Stacey Posted June 19, 2021 Share Posted June 19, 2021 I keep hearing about this. For someone looking into buying a home, it is a bit concerning. If it pops after I buy a house, I could end up paying thousands over the value on a mortgage for a home. I feel like if I do wait though, I will miss out on a house especially if the bubble never pops. Is this going to happen or do you think prices will stay the same (in increase) for a long time? 1 Quote Link to comment Share on other sites More sharing options...
Emma Posted June 20, 2021 Share Posted June 20, 2021 I have been wondering this myself. I don't really remember the last time this happened because I was on the younger side but I do remember a lot of people losing their homes but also many others being able to finally afford them. 1 Quote Link to comment Share on other sites More sharing options...
James Posted June 20, 2021 Share Posted June 20, 2021 Of course it will! Soon (no one knows how long soon is going to be). Everything at some point must return to its mean though and with all markets there will by cycles of things going up and down. Things are extremely frothy out there right now and the loose monetary policy is just making prices skyrocket. Eventually you would think that interest rates are going to have to go up to slap inflation back down. When the rates go up real estate prices will fall. You can not time the market. If we were able to we would all be rich by knowing when to buy and sell. So the question needs to become is this what I want to do for myself? 1 Quote Link to comment Share on other sites More sharing options...
Sophia Posted June 21, 2021 Share Posted June 21, 2021 Just stick with what you can afford, no matter where the market is. That is the safest bet. You can always sell the house you buy or rent it out before you pay off the mortgage and just get a different house. I would just trust your gut! The market could pop next month, next year, or not for another 3 or 4 years. Don't wait if you feel you found the home you want and can afford it! 1 Quote Link to comment Share on other sites More sharing options...
Mila Posted June 23, 2021 Share Posted June 23, 2021 I heard that some banks are buying up a lot of houses. Like actually outbidding first time home buyers which is really disgusting. I feel like this kind of this should not be legal. I think one of the banks is called Black Rock or something like that. Does anyone know if this is true? Maybe they are trying to prevent the pop? Quote Link to comment Share on other sites More sharing options...
James Posted June 23, 2021 Share Posted June 23, 2021 Black Rock is one of the large investment banks heavily investing in single family residences. They are sucking them all up because of the supply and demand problem. If there is no supply to buy the prices will keep going up and it also helps drive up rental rates. On the other side of the coin home builders are facing increased costs and building small homes has not been very profitable for quite awhile now so they stopped building them. Asset prices will come back down again we just need interest rates to go back up. 1 Quote Link to comment Share on other sites More sharing options...
Stacey Posted June 26, 2021 Author Share Posted June 26, 2021 When do you think it will happen? Some people are saying they have been waiting for a few years and really expected to see it pop this year. I have been reading a lot since posting this and I just don't know what to think. It seems like they are trying to prevent it to just screw middle class families over. 1 Quote Link to comment Share on other sites More sharing options...
Emma Posted June 26, 2021 Share Posted June 26, 2021 I don't think anyone knows! That is the thing. Like if people knew this, then they could possibly become millionaires with this knowledge because they would know when to be ready to buy up housing at dirt cheap prices! 1 Quote Link to comment Share on other sites More sharing options...
James Posted June 28, 2021 Share Posted June 28, 2021 On 6/25/2021 at 6:51 PM, Stacey said: When do you think it will happen? Some people are saying they have been waiting for a few years and really expected to see it pop this year. I have been reading a lot since posting this and I just don't know what to think. It seems like they are trying to prevent it to just screw middle class families over. No one knows it will happen when it happens. On 6/26/2021 at 1:18 PM, Emma said: I don't think anyone knows! That is the thing. Like if people knew this, then they could possibly become millionaires with this knowledge because they would know when to be ready to buy up housing at dirt cheap prices! This is correct if there were people that could see the future we would have a lot more millionaires on our hands. It is one of those things we just have to wait and see. I can tell you that home prices will come down when interest rates go up. We should know that for almost all asset classes. No one knows when they are going to raise those rates though. It has to happen eventually to keep inflation incheck. 2 Quote Link to comment Share on other sites More sharing options...
Stacey Posted July 2, 2021 Author Share Posted July 2, 2021 That is one thing I keep overlooking, interest rates. What is the average interest rate right now for housing? I sit really that low? Like to me, it would be smarter to buy with low interest rates vs paying less at higher interest but I am not very educated on the housing market or how it fluctuates. Quote Link to comment Share on other sites More sharing options...
James Posted July 2, 2021 Share Posted July 2, 2021 25 minutes ago, Stacey said: That is one thing I keep overlooking, interest rates. What is the average interest rate right now for housing? I sit really that low? Like to me, it would be smarter to buy with low interest rates vs paying less at higher interest but I am not very educated on the housing market or how it fluctuates. Yeah I think they are down around 3%. Check out the historical rates. Image curtsey of: https://fred.stlouisfed.org/graph/?g=NUh Here is a graph of median home prices. Sorry the graphs dont start at the same date just know the median home price graph starts in 1953 Image curtsey of: https://dqydj.com/historical-home-prices/ I remember being younger when interest rates were higher because I remember I had a plan to save up $1,000,000 and just plop it in the bank earn 8% for $80k a year and call it good. In this day of age keeping money in the bank you lose to inflation :/. 3 Quote Link to comment Share on other sites More sharing options...
Emma Posted July 3, 2021 Share Posted July 3, 2021 Holy cow! It was nearly 19% in the 1980's that is just insane! Here is me thinking I would need perfect credit to get anything below 10%. Does this apply to all credit scores as well? 1 Quote Link to comment Share on other sites More sharing options...
James Posted July 5, 2021 Share Posted July 5, 2021 On 7/3/2021 at 4:41 PM, Emma said: Holy cow! It was nearly 19% in the 1980's that is just insane! Here is me thinking I would need perfect credit to get anything below 10%. Does this apply to all credit scores as well? Those would have been the rock bottom rates for the best credit scores. Think they just dipped under 3% again here just late last week. So a less then stellar score that would still qualify you for a mortgage you will likely be in the 4% range. 2 Quote Link to comment Share on other sites More sharing options...
Emma Posted July 11, 2021 Share Posted July 11, 2021 On 7/5/2021 at 3:32 PM, James said: Those would have been the rock bottom rates for the best credit scores. Think they just dipped under 3% again here just late last week. So a less then stellar score that would still qualify you for a mortgage you will likely be in the 4% range. Wow, now I can see why houses are selling in my area in less than 2 weeks. Makes sense now. These rates are locked in right? They won't change or adjust unless you were to refinance or something like that right? 1 Quote Link to comment Share on other sites More sharing options...
James Posted July 12, 2021 Share Posted July 12, 2021 On 7/10/2021 at 5:49 PM, Emma said: Wow, now I can see why houses are selling in my area in less than 2 weeks. Makes sense now. These rates are locked in right? They won't change or adjust unless you were to refinance or something like that right? As long as you are getting the standard fixed 30 year mortgage yep the rate would be locked in :). 2 Quote Link to comment Share on other sites More sharing options...
Sophia Posted July 13, 2021 Share Posted July 13, 2021 It is really crazy looking back at interest rates, buying power of USD, and what people were earning. I find it quite scary to think that we had more buying power coming out of WWII than we do now. 1 Quote Link to comment Share on other sites More sharing options...
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