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ttyp00 t1_jcan8yb wrote

Reply to comment by [deleted] in Credit Suisse sinks 21% after top shareholder rules out support by fastclickertoggle

I just said that same thing to my wife. And added, "Let's wait to buy a house. Mortgage rates are just about to come crashing down."

edit: great advice below. I so dum. Thanks y'all

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nigelthornberrynose t1_jcbppua wrote

Probably not this time actually. Mortgage rates largely follow the Fed rate and the Fed has precisely two goals (the “dual mandate”):

  1. Keep inflation about 2%.

  2. Keep unemployment about 4%.

That’s it. There’s nothing in the Fed mandate about protecting banks. Inflation is still at 6% yoy (yes that’s down from about 9% yoy a few months ago, but still too high) meanwhile unemployment is still very low at less than 4%. Thinking that the Fed will abandon its goal of price stability (aka 2% inflation) by suddenly cutting interest rates in order to save banks would be a very strange move. IF we see a massive unemployment spike as a result of bank failures then they would have a reason to cut rates. Until then, cooling inflation is a very high priority issue for both ordinary people and politicians so I don’t see a drastic rate cut before an even more painful unemployment report comes out.

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DickJohnsonPI t1_jcbx58g wrote

Is it true that there are problems with the way unemployment numbers have been presented, and that 2022 employment gains were counted in 2023 figures?

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nigelthornberrynose t1_jcc1o22 wrote

There is always debate about how both inflation and unemployment are calculated. People argue the reported numbers are wrong all the time, they have done for as long as I’ve been reading financial news, and probably some of those people are right. Sometimes unemployment numbers are retroactively revised after more information becomes available, that certainly has happened before.

But in terms of predicting monetary policy I’m not sure it matters. What matters is if the numbers the Fed has are above or below their target, not whether the numbers are 100% accurate, as far as their accuracy can even be measured.

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peepjynx t1_jcbxfmu wrote

Btw, something like 99% of homeowners are locked in to fixed interest rates between 3-6%. This is actually a problem. But there will not be any sort of housing market collapse because, after 2008, they kneecapped housing supply.

No one is building jack shit.

For anyone interested in this stuff though, seriously check out this guy's YouTube channel. Even go back a few months. I don't remember who shared this link with me, but I quietly thank them every day.

https://www.youtube.com/@clearvaluetax9382/videos

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Johns-schlong t1_jcdf4nz wrote

Yeah, something a lot of people like to ignore regarding housing pricing is the lack of supply. This isn't like 2008 where there are a surplus of houses. And like you said, most owners are now locked in at historically low rates that make moving less likely.

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jlbuery t1_jcbod22 wrote

Would it be better to buy a home prior to a crash for lower cost and refi for lower interest?

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ArenSteele t1_jcdh6ig wrote

You’ll want to buy a house BEFORE the rates crash. As soon as rates fall, house prices are going to skyrocket again.

If you are psychic and can time up your purchase to a couple of months before they announce an intention to drop rates, you’ll probably get your best possible deal.

Eat the high rates for a couple of years, then refinance at a lower rate if/when they do come down

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