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The 30-year fixed mortgage rate edges above 5% with Conor Sen noting Wells Fargo quoting an APR...

The 30-year fixed mortgage rate edges above 5% with Conor Sen noting Wells Fargo quoting an APR of 5.05% this morning. It wasn't long ago this had a 3-handle on it. Housing bulls say higher rates will lead to even more buying as panicked prospective purchasers rush to get in before the low-rate door shuts. Weekly mortgage applications - trending down of late - should continue to be of interest. Homebuilders ETF (XHB -3.5%).
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Comments (29)
  • Christopher F. Davis
    , contributor
    Comments (1340) | Send Message
     
    Just when I wanted to think about buying a new home. Thats aggravating, and expensive. 5% versus 3.5% just a few months ago? That hurts.
    24 Jun 2013, 11:34 AM Reply Like
  • mobyss
    , contributor
    Comments (2099) | Send Message
     
    Offer 10% less for the house than you would have paid when rates were 3.5%.
    24 Jun 2013, 01:06 PM Reply Like
  • labas112
    , contributor
    Comments (344) | Send Message
     
    I completely agree. I am in the same mode too. Weird times with stocks down and rates rising. People just sitting on cash.
    24 Jun 2013, 01:09 PM Reply Like
  • chopchop0
    , contributor
    Comments (3650) | Send Message
     
    @mobyss, agree with that more than these out-of-touch bulls:

     

    "Housing bulls say higher rates will lead to even more buying as panicked prospective purchasers rush to get in before the low-rate door shuts. "

     

    LOL
    24 Jun 2013, 01:14 PM Reply Like
  • WallStreetDebunker
    , contributor
    Comments (2651) | Send Message
     
    "5% versus 3.5% just a few months ago? That hurts."

     

    Didn't your realtor explain that higher mortgage rates are good for home buyers because of all the extra money to be saved on mortgage deductions at tax time?

     

    I have a friend whose realtor told him "You should buy a house to lower your income taxes.")
    25 Jun 2013, 12:29 AM Reply Like
  • june1234
    , contributor
    Comments (2864) | Send Message
     
    Was 4.17 % last week when 69% of apps remained refi requests. Wont take much more upward to bring that train to a halt.
    24 Jun 2013, 01:03 PM Reply Like
  • jrhollis
    , contributor
    Comments (29) | Send Message
     
    Purchased a newbuild in March when rates were 3.x. By the time the home is built, I could be in trouble. Thanks a lot, Fed. Just ridiculous.
    24 Jun 2013, 01:07 PM Reply Like
  • J Mintzmyer
    , contributor
    Comments (3739) | Send Message
     
    You didn't secure your financing?
    24 Jun 2013, 01:13 PM Reply Like
  • CerpherJoe
    , contributor
    Comments (33) | Send Message
     
    Hmmm .. I'm not sure the Fed is doing this.
    24 Jun 2013, 01:14 PM Reply Like
  • jrhollis
    , contributor
    Comments (29) | Send Message
     
    Can't lock-in rates until you are 30 days out from closing. Homes take months to build. Can't simply walk away, because I had to put a large deposit down. This rate increase is brutal.
    24 Jun 2013, 01:23 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    My last mortgage was opened above 8%. Paid it off.
    24 Jun 2013, 01:12 PM Reply Like
  • marketwatcher23
    , contributor
    Comments (1083) | Send Message
     
    when and how much did you pay for the house?
    24 Jun 2013, 05:09 PM Reply Like
  • Buckoux
    , contributor
    Comments (6439) | Send Message
     
    This is good news. An increase in mortgage rates will slow the rise of housing prices - making them more affordable - and reduce the resistance of lenders to loan money. Too bad Greenspan didn't know about stuff like this, but he was too busy being intellectually obtuse.
    24 Jun 2013, 01:22 PM Reply Like
  • The_Hammer
    , contributor
    Comments (4140) | Send Message
     
    The RE complex schemers have been pumping monthly payments and affordability for a long time. what if rates backs up to 6.50-7%. What does this do to their housing scheme?
    24 Jun 2013, 01:49 PM Reply Like
  • caupachow
    , contributor
    Comments (429) | Send Message
     
    There Is No Housing Recovery! We all knew rates were going to rise sometime, now we all should know housing prices are going to fall. All the institutional investors buying up big lots of vacant houses is just like the fed buying 40 bil a month in MSB's. The game can't go on forever.
    24 Jun 2013, 01:54 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    Bye Bye "Housing Recovery"
    24 Jun 2013, 04:34 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    And Hello Whining about how the government or the Fed isn't doing enough about the economy. Please, people. Is there really that much dependency? Buy the house with the 5% mortgage and work hard to pay it off. Many of us had to do that, worked our ass off, and got out of debt. That is the American spirit, not debt dependency and moral hazard and expectation of entitlement. Cheers.
    24 Jun 2013, 04:41 PM Reply Like
  • marketwatcher23
    , contributor
    Comments (1083) | Send Message
     
    My dad's first mortgage rate was around 15%. He paid 25k for the house. He was making about 10k a year. He was 25 years old. By 45 years old he was making 150k, had paid off his house and pulled out plenty of equity on the way.

     

    So some 25 year old today would pay 450k for that house. They would need to be making over 100k to afford it.

     

    Will that kid be making 1.5 mil 20 years from now? Will that 25 year old have the same economy as the 80's and 90's?

     

    Please....stop trying to compare.
    24 Jun 2013, 05:12 PM Reply Like
  • caupachow
    , contributor
    Comments (429) | Send Message
     
    Thank you marketwatcher23 for a little common sense and perspective that many leave out.
    24 Jun 2013, 05:40 PM Reply Like
  • Bryce_in_TX
    , contributor
    Comments (2999) | Send Message
     
    I don't agree with marketwatcher's numbers. A 25K house in 1979-1980 time frame would not be worth 450K now, not in my neighborhood.

     

    The house across from us, in link below is worth 82k and is a very nice brick home with a 2 car garage. Only 2 bedroom, but it has 1480 sq ft of living space. The garage is 521 sq ft. Monthly payment would be about $650 with mortgage, taxes, and ins, with a 10% down payment. A single person should be able to afford that making 45k. Note, it was purchased in 1977 for 25.5k.

     

    450K? I don't think so.

     

    http://bit.ly/17yU5IH

     

    http://bit.ly/17yU5IJ

     

    Want more space, 4113 Rivercrest would sell for about 165k. 2425 sq ft. 10% down would make the mortgage 148,500, and 1,181 a month for mortgage, ins, and taxes. I think a couple making 80k could afford that.

     

    http://bit.ly/17yU4Vj

     

    The wife and I bought our home, across from the 1902 Burroughs, in 1980 for 35k with a 13.5% mortgage and 5% down. We were making 25k total between us both.

     

    My son lives in Forth Worth and they have new homes going for 150k. Seems affordable to me.

     

    Going from 3.5 to 5% rate raises a 200k mortgage by $175 a month. Not good, but not a deal breaker either I wouldn't think. If people can't afford the rise, then the housing recovery is FED induced only, it would seem to me, and not a real one.
    24 Jun 2013, 09:46 PM Reply Like
  • Bryce_in_TX
    , contributor
    Comments (2999) | Send Message
     
    Have a smart phone contract running you $60 or better a month and a cable tv bill running you $70 a month or better? Drop them both and you have most of the money made up to afford that extra $175 a month. Switch to a pay as you go cell phone and quit using it for tracking stocks, email, etc and only use it when you really need to. We don't need to be connected to the office or the net 24/7. And cut out the Starbucks/eating out so often. Make your lunch at home instead of buying it. That can save you a couple a bucks a day or $40 to $50 a month.

     

    Your employer wants to be able to contact you? Get a beeper. There is a lot of "superfluous" junk we spend money on today. NIce to have, but what do you really want, a home or the junk.

     

    One more idea: carpooling to work. I did it for a couple of years in my 20s.

     

    Instead of new car, buy one 3 or 4 years old. Lots of way to cut costs.
    24 Jun 2013, 10:36 PM Reply Like
  • JohnBinTN
    , contributor
    Comments (3890) | Send Message
     
    Bryce,

     

    That sounds like the "good ol' days" when people would work hard and make sacrifices for what they wanted. Too few people are willing to do that now. Even the "poor" are afforded phones, cable TV, and a virtual carte blanche "card" from the government that allows them to eat whatever they want.

     

    People will no longer give up their "stuff" in order to get a house. They will only complain that they are too expensive, or the interest rate is too high.
    24 Jun 2013, 11:37 PM Reply Like
  • Bryce_in_TX
    , contributor
    Comments (2999) | Send Message
     
    I don't fault for complaining. I've done a lot of it myself. I'm not sure we understand how good we have it, though. My Mother, as a child, traveled by covered wagon from Oklahoma to Archer City, Texas with her Mother and siblings. The wagon station used to be located in the alley, back of my Uncle's cafe/restaurant in the town. They were dirt poor, the kids walking back and forth to a small country school out in the sticks around "Onion Creek" just south of Archer City, TX. I have a picture of my Mother at about 17 or 18 in her graduation gown and cap, with mesquite trees surrounding her. They were share croppers, renting the house and land they lived on, farming the land for food they ate and bartered with to buy clothes and necessities. The kids went to work in the field at age 7. Not a good thing, but that's how it had to be to survive. They drank water out of a cistern well which is still on the property, filled with "squiggly" things, as my aunt's autobiography describes it. They bathed once a week.

     

    My Dad's family was in the same financial condition. On Saturdays they would travel by wagon to the city, bartering their home made butter, and crops for necessities. Neither family had indoor plumbing, nor electricity. They used an out house for a bath room, close to the barn for the animals, and candles at night for light.

     

    Such were the times. My parents understandably wanted their kids to have it better, and not have to struggle like they did. But, I think what happens, rich or poor, is that we all struggle to grow and mature as adults, no matter what kind of environment we grow up in, and that growth is not a lot of fun at times.

     

    I have faith in today's generation. My son and the kids he grew up with will make it. They just have to go through their own maturity process.
    25 Jun 2013, 12:04 AM Reply Like
  • Buckoux
    , contributor
    Comments (6439) | Send Message
     
    Bryce_in_TX,

     

    "I have faith in today's generation."

     

    So do I, it's the governments that disappoint me. City, county, state, federal, they're all worse than Wall Street or banks.
    25 Jun 2013, 01:55 PM Reply Like
  • The Reader
    , contributor
    Comments (106) | Send Message
     
    Rates will not hang at 5%. We have some leveling out coming as the Markets went out of normal ranges with the Fed's excess liquidity. Housing is in recovery but prices will slow to the usual standards of current inflation in the near future. Everyone needs to take a deep breath until things settle out. Not to worry too much about the printing press fix as if the Market tanks they'll be back with some more "Vapor Money Love." Let's hope not and maybe let everything fall into place where it's supposed to be and finally go back to a free enterprise capitalistic society once again.
    24 Jun 2013, 11:32 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    We're not going back to a true enterprise capitalistic society. We have created structural problems that money printing can only smooth over for a while.

     

    - Demographic shifts (aging population)
    - Gutted manufacturing base (crushes middle class)
    - Sick, obese "workforce"
    - Chronic deficits
    25 Jun 2013, 08:28 AM Reply Like
  • The Reader
    , contributor
    Comments (106) | Send Message
     
    Are there structural problems? Yes

     

    (Aging Yes) Still want to work and stand on their own two feet. 40 is the new 30.

     

    (The Middle Class has been under pressure for 30 years) Plenty of things to make, let's get busy)

     

    (Sick Workforce) Have not seen that yet?

     

    (Chronic Deficits) Oh yeah, kick the can
    I think the American people like to work and want to work. The deficits can been be reduced with some tax cuts and a less divided Congress. They are closer to the same platforms than they want to let on. They boast their differences but it is not that far apart.
    26 Jun 2013, 01:40 AM Reply Like
  • Bryce_in_TX
    , contributor
    Comments (2999) | Send Message
     
    In regards to deficits, I think we have to cut spending so we are not spending more than the revenue generated. I think the idea that tax cuts will bring in more revenue is valid to a point, but at a certain level reaches a point of diminishing returns. Going from 90% to 70%, it's reasonable to think that would generate a lot of revenue. Going from 70% to 50% also reasonable. Going from 35% to lower, not so reasonable in my opinion. Overall, I think the 30 plus year experiment of lower taxes is mostly a failure, otherwise we wouldn't be in the debt situation we are in. Deficit spending began in earnest with the honorable Mr. Reagan and has continued ever since. We Republicans say we are for fiscal responsibility, but under Republican presidents the debt increased some 7 or 8 fold. The 2008 crisis made it multiple times worse. It's got to stop. We are on an unsustainable course and the cliff is getting very near.

     

    The "sick" workforce has to do with 1/3 of the population being obese and the dramatic rise in diabetes and other weight related diseases.
    26 Jun 2013, 02:26 AM Reply Like
  • The Reader
    , contributor
    Comments (106) | Send Message
     
    The CDC changed body weight guidelines not very long ago that put many people into the obese category. The rate today at CashCall are at 4.25% "No-Cost" L:oan. Rates will climb downward.
    3 Jul 2013, 12:51 AM Reply Like
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