bick2

We May See Mortgage Rates Fall to 3.5%

The total number of houses is not the issue. The problem is that the price of houses went through a bubble and is still coming down. A lot of people were priced out because of the bubble. Yes 3.5% helps a lot IF you are a new, qualified buyer or are above water and are looking to refi. But if you are a new buyer you have got to be thinking this is not the bottom yet so hold on for a while yet.

But if you are below water 3.5% doesn't help you refinance. To refi you need to come up with 20% equity. THIS is the biggest problem. Underwater owners.

On Jan 13 05:41 PM Socialism cannot compete! wrote:

> Meaningless. What people have got to realize is that there are simply
> TOO MANY houses on the market. We got to a point where people were
> flipping houses, owning investment properties, etc. -- who shouldn't
> have been doing so. They aren't going to reenter that situation.
> Or at least most won't...until prices drop much, much more significantly.
> People have lost too much money and can't afford those nth homes.
> One is now enough. Lowering of rates makes affordability of the
> first mortgage better for the subset that was struggling with that,
> but far too many of these homes were 2nd or 3rd homes...and simply
> aren't going to be bought no matter the interest rate -- because
> no buyers EXIST.
>
> There's a big difference between a deal needing to become attractive
> enough to lure out existing would-be buyers...and needing a buyer
> to exist in the first place. Many of those who do not own homes
> in the U.S. either do not want to, or simply cannot afford to, no
> matter the interest rate!!
>
> I'm predicting an average drop of 30% in home pricing yet to come,
> in the next 2 years.