The average 30-year fixed mortgage interest rate is now 5.06%, which is up from 4.72% a week ago. That is a massive increase and rates haven't been above 5% since 2011. Many of the millennials in the market for homes have never even seen rates this high. At 5.06%, a borrower with a $500,000 mortgage will pay $2700 per month. That's an increase of ~$600 per month ($6800 per year) from the end of 2021 when rates averaged 3.11%. Before adjusting for inflationary pressure on the actual home price, the cost to borrow now makes the home 20% more expensive than it was just a few months ago.

I think the crazy run-up in real estate will be ending soon. I'm not saying the market will come down and I know there are some cash buyers unimpacted by rates, but there's not likely to be multiple offers over asking price on the day that a home hits the market.

I'm ready for it to real-estate market to tank, I need to buy a place.

And to think when I bought my place in October I was unhappy with the 2.75 I got and was trying g to push them to 2.6. Guess it looks good now. The first place I bought many years ago was at 6%

I predict that the higher mortgage rates along with construction costs will start to have an impact on home construction. Maybe not in DFW and areas with lower homes prices but definitely in higher cost areas. That on top of inflation will take us into a recession. Discretionary spending is going to tank along with companies and stocks that sell products. I am glad my son got his house at the end of last year and locked in 2.8%.

Hate to break it to you, but DFW is no longer considered "lower cost". I think Texas land/home prices have weathered storms well historically because it was lower priced, however I could see this changing now that we are a higher cost of living through "artificial" run ups

TLew, I totally agree, DFW is no longer a low cost living option for buyers and renters alike. Same goes for Austin and Houston. We now also have some of the highest property tax bills in the entire country. There needs to be major reforms on property taxes in this state.

Sux to be buyer right now! Also waiting for market to tank to buy up some foreclosures.

Agreed, was in Celina for my gmas burial, new home addition with signs saying homes starting at 800k!

40 year mortgage will be the norm shortly per HUD

Thank goodness I did my cash-out refi in Dec. 3.125%. At 5% I would be paying $500 more a month. And lumber is down so my remodel will stay manageable hopefully....

Here in Dallas people throw huge amounts of cash up-front so they'll just put more in.

https://fortworth.culturemap.com/ne...housing-growth-and-stability-smartasset/

Prices aren't going down folks....Texas is still considered low cost housing compared to the coasts. The average home price here is still below the national average.

I don't see that happening in DFW area

I think my first mortgage was 8.5% and that was pretty good. Thankful to have paid it off now.

Look around more and see what you find



https://therealdeal.com/texas/2022/01/28/texas-housing-boom-is-market-overpriced/

How did they determine "overpriced"? There's no reference in that article to any real data. They are comparing the current market to "past pricing trends". That is exactly why the Texas market has exploded, it was under valued for many, many years and just now starting to catch up. The article actually proves that there is a lot of gas left in the tank for growth. Even if DFW is 19th, that is far down the list compared to being the 4th largest metro in the U.S.

I stick to my original assessment.

Try this one to see if it gives you more detail (same FAU/FIU study)

https://fortune.com/2022/02/22/us-h...ruary-2022-mortgage-rates-buying-a-home/

It did not. From the article....

"While some of these cities are still showing up on lists of the fastest-growing markets, researchers say the premium figures indicate housing prices in these areas are poised to flatten in the future, having neared or reached a peak of the current housing cycle. And sellers should brace themselves for a difficult time if they hope to get top dollar in the near future."

They are basing the values on the "Zillow Home Value Index"....never heard of that. I doubt any investors or home buyers are using that as a basis for purchases.

Basically they are saying that the explosion in values cannot continue, which I do agree with. I strongly disagree that real estate values in Texas are dropping anytime soon. It makes zero sense to have a market valued as the #1 market for stability, but also be over priced.

Did you read the article I posted?

Whoa

Sure did, but we come from different spots. By virtue of the equation, home prices HAVE to fall. Why? If mortgage rates go up to 10% then affordability goes down to all but cash buyers. This drives demand for lower priced homes, oversupply past a certain $ figure, and therefore median home price goes down.

Sure, maybe mortgage rates don't go up to 10%, but the whole point of this thread is how quickly they have ratcheted up.

Hello 40 year......
And student loan forgiveness.

Might buy 3 more properties.

We shall see....I think folks underestimate how many cash buyers are out there. I have been tooting this horn for 5-10 years, and even if prices drop 30% they will still be higher than they were 2 years ago.

Poll today said 50 percent of blue state people want to move. Water is gonna make millions move.

Texas and Oklahoma better build more lakes fast.

The rates are kicking up significantly and there are other factors slowing demand as well. Demand and then prices are/going to stagnate soon. Perhaps a slight softening of demand and prices will follow an extended plateau. Relatively low supply is keeping the price machine churning, for now. I think we have at least 24 months to go before the softening happens - DEPENDING ON HOW FAST AND HIGH THE RATES GO.

BUT I keep hearing tales of how good we have it from my parents that bought their first house with a mortgage rate in the upper teens when I was in diapers. I bought my first house at 5.75%. It wasn't a budget buster, but a new modest 3/2 starter home then was $90-$100k where now it seems like $250,000 is the floor for a similar residence.

I was out of position to take advantage of the Recession even though Ray Charles could have seen it coming. I have tried hard to be ready for the next real estate 'event' and take advantage of it - COVID certainly wasn't the event I anticipated it to be in that regard.

Mine too. 5%is still dang good compared to the early 90’s.

Paid 8 % on my first house. Thirty six Dunhaven, Dallas, TX.