Mortgage Rates????

[MuggsyB]

7.09%?  I guess I won't be moving anytime soon.  I'm no expert....how is this sustainable?   Can we call this a crisis? 

[tower912]

That is what I paid when I bought my house 30 years ago.     Thought it was a huge win when, 7 years later, I refinanced to a 15 year note and got my interest rate down to 5.25%.    My parents paid 9% when they bought the house I spent my teen years in.    It will sort itself out.   

[Pakuni]

[tower912]

Thank you, Pakuni.

[dgies9156]

7.09%?  I guess I won't be moving anytime soon.  I'm no expert....how is this sustainable?   Can we call this a crisis?

I paid 12.75 percent interest on my first home in 1984. And, I thought I got a bargain!

We're too addicted to low interest rates. And, you're right, housing inventory will be bleak for a couple of years.

[Jockey]

Not a crisis. But love the hyperbole (again).

I paid 13.5% when I bought my house. Re-financed twice.

Costs go up and costs come down. Always have and always will.

[MuggsyB]

Median home prices are extremely high as are rents. 

[ATL MU Warrior]

Median home proces are extremely high as are rents.

When told that rates are not a crisis, I guess this is the next logical area to move to. 

[MuggsyB]

When told that rates are not a crisis, I guess this is the next logical area to move to.

So you're saying this isn't a problem at all?

[Skatastrophy]

So you're saying this isn't a problem at all?

Historically it hasn't been a problem. Why would it be a problem this time?

[Frenns Liquor Depot]

So you're saying this isn't a problem at all?

Maybe but seriously everything isn't a crisis.

These are all outcomes of (global) policy decisions beginning in early 2020, massive shifts in consumer spending/demand during the pandemic and significant supply side shocks.

It's going to take a while to readjust and we are in the middle of it. 

[ATL MU Warrior]

So you're saying this isn't a problem at all?

Depends.  I am a homeowner who is sitting in a very rapidly appreciating asset that I was able to refinance at ~3%.  I am in great shape.

For a first time homebuyer in the market now, not great.

For my kids, oldest of whom is probably still 8-10 years from being in a position to buy a home, it's a big fat "Who knows?"

[wadesworld]

The price of housing is a lot more of a problem than mortgage rates.

[Dr. Blackheart]

Monthly property tax payments are still higher than mortgage payments.

[jesmu84]

Housing is approaching crisis levels.

There's zero political will to solve the issue

[LloydsLegs]

We bought our house in 1990 with $180,000 mortgage at 11.25% 7/23 ARM.

Refinanced 2 x in the 90's, again in 2005 including a construction loan for an addition that cost more than the original house (ughh), and last time in 2011.

Paid off in 2014.  Still live in the house.

These things go in cycles- we've been with extremely low rates for so long that the youngsters have no memory of anything else.  When my parents had to move for my dad's job in 1979, their rate was over 12%- and rates increased over the next few years.  Hell, my law school student loan rate was 12% in the late 80's.

And we are aggressive on the property tax appeals, which has worked. Just got another reduction, this time on my own without hiring one of Madigan's tax appeal lawyer Cronies.

Also, was was talking to one of my junior partners earlier this week - she lives in Kenilworth, maybe the highest property tax rate in IL (no commercial district, and funds its own elementary school district with a population of only 2,450):  she's paying $60,000 (bought house for $1.6 million on 2020). More than 4x what we pay - granted, her house is worth more than 2 x ours - but $60,000!  JFC.

[LloydsLegs]

This

[TSmith34, Inc.]

That is what I paid when I bought my house 30 years ago.     Thought it was a huge win when, 7 years later, I refinanced to a 15 year note and got my interest rate down to 5.25%.    My parents paid 9% when they bought the house I spent my teen years in.    It will sort itself out.   

This.

[Hards Alumni]

There needs to be a lot more context in all of this discussion.

You guys had high interest rates when you bought in the 80s and 90s, but the houses were far cheaper.  Approaching 7% interest rates on a 300k house... it becomes a lot more difficult to pay than 7% on your 100k houses.  Especially since real wages haven't risen at the same rate to help afford those houses.

There is a ton of nuance to these discussions,

[MuggsyB]

There needs to be a lot more context in all of this discussion.

You guys had high interest rates when you bought in the 80s and 90s, but the houses were far cheaper.  Approaching 7% interest rates on a 300k house... it becomes a lot more difficult to pay than 7% on your 100k houses.  Especially since real wages haven't risen at the same rate to help afford those houses.

There is a ton of nuance to these discussions,

Excellent point Hards.  The median home price. along with property taxes, combined with mortgage rates, are somewhat concerning imo. 

[MuggsyB]

Hards:

What's the best restaurant in Madison now?

Fairchild?  I may have to go there the 2nd week of Sept. 

How's Harvey House? 

[lurch91]

So you're saying this isn't a problem at all?

Don't worry, there will be another housing bubble in the next 10 years where housing prices will collapse - and you'll state "Housing prices are in crisis".

[Hards Alumni]

Hards:

What's the best restaurant in Madison now?

Fairchild?  I may have to go there the 2nd week of Sept. 

How's Harvey House?

Great questions.  I have not been to HH, but my friends have, and the consensus is that while it is good... it is overrated and pricey.  They like to push their martinis.

I have not been to Fairchild, but have heard great things, and of course they're a James Beard winner.

As is Ahan... which I have not been to, but have heard really great things.  Also a James Beard winner.

Personally, I am a big fan of Heritage Tavern and Mint Mark.  Both are great options, with MM being away from the square on the near East side. 

If you're interested in a cocktail check out the Robin Room on Johnson St before dinner.  Alternatively, you can head over to Prost! for a couple of German beers and a homemade pretzel.    If neither of those are of interest, and the weather is cooperating, there is a nice beer garden at Olbrich Park.  It is dog friendly, next to the water, and very social.

If absolutely none of these interest you, Pig in a Fur Coat never disappoints.

[wadesworld]

There needs to be a lot more context in all of this discussion.

You guys had high interest rates when you bought in the 80s and 90s, but the houses were far cheaper.  Approaching 7% interest rates on a 300k house... it becomes a lot more difficult to pay than 7% on your 100k houses.  Especially since real wages haven't risen at the same rate to help afford those houses.

There is a ton of nuance to these discussions,

Exactly.

[dgies9156]

Monthly property tax payments are still higher than mortgage payments.

Welcome to Illinois, Doc!