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WirelessBCupSupport t1_iwvo7c7 wrote

Mortgage rates aren't that high. My first home was 7.25% back in the 90's. Granted, the home prices were 1/3 what it is now. But in two or three years, if rates drop, you refi and put the points into the refi. Done.

Its a vicious cycle: you want to get your first home cheap, but then in 7-12yrs, when its time to get a bigger home, you want your current to have appreciated that you actually have 20%or more, to put down on the next one. No one wants to be underwater, which I'm guess, is now happening to many that outbid and overbid.

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Bocephuss t1_iwvsqhd wrote

>No one wants to be underwater, which I'm guess, is now happening to many that outbid and overbid.

Maybe I am missing something but even if you overbid on a house last year, you did so at a sub 3% interest rate.

So even if your home isn't worth as much as you paid, your monthly payments are most likely still lower than what they would be if you bought the same house today at 7%

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Savet t1_iwwnc3k wrote

You aren't missing anything. Everybody that rushed to buy at super low rates was essentially just buying the rate down with the inflated purchase price. Now we have a bunch of people that have never seen real interest rates freaking out.

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boysan98 t1_iwvqf8q wrote

Yeah but the cost of living has gone up relative to housing as well. So yes 7.25 is insanely high.

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phriot t1_iww80qw wrote

>Granted, the home prices were 1/3 what it is now.

This is the problem. Rates are high, but prices are still high. Maybe they'll come down enough to make payments affordable at these rates, but that's yet to be seen nationally.

We bought a house last year. To get the same payment today, the loan would have to be for $130,000 less. We probably could have saved another $25,000 in that time (difference in rent vs our total housing payment, plus repairs we've done to the house this year). There are no houses in our area for $105,000 less than what we paid that are anywhere near the same quality. Homes in that price range are either 2br condos, or are literal complete gut jobs. And that budget wouldn't leave anything left over for major rehab, so we either couldn't buy today, would be forced into a living situation we didn't want, or we'd have to find a way to pay a mortgage and rent while we did enough repairs to live in the gut job.

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CheesypoofExtreme t1_iww8p2j wrote

>Its a vicious cycle: you want to get your first home cheap, but then in 7-12yrs, when its time to get a bigger home, you want your current to have appreciated that you actually have 20%or more, to put down on the next one.

I actually do not care if my house is worth 20% or not before upgrading. Any sensible person should understand that it's simply not feasible. What I do care about is being able to save for that larger home, which is impossible when starter homes are as expensive as they are.

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