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Higher Rates, Tighter Credit And Rising Supply Are Now All In Play

A report from the Wall Street Journal. “During the fourth quarter, Zillow lost an average of about $25,000 on every home it sold, before interest expense. On Feb. 10, Zillow Group said it lost $881 million on its algorithmic-driven home-flipping business last year. It was the first earnings report since the real estate company shut down that operation in the fall. The full company, which includes Zillow’s profitable home-listing and advertising business, posted a consolidated net loss of $528 million in 2021, mostly because of its home-flipping business, Zillow Offers.”

From Housing Wire. “How long can this last? Compass lost $494 million in 2021, a historically robust year for U.S. real estate, as the New York City brokerage continues to burn through money amid its rapid expansion. The net income loss is 83% greater than Compass’s $270 million loss in 2020, eight-year-old Compass’s final year as a private company.”

From Bloomberg. “First-time home buyers, already getting clobbered by bidding wars, now face a potential knockout punch: higher mortgage rates. The jump in borrowing costs is sapping their purchasing power, preventing them from bidding high enough to have a chance. ‘Housing affordability is set to get crushed,’ said Mark Zandi, chief economist for Moody’s Analytics.”

From Yahoo Money. “For many Americans, low inventory, high prices and — most recently — rising mortgage rates are putting a home purchase out of financial reach. For a time, buyers even found themselves able to afford more expensive homes while keeping their monthly payments manageable. That’s no longer the case. According to Black Knight, the monthly principal and interest payment needed to purchase an average-priced home is at an all-time high of $1,454 — up $350 per month year-over-year.”

The Orange County Register. “Southern California homebuying got off to a slow start in January with both prices and sales dipping. At current rates, a buyer with 20% down would have paid $2,379 monthly on January’s $687,000 median vs. a year earlier’s $1,938 house payment on the $595,000 median. That’s a 23% jump in the mid-range house’s theoretical loan payments.”

From Crosstown on California. “Another reason for the drop in foreclosures may be that as housing prices skyrocket, people refinance their property or take out a home equity loan. Loan amounts are based on the difference between a property’s market price and the mortgage due, which means homeowners may be able to borrow more. The lenders are paying attention. ‘It’s very uncommon for banks to foreclose on properties when the values of their properties are appreciating or going up,’ added Gary Painter, a professor at the USC Sol Price School of Public Policy.”

From Socket Site in California. “Having been expanded, renovated and converted, the now 3,172-square-foot St. Francis Wood house at 250 Santa Paula Avenue was foreclosed upon by Deutsche Bank last year. Listed as a bank-owned property for $4,197,600 this past September, the asking price for 250 Santa Paula Avenue was reduced to $3,987,800 in October, to $3,788,500 in November and then to $3,599,100 in December. And the sale of 250 Santa Paula Avenue has now closed escrow with a contract price of $3,239,200 or roughly $377,000 less than the $3,616,117 Deutche Bank had been owed at the time it foreclosed.”

The Orlando Business Journal in Florida. “The number of metro Orlando homes sold, as well as the median price, dropped from December to January, according to the Orlando Regional Realtor Association. It’s a rare dip for the region’s on-fire housing market, which real estate professionals attribute to a seasonal slowdown and house hunters pulling back from the market amid historic price run-ups and bidding wars.”

“While the busy housing market led to a big year for Winter Park-based Realtor Chirstine Elias, the skyrocketing prices are turning off some would-be buyers, Elias told OBJ. Many of those clients are out-of-state investors wanting a lower price point. Plus, local buyers looking to downsize or upsize also are backing off, said Elias. ‘I have half a dozen clients who got frustrated and pulled back.'”

From This Is Money. “More than £5billion has been wiped off the value of UK housebuilders since the start of the year. Blue-chip builders Taylor Wimpey, Persimmon, Barratt Developments and Berkeley have lost £4.1billion in total – the worst fall since the market crash of March 2020. Mid-cap firms Bellway, Crest Nicholson, Redrow and Vistry Group lost another £1.1billion.”

From Radio New Zealand. “The seemingly out of control housing market is being pegged back, with expectations of a greater fall in prices than previously thought. ASB senior economist Mike Jones said the wind was coming out of the housing market’s sails. ‘We’ve long been expecting a marked slowdown in house price inflation in this year, driven by the confluence of three major macro negatives – higher mortgage rates, tighter credit conditions and rising supply. These are now all in play.'”

From Dow Jones. “A local Chinese court has frozen 640.4 million yuan ($101.0 million) in assets belonging to a subsidiary of China Evergrande Group because of delays in payments for construction. The Guangzhou Intermediate People’s Court ordered the assets of Chengdu Xinyi Real Estate Development Co. to be frozen in a suit brought by a unit of Shanghai Construction Group Co. in December, the company said in a filing to the Shanghai bourse on Tuesday. The order followed Shanghai Construction Group’s statement last week that a Guangzhou court had frozen CNY361.5 million of assets of another Evergrande subsidiary due to overdue payments.”

From Reuters. “Shares of cash-strapped Chinese property developer Shimao Group eased on Thursday, after it sought to extend payments of a $947 million trust loan and reports said that a court had frozen sale of 178 apartments financed by the loan. Shimao proposed to creditors on Wednesday it would repay the onshore trust loan in states in the next three years, of which 1.3 billion yuan ($205.36 million) would become due on Thursday, sources told Reuters The trust loan was used to finance a large mixed-used development in Shenzhen. Financial news website Cailianshe reported 178 unsold apartments in the development have been frozen by judicial authorities.”

“Shimao’s plan to extend loan payments is yet to be approved by creditors, and some creditors said they were not happy with the proposal that did not offer any credit enhancement. The Shanghai-based developer, which defaulted on a trust loan last month, has been scrambling to extend debt with creditors and dispose of assets to raise funds.”

Related Posts

Can We Lowball To Get A House Now?

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This Post Has 143 Comments

  3. ‘The jump in borrowing costs is sapping their purchasing power, preventing them from bidding high enough to have a chance. ‘Housing affordability is set to get crushed’ – Ho Chi Zandi.

    These articles always say ‘yer buyers are hurting!’ I think it’s the sellers who are getting spanked, whether they know it yet or not.

    1. There seems to be magical thinking, using low inventory numbers as rationale, that buyers can endlessly match whatever new conditions exist that raise monthly payments.

      Everyone is going to act shocked when prices decline because the mortgage rate Black Friday sale is over.

      1. It’s actually a very contrived table setting. Look at this, not that. As Socket Site does a good job describing, the UHS mis-report things like days on market to the point that it’s just a falsehood.

        Look back at the careful REIC evolution on price. The prices weren’t the problem, it was the loans! We get rid of subprime (in name only) and prices are fundamentally sound. Even though there’s more subprime now.

        OK, so now prices and payments are the highest ever. Interest rates near a 5,000 year low.

  4. ‘the confluence of three major macro negatives – higher mortgage rates, tighter credit conditions and rising supply. These are now all in play’

    Doncha hate it when that happens?

    1. Fed member calls for full percentage interest rate hike by July
      Jim Bullard, the president of the St. Louis Federal Reserve and member of the Federal Open Market Committee, says that the Federal Reserve wants to pursue the best policy as members debate how quickly they should raise interest rates.

      https://www.cnn.com/videos/business/2022/02/17/federal-reserve-committee-interest-rate-hike-jim-bullard-firstmove-vpx.cnn/video/playlists/intl-business/

      1. Good find. With a (conservative estimate) of 500 PhDs on staff how did not one of them give the @#^&B headsup on inflation projections being wrong. I would love if congress investigated – i am sure some of them were finding issues – but the policy makers shut them down.

        Bullard first made the suggestion in an interview with Bloomberg last week. His comments rattled the stock markets and led some to speculate that there could be as many as seven quarter-percentage point hikes by the end of the year — much higher than the four hikes most economists expect.

        Bullard reiterated his position this week, telling CNBC that the Fed needs to front-load more of its planned hikes.

        “We’ve been surprised to the upside on inflation,” he said. “Our credibility is on the line here and we do have to react to the data. However, I do think we can do it in a way that’s organized and not disruptive to markets.”

        1. With a (conservative estimate) of 500 PhDs on staff how did not one of them give the @#^&B headsup on inflation projections being wrong.

          It’s an echo chamber.

          I do think we can do it in a way that’s organized and not disruptive to markets.

          Oh, look, he let it slip that their only concern is the stock market. These asz clowns are hanging on the stock market and house prices’ every move. Since when was that their mandate? Oh, it’s not.

        2. With a (conservative estimate) of 500 PhDs on staff how did not one of them give the @#^&B headsup on inflation projections being wrong.

          Because their continued employment depended on not saying that?

  6. I truly wished I had bought a home in Austin 10-15 years ago…

    “Trinity Ranch is a 1,700-plus home subdivision planned for Elgin, where homes are expected to be valued in the $300,000 range.”

    300k starter homes in Elgin, TX?!

    “ The report says Austin had the biggest percentage increase in $10 million-plus sales (450%) nationwide.”

    Welcome to the new California.

    “The new ABoR report said that in January 2021, median sales prices in the Austin-Round Rock MSA rose 30.4% to $476,000 amid the dip in closed sales.”

    Median home prices were less than $190k when I moved here for college …

    “Pending listings increased 3.8% to 3,352, as months of inventory stayed flat at 0.4 months.“

    0.4 months …..

    1. 15 years ago was 2007, maybe not a great time.
      10 years ago was 2012, which seems like a better time for a purchase.
      Of course, HBB would have roasted you to high heaven for buying.

      1. After the housing bubble burst, why would you keep coming to a HOUSING BUBBLE blog- and especially coming looking for validation? I started reading and posting here around 2005, and bought another house in 2010 and went on with my life.

      3. Of course nobody would have made a fortune buying in 2014 without unprecedented housing market stimulus
        from the Fed, pumping trillions or dollars in Quantitative Easing into the housing market, from 2012 or so through the present.

        If anyone predicted the Fed going all in on Housing Bubble support, I’d like to see the evidence.

        2. “If anyone predicted the Fed going all in on Housing Bubble support, I’d like to see the evidence.”

          For starters, I’m confident that Dianne Feinstein and Nancy Pelosi have been laughing all the way to the proverbial bank.

        3. The fed isn’t as omnipotent as you think. What you need to understand is the cycle. 7 up years and 7 down years. You can place the last top somewhere between 2005-2007 and you get a bottom at 2012-2014. That was the perfect time to buy! Fast forward and you get a top of 2019-2021. It would be too long winded to get into why this is the way it is but you can work your back in time and see that it holds true. Therefore, the best time to beat this game is going to be 2026-2028. You will need cash to play but you will have lots of options. 2027 will probably be the sweet spot in San Diego. You will then watch prices get even stupider than you thought was possible through the next top as we continue on our journey of debasement. The best advice is to try to zoom out on the timeline and get in sync with the cycles. You are currently viewing too small of a sample to see it. Once you see the bigger picture (aka the forest for the trees) you will see the fed is mostly a reactionary entity. They merely amplify cycles that are already occurring naturally. Sure they can affect prices and rates etc but they aren’t actually in control of the overall market impulse.

          1. “What you need to understand is the cycle. 7 up years and 7 down years.”

            That’s not the way the world works. Models fall apart and the model you just explained is a very bad one.

  7. ‘foreclosed upon by Deutsche Bank last year. Listed as a bank-owned property for $4,197,600 this past September, the asking price for 250 Santa Paula Avenue was reduced to $3,987,800 in October, to $3,788,500 in November and then to $3,599,100 in December. And the sale of 250 Santa Paula Avenue has now closed escrow with a contract price of $3,239,200 or roughly $377,000 less than the $3,616,117 Deutche Bank had been owed at the time it foreclosed’

    Chase that market down DB. Last decade these clowns took a$$ poundings all over northern Arizona. Don’t know what they were doing there in the first place. They had a subprime company too.

      1. Hope all Canadians who value there Freedom yank every cent out of their corrupt banking system.

        Turdeau is just showing where dissent will get you. Scumbags.

  10. ‘which means homeowners may be able to borrow more. The lenders are paying attention. ‘It’s very uncommon for banks to foreclose on properties when the values of their properties are appreciating or going up’

    There was a time when you got foreclosed cuz you weren’t making payments.

    1. When did Florida transform from being the 1) worst summer weather in America, 2) the home of Florida Man, and 3) the inspiration for the ubiquitous game “Florida or not Florida” where people guess if some lunatic lived in Florida or the rest of the United States- into “paradise”?

      1. Probably when they decided real estate fraud was a perpetual motion machine of permanent gains. Like lipstick on a pig.

    2. ‘It has been a nightmare,’ woman living in car says

      Cursory observation: low IQ. She probably thought having children would bring in “da’ gravy.” No mention of the “baby daddies.”

    2. It was all fun and games when Generation Z cryptocurrency investment geniuses were regularly transforming their fast food paychecks into multimillion dollar HODLings. I highly suspect that it’s during the unraveling phase of manias, like cryptocurrency, when mental health crises emerge.

      1. Matt Damon told me that crypto only goes up and that fortune favors the brave. Are you calling Matt Damon a lion!?!?

          3. Matt has $170M. Sounds like a lot, but he married a single mom bartender (luv at first sight) + 3 more kids of his own. So $170M might not be enough.

    3. People are stupid.

      “Many crypto-investors are ordinary people taking a risk with their life savings rather than elite traders who can swallow sudden losses. A recent CNBC survey of 750 crypto investors found that a third actually knew very little about what they were investing in.”

      1. “…a third actually knew very little about what they were investing in.”

        I’d be happy to help them out.

        They are investing in an asset class with no fundamental value or regulatory controls, which until recently was supported by a steady influx of money due to a mountain of hype and a period of extraordinarily low interest rates that favored high risk gambles over safe investments.

        Now that rates are rising, it should be interesting to see if cryptocurrencies can continue their meteoric rate of ascent.

  17. “During the fourth quarter, Zillow lost an average of about $25,000 on every home it sold, before interest expense. On Feb. 10, Zillow Group said it lost $881 million on its algorithmic-driven home-flipping business last year.”

    Posters here have long suspected that the Zestimates were upwardly biased. Now the evidence is openly on display.

    Too bad for the investors who lost a bundle and the employees who lost their jobs on this folly.

    1. The thing is just like Crypto trading, it works until it doesnt. It seems to work with ever decreasing interest rates and increasing prices.

      Then it doesnt

      1. Fraud has a way of making things look good for the next group of suckers. It only stops working when you run out of suckers. The real tears haven’t even started flowing yet. On a positive note, their legacy will be to serve as good lessons of what not to do. It’s better than nothing, right?

  18. “Gary Painter, a professor at the USC Sol Price School of Public Policy and an expert on housing economics… said the recession provided a lesson in how a moratorium and a buoyant market, where prices go up gradually, can prevent a wave of foreclosures. Given the numbers, it appears to be a lesson that was learned.”

    So let me see if I understand this correctly professor- a moratorium on foreclosures prevents foreclosures? Wow that is amazing, no wonder he gets the big bucks at USC.

    1. REIC talk again. Everybody stop paying everything. No foreclosures! Look, foreclosures are low! More people are seriously delinquent than last decade, but foreclosures are low.

      As I type, out there many non-bank, fly by night shops are locking in 30 year loans at a rate that’s half guberments admitted inflation.

      1. “…locking in 30 year loans at a rate that’s half guberments admitted inflation.”

        How do investors make money buying bonds at an interest rate that generates a guaranteed real dollar loss?.

        Oh yeah…it’s the central bank buying the loans and parking them on its balance sheet, so no problemo.

        1. “How do investors make money buying bonds at an interest rate that generates a guaranteed real dollar loss?.”

          By collecting hefty fees from investing huge amounts of money that belongs to somebody else.

        2. it’s the central bank buying the loans and parking them on its balance sheet, so no problemo

          I works great, until it doesn’t.

        3. How do investors make money buying bonds at an interest rate that generates a guaranteed real dollar loss?.”

          Foreclose on the borrowers and get their money back , they hope.

  19. “How long can this last? Compass lost $494 million in 2021, a historically robust year for U.S. real estate, as the New York City brokerage continues to burn through money amid its rapid expansion. The net income loss is 83% greater than Compass’s $270 million loss in 2020, eight-year-old Compass’s final year as a private company.”

    Compass’ IPO price was $20.15. It is now 8.61. Sounds like they are run by Zillow-like real estate geniuses.

    Not to worry though, their CEO is worth about $500 million.

  20. The Financial Times
    Federal Reserve
    Can Jay Powell build consensus at a divided Federal Reserve?
    After a united front during the pandemic, officials are split over how aggressively to raise rates
    Federal Reserve chair Jay Powell has the tricky task of negotiating agreements between policymakers who are at odds on how to tighten monetary policy
    © Financial Times
    Colby Smith in New York yesterday

    At the start of the pandemic, US central bank officials were united on the need to shore up the world’s largest economy and stave off a financial crisis by slashing interest rates to zero and buying trillions of dollars of assets.

    But as the Federal Reserve prepares to unwind that unprecedented monetary support in the face of surging inflation, divisions have emerged among its policymakers over how — and how quickly — to withdraw the stimulus that has been in place for nearly two years.

    Minutes from January’s meeting of the Federal Open Market Committee, released on Wednesday, showed that officials agree on one thing: the first US interest rate rise since 2018 will be implemented “soon”, all but guaranteeing an increase in March.

    Beyond that, there appears to be little harmony yet on the number, or size, of subsequent interest rate rises.

    “It is very telling to me that there is a lot of debate going on across the committee and there is no consensus about the appropriate pace of tightening,” said Blerina Uruci, US economist at T Rowe Price. “It seems very much still up in the air.”

    Differences of opinion among officials have played out in public too, as policymakers use speeches and interviews to suggest significantly different approaches to tightening monetary policy.

    That has left Jay Powell, acting chair until confirmed for a second term by the Senate, with the tricky task of forging consensus on a committee that is split not only on the pace and size of interest rate rises but also what to do with a balance sheet that has increased to nearly $9tn as a result of the central bank’s pandemic largesse.

    “How to thread the needle for a decision-making process that is a bit frayed is a heavy lift,” said Diane Swonk, chief economist at Grant Thornton.

    “We won’t only be getting mixed messages from the economy, but the interpretation of those mixed messages from the economy will mean mixed messages from members of the Federal Reserve.”
    …

  21. Discussion on yesterday’s thread about do you personally know anyone who died of COVID, less than 6% of these reported deaths were “of” COVID, the total number is “with” COVID.

    Life has a 100% mortality rate. One third of Europe died from the plague in the 14th Century, and humanity still exists.

    At this point, you are either pro freedom or pro tyranny, there is no middle ground.

    And if you’re scared, stay home. The rest of society is moving on, without you.

    1. New York Times — Vulnerable to the Virus, High-Risk Americans Feel Pain as the U.S. Moves On (2/17/2022):

      https://archive.fo/PiJZc

      Life has a 100% mortality rate. We can’t bubble wrap the entire outside world and destroy the economy to save these people.

      Sorry, but we’re moving on.

      1. And what’s the most important thing is this life? Freedom. Not for most of it or some of it. Freedom for all of life.

        1. “Freedom for all of life.”

          I am all for freedom, freedom for all.

          I enjoy the freedom people regularly exhibit whenever they freely enter my bank and freely indenture themselves to me for decades with just a few movements of an inked up pen.

      3. New York Times — Vulnerable to the Virus, High-Risk Americans Feel Pain as the U.S. Moves On (2/17/2022):

        I saw a similar article in the British media.

        Also saw an article about how there will now be an annual Covid jab, which your doctor will nag and badger you to take.

        They just won’t give up.

    2. And if you’re scared, stay home.

      And keep getting jabbed, until your heart explodes or you have a stroke.

    3. It was more than a third. They say the more detailed records a village or parish kept, the higher the death rate. It was 70 or higher in many towns in Italy and France.

  23. From Yahoo Money. “For many Americans, low inventory, high prices and — most recently — rising mortgage rates are putting a home purchase out of financial reach. For a time, buyers even found themselves able to afford more expensive homes while keeping their monthly payments manageable. That’s no longer the case. According to Black Knight, the monthly principal and interest payment needed to purchase an average-priced home is at an all-time high of $1,454 — up $350 per month year-over-year.”

    The Orange County Register. “Southern California homebuying got off to a slow start in January with both prices and sales dipping. At current [mortgage interest] rates, a buyer with 20% down would have paid $2,379 monthly on January’s $687,000 median vs. a year earlier’s $1,938 house payment on the $595,000 median. That’s a 23% jump in the mid-range house’s theoretical loan payments.”

    – Rising rates mean falling prices; just the opposite of the Fed’s “wealth effect” easy $ policies to boost housing and stonks. It cuts both ways, since they really just inflated numerous asset bubbles and bubbles always burst.

    https://www.wsj.com/articles/u-s-home-prices-surge-higher-pricing-out-many-buyers-11620748183?mod=lead_feature_below_a_pos1
    Real Estate Property Report
    U.S. Home Prices Surge, Scaring Off Some Potential Buyers
    Rapid increase is outweighing the benefit of low mortgage rates
    By Nichole Friedman
    Updated May 11, 2021 6:59 pm ET

    https://research.rabobank.com/markets/en/detail/publication-detail.html?id=299763
    No Oasis: But is There a Masterplan?
    Macro Strategy
    Global Daily | by Michael Every | 16 Feb 2022

    “Markets took yesterday’s non-committal Fed minutes as relatively dovish. I would say that’s a fair assessment. More worrying is that they were non-committal about what the Fed will do at its March meeting because the Fed has no idea what to do. All its choices are bad. There is no oasis ahead, as markets like to believe. There is no Fed ‘masterplan’ to stop inflation without stopping either the asset-price appreciation we’ve built markets on for decades, or the faux appreciation for the working class we’ve built markets on the backs of for decades, or both. As my fellow chutzpahnik Philip Marey bewails: “The minutes also noted that a formal framework review would start in 2024 and conclude in 2025. Although the flexible average inflation targeting (FAIT) strategy was reaffirmed at the January meeting, it has caused the Fed to fall far behind the curve. Policy rates are at the zero bound [~0%] and the Fed is still buying assets when GDP growth is 6.9%, CPI inflation is 7.5% and unemployment is 4.0%. Is this rational monetary policy or are the lunatics running the asylum? There is no need to wait until 2024; the Fed’s groupthink has produced another failed strategy that should be terminated immediately.” But let’s not hold our breath: the Fed will continue to swagger arrogantly around as if it knows best, and things will get thrown and broken.”

    – The monetary policies after the 2008-09 GFC never really ended; they just continued on until the Fed finally gets the inflation they so desperately desired. Lucky us! 🙂

    https://www.washingtonpost.com/wp-dyn/content/article/2010/11/03/AR2010110307372.html
    What the Fed did and why: supporting the recovery and sustaining price stability
    By Ben S. Bernanke
    Thursday, November 4, 2010

    “This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment [stonk buybacks]. And higher stock prices will boost consumer wealth [inequality] and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.”

    – Any centrally-planned, command and control institution is doomed to fail. Unfortunately, Fed policies affect us all.
    – Living the dream.

      1. That’s too kind. The entire FED should be rounded up and fed to hungry lions and tigers in a stadium, while the world watches like during the old Roman Circus Maximus days. These people are a blight upon humanity.

    1. I get 6% cash back on a card I use for groceries. I need to eat. I don’t understand the apprehension to responsible credit card usage.

  26. A reader sent this in:

    Wed, Feb 16 2022, 3:24 PM

    ‘There have been a few hours of a few days over the past week where mortgage rates have been just a bit higher than they are this afternoon. But for all practical purposes, rates continue operating in line with the highest levels since May 2019. Despite a multitude of news stories suggesting 30yr fixed rates somewhere in the medium-high 3.0% range, rates are actually easily over 4.0% and they have been since last Thursday.’

    ‘To give you an idea of just how quickly this move has happened (or possibly, just how tuned out some market experts are), we’re still seeing predictions for rates to average something in the low 3% range in Q1. Note, we’re halfway through Q1 and rates are already up to an average of nearly 3.75% and rising every day. Moreover, on each of the last 5 business days the average lender has been over 4.0%.’

    ‘A big source of confusion is the industry’s reliance on stale data. That typically isn’t a problem when markets aren’t making volatile moves. But it’s a big problem right now. Although it will be updated significantly higher tomorrow, the most recent Freddie Mac weekly rate survey still shows a horribly antiquated number (3.69%).’

    ‘Thankfully, there was no new drama in the rate world today. Unfortunately, there were no new reasons for rates to push back against the remnants of last week’s drama (things like Thursday’s inflation data and Fed comments that pushed us up and over 4.0%).’

    https://www.mortgagenewsdaily.com/markets/mortgage-rates-02162022

    1. Ahem…

      ‘the most recent Freddie Mac weekly rate survey still shows a horribly antiquated number (3.69%)’

    2. This is what is confusing me. The actual rate for lending to affiliate banks is 0.25%. They use a +3 and say that the prime rate is 3.25%. But are the banks playing funny business lending to their institutional financial customers – say at 2.25%.

      Just asking


      The Current U.S. (Fed) Prime Rate is: 3.25% is 0.25% when the lend money.

      January 26, 2022: The FOMC has voted to leave the
      target range for the fed funds rate at 0% – 0.25%.
      Therefore, the United States Prime Rate remains at 3.25%

      The next FOMC meeting and decision on short-term
      interest rates will be on March 16, 2022.

  27. From Denver 9News:

    Marshall Fire victims worry they won’t be able to afford to rebuild their homes

    As they get quotes from builders, some residents find they’re hundreds of thousands of dollars underinsured.
    …

    Michael Lappin bought a home in the Cornerstone neighborhood in 2006. He said he’s interviewed more than a dozen builders, and the one he decided to go with gave him a quote of $325 per square foot. According to Lappin, his insurance policy will cover less than $200 per square foot.

    $325 per square foot? It would cost over 900K to rebuild a 3000 sq foot shack. Sounds like the builder boyz are gouging.

      1. Maybe they shouldn’t rebuild.

        I know people who live in western Lakewood (Denver suburbs) and up in Gunbarrel (Boulder suburbs) who own houses, and were within a mile of forced evacuations due to wildfires within the past two years.

        Living in the city sucks for many reasons but it’s urban and built up enough that it’s not gonna burn to the ground from wildfires. And if it ever gets to that point I’ll just move back to the Midwest…

    2. $325 per square foot? It would cost over 900K to rebuild a 3000 sq foot shack. Sounds like the builder boyz are gouging.

      This is in line with what I’ve been seeing as we price our house build. It’s ridiculous (FJB)

      1. Where are you living in the interim? Maybe sell the land and wait this thing out. Building right now is a bad move, IMO.

        1. IIRC, drumminj fled Seattle and bought land in Tennessee. Joshua Tree Extension is his contribution to HBB. Tread lightly. 🍷

        2. Redpilled is right as far as location.

          We’re in a rental house for now (rent went up 8% when we renewed). Given our delays in building (long story involving architects and builders) we’ve considered selling the land and starting over, esp since we could likely sell the land for quite a bit more than we paid/put into it (clearing, drilling well, running electrical service, driveway, etc), but honestly this is an ideal spot for the life we want to have.

          We’re still in limbo right now/haven’t broken ground on the house, so we’ll see. It really is an unholy scenario of high material and labor prices, busy/unresponsive architects, trades, and builders, and now interest rates going up. Don’t think we have it in us to wait it out another year or two though.

          Enjoying working on the land to be honest. And seeing the coyotes, turkeys, deer, bobcat and all the other wildlife (just caught a mountain lion on camera this past week). Will be much happier living such a life full-time, vs commuting to it as I do now.

          1. Since you have the utilities now, how about putting in a small insulated prefab shop building with a 1/2 bathroom to live in while you decide on the permanent house?

          2. how about putting in a small insulated prefab shop building with a 1/2 bathroom to live in while you decide on the permanent house?

            We’ve thought about that. I am putting in a 1200sq ft shop (just had the foundation pad for it built up, actually). Unfortunately around here, if we add plumbing to it we need ANOTHER designated septic area, on top of the 28,000 sq ft one we already have. Makes no sense, but those appear to be the rules around here.

            We haven’t ruled that idea out – one of the reasons we just had a bunch of dirt work/clearing done even though the house isn’t started yet. Gives us some options.

    3. “He said he’s interviewed more than a dozen builders, and the one he decided to go with gave him a quote of $325 per square foot.”

      🤣🤣🤣

      Someone got taken to the cleaners. $50 a square foot my friends….. $50 a square foot.

      Mount Carmel, UT Housing Prices Crater 27% YOY As Utah Leads Nation In Mortgage Defaults And Foreclosures

      https://www.movoto.com/mount-carmel-ut/market-trends/

  28. Interesting – there are govt organizations that do the hard work / analysis. In this case the Canadian Parliament Budget Officer (PBO) that is clearly identifying the problem and long term risks.

    However the housing minister (himself a housing ‘investor’) says it is imparitive not to harm the ‘mom & pop’ investors errr . speculators, so he is going to do worse than nothing.

    The report looks at average home prices and households’ borrowing capacity in Halifax, Québec, Montréal, Ottawa-Gatineau, Toronto, Hamilton, Winnipeg, Edmonton, Calgary, Vancouver and Victoria.

    In 2015, when the national average home price was $413,000, prices in most Canadian cities were close to affordable levels, it said.

    But in the years leading up to the pandemic home prices in Hamilton, Toronto, Ottawa, Victoria, Halifax and Vancouver “de-linked” from borrowing capacity, rising to 20 per cent above what the average household could afford.

    The PBO estimates that average home prices in Hamilton, Toronto, Halifax and Ottawa are now 50 per cent above affordable levels


    https://financialpost.com/news/economy/buying-a-home-costs-up-to-50-more-than-canadians-can-afford-in-many-big-cities-says-pbo

      1. What most interests me is the chasm between governments’ stated intentions to provide their subjects with affordable housing and their actions to drive housing prices through the roof.

        Got cognitive dissonance?

    1. Grow some ballz and get out of that relationship NOW.

      Run, Forrest, run!

      $380,000 of debt for dual master’s degrees in Obama Studies and Blame Whitey For Everything Studies?

      “They’re not sending their best”

      1. I have always proposed a simple solution, treat that piece of paper as an asset, If you don’t pay it gets repossessed just like a car your home, your tv, your boat etc.

        Think of what that means, you throw in the towel, you give up, and can never apply for jobs that require that degree. Cancel your degrees cancel your debt, and start your new career debt-free at starbuxxx.

        1. What sort of job requires a degree in Victim Studies? Last I checked, baristas don’t need degrees.

          Most job listings in my profession allow for “experience in lieu of a degree”

    3. “I don’t have a steady income. I have two masters degrees, and I owe $380K in student loans.”

      That dog won’t hunt.

      1. She expecting a Biden Bailout.

        All she got was a crack pipe.

        I have read stories about people fleeing the country to avoid repaying the loan, but that usually requires a foreign passport.

      2. I love the advice she got: make payments for 20-25 years and the balance of the loan will be forgiven.

        She was probably planning on having some cushy six figure gooberment job, maybe as part of AOC’s inner staff, and not slinging latte’s.

        The problem with those cushy gooberment jobs is that there aren’t enough of them for every Victim’s Studies major, and it usually requires connections to get one.

    4. “I can’t afford to have the loans forgiven, because I think it’s a taxable event.”

      What a phuc’n loser!

  32. The Russian invasion threat seems conveniently timed to take some of the heat off the Fed for announced rate increase plans. Can’t blame a stock market selloff due to invasion fears on the Fed.

    1. The Financial Times
      Markets Briefing Equities
      Ukraine fears drive sharp losses in US stocks
      S&P 500 falls 2.1% and haven assets gain after warning of ‘imminent’ Russian invasion
      Traders at the New York Stock Exchange. Financial markets have whipsawed over the past week
      © Courtney Crow/NYSE/AP
      Kate Duguid and Eric Platt in New York and Naomi Rovnick in London 2 hours ago

      Wall Street and European stocks sank on Thursday as the US said Russia was on the brink of invading Ukraine within several days.

      The technology-heavy Nasdaq Composite index faced the brunt of the losses, sliding 2.9 per cent, while the blue-chip S&P 500 closed down 2.1 per cent. The market declines this year have wiped more than $3tn off the value of US stocks, with the S&P 500 down over 8 per cent.

      Linda Thomas-Greenfield, US ambassador to the UN, said in a tweet that “the evidence on the ground is that Russia is moving towards an imminent invasion”.
      …

      1. as the US said Russia was on the brink of invading Ukraine

        Why do we care, other than the fact that Brandon will get us into a war we can’t win?

        1. “Why do we care…”

          NATO’s credibility and solidarity is on the line, but every European knows it’s the U.S. is who’ll provide the primary military support.

          Putin likely wasn’t counting on the U.S. response he has been dealt, and he can’t back down without losing credibility. Realize that there has been a low intensity conflict in eastern Ukraine for the past eight years, and don’t forget the Malaysian airliner, MH17, shot down with a Russian buk missile near Hrabove in Donetsk Oblast, Ukraine. FWIW, snipers have been killing obvious civilians when ever the opportunity presents itself.

          When Russia annexed the Crimean peninsula in 2014 the NATO response was tepid, IIRC.

      1. Do you think Cathie Woods will still be an investment icon in five years? It seems like there’s a LOT more CR8R to come between now and then.

      2. Depends on how much trouble is supply chain related vs. overvalued shares. Seems like asset values across the board have a long drop before the curve flattens out. These stories about CMBS look real bad for the retirement board investors.

    1. What will he do if truckers nationwide decide to not work and stay home? What will he do when shelves are barren and the citizenry begin to panic?

  34. Globalist oligarchs and woke corporations kept funneling tens of millions of dollars to BLM as long as the Burn-Loot-Murder was directed at whites and Asians. But the other day a BLM activist went rogue and tried to assassinate a Democrat mayoral candidate who was also a member of The Tribe – and the consequences, to include Jeff Bezos turning off the money spigot, were predictably swift and severe. Memo to BLM: All animals are equal, but some animals are more equal than other animals – and don’t you forget it. And when globalist oligarchs are funneling millions to you through “pass-through” organizations, it’s to support Communist insurrection, NOT to buy up mansions in lily-white upscale neighborhoods.

    Amazon suspends Black Lives Matter from its charity platform

    https://nypost.com/2022/02/17/amazon-suspends-black-lives-matter-from-its-charity-platform/

    The beleaguered Black Lives Matter Global Network Foundation has been kicked off Amazon’s charity platform for its failure to disclose where tens of millions in donations it received nearly two years ago have ended up.

    AmazonSmile, which gives a portion of eligible purchases on the online shopping site to charities, said it “had to temporarily suspend” the group today, an Amazon spokesperson told The Post.

    1. But the other day a BLM activist went rogue and tried to assassinate a Democrat mayoral candidate who was also a member of The Tribe

      That sure wasn’t part of the plan or the Narrative. The Tribe, even when they are blond and blue eyed, are supposed to be People of Color, not white.

      1. The BLM activist who attempted a mostly peaceful assassination of the Democrat mayoral candidate is out on bail courtesy of BLM.

        Local BLM chapter posts bail for man charged with attempted murder of mayoral candidate

        by ZACHARY ROGERS | The National Desk
        Thursday, February 17th 2022

        LOUISVILLE, Ky. (TND) — A man who is charged with the attempted murder of a mayoral candidate in Louisville is no longer in jail after a local Black Lives Matter chapter teamed up with a community bail fund to post his bail.

        Quintez Brown, 21, who is said to be a “social justice activist” running as a candidate for Louisville’s metro council, allegedly tried to assassinate Democrat mayoral candidate Craig Greenberg.

        https://fox11online.com/news/nation-world/man-charged-with-attempted-murder-of-ky-mayoral-candidate-out-of-jail-thanks-to-blm-black-lives-matter-louisville-kentucky-quintez-brown-craig-greenberg-assassinate-assassination-bail-fund-police-social-justice-activist

        Rachel DrozeTV
        @RachelDrozeTV

        The $100,000 cashiers check has been officially given to the clerks office to pay for @BLMLouisville activist Quintez Brown’s release. @LouCommBailFund is paying. Brown is accused of shooting at Louisville mayoral candidate @RunWithCraig.

        https://twitter.com/RachelDrozeTV/status/1494057719313182722?s=20&t=wLyZ2w1cnsujQs3jAXVlTg

        1. a mayoral candidate in Louisville

          I’ll bet that dude was parachuted into Louisville to be the Dem candidate, while BLM wanted someone else. Quintez Brown was just letting the party know they nominated the wrong guy.

    2. Another non-Narrative Compliant story for the MSM to memory-hole.

      PICTURED: 21-year-old BLM activist being honored by Obama, three years before trying to MURDER Jewish Democrat in his office -only to be released on $100,000 after BLM ponies up the cash

      https://www.dailymail.co.uk/news/article-10522989/BLM-helps-raise-100-000-bail-defund-police-activist-student-21-charged-attempted-murder.html

      A BLM activist accused of trying to assassinate a Jewish mayoral candidate has been pictured with Barack Obama, as his alleged victim slammed the ‘broken criminal justice system’ for freeing the suspected shooter on bail.

      Quintez Brown, 21, was one of 22 people chosen to meet the former President of the United States in 2019 as part of Obama’s My Brother’s Keeper Alliance, which is aimed at closing achievement gaps facing young boys and men of color.

  36. Yellen the Felon will never acknowledge her own culpability in creating soaring inflation with the tsunami of Yellen Bux she unleashed into the global financial system.

    Treasury Secretary Janet Yellen admits surging 7.5% inflation is ‘NOT acceptable’ but claims US economy would be even WORSE without Biden’s lavish spending

    https://www.dailymail.co.uk/news/article-10521431/High-US-inflation-not-acceptable-recovery-track-Yellen-AFP.html

    Treasury Secretary Janet Yellen has admitted soaring US inflation is ‘not acceptable’ – then insisted the American economy would be even worse were it not for the very spending by the Biden administration that has been blamed for soaring prices.

    Speaking to AFP, Yellen said of the rise in cost of living – which hit 7.5 per cent last month: ‘Inflation is clearly a great concern to Americans, and it really needs to be addressed.

    ‘Certainly it’s not acceptable to stay at current levels.’

    1. ‘Certainly it’s not acceptable to stay at current levels.’

      What she’s saying is that it was fine for prices to rise to where they are now, but she wants the rate to slow. In other words, they repriced everything higher forever – put a new floor under stock and house prices.

  37. Today my uber liberal co-worker who moved to Florida to try and turn it Blue was whining about the cost to fill up her mini van to a couple of Gen Z kids. Unfortunately for her, I was walking by and heard. I quickly reminded them that gas was $2.00 a gallon under Trump.

    Ah, the joy of their looks!

    1. News Feds: Group got millions in pandemic unemployment fraud The Associated Press February 17, 2022 8:05 PM NEW YORK

      Authorities made arrests from New York to Delaware to California Thursday as they rounded up 10 men accused of fraudulently reaping more than $4 million in unemployment benefits during the coronavirus pandemic. They and others, including an 11th defendant who’s still at large, used more than 800 other people’s identities to file claims in New York, the Brooklyn U.S. attorney’s office said Thursday. “Unemployment got us workin’ a lot,” quipped a YouTube music video that featured five of the men, according to prosecutors.

      Starting shortly after the federal government expanded unemployment benefits in March 2020, the ring filed nearly 1,000 claims to New York’s Labor Department, prosecutors said. According to an indictment, the men used other people’s identities but their own or associates’ addresses to get the benefits sent to them on debit cards, then made cash withdrawals with the cards. Eight were arrested in New York City, one in Delaware and one in California.

      Unemployment fraud has been a nationwide problem during the pandemic, as benefit applications overwhelmed state unemployment agencies. Criminals were able to buy stolen identity data on the dark web and use it to file a heap of phony claims. The federal Labor Department has said that about $87 billion in pandemic unemployment benefits could have been paid improperly nationwide, with a significant portion attributable to fraud. An Associated Press review in March 2021 found that estimates ranged from $11 billion in fraudulent payments in California to several hundred thousand dollars in states such as Alaska and Wyoming.

      Read more at: https://www.kansascity.com/news/article258526188.html#storylink=cpy

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