August 25, 2013

You are SO priced out forever

Haven’t bought a house yet? Here’s some cheery news proving you waited too long.

Freddie Mac: 30-year mortgage jumps to 4.58%, highest in 2 years

130824-lat-builderBy E. Scott Reckard, Los Angeles Times
August 22, 2013, 10:59 a.m.

Fixed mortgage rates jumped again this week, with Freddie Mac‘s widely watched survey saying lenders were offering 30-year home loans at an average of 4.58%.

That was up from 4.4% last week and the highest rate Freddie has reported in two years.

Freddie Mac reported Thursday that the average for the 15-year fixed loan, a popular alternative for people refinancing mortgages, was 3.6%, up from 3.44% last week and 2.89% at this time a year ago.

The higher rates have sharply reduced the number of borrowers able to refinance their home loans at lower rates, and with delinquencies and foreclosures also on the wane, big mortgage lenders are cutting back on staffing.

Ruh-roh Raggy. When the banks don’t think they need staff anymore, you know this party isn’t going to end well.  Fortunately, this article was reporting from the Southland, which is most definitely not in the Real Bay Area. Everyone knows in the RBA home prices only go up because nobody here needs a mortgage at all.

Bring a suitcase full of cash to your closing or go home.

Comments (13) -- Posted by: madhaus @ 7:08 am

13 Responses to “You are SO priced out forever”

  1. waiting_for_the_fall Says:

    I always assumed I would buy again in the next year or two, but now I’m not so sure. I’ve been able to save more money then I ever would have if I bought a few years ago.
    When you buy a home, there’s always something you want to change or update to your tastes, which takes money. All that money I would have spent on fixing up a home is now in the bank.
    In another ten years, I’ll have enough saved to buy cash, or nearly all cash, and still enough saved for retirement.
    I’m glad I rented during the latest housing bubble.

  2. nomadic Says:

    I used to think it would’ve been better to cash out in 2008, but sales like this make me glad I didn’t. It needs to be completely remodeled but sold way over asking at $1.8M.

    http://www.redfin.com/CA/Los-Altos/1231-Patlen-Dr-94024/home/1212826

    wftf, are you renting a house? Has your landlord cut you a break by not raising rents?

  3. waiting_for_the_fall Says:

    I’m renting in a triplex. My rent hasn’t gone up in 7 years. The place is old and outdated, but the price is right.

    If I rented an apartment, my rent would go up every year. If you want stable rent, try to find a house or duplex/triplex where the owner doesn’t use a property manager. Property managers always recommend raising rents to the owner.

  4. DonnieJ Says:

    I too have rented since the fall. I haven’t seen any increase in rents where I rent. I did observe increases in rents in ‘desirable’ areas, however I just moved 10 or 20 minutes away from there, and found rents on par with the early 2000’s. Anytime a landlord attempts to raise rent, I say ‘see ya’ and find another rent in my range not soon after. Any report on rents when averaged over the past few years over the entire geographical area (in this case SFbay) look flat, and are flat.

  5. sprezzatura Says:

    SO glad I bought in 2011.

  6. SV Shopper Says:

    So glad I bought too! #1 sounds like being in denial or self justification. Say it with me: renting a triplex for 7 years of my life is pathetic!

  7. Steve Tyler Says:

    Calling renting “pathetic” is the kind of mentality that’s inflating this property bubble.

  8. No2Realtards Says:

    Been renting for past 3 years in Mountain View and don’t see how buying is cheaper right now for me. Probably will move to San Jose next year to save money as rents are lot cheaper there in Campbell area.

  9. mtv-renter Says:

    Why is renting pathetic? You pay for shelter, but don’t get to cash in on housing appreciation, nor do you lose when it depreciates. I happily spent 15 years renting, the last 10 of which my rent didn’t go up. I just bought a house near where I rented my apartment, and my property tax alone is about equal to that rent!

  10. waiting_for_the_fall Says:

    I don’t feel renting 7 years is pathetic.

    I bought in 99 and sold in 2005, so I know the advantages of owning vs. renting. The only reason I came out of the last bubble on top was the huge appreciation. I wasn’t able to save money while owning like I am now. People that bought last year are fooling themselves if they think those types of gains are coming anytime soon. The bubble that popped in 2005 was a once in a lifetime event. It isn’t coming back for another 70 years, if ever.

    My rent is 20% of my monthly income. Can most people that bought last year say the same? I’m free to move where the jobs are while renting. Buying a home is a big commitment that you will have a job making the same or more money, in the same area.
    As long as rent is so much cheaper than buying, I’m going to rent.

  11. Alex Says:

    Foreigners with suitcases of cash have landed.

  12. TomInCA Says:

    Calling renters ‘pathetic’ is, quite frankly, childish.

    I myself have been living in the Bay Area for 15 years and have rented the entire time. Why? Because I never felt comfortable with owning a property. Prices were too high relative to my income and I did not think it fiscally prudent to purchase anything, especially considering the up and down nature of our economy. From the dot com crash, 9/11, the first housing bubble and the credit crunch. It has been a tumultuous time to say the least.

    Nowadays, I actually make a substantial amount of money (Director of Engineering salary), yet I am still more comfortable renting. As far as I am concerned, buying a property here negates the advantages of my high salary. By purchasing something, I will invariably have a huge sunk cost in one asset as opposed to a distributed portfolio.

    As far as I am concerned, my end game is to maximize my Silicon Valley salary as much as possible and then move to a cheaper part of the state or another part of the country. I prefer that logic to having the pleasure of owning a property that I don’t even like.

  13. burbed Says:

    Apologies if there are duplicate comments. I applaud the tenacity of those who submit duplicate comments, because their original comment gets eaten by the spam holding system – but there’s no need to post a comment twice as eventually it will be reviewed.


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