paid then but 1/3 of the purchasing power. Yupp....... the Fed isn't going to raise interests rates.

CNBC



Refinance volume has been falling steadily as rates rise, but it took another sharp drop, down 16 percent for the week, seasonally adjusted. Refinances are most rate sensitive and are now down 3 percent from a year ago, when rates were not much different than they are today.


Oh well.

It's because young kids are lazy.

Personally.. I agree with Peter Schiff. I didn't like him when he did the OWS video but after listening to his podcast I've realized hes actually an anti establishment insider.

Mortgage News Daily Graphs

Schiff Gold



On the new home buyer front, things are also discouraging. Millennials are delaying first home purchases until they’ve paid down the $1.3 trillion in student loans. With 11% of student loans currently in default, the deferment could impact home sales for the foreseeable future. Overall, things are looking pretty bleak for the housing industry in the short term. Long-term interest rates have been rising with the post-election bond selloff, and are also contributing to the housing slowdown. On top of that, speculation over Donald Trump’s fiscal stimulus plans and the increasing possibility of a Fed rate hike this month is keeping the industry uncertain.


Yup.... Once again the crux of the issue is that people aren't in secure enough positions in my age group to be able to take the risk of buying a home. We won't see the same returns the previous generation has if any at all. On top of that the market is so weak for our age group that buying new cars is out too.

Long gold, long silver and oil.
edit on 8-12-2016 by Darkmadness because: (no reason given)




posted on Dec, 8 2016 @ 09:45 AM
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a reply to: Darkmadness

Since you really don't own it, better off renting anyway.



posted on Dec, 8 2016 @ 09:47 AM
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a reply to: searcherfortruth

My thoughts exactly. Unless it's unincorporated land that the government or the BLM has no interests in such as natural resources (oil, water mainly).



posted on Dec, 8 2016 @ 09:49 AM
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I make good money too but I'm in the same boat as you. I rent and have no retirement and buying a house just seems too difficult unless I get a cheap trailer or a tiny shack.



posted on Dec, 8 2016 @ 09:50 AM
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Okay, well on the technicality that you may not *own it* a home is well worth the investment in regards to buying it at one price, living there with the same money you'd spend on rent, and then selling it a few years later for a higher price than you bought it.

Currently you're making your landlord rich.



posted on Dec, 8 2016 @ 09:50 AM
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You can buy a house today for about 3.5% interest.

I'm closing friday on a house i just sold. The guy said his payment with taxes, insurance and mortgage insurance is about $30 more than his rent.

If people can't afford to buy a house with today's interest they will never buy. I bought my current house in 2000 and it was a 8.625%. I refinanced twice as rates dropped and it's at 3 something now.
Payed off in 3 more years! Whooooo!
edit on 8-12-2016 by Bluntone22 because: (no reason given)



posted on Dec, 8 2016 @ 09:55 AM
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I work in mortgage finance. Rates rose sharply but are still low historically. If you can't afford the home at 4%, you can't afford the home at 3.5% imho.

Real estate still is a relatively solid long term investment and a good hedge against inflation.

I do agree that real estate and life in general is far more expensive than it was for our parent's generation. Especially if you live in a major urban area.

While I get the desire to rent, etc of millenials; all that noise stops once you have children. Then you realize there is more to life than just your own whims and desires. Then you want a HOME, not just an apartment or a place to live. We have a natural nesting instinct. Schools start becoming more important. Stability in your life is what becomes key when you have a child. Owning a home is a huge part of that stability.



posted on Dec, 8 2016 @ 10:02 AM
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a reply to: Edumakated

Millenialls don't remember the 18% mortgage rates in 1980.



posted on Dec, 8 2016 @ 10:06 AM
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originally posted by: Bluntone22
a reply to: Edumakated

Millenialls don't remember the 18% mortgage rates in 1980.


Yep. There's a reason apartments, townhomes, and condos (especially condos) were all the rage.



posted on Dec, 8 2016 @ 10:12 AM
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originally posted by: Bluntone22
a reply to: Edumakated

Millenialls don't remember the 18% mortgage rates in 1980.


I know. I can't tell you how many people contacted me panicking because rates went above 4%. For the most part, it is still free money (effective rate is probably 2.5-3% when you factor in mortgage interest deduction).

Refinances dropped off because pretty much anyone who qualified to refinance has done so already. Rates would really need to be down around 3% for a 30 year fixed to cause a boom again imho. They probably would have been had government regulations not raised costs for banks. Mortgage rates are at least .25-.375% higher than they should be because of Dodd-Frank, CFPB, and other regulatory BS that has been implemented over the past couple of years. Banks baked the cost of these regulations into the rates.

If you are living in an area for the long term, buying still makes sense. However, I usually advise against buying if you only have less than a 5 year outlook. Renting might make more sense if your life isn't stable. Crazy thing though is that renting in many cases is more expensive than buying.



posted on Dec, 8 2016 @ 10:17 AM
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a reply to: Edumakated

The guy buying my house got a USDA loan and there is a 1% urban housing fee tacked on.
I split the closing costs with him but said I would not split that one. Not my problem he can't get a conventional loan.
I think that's why anyways.
More government regulations biting people in the butt.



posted on Dec, 8 2016 @ 10:17 AM
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a reply to: Edumakated

Millennials aren't making money nor do they have the same purchasing power that you guys had.

It's hard to comprehend I know.



posted on Dec, 8 2016 @ 10:19 AM
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originally posted by: Darkmadness
a reply to: Edumakated

Millennials aren't making money nor do they have the same purchasing power that you guys had.

It's hard to comprehend I know.


I bought my first home when I was 29.
Millennials have no patience either.
They need to build that purchasing power over time.



posted on Dec, 8 2016 @ 10:23 AM
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originally posted by: Darkmadness
a reply to: Edumakated

Millennials aren't making money nor do they have the same purchasing power that you guys had.

It's hard to comprehend I know.


SOME aren't. Most of my clients are millenials. You know, the ones that studied and did well in school. Majored in something useful. Didn't waste four years protesting and finding themselves but actually picked up some skills valuable to employers.

I bought my first place when I was 28. It take patience and planning unless you have family help.

Things are more expensive in urban areas, but that is a lifestyle choice.



posted on Dec, 8 2016 @ 10:25 AM
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a reply to: Edumakated



SOME aren't. Most of my clients are millenials. You know, the ones that studied and did well in school. Majored in something useful. Didn't waste four years protesting and finding themselves but actually picked up some skills valuable to employers.


Don't even give me this line of BS when 45% of of students can't pay back their loans.

45% of students are not majoring in philosophy and poly sci.



posted on Dec, 8 2016 @ 10:28 AM
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a reply to: Darkmadness

Here's the thing.

If you want property as an investment, YOU WANT IT FOR THE WRONG REASONS! The only reason to want to own your own home, is so no bastard can kick you out of it because its been a slow month. I would love to own my own home. Why? Because I want to be the only person who decides whether I can have a pet, or a damned cigarette for that matter, inside my house. I want to be the one who decides how it is decorated, how it is managed, who may come and go and at what times. I want no one to have authority over the space, no one to be able to say, with only six months warning "Oh... yeah, your home? The place you live? We are selling that."

If you want property for investment, then frankly you have nothing to worry about in the first place, because people who NEED the security of never having to move again in their whole lives, are not even THINKING about re-sale value, and should not be either. At the end of the day, if you have a roof over your head, the job is a gooden. Most mortgages come in at less per month than the rent does by a STAGGERING amount, certainly around here! You are talking about a couple of hundred pounds a month, rather than closer to a grand. I love those odds! I wish I had the money to take them! That is, of course, assuming that you want to put yourself in hundreds of thousands of pounds of debt, which I would rather avoid like the plague, but all the same, I wish I had that kind of life, where I could afford to buy ANYWHERE to damned well live of my own.

At this rate, I will be lucky if I have saved enough to rent an apartment for a month in fifteen years time!



posted on Dec, 8 2016 @ 10:35 AM
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originally posted by: Darkmadness
a reply to: Edumakated



SOME aren't. Most of my clients are millenials. You know, the ones that studied and did well in school. Majored in something useful. Didn't waste four years protesting and finding themselves but actually picked up some skills valuable to employers.


Don't even give me this line of BS when 45% of of students can't pay back their loans.

45% of students are not majoring in philosophy and poly sci.



He wasn't talking about the 45 percent. They're probably majoring in arts or something equally stupid.



posted on Dec, 8 2016 @ 10:39 AM
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a reply to: TrueBrit

Keep at it. I was 64 before we bought our first house and paid cash. Now I won't have to pay $6,000 for retirement or assisted living. I have renters who help with assistance as part of rent.



posted on Dec, 8 2016 @ 10:39 AM
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a reply to: Flesh699

Why don't you show me a link that has the stats on what classes students are taking since I can't find one????



posted on Dec, 8 2016 @ 10:48 AM
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a reply to: Darkmadness

There are many factors as to why they can't pay their loans.
Did they take 7 years for a four year degree?
Did they go to a college in their home state or a higher tuition out of state College?
Is their degree in history?



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