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Thats because anyone with a 2.5% mortgage would rather die before losing their home. 34% of mortgages are below 3% interest rate, which means their house payme

Thats because anyone with a 2.5% mortgage would rather die before losing their home. 34% of mortgages are below 3% interest rate, which means their house payment is at least 30% cheaper than renting. Nobody is going to give that up easily. Here you could easily go from a 3/3 single family home to a 2br apartment for the same price monthly. Which means you would need to move into a 1br apartment to save any money. All this to say, the first thing to go is the credit card payments, then the car payments, and finally the mortgage payments.

reactordev 2y ago
This. Anyone I know that has a sub 3% is planning on staying put until their end. The rest of us are never going to see sub 3% in our lifetimes again. 6% is here to stay. Maybe in the distant future we hit 5.5% but unlikely. I went through a divorce and my ex got the house. I thought I would travel for a few years before buying another one and I missed out on the 3% rates.
- jghn 2y ago
  I don't disagree but people talking about current rates as if they're terrible distort reality. It really wasn't that long ago (aughts) that rates in the 5/6% range were viewed as historically good. And I'm old enough to remember when rates in the teens were normal.
  - polymathemagics 2y ago
    Yeah, and for a lot of earners in high tax states, the effective interest rate you pay is essentially almost half off thanks to the mortgage interest tax deduction. If your marginal tax rate across federal / state / local is high (mine's 46%), then you can get back almost half the interest. Which shortens the gap between a 3% vs 6% mortgage, the effective difference being more like 1.5% than 3%.
- flatline 2y ago
  I got a 3.25% loan post-divorce in a part of the country I hated, and ended up selling and relocating. I do not plan on buying again soon, current prices combined with current interest rates make it unappealing. If home prices come off or stagnate long enough, I will once again consider buying. Right now I can set aside $1000/mo renting, which is enough to pay someone else for the hassle of maintaining a house.
- lm28469 2y ago
  6%?! Damn in France we went from 1% to 4% and it felt like the end of the world, 6% is insane
  - JeremyNT 2y ago
    Key to know for people outside the US (if you don't already know this) is that here you almost always deal in 30 year fixed mortgages. The buyer will never see their rates go higher than this in the life of the loan, and in reality, if/when rates drop again, they can refinance to a new 30 year fixed at the lower rate.
- silisili 2y ago
  Never say never. It may be a long while til we see 3%, but 5.5% isn't far off. Some saw about that during the recent dip a few months ago. There are of course a lot of factors, but I think we'll be back in the high fives at some point in 2025 and settle around 4.5-5 after that. That's if Mr Tariff doesn't spike inflation.
trenning 2y ago
Counter point, I have a 2.25% fixed 30yr but am looking to sell in the next couple months. Reason being I’m in a townhouse. They do not appreciate at the same rate as single family detached and it also carries an endlessly increasing hoa fee. Due to the hoa increases it also limits how well a property can cash flow as a rental so keeping the property as an investment is doubly less attractive as often you can forgo rental income in lieu of asset appreciation.
- jjav 2y ago
  HOAs are the only thing so evil that it is more favorable to give up a 2.25% mortgage than to deal with a HOA!
ethagnawl 2y ago
> All this to say, the first thing to go is the credit card payments, then the car payments, and finally the mortgage payments. I do wonder how much of these credit card balances are people paying ~$3.50 per gallon to fill up and kit out SUVs and trucks they're paying ~$700 a month for. As someone who strives to spend/save responsibly and drives wholly owned used cars and is still a few paychecks away from disaster, I do not understand how working/middle class people are keeping up with these costs. I notice our local Chevy dealership is also full to the brim (literally covering all of the grass on their lot) with new trucks and SUVs. I would love to better understand who is buying/leasing those vehicles and how they're keeping them on the road -- for now.
- deleted 2y ago
  [deleted]
arealaccount 2y ago
Can confirm - if I moved to a home that was the same price ignoring realtors fees and whatnot, my 2000/mth mortgage would go to almost 4.

reactordev 2y ago

This. Anyone I know that has a sub 3% is planning on staying put until their end. The rest of us are never going to see sub 3% in our lifetimes again. 6% is here to stay. Maybe in the distant future we hit 5.5% but unlikely. I went through a divorce and my ex got the house. I thought I would travel for a few years before buying another one and I missed out on the 3% rates.

jghn 2y ago
I don't disagree but people talking about current rates as if they're terrible distort reality. It really wasn't that long ago (aughts) that rates in the 5/6% range were viewed as historically good. And I'm old enough to remember when rates in the teens were normal.
- polymathemagics 2y ago
  Yeah, and for a lot of earners in high tax states, the effective interest rate you pay is essentially almost half off thanks to the mortgage interest tax deduction. If your marginal tax rate across federal / state / local is high (mine's 46%), then you can get back almost half the interest. Which shortens the gap between a 3% vs 6% mortgage, the effective difference being more like 1.5% than 3%.
flatline 2y ago
I got a 3.25% loan post-divorce in a part of the country I hated, and ended up selling and relocating. I do not plan on buying again soon, current prices combined with current interest rates make it unappealing. If home prices come off or stagnate long enough, I will once again consider buying. Right now I can set aside $1000/mo renting, which is enough to pay someone else for the hassle of maintaining a house.
lm28469 2y ago
6%?! Damn in France we went from 1% to 4% and it felt like the end of the world, 6% is insane
- JeremyNT 2y ago
  Key to know for people outside the US (if you don't already know this) is that here you almost always deal in 30 year fixed mortgages. The buyer will never see their rates go higher than this in the life of the loan, and in reality, if/when rates drop again, they can refinance to a new 30 year fixed at the lower rate.
silisili 2y ago
Never say never. It may be a long while til we see 3%, but 5.5% isn't far off. Some saw about that during the recent dip a few months ago. There are of course a lot of factors, but I think we'll be back in the high fives at some point in 2025 and settle around 4.5-5 after that. That's if Mr Tariff doesn't spike inflation.

trenning 2y ago

Counter point, I have a 2.25% fixed 30yr but am looking to sell in the next couple months. Reason being I’m in a townhouse. They do not appreciate at the same rate as single family detached and it also carries an endlessly increasing hoa fee. Due to the hoa increases it also limits how well a property can cash flow as a rental so keeping the property as an investment is doubly less attractive as often you can forgo rental income in lieu of asset appreciation.

jjav 2y ago
HOAs are the only thing so evil that it is more favorable to give up a 2.25% mortgage than to deal with a HOA!

ethagnawl 2y ago

> All this to say, the first thing to go is the credit card payments, then the car payments, and finally the mortgage payments. I do wonder how much of these credit card balances are people paying ~$3.50 per gallon to fill up and kit out SUVs and trucks they're paying ~$700 a month for. As someone who strives to spend/save responsibly and drives wholly owned used cars and is still a few paychecks away from disaster, I do not understand how working/middle class people are keeping up with these costs. I notice our local Chevy dealership is also full to the brim (literally covering all of the grass on their lot) with new trucks and SUVs. I would love to better understand who is buying/leasing those vehicles and how they're keeping them on the road -- for now.

deleted 2y ago
[deleted]

arealaccount 2y ago

Can confirm - if I moved to a home that was the same price ignoring realtors fees and whatnot, my 2000/mth mortgage would go to almost 4.