I got an email yesterday telling me times have never been better to refinance my home. They swore that they could get me a number that was more than double my current rate.
Never been better for banks maybe. I refinanced during the pandemic and went from a 30 year to a 15 and barely changed my monthly payment.
That’s normal. You either cut years or cut monthly payment. Very rarely both unless rates are actively dropping.
A 15 yr saves you six figures over a 30 yr iirc so congrats!
I mean they are literally just taking your money and telling everyone it’s a good thing. Fucking wild man. My buddy has a second property that went up from $1700 a month to $2700. Insane. That some private entity can one day decide people have too much money and just literally take it.
And capitalism is the way???
There seems to be a lot of context missing because this does not make sense. A private entity has no say in what you pay after you purchase a property. Unless there is a private entity doing tax assessments. Which I’m hoping would be extremely unusual but I’m only familiar with the process in my area.
ARMs can go up. Generally not a great mortgage to get
That has nothing to do with private entities.
Probably the payment went up because of the taxes or insurance. Or maybe they didn’t have an escrow account and didn’t pay taxes or insurance and it was force placed.
If you have a variable rate it could also go up for that reason. But most people when rates were low had fixed rate mortgages.
Could be fixed rate that expired and had to be renewed, but with a new rate.
In the US a fixed rate does not expire. At the end the loan has been repaid. I do not know of they are in the US.
How does that work? You take a loan, negotiate a rate (say 3%) upfront, and you have this rate as long as the loan is not payed?
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How did Zillow do this?
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I’m not saying he’s right, but Zillow started buying a ton of properties during the pandemic for significantly more than they were really worth in the hopes of flipping them for even more money.
Zillow over payed for houses, then couldn’t sell them as quickly as expected because the COVID housing market took a down turn, and so they sold them at a loss, lost millions of dollars, and closed the house buying business. They also made plenty of low offers or under-payed for houses at times. They were trying to break even on home value on the hole, but couldn’t reign in the wild swings of gains and losses. Their entire business model was based on the seller fees, not on the house value.
In any case, they closed that business in 2021, and has since sold the rest of their inventory.
I don’t see how that would have a lasting effect on housing prices though. I’d attribute it more to a housing shortage due to people buying up real estate, and keeping it as rentals. Even when operating, Zillow aimed to resell houses within 3 months, not hold on to them as investments.
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“That’s what one real-estate agent claims in a video that went viral on the social-media platform TikTok”
Hardly a compelling source.
" he’s suggesting that companies such as Zillow are using the data they glean from people’s perusal of home listings on their sites to make decisions about which houses to buy as iBuyers."
Based on what exactly? Zillow used publicly available information about houses, just like everyone else does. Zillow traffic patterns had nothing to do with it and really wouldn’t even be useful for that. Buying decisions were based on home value and forecasted ability to resell, not derived interest based on page views.
“Gotcher later argues that the company will buy 30 homes at one price, and then purchase a 31st home at a higher price. “What that just did is create a new comp,””
False. Zillow literally excluded houses that it bought from its comps to avoid that bias. I know because I wrote that code.
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Why does it not crash?
Too many companies with deep pockets buying everything up to rent and then never selling. Once a company buys it, it’s pretty much off the market forever unless that company goes bankrupt but then they either get a bailout or another company buys that one for cheap.
It never will. If it so much as dips, the ultra wealthy will buy up everything they can find, inflating it once again.
Regulations could stop it easily, but profits are apparently more important.
Along with what the other comment said, all the people that are buying that aren’t corporations can actually afford the house they’re buying largely due to the WFH change so they all moved out of cities with their large salaries and moved to low cost of living places, took all the affordable housing and since there’s no economic collapse they will continue to be ok (thankfully I guess?) so there won’t be a housing crisis other than the unaffordability crisis which isn’t a crisis to capitalists it’s just a feature of their market based system.
The solution “the market” chose was neofeudalism… Can’t buy, only rent. “I take your income forever and continuously raise the rent until you can’t afford it and then the next schmuck moves in. Where you go, who cares? Not my problem.” Lovely society we have…
Why would it crash?
There’s near limitless demand and deliberately limited supply. Any dips will come from lack of affordability on lending as interest rates rise, but you’re talking hyperinflation for an actual crash.
So the house prices might drop by 20%, but you’ll be able to borrow 20% less. So if you’re fucked before any price drops, you’re still fucked afterwards.
Just 13 years?
Was about to say. Why kind of not 30 year fixed loans are they offering now?
Even paying an extra 1/4 of my mortgage monthly only reduces it to like 22 years vs 30 lol.
It isn’t the amount of time it takes to pay off the house. It is the time it takes not to loose money on selling a house. The number was about 5 years when I purchased my home. You take the selling price of your home subtract the mortgage, taxes, and realtor fees. It now takes 13 years before you can sell your house and break even. This just makes investing in homes worse. It also makes buying a home more risky and inflexible.
Ahhhh now I get what you mean. Thanks for the clarification.
