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View Full Version : The market/ whats gonna happen



axkiker
08-25-2006, 06:11 AM
Well I have been following the market etc since I got into mortgages a few years back. I have recently switched careers but still like to follow the bond etc just to see how things are going. What do you all for see happening to the rates. As I watch the cost of gas and cost of living go up and up I just cant see how interest rates can continue to follow the same upward trend without negative effects. I know the feds didnt increase prime this last meeting but are still expected to during their next meeting.
A few things I see happening are
Gas keeps going up
cost of living due to higer fuel cost goes up
cost of living increases in most companies are not comensating
5 years ago only 25% of fule purchases went on credit. Now its over 75%
Home sales are slowing. Which in turn is gonna kill all thoes out there with 2, 3, or 5 year arms who wont be able to afford the home when it comes time to refinance.
Once it comes time to refinance and they cant. Its gonna be foreclosure and bankruptsy time.
so looks to me we may see a recession in the near future. Not sure how soon maybe 2-4 years. Alot depends on the middle easst etc. If not ill be looking into purchasing rental properties
any insight.

ratso
08-25-2006, 06:45 AM
It ain't lookin' good...

Dribble
08-25-2006, 06:58 AM
Recessions are a integral part of a capitalist economy and are not necessarily a bad thing. In order to prevent runaway growth and the ensuing runaway inflation (ie. Germany in the 1930's) the economic pendulum must swing. It causes short term economic pain for some but over the long run ensures a healthy economy. The drop in real estate prices could translate into a drop in my property taxes. Also remember that it is finacially smarter to sell and move up in a down real estate market than in an up market.
The reason why fuel purchases on credit have risen is because people pay at the pump with their ATM/credit card. The computer doesn't know that when you hit the credit button and use your ATM card that it is not a Visa card. Therfore it stats the purchase as credit.

voodoomedman
08-25-2006, 07:03 AM
The reason why fuel purchases on credit have risen is because people pay at the pump with their ATM/credit card. The computer doesn't know that when you hit the credit button and use your ATM card that it is not a Visa card. Therfore it stats the purchase as credit.
That and some people do like me and put everything on a credit card and pay off at the end of the month. Gas and Groceries are bonus points too. Were all flying to South Carolina next month for free because of that.

CBadDad
08-25-2006, 07:09 AM
It ain't lookin' good...
It's looking great. I can't wait for interest rates to hit 8%. The higher the rate the better the tax advantage. Since the monthly payment is all that really matters to most of us, that means prices will decrease and I can buy more.
Apologies to those that the recession brings to their knees, but it is gonna happen. I'm surprised that it has taken this long.

BoatFloating
08-25-2006, 07:19 AM
Goldman Sachs just informed the company I work for Lime Financial that they are predicting a 1 1/2 rate drop within the next 6-12 months. Also don't be surprised if the fed lowers rate .25 in the Dec meeting. I think the mortgage industry is leveling off. So the future is bright. I agree there will be a ton of foreclosures but all that means is that some one will buy that house. I can tell you a lot of the foreclosures were caused by Loan Officers putting people in the wrong loan program and into a house they couldn't afford in the long run.

Devil's Advocate
08-25-2006, 07:33 AM
I've got a 3 arm on my condo which re-fi will be coming up soon. All of it makes me nervous. We are looking into land and homes now....not sure about what the market is going to do. :squiggle:

BoatFloating
08-25-2006, 07:44 AM
I've got a 3 arm on my condo which re-fi will be coming up soon. All of it makes me nervous. We are looking into land and homes now....not sure about what the market is going to do. :squiggle:
Yes rates are higher than 3 years ago but as long as credit stayed the same or got better the hit shouldn't be that painful....

lucky
08-25-2006, 07:56 AM
I'm waiting- Glad i sold my house even though it was a fires sale due to the divorce- It eased up my finances and i'm banking on the market fall :) buahahaa -- this upcoming winter will be INTERESTING :)

Freak
08-25-2006, 07:57 AM
Deflation from a Recession. Coming to you soon. Just my take.
I love these #'s.
32.6% of new US mortgages and home equity loans
in 2005 were interest only, up from 0.6% in 2000
43% of first-time home buyers in 2005 put no
money down
15.2% of 2005 buyers owe at least 10% more than
their home is worth
10% of all home owners with mortgages have no
equity in their homes
$2.7 trillion dollars in loans will adjust to higher
rates in 2006 and 2007
At the end of 2003, 1% of Washington Mutual's
(WaMu's) option ARM (adjustable rate mortgage)
loans were in negative amortization (the borrowers
were borrowing more money each month, not even
paying enough to pay the monthly interest charge
in full). At the end of 2005, 47% of WaMu's option
ARM's were in negative amortization (55% by value
of the loans).
WaMu is booking these negative amortization
payments as earnings. In prior times, loans where
borrowers were making less than the interest
payments would be classified as non-performing
loans. In January-March, 2005, WaMu booked $25
million in earnings from negative amortization
payments. In the same period in 2006, WaMu
booked $203 million in earnings from these
payments. These borrowers are increasing their
mortgage balances as property values have started
falling, so the default risk on these loans is
extremely high.
Mr. Witter estimates that a simple revision to the
mean suggests a 30% drop in residential property
values in the US.
The no down payment disaster. :skull:

Freak
08-25-2006, 08:00 AM
okay noobie here wanting to ask a question. I don't currently own a home:cry: With all the talk of foreclosures and bankruptcies(sp?), does that mean buying a house will be easier in the near future?
I think so. What you will need to do is time the bottom correctly. You don't want to buy and you owe 20k more than it's currently worth four months later.

YeLLowBoaT
08-25-2006, 08:02 AM
I just saw on the news where Forclosures( not defualts, but actal forclosures) in my county are up 118% from last quater from a year ago. I see that happening for awhile. Too many ppl paid way to much/crappy loans for thier house. If prices keep droping I see more ppl starting to walk away from thier homes. Its happend b4 and it will happen again. Its only a matter of how far and for how long. My feeling is that new construction in sac will be dead for the most part. Atleast once they get all the houses built that they already took the loans out for.
I think it will take a few more years for all the ppl that bought houses they can't aford to be out and things to start to level off. Its all a guessing game when it comes to the market anyways. Many, many ppl have done the darts vs the experts when it comes to the markets... the darts win 90% of the time, what does that tell you?

Dave C
08-25-2006, 08:06 AM
its funny... it really depends on who you talk to. Talk to someone in the mortgage racket ... err... I meant.. mortgage business and the rates are going down. Talk to someone in other financial services the rates are going up. :rollside: :rollside:
thats not to say either knows whats going to happen because predicting interest rates is like looking into a crystal ball.
BTW interest rates are affected more by increases/decreases in the money supply and less to do the the short term interest rates that the fed plays with. For the last couple of years had a loose money policy. Money supply and interest rates have a inverse relationship. (more money, lower rates)
The fed has some influence on the money supply but its also dictated by how much foreign investment we get in our money market which has been substantial.
so to answer the question, I don't think anyone knows for sure what the hell is going to happen..... :rollside:

rivercrazy
08-25-2006, 08:32 AM
I like my 35% LTV and my 5.5% 30 year fixed rate loan!
Some here were talking about no equity down purchases. Bullseye! Without the potential pain of loosing a significant equity down payment, these borrowers are not as motivated to do the right thing and honor what they signed up for.

lucky
08-25-2006, 08:35 AM
its funny... it really depends on who you talk to. Talk to someone in the mortgage racket ... err... I meant.. mortgage business and the rates are going down. Talk to someone in other financial services the rates are going up. :rollside: :rollside:
thats not to say either knows whats going to happen because predicting interest rates is like looking into a crystal ball.
BTW interest rates are affected more by increases/decreases in the money supply and less to do the the short term interest rates that the fed plays with. For the last couple of years had a loose money policy. Money supply and interest rates have a inverse relationship. (more money, lower rates)
The fed has some influence on the money supply but its also dictated by how much foreign investment we get in our money market which has been substantial.
so to answer the question, I don't think anyone knows for sure what the hell is going to happen..... :rollside:
I do believe we all know whats going to Happen - - the feds are rebuilding their reserves and Utilizing all means which includes the American public ! We will hit a whooope do in the housing while every thing adjusts - The Consevative people will have an opertunity to take advantages of the Recklessness of the past few years ! just stay pre qualified so you can jump on that Real good deal :) We will re establish Wages and adjust inflation for the next generation ! ps our kids are focked

cc322
08-25-2006, 08:49 AM
Up... down... whos know's. All I know is i am paying about the same rate as I did when I bought my home 8 years ago. Hasent changed that much.

cdog
08-25-2006, 08:54 AM
http://www.***boat.com/image_center/data/520/19798531.jpg
I got it!

al cole'holic
08-25-2006, 09:08 AM
...yes, this shit again!!
I think since the last time we went through this, I bought a 3rd property....working on #4 as I type. :boxed:

BoatFloating
08-25-2006, 09:10 AM
BTW interest rates are affected more by increases/decreases in the money supply and less to do the the short term interest rates that the fed plays with. For the last couple of years had a loose money policy. Money supply and interest rates have a inverse relationship. (more money, lower rates)
The fed has some influence on the money supply but its also dictated by how much foreign investment we get in our money market which has been substantial.
Not in the subprime market. It's based on short term bonds and the fed effects that. Also Heloc is directly tied to the fed rate in the A paper Alt and Sub Prime. So as the Fed raises the rate the payment on a Heloc goes up....

Jyruiz
08-25-2006, 09:29 AM
http://www.***boat.com/image_center/showphoto.php?photo=113026&password=&sort=1&thecat=
Someone put this dam pic up for me. I still can't figure it out.
Here you go.
http://www.***boat.com/image_center/data/520/19798531.jpg