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shitlibs irate over 30-year fixed mortgages

https://www.nytimes.com/2023/11/19/business/economy/30-year-...
flirting magenta lodge ceo
  11/19/23
I'm sure the banks would treat everyone really nicely if it ...
pale prole digit ratio
  11/19/23
the simple fix is to not allow foreigners to buy real estate...
Wonderful stage haunted graveyard
  11/19/23
Neither of that solves the issue that any homeowner with hal...
pale prole digit ratio
  11/19/23
or boomers w/ paid off houses downsizing and cashing out whi...
Wonderful stage haunted graveyard
  11/19/23
Shouldn't this cause building new homes and ultimately downw...
Irradiated striped hyena
  11/19/23
Boomers and shitlibs united in preventing new construction b...
Bistre Costumed Potus
  11/19/23
"heavily tax rent-seeking" this will never happ...
Sexy famous landscape painting
  11/19/23
cut it w the antisemitism
Wonderful stage haunted graveyard
  11/19/23
...
mauve center genital piercing
  11/19/23
...
Insanely creepy passionate toaster jew
  11/20/23
"Rent seeking" is bad for prospective home buyers ...
trip hissy fit
  11/19/23
SF Vacant house tax specifically exempts single family homes...
Bistre Costumed Potus
  11/19/23
That's unfortunate. No housing should be exempt IMHO.
trip hissy fit
  11/20/23
lol. Americans really are greedy fucks
Domesticated Submissive Parlor Goyim
  11/20/23
rent seeking aka investing in providing more housing. punish...
Lemon pocket flask
  11/20/23
fairly simple fix...i think i'm smart...more regulation...sh...
ruddy low-t area
  11/19/23
Copy paste.
Tantric Wagecucks Incel
  11/19/23
just disable javascript on this site bro
flirting magenta lodge ceo
  11/19/23
just stop
Iridescent Meetinghouse Hairy Legs
  11/19/23
he's correct but it's also RUDE to not comply Ben Cassel...
Sexy famous landscape painting
  11/19/23
https://archive.is/zaquI#selection-321.0-325.101
ocher crawly hospital electric furnace
  11/19/23
that stupid site always directs to a captcha loop for me
Sexy famous landscape painting
  11/19/23
The guy who runs it has some weird grudge against cloudflare...
mind-boggling dark heaven
  11/19/23
Yeah, I think I might have had trouble with Quad 9 too.
hairraiser windowlicker
  11/19/23
Same but only on iPad. iPhone works fine. Odd case.
Rebellious headpube
  11/22/23
"By making it easier to buy, the government-subsidized ...
ocher crawly hospital electric furnace
  11/19/23
...
stubborn lay trump supporter
  11/19/23
Nope Fuck you kike
Motley Bonkers Nursing Home Rigpig
  11/19/23
Amazing poast moniker synergy
ocher crawly hospital electric furnace
  11/19/23
...
trip hissy fit
  11/19/23
...
mentally impaired theatre
  11/22/23
...
Iridescent Meetinghouse Hairy Legs
  11/19/23
...
Irradiated striped hyena
  11/19/23
nimby
maroon kitchen messiness
  11/19/23
eat a cock then go back to israel
thriller federal shrine
  11/19/23
*quadruples number of residents but keeps parking and school...
Lemon pocket flask
  11/20/23
This is the real issue.
Rebellious headpube
  11/22/23
on top of that libs will put rent caps in place to further p...
Lemon pocket flask
  11/24/23
"In response, the federal government created the Home O...
Narrow-minded theater stage
  11/19/23
.
erotic tank
  11/19/23
They should just make banks retain more loans on their books...
irate institution
  11/19/23
What? That's not the issue, at least not in this case. Even...
ocher crawly hospital electric furnace
  11/19/23
My argument is that MBS prices influence mortgage rates, and...
irate institution
  11/19/23
Wow someone on xo who actually has accurate and cr domain kn...
Motley Bonkers Nursing Home Rigpig
  11/19/23
Ty brother, ty
irate institution
  11/19/23
MBS made real estate an investment class. It has been horrib...
Domesticated Submissive Parlor Goyim
  11/19/23
Fucking Saudis
Iridescent Meetinghouse Hairy Legs
  11/19/23
100% TRUTH
irate institution
  11/20/23
there is nothing wrong with people staying in their current ...
ruddy low-t area
  11/19/23
(Russian boyar)
Lemon pocket flask
  11/24/23
...
Motley Bonkers Nursing Home Rigpig
  11/19/23
everyone deserves to own their own home
Excitant Splenetic Coffee Pot
  11/19/23
They absolutely do not
Motley Bonkers Nursing Home Rigpig
  11/19/23
The answer is just to build more. As long as demand continu...
tan impertinent becky
  11/19/23
end SFH zoning
Domesticated Submissive Parlor Goyim
  11/19/23
Go back to China
Motley Bonkers Nursing Home Rigpig
  11/19/23
ya man. how horrible of me to want the FREE MARKET to decide...
Domesticated Submissive Parlor Goyim
  11/19/23
Yeah cr the “free market” of trillions of dollar...
Motley Bonkers Nursing Home Rigpig
  11/19/23
Good job man. You made condos and townhomes to be Jewish and...
Domesticated Submissive Parlor Goyim
  11/19/23
he is 100% correct.
thriller federal shrine
  11/20/23
lol
Domesticated Submissive Parlor Goyim
  11/20/23
americans don't raise their families in fucking apartments. ...
thriller federal shrine
  11/20/23
(guy who doesnt want to let the market decide what housing g...
Domesticated Submissive Parlor Goyim
  11/20/23
the market is white americans. we don't want to live in shit...
thriller federal shrine
  11/21/23
I 100% agree and yet white americans want townhomes and cond...
Domesticated Submissive Parlor Goyim
  11/22/23
...
Iridescent Meetinghouse Hairy Legs
  11/21/23
...
Peach Stimulating Generalized Bond Garrison
  11/21/23
No u live in a pod
jade community account
  11/19/23
I don't understand that response at all. No one is making yo...
hairraiser windowlicker
  11/19/23
One apartment complex ruins blocks of SFHs.
Irradiated striped hyena
  11/19/23
That doesn't say much about his pod response, but one NIMBY ...
hairraiser windowlicker
  11/20/23
The one weird trick is to move to undesirable metropolitan a...
Iridescent Meetinghouse Hairy Legs
  11/19/23
30 year is horrible. hth
Domesticated Submissive Parlor Goyim
  11/19/23
perhaps the government would be a bit less able to play casi...
Lavender doctorate milk
  11/19/23
?
Domesticated Submissive Parlor Goyim
  11/19/23
if 20% of mortgages were up for renewal every year, dumb pol...
Lavender doctorate milk
  11/19/23
??
Domesticated Submissive Parlor Goyim
  11/19/23
... and student loans
Insanely creepy passionate toaster jew
  11/20/23
I have a 30-year mortgage that I have prepaid down just over...
charismatic volcanic crater
  11/19/23
what's the rate?
erotic tank
  11/19/23
6.5%. Gave up a 2.75 to move here. Honestly, interest rates ...
charismatic volcanic crater
  11/19/23
I am also a 6.5%mo and am paying it down but I wouldn't if I...
erotic tank
  11/19/23
We bought our first house when we had 1 kid. Lived there 8 y...
charismatic volcanic crater
  11/19/23
I am not arguing against your personal reasons for moving; o...
erotic tank
  11/19/23
Why do you live in Houston Texas?
black casino
  11/19/23
I don’t.
charismatic volcanic crater
  11/19/23
Fine. Why do you live in Harris County, TX?
Rose quadroon gunner
  11/19/23
No comment.
charismatic volcanic crater
  11/19/23
Yeah I figured you are more towards the north-north-west. I ...
Rose quadroon gunner
  11/19/23
I don’t know what you’re talking about.
charismatic volcanic crater
  11/19/23
This article is built on the retarded premise that taking aw...
maize nowag locale
  11/19/23
It would force the price of homes now, so in reality, there ...
Domesticated Submissive Parlor Goyim
  11/20/23
Another easy solution would be to allow people to pay off th...
trip hissy fit
  11/19/23
It doesn't work that way. Yes, mortgages are bought and sold...
maize nowag locale
  11/19/23
...
snowy stag film
  11/20/23
Why would your bank every agree to that? If you move they ge...
Irradiated striped hyena
  11/19/23
Because for many people, they won't move if they have to pay...
trip hissy fit
  11/20/23
Interesting I didn’t know Denmark actually has that. I...
Motley Bonkers Nursing Home Rigpig
  11/19/23
Except you have no idea what you are talking about. Banks...
Domesticated Submissive Parlor Goyim
  11/20/23
I knew some asshole would bring this up. Okay, if you want t...
trip hissy fit
  11/20/23
We prefer the term innumerate. xoxo hth
fighting appetizing plaza mood
  11/20/23
Why the fuck would a pension fund, who planned to hold the m...
Domesticated Submissive Parlor Goyim
  11/21/23
You may not be a lawyer, but you are clearly still mathemati...
trip hissy fit
  11/21/23
Are you really that fucking stupid? Go learn about durati...
Domesticated Submissive Parlor Goyim
  11/22/23
For my scheme to work, they would probably sell it back to m...
trip hissy fit
  11/23/23
This already exists IRL, but it is so costly and complicated...
Domesticated Submissive Parlor Goyim
  11/23/23
They make it work in Denmark, which suggests to me that it i...
trip hissy fit
  11/24/23
classic journalist thinkpiece. lots of interesting history,...
Mint antidepressant drug library
  11/19/23
God damn. I thought the Georgist article the other day was b...
chartreuse razzle patrolman station
  11/19/23
There's a lot of misinformation in the article and this thre...
pale prole digit ratio
  11/19/23
paragraph 2. show stats re 'way more likely to default on a ...
ruddy low-t area
  11/19/23
there's no need to show stats on likelihood of default. if y...
pale prole digit ratio
  11/19/23
dude, you beg the question. variable rates help everyone avo...
ruddy low-t area
  11/19/23
...
Anal chad
  11/19/23
...
Hideous idiot parlour
  11/19/23
"Half the fucking country would be in default right now...
Domesticated Submissive Parlor Goyim
  11/20/23
You seem to not understand that EVERYONE'S payment would...
pale prole digit ratio
  11/21/23
Ok you are really dumb so I will explain it more to you. ...
Domesticated Submissive Parlor Goyim
  11/21/23
Your argument seems to hinge on (i) even though the peop...
pale prole digit ratio
  11/21/23
Please feel free to link to any developed country where what...
Domesticated Submissive Parlor Goyim
  11/22/23
Being stuck in a home because your existing mortgage rate is...
brilliant contagious hominid menage
  11/19/23
feature, not bug
Insanely creepy passionate toaster jew
  11/20/23
The only people who care about being in this problem are aut...
Irradiated striped hyena
  11/21/23
Not true. Normal people don't think about it in those terms...
erotic tank
  11/21/23
people shouldn't be shiftless and rootless. XO is full of...
black casino
  11/21/23
this is credited actually. if you want to be a rootless fag...
thriller federal shrine
  11/21/23
If normies need to move, they move. If they don't need to...
Irradiated striped hyena
  11/21/23
https://www.marketwatch.com/story/its-time-for-a-tax-credit-...
Amethyst Gaming Laptop
  11/21/23
😆
Irradiated striped hyena
  11/21/23
😂
black casino
  11/21/23
lmao
ocher crawly hospital electric furnace
  11/21/23
Realtors say lmao
sticky fragrant weed whacker
  11/22/23
...
Anal chad
  11/22/23
...
Rebellious headpube
  11/22/23
Clown 🌎. Realtors gonna realtor though
Poppy aphrodisiac mad cow disease
  11/22/23
People moving every few years all around the country to chas...
talented marketing idea
  11/22/23
Agreed. If you were born in a rural part of the country, con...
Domesticated Submissive Parlor Goyim
  11/23/23


Poast new message in this thread



Reply Favorite

Date: November 19th, 2023 1:12 PM
Author: flirting magenta lodge ceo

https://www.nytimes.com/2023/11/19/business/economy/30-year-mortgage.html

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074430)



Reply Favorite

Date: November 19th, 2023 1:32 PM
Author: pale prole digit ratio

I'm sure the banks would treat everyone really nicely if it as adjustable.

I think there's a fairly simple fix here which is that congress should require the securitizations to transfer the loans to a new purchase for a fee equal to their costs.

It seems to me you're otherwise fucking over the housing market for a very long time. A huge portion of the people with the 3.0% loans are probably never selling - it's in many cases a better financial decision to just keep it as a rental.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074531)



Reply Favorite

Date: November 19th, 2023 1:42 PM
Author: Wonderful stage haunted graveyard

the simple fix is to not allow foreigners to buy real estate in the US, and then heavily tax rent-seeking -- primary residency purchases should be heavily favored/unpunished

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074601)



Reply Favorite

Date: November 19th, 2023 1:44 PM
Author: pale prole digit ratio

Neither of that solves the issue that any homeowner with half a brain has an interest rate around 3% and moving would be an enormous financial hit to them - so the only inventory is going to come from people dying or getting divorced.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074613)



Reply Favorite

Date: November 19th, 2023 1:49 PM
Author: Wonderful stage haunted graveyard

or boomers w/ paid off houses downsizing and cashing out while prices are still up.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074633)



Reply Favorite

Date: November 19th, 2023 7:11 PM
Author: Irradiated striped hyena

Shouldn't this cause building new homes and ultimately downward pressure on prices?

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075828)



Reply Favorite

Date: November 19th, 2023 11:44 PM
Author: Bistre Costumed Potus

Boomers and shitlibs united in preventing new construction because it will upset boomers that young people get nicer houses, but they are smart enough to gesture at environmental concerns.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076549)



Reply Favorite

Date: November 19th, 2023 1:50 PM
Author: Sexy famous landscape painting

"heavily tax rent-seeking"

this will never happen in the US. too many people make too much money from it

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074636)



Reply Favorite

Date: November 19th, 2023 1:53 PM
Author: Wonderful stage haunted graveyard

cut it w the antisemitism

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074655)



Reply Favorite

Date: November 19th, 2023 5:18 PM
Author: mauve center genital piercing



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075402)



Reply Favorite

Date: November 20th, 2023 1:32 AM
Author: Insanely creepy passionate toaster jew



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076834)



Reply Favorite

Date: November 19th, 2023 5:41 PM
Author: trip hissy fit

"Rent seeking" is bad for prospective home buyers but good for renters, and I don't see any argument for favoring one segment over the other. However, I do support a heavy tax on people who buy real estate and then leave it empty. I know the city of San Francisco is in the process of implementing such a tax to try to increase the housing supply. Basically, you are allowed to buy 10 houses if you plan to rent them out or put them on AirBNB or whatever. But if you're a Saudi sheikh or Russian oligarch who buys a house and only uses for one week out of the year, then you pay a heavy tax on it.

That's not going to solve the housing crisis by itself, but it's a big step in the right direction. I don't support laws where the government decides who gets to own real estate, and I also think the free market, not the government, should decide how people use their property. But I'm fine with making it very expensive to buy real estate that you're not going to actually use.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075515)



Reply Favorite

Date: November 19th, 2023 11:44 PM
Author: Bistre Costumed Potus

SF Vacant house tax specifically exempts single family homes hehe

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076550)



Reply Favorite

Date: November 20th, 2023 1:01 AM
Author: trip hissy fit

That's unfortunate. No housing should be exempt IMHO.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076667)



Reply Favorite

Date: November 20th, 2023 1:37 AM
Author: Domesticated Submissive Parlor Goyim

lol. Americans really are greedy fucks



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076853)



Reply Favorite

Date: November 20th, 2023 9:46 AM
Author: Lemon pocket flask

rent seeking aka investing in providing more housing. punishing them just reduces the housing stock further

the real bottleneck is regulatory at the construction level, not investors who almost exclusively buy existing stock, improve it, and rent it out

a tax on unoccupied homes would make more sense as it would punish speculators and push more housing onto both the rental and sales markets

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47077565)



Reply Favorite

Date: November 19th, 2023 3:42 PM
Author: ruddy low-t area

fairly simple fix...i think i'm smart...more regulation...shit backfires...oops, who knew?

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075062)



Reply Favorite

Date: November 19th, 2023 1:40 PM
Author: Tantric Wagecucks Incel

Copy paste.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074586)



Reply Favorite

Date: November 19th, 2023 1:43 PM
Author: flirting magenta lodge ceo

just disable javascript on this site bro

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074606)



Reply Favorite

Date: November 19th, 2023 1:44 PM
Author: Iridescent Meetinghouse Hairy Legs

just stop

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074609)



Reply Favorite

Date: November 19th, 2023 1:51 PM
Author: Sexy famous landscape painting

he's correct but it's also RUDE to not comply

Ben Casselman

By Ben Casselman

Nov. 19, 2023

Buying a home was hard before the pandemic. Somehow, it keeps getting harder.

Prices, already sky-high, have gotten even higher, up nearly 40 percent over the past three years. Available homes have gotten scarcer: Listings are down nearly 20 percent over the same period. And now interest rates have soared to a 20-year high, eroding buying power without — in defiance of normal economic logic — doing much to dent prices.

None of which, of course, is a problem for people who already own homes. They have been insulated from rising interest rates and, to a degree, from rising consumer prices. Their homes are worth more than ever. Their monthly housing costs are, for the most part, locked in place.

The reason for that divide — a big part of it, anyway — is a unique, ubiquitous feature of the U.S. housing market: the 30-year fixed-rate mortgage.

That mortgage has been so common for so long that it can be easy to forget how strange it is. Because the interest rate is fixed, homeowners get to freeze their monthly loan payments for as much as three decades, even if inflation picks up or interest rates rise. But because most U.S. mortgages can be paid off early with no penalty, homeowners can simply refinance if rates go down. Buyers get all of the benefits of a fixed rate, with none of the risks.

“It’s a one-sided bet,” said John Y. Campbell, a Harvard economist who has argued that the 30-year mortgage contributes to inequality. “If inflation goes way up, the lenders lose and the borrowers win. Whereas if inflation goes down, the borrower just refinances.”

This isn’t how things work elsewhere in the world. In Britain and Canada, among other places, interest rates are generally fixed for only a few years. That means the pain of higher rates is spread more evenly between buyers and existing owners.

In other countries, such as Germany, fixed-rate mortgages are common but borrowers can’t easily refinance. That means new buyers are dealing with higher borrowing costs, but so are longtime owners who bought when rates were higher. (Denmark has a system comparable to the United States’, but down payments are generally larger and lending standards stricter.)

Only the United States has such an extreme system of winners and losers, in which new buyers face borrowing costs of 7.5 percent or more while two-thirds of existing mortgage holders pay less than 4 percent. On a $400,000 home, that’s a difference of $1,000 in monthly housing costs.

“It’s a bifurcated market,” said Selma Hepp, chief economist at the real estate site CoreLogic. “It’s a market of haves and have-nots.”

It isn’t just that new buyers face higher interest rates than existing owners. It’s that the U.S. mortgage system is discouraging existing owners from putting their homes on the market — because if they move to another house, they’ll have to give up their low interest rates and get a much costlier mortgage. Many are choosing to stay put, deciding they can live without the extra bedroom or put up with the long commute a little while longer.

The result is a housing market that is frozen in place. With few homes on the market — and fewer still at prices that buyers can afford — sales of existing homes have fallen more than 15 percent in the past year, to their lowest level in over a decade. Many in the millennial generation, who were already struggling to break into the housing market, are finding they have to wait yet longer to buy their first homes.

“Affordability, no matter how you define it, is basically at its worst point since mortgage rates were in the teens” in the 1980s, said Richard K. Green, director of the Lusk Center for Real Estate at the University of Southern California. “We sort of implicitly give preference to incumbents over new people, and I don’t see any particular reason that should be the case.”

A ‘Historical Accident’

The story of the 30-year mortgage begins in the Great Depression. Many mortgages at the time had terms of 10 years or less and, unlike mortgages today, were not “self-amortizing” — meaning that rather than gradually paying down the loan’s principal along with the interest each month, borrowers owed the principal in full at the end of the term. In practice, that meant that borrowers would have to take out a new mortgage to pay off the old one.

That system worked until it didn’t: When the financial system seized up and home values collapsed, borrowers couldn’t roll over their loans. At one point in the early 1930s, nearly 10 percent of U.S. homes were in foreclosure, according to research by Mr. Green and a co-author, Susan M. Wachter of the University of Pennsylvania.

In response, the federal government created the Home Owners’ Loan Corporation, which used government-backed bonds to buy up defaulted mortgages and reissue them as fixed-rate, long-term loans. (The corporation was also instrumental in creating the system of redlining that prevented many Black Americans from buying homes.) The government then sold off those mortgages to private investors, with the newly created Federal Housing Administration providing mortgage insurance so those investors knew the loans they were buying would be paid off.

The mortgage system evolved over the decades: The Home Owners’ Loan Corporation gave way to Fannie Mae and, later, Freddie Mac — nominally private companies whose implicit backing by the federal government became explicit after the housing bubble burst in the mid-2000s. The G.I. Bill led to a huge expansion and liberalization of the mortgage insurance system. The savings-and-loan crisis of the 1980s contributed to the rise of mortgage-backed securities as the primary funding source for home loans.

By the 1960s, the 30-year mortgage had emerged as the dominant way to buy a house in the United States — and apart from a brief period in the 1980s, it has remained so ever since. Even during the height of the mid-2000s housing bubble, when millions of Americans were lured by adjustable-rate mortgages with low “teaser” rates, a large share of borrowers opted for mortgages with long terms and fixed rates.

After the bubble burst, the adjustable-rate mortgage all but disappeared. Today, nearly 95 percent of existing U.S. mortgages have fixed interest rates; of those, more than three-quarters are for 30-year terms.

No one set out to make the 30-year mortgage the standard. It is “a bit of a historical accident,” said Andra Ghent, an economist at the University of Utah who has studied the U.S. mortgage market. But intentionally or otherwise, the government played a central role: There is no way that most middle-class Americans could get a bank to lend them a multiple of their annual income at a fixed rate without some form of government guarantee.

“In order to do 30-year lending, you need to have a government guarantee,” said Edward J. Pinto, a senior fellow at the American Enterprise Institute and a longtime conservative critic of the 30-year mortgage. “The private sector couldn’t have done that on their own.”

For home buyers, the 30-year mortgage is an incredible deal. They get to borrow at what amounts to a subsidized rate — often while putting down relatively little of their own money.

But Mr. Pinto and other critics on both the right and the left argue that while the 30-year mortgage may have been good for home buyers individually, it has not been nearly so good for American homeownership overall. By making it easier to buy, the government-subsidized mortgage system has stimulated demand, but without nearly as much attention on ensuring more supply. The result is an affordability crisis that long predates the recent spike in interest rates, and a homeownership rate that is unremarkable by international standards.

“Over time, the 30-year fixed rate probably just erodes affordability,” said Skylar Olsen, chief economist for the real estate site Zillow.

Research suggests that the U.S. mortgage system has also heightened racial and economic inequality. Wealthier borrowers tend to be more financially sophisticated and, therefore, likelier to refinance when doing so saves them money — meaning that even if borrowers start out with the same interest rate, gaps emerge over time.

“Black and Hispanic borrowers in particular are less likely to refinance their loans,” said Vanessa Perry, a George Washington University professor who studies consumers in housing markets. “There’s an equity loss over time. They’re overpaying.”

‘Who Feels the Pain?’

Hillary Valdetero and Dan Frese are on opposite sides of the great mortgage divide.

Ms. Valdetero, 37, bought her home in Boise, Idaho, in April 2022, just in time to lock in a 4.25 percent interest rate on her mortgage. By June, rates approached 6 percent.

“If I had waited three weeks, because of the interest rate I would’ve been priced out,” she said. “I couldn’t touch a house with what it’s at now.”

Mr. Frese, 28, moved back to Chicago, his hometown, in July 2022, as rates were continuing their upward march. A year and a half later, Mr. Frese is living with his parents, saving as much as he can in the hopes of buying his first home — and watching rising rates push that dream further away.

“My timeline, I need to stretch at least another year,” Mr. Frese said. “I do think about it: Could I have done anything differently?”

The diverging fortunes of Ms. Valdetero and Mr. Frese have implications beyond the housing market. Interest rates are the Federal Reserve’s primary tool for corralling inflation: When borrowing becomes more expensive, households are supposed to pull back their spending. But fixed-rate mortgages dampen the effect of those policies — meaning the Fed has to get even more aggressive.

“When the Fed raises rates to control inflation, who feels the pain?” asked Mr. Campbell, the Harvard economist. “In a fixed-rate mortgage system, there’s this whole group of existing homeowners who don’t feel the pain and don’t take the hit, so it falls on new home buyers,” as well as renters and construction firms.

Mr. Campbell argues that there are ways the system could be reformed, starting with encouraging more buyers to choose adjustable-rate mortgages. Higher interest rates are doing that, but very slowly: The share of buyers taking the adjustable option has edged up to about 10 percent, from 2.5 percent in late 2021.

Other critics have suggested more extensive changes. Mr. Pinto has proposed a new type of mortgage with shorter durations, variable interest rates and minimal down payments — a structure that he argues would improve both affordability and financial stability.

But in practice, hardly anyone expects the 30-year mortgage to disappear soon. Americans hold $12.5 trillion in mortgage debt, mostly in fixed-rate loans. The existing system has an enormous — and enormously wealthy — built-in constituency whose members are certain to fight any change that threatens the value of their biggest asset.

What is more likely is that the frozen housing market will gradually thaw. Homeowners will decide they can’t put off selling any longer, even if it means a lower price. Buyers, too, will adjust. Many forecasters predict that even a small drop in rates could bring a big increase in activity — a 6 percent mortgage suddenly might not sound that bad.

But that process could take years.

“I feel very fortunate that I slid in at the right time,” Ms. Valdetero said. “I feel really bad for people that didn’t get in and now they can’t.”

Ben Casselman writes about economics with a particular focus on stories involving data. He has covered the economy for nearly 20 years, and his recent work has focused on how trends in labor, politics, technology and demographics have shaped the way we live and work. More about Ben Casselman

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074641)



Reply Favorite

Date: November 19th, 2023 1:51 PM
Author: ocher crawly hospital electric furnace

https://archive.is/zaquI#selection-321.0-325.101

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074640)



Reply Favorite

Date: November 19th, 2023 1:52 PM
Author: Sexy famous landscape painting

that stupid site always directs to a captcha loop for me

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074645)



Reply Favorite

Date: November 19th, 2023 1:56 PM
Author: mind-boggling dark heaven

The guy who runs it has some weird grudge against cloudflare dns so it doesn’t work

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074667)



Reply Favorite

Date: November 19th, 2023 3:25 PM
Author: hairraiser windowlicker

Yeah, I think I might have had trouble with Quad 9 too.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074985)



Reply Favorite

Date: November 22nd, 2023 1:57 AM
Author: Rebellious headpube

Same but only on iPad. iPhone works fine. Odd case.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47085476)



Reply Favorite

Date: November 19th, 2023 1:55 PM
Author: ocher crawly hospital electric furnace

"By making it easier to buy, the government-subsidized mortgage system has stimulated demand, but without nearly as much attention on ensuring more supply. The result is an affordability crisis that long predates the recent spike in interest rates, and a homeownership rate that is unremarkable by international standards."

There's your problem. We should build so much fucking housing that the market craters. If it costs half as much, a higher interest rate doesn't matter nearly as much. This also includes upzoning, let's turn blocks of single family housing into blocks of condos and apartments.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074660)



Reply Favorite

Date: November 19th, 2023 1:58 PM
Author: stubborn lay trump supporter



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074672)



Reply Favorite

Date: November 19th, 2023 2:24 PM
Author: Motley Bonkers Nursing Home Rigpig

Nope

Fuck you kike

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074752)



Reply Favorite

Date: November 19th, 2023 3:47 PM
Author: ocher crawly hospital electric furnace

Amazing poast moniker synergy

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075075)



Reply Favorite

Date: November 19th, 2023 5:41 PM
Author: trip hissy fit



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075518)



Reply Favorite

Date: November 22nd, 2023 10:56 AM
Author: mentally impaired theatre



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47086264)



Reply Favorite

Date: November 19th, 2023 3:49 PM
Author: Iridescent Meetinghouse Hairy Legs



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075083)



Reply Favorite

Date: November 19th, 2023 7:23 PM
Author: Irradiated striped hyena



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075856)



Reply Favorite

Date: November 19th, 2023 4:58 PM
Author: maroon kitchen messiness

nimby

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075340)



Reply Favorite

Date: November 19th, 2023 5:31 PM
Author: thriller federal shrine

eat a cock then go back to israel

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075470)



Reply Favorite

Date: November 20th, 2023 9:47 AM
Author: Lemon pocket flask

*quadruples number of residents but keeps parking and schools the same*

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47077571)



Reply Favorite

Date: November 22nd, 2023 1:58 AM
Author: Rebellious headpube

This is the real issue.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47085480)



Reply Favorite

Date: November 24th, 2023 8:00 AM
Author: Lemon pocket flask

on top of that libs will put rent caps in place to further punish those who invest in housing

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47092528)



Reply Favorite

Date: November 19th, 2023 2:02 PM
Author: Narrow-minded theater stage

"In response, the federal government created the Home Owners’ Loan Corporation, which used government-backed bonds to buy up defaulted mortgages and reissue them as fixed-rate, long-term loans. (The corporation was also instrumental in creating the system of redlining that prevented many Black Americans from buying homes.)"

Every time.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074679)



Reply Favorite

Date: November 19th, 2023 2:58 PM
Author: erotic tank

.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074882)



Reply Favorite

Date: November 19th, 2023 2:05 PM
Author: irate institution

They should just make banks retain more loans on their books and cut down MBS issuance. The problem is banks switched from taking credit risk to just originating stuff for a fee and shifting the credit risk to investors after some boomer invented securitized mortgage bonds

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074689)



Reply Favorite

Date: November 19th, 2023 2:07 PM
Author: ocher crawly hospital electric furnace

What? That's not the issue, at least not in this case. Even if banks retained the loans on their books, you'd still have the dynamic where people stay in current housing rather than move because a new mortgage for the same $ would be much more expensive.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074696)



Reply Favorite

Date: November 19th, 2023 2:26 PM
Author: irate institution

My argument is that MBS prices influence mortgage rates, and the low interest rates combined with the current state of the MBS market over the past decade created the current situation.

It's the natural course of things, people chased yield and bid up the price of mortgages - investors were much more willing to accept the lower rates for loans and so people made a rational decision to refinance or buy homes, with banks typically acting as an enabling intermediary.

The combination of the current MBS market, no ban on foreign investment, and a decade of low rates is what was responsible for much of the rise in housing prices across the country IMO.

Different regions increased in price far above the average for other reasons too.

Now that rates have returned to somewhere close to normal, you wont have as much of an issue going forward - particularly if less loans are securitized and sold.

There's no need to abolish the 30 year mortgage or to make refinancing more difficult in response to something that was essentially a series of significant policy errors (to be generous) not related to the structure of the mortgages themselves, but problems with monetary policy and regulation.

If you change the speed limit on a highway from 60 to 100, people are going to go 100 and not think it's speeding - the rational response is to reduce the speed limit back to 60 if there are problems, not to make people drive tractors.

If banks were required to retain a larger percentage of the loans they originated, you would have far less credit extended into the system to prop up house prices that are already unsustainable and avert the risk of a large bubble, while bolstering the credit quality of banks themselves.

The issue is that this does not benefit large banks - but instead medium and smaller ones.

Now that interest rates are higher and there is tighter lending, prices have declined (at least in my area). For commercial and multifamily, the corresponding decline in prices is because of the fact that you simply can't make money on a property that has a cap rate of 5% if debt costs 7-8% - unless you put a large amount down, like 60%.

If someone bought their house/building and has a 2-4% loan, but the price of the house/building in the market is 20% less because of higher rates, it's sort of a wash.



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074758)



Reply Favorite

Date: November 19th, 2023 2:27 PM
Author: Motley Bonkers Nursing Home Rigpig

Wow someone on xo who actually has accurate and cr domain knowledge

I love you

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074765)



Reply Favorite

Date: November 19th, 2023 2:35 PM
Author: irate institution

Ty brother, ty

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074798)



Reply Favorite

Date: November 19th, 2023 2:42 PM
Author: Domesticated Submissive Parlor Goyim

MBS made real estate an investment class. It has been horrible for society

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074819)



Reply Favorite

Date: November 19th, 2023 3:50 PM
Author: Iridescent Meetinghouse Hairy Legs

Fucking Saudis

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075089)



Reply Favorite

Date: November 20th, 2023 8:02 PM
Author: irate institution

100% TRUTH

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47080174)



Reply Favorite

Date: November 19th, 2023 3:44 PM
Author: ruddy low-t area

there is nothing wrong with people staying in their current housing

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075065)



Reply Favorite

Date: November 24th, 2023 8:53 AM
Author: Lemon pocket flask

(Russian boyar)

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47092613)



Reply Favorite

Date: November 19th, 2023 2:25 PM
Author: Motley Bonkers Nursing Home Rigpig



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074753)



Reply Favorite

Date: November 19th, 2023 2:21 PM
Author: Excitant Splenetic Coffee Pot

everyone deserves to own their own home

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074744)



Reply Favorite

Date: November 19th, 2023 2:25 PM
Author: Motley Bonkers Nursing Home Rigpig

They absolutely do not

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074756)



Reply Favorite

Date: November 19th, 2023 2:27 PM
Author: tan impertinent becky

The answer is just to build more. As long as demand continues to outstrip supply in desirable metropolitan areas, there's no "one weird trick" to make housing affordable

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074763)



Reply Favorite

Date: November 19th, 2023 2:38 PM
Author: Domesticated Submissive Parlor Goyim

end SFH zoning

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074806)



Reply Favorite

Date: November 19th, 2023 2:40 PM
Author: Motley Bonkers Nursing Home Rigpig

Go back to China

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074813)



Reply Favorite

Date: November 19th, 2023 2:41 PM
Author: Domesticated Submissive Parlor Goyim

ya man. how horrible of me to want the FREE MARKET to decide what housing we live in.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074816)



Reply Favorite

Date: November 19th, 2023 2:51 PM
Author: Motley Bonkers Nursing Home Rigpig

Yeah cr the “free market” of trillions of dollars of Jewish Monopoly money being sunk into transporting subhuman brown dependents from the third world into my society and then bulldozing down legacy white single family homes to clear space to build dystopian mass containment structures for them

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074855)



Reply Favorite

Date: November 19th, 2023 2:52 PM
Author: Domesticated Submissive Parlor Goyim

Good job man. You made condos and townhomes to be Jewish and Mexican. You are now completly broken

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074860)



Reply Favorite

Date: November 20th, 2023 9:53 AM
Author: thriller federal shrine

he is 100% correct.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47077598)



Reply Favorite

Date: November 20th, 2023 9:58 AM
Author: Domesticated Submissive Parlor Goyim

lol

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47077614)



Reply Favorite

Date: November 20th, 2023 9:59 AM
Author: thriller federal shrine

americans don't raise their families in fucking apartments. sorry this upsets you.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47077618)



Reply Favorite

Date: November 20th, 2023 10:01 AM
Author: Domesticated Submissive Parlor Goyim

(guy who doesnt want to let the market decide what housing gets built but he certainly knows that the market wants!)

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47077630)



Reply Favorite

Date: November 21st, 2023 5:10 PM
Author: thriller federal shrine

the market is white americans. we don't want to live in shitty apartments in crappy cities and def don't want to be around people who do. tough shit if that means you muds can't afford to live properly.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47083639)



Reply Favorite

Date: November 22nd, 2023 7:38 AM
Author: Domesticated Submissive Parlor Goyim

I 100% agree and yet white americans want townhomes and condos in addition to SFH.

Look, I see you are clearly jewish as you think the whole country is like NYC, but sorry kike, that is not real america.

hth

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47085753)



Reply Favorite

Date: November 21st, 2023 10:40 AM
Author: Iridescent Meetinghouse Hairy Legs



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47081806)



Reply Favorite

Date: November 21st, 2023 10:41 AM
Author: Peach Stimulating Generalized Bond Garrison



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47081810)



Reply Favorite

Date: November 19th, 2023 3:23 PM
Author: jade community account

No u live in a pod

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074978)



Reply Favorite

Date: November 19th, 2023 3:28 PM
Author: hairraiser windowlicker

I don't understand that response at all. No one is making you give up you SFR.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074995)



Reply Favorite

Date: November 19th, 2023 8:36 PM
Author: Irradiated striped hyena

One apartment complex ruins blocks of SFHs.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076043)



Reply Favorite

Date: November 20th, 2023 9:35 PM
Author: hairraiser windowlicker

That doesn't say much about his pod response, but one NIMBY destroys another's productive use of their land.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47080473)



Reply Favorite

Date: November 19th, 2023 5:32 PM
Author: Iridescent Meetinghouse Hairy Legs

The one weird trick is to move to undesirable metropolitan areas until they become desirable. Cramming more people into SF/NYC/LA is not the answer.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075476)



Reply Favorite

Date: November 19th, 2023 2:41 PM
Author: Domesticated Submissive Parlor Goyim

30 year is horrible. hth

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074815)



Reply Favorite

Date: November 19th, 2023 2:43 PM
Author: Lavender doctorate milk

perhaps the government would be a bit less able to play casino with the money supply if it meant large numbers of homeowners would stop paying their mortgage

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074823)



Reply Favorite

Date: November 19th, 2023 2:44 PM
Author: Domesticated Submissive Parlor Goyim

?

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074829)



Reply Favorite

Date: November 19th, 2023 2:47 PM
Author: Lavender doctorate milk

if 20% of mortgages were up for renewal every year, dumb policies that triple interest rates over a short period of time would have a lot more cost for the government

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074841)



Reply Favorite

Date: November 19th, 2023 2:47 PM
Author: Domesticated Submissive Parlor Goyim

??

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074844)



Reply Favorite

Date: November 20th, 2023 1:35 AM
Author: Insanely creepy passionate toaster jew

... and student loans

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076845)



Reply Favorite

Date: November 19th, 2023 3:10 PM
Author: charismatic volcanic crater

I have a 30-year mortgage that I have prepaid down just over 11.5 years in the last 6 months. I don’t know what they are talking about in this article. Click bait bullshit is what it is.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074915)



Reply Favorite

Date: November 19th, 2023 3:19 PM
Author: erotic tank

what's the rate?

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47074967)



Reply Favorite

Date: November 19th, 2023 3:30 PM
Author: charismatic volcanic crater

6.5%. Gave up a 2.75 to move here. Honestly, interest rates have no impact on people buying new primary residences. You move where you need to move for your situation. All of this crap about interest rates is noise.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075001)



Reply Favorite

Date: November 19th, 2023 3:34 PM
Author: erotic tank

I am also a 6.5%mo and am paying it down but I wouldn't if I were at 2.75%. You don't realize how dumb americans are and how they will exchange their 'starter home' for another just because some birdbrain thinks she 'needs' another 'bonus room'.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075024)



Reply Favorite

Date: November 19th, 2023 3:41 PM
Author: charismatic volcanic crater

We bought our first house when we had 1 kid. Lived there 8 years and had 3 more. The suffering was unreal. Moved and my wife drives 10 mins to work now instead of 45. Daycare is 3 mins away instead of 25. Grocer is 5 mins or less instead of 20. My commute is less. House has a 4th bedroom so only two of our boys have to share a room. It’s so much better. We really needed to move and really hated where we were, or at least I did. Interest rates don’t mean anything to the decision. I mean it’s great to pay less, but it’s an afterthought in deciding whether to stay or go.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075058)



Reply Favorite

Date: November 19th, 2023 3:49 PM
Author: erotic tank

I am not arguing against your personal reasons for moving; obviously I how my own reasons for buying at 6.5%. Bu the article is talking about national averages and our cases may not be typical.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075077)



Reply Favorite

Date: November 19th, 2023 4:46 PM
Author: black casino

Why do you live in Houston Texas?

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075313)



Reply Favorite

Date: November 19th, 2023 5:18 PM
Author: charismatic volcanic crater

I don’t.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075400)



Reply Favorite

Date: November 19th, 2023 5:22 PM
Author: Rose quadroon gunner

Fine. Why do you live in Harris County, TX?

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075422)



Reply Favorite

Date: November 19th, 2023 5:34 PM
Author: charismatic volcanic crater

No comment.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075484)



Reply Favorite

Date: November 19th, 2023 5:54 PM
Author: Rose quadroon gunner

Yeah I figured you are more towards the north-north-west. I am thinking Spring or The Woodlands. Possibly Cypress or Jersey Village.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075563)



Reply Favorite

Date: November 19th, 2023 6:07 PM
Author: charismatic volcanic crater

I don’t know what you’re talking about.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075615)



Reply Favorite

Date: November 19th, 2023 4:19 PM
Author: maize nowag locale

This article is built on the retarded premise that taking away people's preexisting 3% mortgages to make things more "equal" would somehow reduce the 7%+ new buyers are paying. The author completely misunderstands that the "wins and losses" when mortgage rates fluctuate are shifted between the buyers and sellers of the mortgages (investors), not between the borrowers. Getting rid of the 30 year mortgage wouldn't lower rates one bit right now. Everyone would be paying the higher rate.

"There is no way that most middle-class Americans could get a bank to lend them a multiple of their annual income at a fixed rate without some form of government guarantee."

Also LOL @ this dumb fuck for not understanding the concept of "collateral." He is implying that "most middle-class Americans" cannot get conventional loans, which is ridiculous.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075207)



Reply Favorite

Date: November 20th, 2023 1:40 AM
Author: Domesticated Submissive Parlor Goyim

It would force the price of homes now, so in reality, there would be no winner or loser from rates changes. Everyone would be on the same footing. If rates are higher for all, then people sell homes which will push the price of homes down.

This is exactly what has happened in Euro countries that do this. So your comment "Everyone would be paying the higher rate" is pretty retarded when you exclude the part that home prices for everyone would be lower too to offset the higher rate.

hth

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076859)



Reply Favorite

Date: November 19th, 2023 5:56 PM
Author: trip hissy fit

Another easy solution would be to allow people to pay off their mortgages for less than face value if rates drop. For example, I have about $200k left on my mortgage at 2%. I'm sure my bank would love to get that $200k back so that they could lend it out to someone else at 8%. According to my financial calculator, a 15-year $200k mortgage at 2% is worth about the same as a 15-year $130k mortgage at 8%. So if I want to move, my bank should allow me to pay off my mortgage for $130k, allowing me to pocket the extra $70k.

That would solve the problem of people not wanting to move because they would lose their low rate. And it doesn't hurt the banks at all, because they are already losing money on loans that are tied up at low rates for 30 years. This system exists in Denmark (the only other major industrialized country where fixed-rate mortgages are the norm). I really wish the banks would make this happen.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075573)



Reply Favorite

Date: November 19th, 2023 7:00 PM
Author: maize nowag locale

It doesn't work that way. Yes, mortgages are bought and sold, but your valuation is wrong because the possibility that it will be paid off early (creating a gain to the holder vs. current market price) has to be priced in.

But it would be nice if there was a way for the borrower on a mortgage to buy it back at the same price it trades for between institutions. The seller in theory should be indifferent about whether it sells to the borrower or to another institution.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075800)



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Date: November 20th, 2023 9:51 AM
Author: snowy stag film



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47077589)



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Date: November 19th, 2023 8:40 PM
Author: Irradiated striped hyena

Why would your bank every agree to that? If you move they get the entire $200k.

If you call them to get a quote for this number, chances are you are going to move.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076059)



Reply Favorite

Date: November 20th, 2023 1:01 AM
Author: trip hissy fit

Because for many people, they won't move if they have to pay off the face value of their mortgage, but they will move if they can pay if off at a discount. And the bank makes money every time someone pays off a mortgage below the market rate.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076665)



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Date: November 19th, 2023 8:58 PM
Author: Motley Bonkers Nursing Home Rigpig

Interesting I didn’t know Denmark actually has that. It’s logical and cr

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076116)



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Date: November 20th, 2023 1:55 PM
Author: Domesticated Submissive Parlor Goyim

Except you have no idea what you are talking about.

Banks don't own the vast majority of the mortgages that they give out. So they can't sell something they don't own.

hth

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47078642)



Reply Favorite

Date: November 20th, 2023 8:43 PM
Author: trip hissy fit

I knew some asshole would bring this up. Okay, if you want to be precise, I should have said, "The owner of the mortgage-backed security that owns my mortgage should allow me to sell my mortgage back to them at less than face value so that they can reinvest the proceeds in a different mortgage that has a higher rate." There, happy now?

It doesn't change my main point. I figured the math illiterate lawyers on this bort would already have enough trouble understanding the concept that the value of a mortgage decreases when interest rates rise. So I just assumed that the bank owned my mortgage to keep things simple.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47080345)



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Date: November 20th, 2023 9:26 PM
Author: fighting appetizing plaza mood

We prefer the term innumerate.

xoxo

hth

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47080444)



Reply Favorite

Date: November 21st, 2023 3:21 AM
Author: Domesticated Submissive Parlor Goyim

Why the fuck would a pension fund, who planned to hold the mortgage until 'maturity' allow it to be prepaid so easily at a discount? Basically you are forcing investors to take even more prepayment risk, which basically fucks their ability to manage their duration risk.

Large financial institution and investors invest to try to match cash flows, knowing that some things that they invest in will lose value/gain in value as rates change and that change will also impact the likelihood that those assets are prepaid.

You solution is just to add more uncertainly and to effectively prevent debt holders from being able to hold to maturity which will only have the impact of removing investors from the market --> higher rates for no reason.

hth

Btw, I am not a faggot lawyer

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47081245)



Reply Favorite

Date: November 21st, 2023 7:10 PM
Author: trip hissy fit

You may not be a lawyer, but you are clearly still mathematically challenged. What's going to earn you more money in interest over 20 years: $200k at 2% interest, or $150k at 8% interest? Come on, even mathematically illiterate lawyers should be able to calculate the interest in year 1 if you disregard payments.

The point is that if you have a large hunk of money tied up at a low interest rate and current rates are much higher, you can make money by refinancing at the higher rate even if you give up some principal. That's precisely why bond values drop when interest rates rise.

And no, right now financial institutions already face the worst of both worlds when it comes to refinancing. If rates drop, borrowers can just refinance. But if rates rise, the mortgage holder is stuck with an investment that pays below market rates and can't do anything about it. Either way, the bank loses. If anything, my proposal would lower mortgage rates, because it would reduce the risk that I just outlined. If banks are allowed to let borrowers buy out their mortgage for less than face value when rates rise, that gives banks an incentive to offer lower rates because they are less likely to be stuck with an asset that pays 2% for the next 30 years.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47084048)



Reply Favorite

Date: November 22nd, 2023 7:41 AM
Author: Domesticated Submissive Parlor Goyim

Are you really that fucking stupid?

Go learn about duration management for pension funds and financial institutions.

"the mortgage holder is stuck with an investment that pays below market rates and can't do anything about it." LJL. If a pension fund or whoever owned your mortgage wanted to unload your mortgage at a loss, guess what?! They can already do that! Why the fuck would they need to deal with you when they can just sell it at a loss to another MBS investor if they wanted too? Guess what, more often than not they choose not to sell it! So weird right?!

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47085756)



Reply Favorite

Date: November 23rd, 2023 12:54 AM
Author: trip hissy fit

For my scheme to work, they would probably sell it back to me at higher than the fair market value (i.e., what another MBS investor would pay for it) but still less than face value. An investor is not going to pay greater than fair market value for a mortgage, but the mortgage holder might be willing to pay more if they need to move. In my hypothetical example above, a $200k mortgage at 2% is worth about $130k when the market rate is 8%. If I need to move, the bank (or MBS holder) could let me pay off my mortgage for $150k (for example). The bank gets to unload an underperforming asset at greater than market value and I get an extra $50k to use as a down payment on my new house. Both parties win.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47088948)



Reply Favorite

Date: November 23rd, 2023 11:00 AM
Author: Domesticated Submissive Parlor Goyim

This already exists IRL, but it is so costly and complicated that it never gets done.

You would need to eliminate the MBS market to do what you want.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47089636)



Reply Favorite

Date: November 24th, 2023 3:29 AM
Author: trip hissy fit

They make it work in Denmark, which suggests to me that it is not impossible.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47092405)



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Date: November 19th, 2023 7:33 PM
Author: Mint antidepressant drug library

classic journalist thinkpiece. lots of interesting history, gestures at vague system problems with the world today, quotes from a few unique academics who have their own pet ideas for remaking the whole system, and no real clear takeaway

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47075885)



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Date: November 19th, 2023 8:56 PM
Author: chartreuse razzle patrolman station

God damn. I thought the Georgist article the other day was bad. NYTimes is really going full retard.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076106)



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Date: November 19th, 2023 9:28 PM
Author: pale prole digit ratio

There's a lot of misinformation in the article and this thread.

The Fannie/Freddie guarantee has the reverse effect to do with the 30 year fixed rate problem. A person is way more likely to to default on a variable rate loan. In fact, that's what caused the collapse in 2008. Imagine if that hadn't just happened with a small segment of risky dumb borrowers, but instead every single person in the country went from paying a 3% rate to a 7% rate. Half the fucking country would be in default right now.

Also, requiring lenders to retain more loans doesn't make sense either. That's the remedy to stop lenders from making RISKY loans, and again, 30 year fixed loans are the safest investment ever (2008 was caused by treating ARM mortgages like fixed mortgages).

Finally, they act like somehow these loans are duping over the American public. They're not. The loans are securitized and bought up by institutional investors. The idea that American homeowners should have variable rates so that funds should get higher returns is is the most global capitalist bullshit line of thinkign ever.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076197)



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Date: November 19th, 2023 10:47 PM
Author: ruddy low-t area

paragraph 2. show stats re 'way more likely to default on a variable vs fixed loan. make it for all loans since 2000 to get enough scenarios

paragraph 3. having fewer "risky loans" is either a goal for or against. calling 30 year fixed loans the "safest investment ever" is bullshit. they are very safe in some ways and very risky in others

paragraph 4. variable rates are not for funds to get higher returns. variable rates are a way to share risk between lenders and borrowers. nothing more, nothing less.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076389)



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Date: November 19th, 2023 11:09 PM
Author: pale prole digit ratio

there's no need to show stats on likelihood of default. if you looked at actual stats its probably skewed because variable rates are for more sophisticated parties.

but for your average joe, which is what 95% of mortgages are, there should be no debate that they're less likely to default if their payment is fixed for 30 years, then a variable rate, in which case someone buying an average home would've seen their payment go from $1,400 to $2,200 in just 2 years...

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076453)



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Date: November 19th, 2023 11:19 PM
Author: ruddy low-t area

dude, you beg the question. variable rates help everyone avoid default when rates decrease. i don't concede your premise.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076483)



Reply Favorite

Date: November 19th, 2023 11:42 PM
Author: Anal chad



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076544)



Reply Favorite

Date: November 19th, 2023 11:40 PM
Author: Hideous idiot parlour



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076542)



Reply Favorite

Date: November 20th, 2023 1:44 AM
Author: Domesticated Submissive Parlor Goyim

"Half the fucking country would be in default right now. "

oh noes! Except not true at all! Only recent buyers. Most buyers who bought 2015 and earlier have low rates, but also given that their home purchase price was a lot lower, would not be in default.

retard

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076864)



Reply Favorite

Date: November 21st, 2023 1:08 AM
Author: pale prole digit ratio

You seem to not understand that EVERYONE'S payment would be essentially increasing by 50% - regardless of when they bought. So if your payment was $1,400 at your 2015 price then now its $2,200 when you more than double the interest rate.

You're giving them a $1,000 emergency every month - and allegedly 53% of Americans don't have $1,000 for 1 emergency.



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47081132)



Reply Favorite

Date: November 21st, 2023 3:24 AM
Author: Domesticated Submissive Parlor Goyim

Ok you are really dumb so I will explain it more to you.

Banks dont want to own homes. REO for them is a pain in the ass and often forces them to take a 50% loss.

If everyone's payment went up 50%, there would be tons of default --> banks become the nation's largest landlord without tenants --> banks dont want that. Hence, they would set terms that allow the vast majority to stay in their homes.

Also, not everyone would have their mortgage reset at the same time.

Can you name me 1 western nation that mostly uses adjustable rate mortgages that suffered the fate you are describing? I will wait super smart lawyer.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47081248)



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Date: November 21st, 2023 8:17 PM
Author: pale prole digit ratio

Your argument seems to hinge on

(i) even though the people would be fucked, banks would be benevolent and work wtih the borrowers, rather than foreclose on the asset - because there definitely wouldn't be some fund who would pop up to purchase all these SFHs at a discount

(ii) i'm wrong taht everyone would be fucked, because it would be structured in a way to stagger everyone getting fucked

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47084243)



Reply Favorite

Date: November 22nd, 2023 7:43 AM
Author: Domesticated Submissive Parlor Goyim

Please feel free to link to any developed country where what you suggest has happened.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47085760)



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Date: November 19th, 2023 11:08 PM
Author: brilliant contagious hominid menage

Being stuck in a home because your existing mortgage rate is too low is a special type of government control.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47076448)



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Date: November 20th, 2023 10:50 PM
Author: Insanely creepy passionate toaster jew

feature, not bug

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47080776)



Reply Favorite

Date: November 21st, 2023 10:18 AM
Author: Irradiated striped hyena

The only people who care about being in this problem are autistic xo poasters that nobody cares about. Oh no! I would lose my interest rate!

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47081726)



Reply Favorite

Date: November 21st, 2023 10:37 AM
Author: erotic tank

Not true. Normal people don't think about it in those terms. However, when a normie goes to buy a house they usually want a same or better place, and when they see the jacked up payment, even if the price is not much more, they will decline to buy.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47081795)



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Date: November 21st, 2023 10:39 AM
Author: black casino

people shouldn't be shiftless and rootless.

XO is full of miserable bugmen moving from one shitbox in a bughive to another and wondering why they're friendless and alone.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47081804)



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Date: November 21st, 2023 10:42 AM
Author: thriller federal shrine

this is credited actually. if you want to be a rootless faggot then have at it but it shouldn't be incentivized.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47081814)



Reply Favorite

Date: November 21st, 2023 10:53 AM
Author: Irradiated striped hyena

If normies need to move, they move.

If they don't need to move, they don't move.

They don't care about their killer interest rate.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47081870)



Reply Favorite

Date: November 21st, 2023 1:16 PM
Author: Amethyst Gaming Laptop

https://www.marketwatch.com/story/its-time-for-a-tax-credit-for-home-sellers-to-prod-owners-to-list-their-houses-realtors-say-057f8aab?reflink=mw_share_email

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47082549)



Reply Favorite

Date: November 21st, 2023 1:38 PM
Author: Irradiated striped hyena

😆

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47082619)



Reply Favorite

Date: November 21st, 2023 7:11 PM
Author: black casino

😂

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47084051)



Reply Favorite

Date: November 21st, 2023 11:51 PM
Author: ocher crawly hospital electric furnace

lmao

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47085059)



Reply Favorite

Date: November 22nd, 2023 1:57 AM
Author: sticky fragrant weed whacker

Realtors say lmao

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47085478)



Reply Favorite

Date: November 22nd, 2023 10:42 AM
Author: Anal chad



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47086209)



Reply Favorite

Date: November 22nd, 2023 3:01 PM
Author: Rebellious headpube



(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47087028)



Reply Favorite

Date: November 22nd, 2023 3:13 PM
Author: Poppy aphrodisiac mad cow disease

Clown 🌎. Realtors gonna realtor though

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47087070)



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Date: November 22nd, 2023 3:19 PM
Author: talented marketing idea

People moving every few years all around the country to chase jobs is insane and is why our nation has so little social cohesion. It’s also why our economy is so great. But I think that ending is 100% needed.

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47087095)



Reply Favorite

Date: November 23rd, 2023 11:01 AM
Author: Domesticated Submissive Parlor Goyim

Agreed. If you were born in a rural part of the country, congrats you are a farmer for life. Suck it

(http://www.autoadmit.com/thread.php?thread_id=5446804&forum_id=2#47089637)