[Robojo]

Originally Posted by Normal

3 days ago Jamie Dimon stated 8% rates are in our near future. Most cannot argue this because national debt is climbing well past GDP. How will this affect life here in the Villages?

Jamie Dimon—Head Of U.S.’ Largest Bank—Warns Of 8% Interest Rates Along With Recession

Mortgage rates have already gone over 9%. I moved here in September and I'm renting because I'm not paying that.

[Cuervo]

If history is any roadmap in a free-market society price will increase as demand increases.
If demand decreases so will prices, but I do not see that happening in the near future, unless there is some unforeseen major even.
There are no more nickel candy bars.

[opinionist]

There are only two ways that accelerating government debt ends. Russia did a direct default on their debt and had to live without credit for years. The Weimar Republic printed money until a wheelbarrow of cash was needed to by a loaf of bread. The real inflation rate is a killer for quality of life. Savings in dollar denominated assets can be rendered worthless in terms of purchasing power. Savings in tangible assets hold their value but do not earn interest. Choose wisely.

[Romad]

Originally Posted by Boomer

Our worst was a 10% in 1979 and we were thrilled to get it. Had a couple of 8’s along the way.

But! The thing is now though that house prices are an obscenity.

Remember the days of not spending more on your mortgage than 25% of gross. (And that advice might have included taxes and insurance. It was a long time ago.)

One of our next generation just bought their first house. They had to go up a notch or two in price because landlords were grabbing up everything cheaper in the college town where they live. They are two-income, no student loans, good savers and had a 20% downpayment —but still the chase for that first house has been crazy times. A quote from them, “Now, nobody can raise our rent!”

Another of our next generation just bought one in CA. Holy Digits!!!

I read an article the other day about how we Boomers need to get the hellouta the way so our houses will be for sale. Bashing Boomers seems to be the name of a rather popular game recently. (sigh)

Boomer

If there was real interest to increase the housing stock, there would be more pushes to end short term rentals. Instead, there are ridiculous articles in the WSJ about Boomers.

[Vermilion Villager]

Originally Posted by Shipping up to Boston

Hopefully it doesn’t end up like ‘08....lot of young people back then bailed and left the keys in the front door on their way out

Different in '08. Then people had mortages but couldn't afford the payments when the interest rate on their adjustable rate mortages kicked in. Now you either have a mortage or you don't. If you do it's probably low rate....if its a low rate you're not going anywhere unless you can pay cash.

[jimjamuser]

Originally Posted by Normal

Thank you autocorrect lol. Dimon knows what he is doing and sometimes yes, sometimes no. But most agree national debt is climbing well past sustainable levels. Something will give.

People tend to get overly "twerped out" about national debt (usually to blame some Washington organization or another) US nation debt is basically owed to the citizens of the US. It is like some people think that the world is going to leave relying primarily on the US Dollar and move to the Chinese currency--------NOT in our lifetimes.

[jimjamuser]

Originally Posted by Randall55

High interest rates mean new retirees may not be able to sell their homes in order to move to the Villages. For those who sell with a sizable profit, investing instead of buying a home is a good option. I am starting to see more year-round renters.No large down payment and maintenance-free living is the attraction.

And at the end of 5 years, you own NO home and can be comforted by swimming in rent receipts. The whole thing has ALWAYS been a trade-off.

[jimjamuser]

Originally Posted by Craig Vernon

Your point is also 100% correct. Smart buyers are not willing to pay all the costs related for their purchase but can still live the dream with less stress. This means the value of the villages is questionable in the current economic environment.

It is difficult to evaluate the pride and stability of home ownership. Some home owners might consider RENTERS to be like vagabonds.

[jimjamuser]

Originally Posted by Normal

Deficits don’t, but debt does. Don’t confuse the two. Spending problems and debt are totally different.

I worry more about population growth worldwide and in the US more than interest rates. And population growth (of both kinds) affects government spending.

[jimjamuser]

Originally Posted by Boomer

Our worst was a 10% in 1979 and we were thrilled to get it. Had a couple of 8’s along the way.

But! The thing is now though that house prices are an obscenity.

Remember the days of not spending more on your mortgage than 25% of gross. (And that advice might have included taxes and insurance. It was a long time ago.)

One of our next generation just bought their first house. They had to go up a notch or two in price because landlords were grabbing up everything cheaper in the college town where they live. They are two-income, no student loans, good savers and had a 20% downpayment —but still the chase for that first house has been crazy times. A quote from them, “Now, nobody can raise our rent!”

Another of our next generation just bought one in CA. Holy Digits!!!

I read an article the other day about how we Boomers need to get the hellouta the way so our houses will be for sale. Bashing Boomers seems to be the name of a rather popular game recently. (sigh)

Boomer

The problem with housing has ALWAYS been, "I have mine now I will support legislation that keeps you-all riff-raff out of my neighborhood". "And no dome homes because they look too modern." And don't even think like Europeans and build FINE HOMES on a factory line. I suppose it all boils down to social inertia and lack of imagination.

[jimjamuser]

Originally Posted by Boomer

The big and important difference now is that buyers have to actually qualify for mortgages.

I could see that mess coming when all that was going on. I am not an economist. It was so obvious.

Money was too damned cheap and easy. Mortgage brokers were allowed to run amok with drive-by appraisals and stated assets loans. Then came the derivatives. That whole ugly mess was the result of pure unrestrained greed — all around.

Boomer

I remember derivatives and the "GENIUS" that gave his blessing. Something always seemed wrong about the concept.

[jimjamuser]

Originally Posted by Blueblaze

Most of my life, mortgages have been over 8%. My first as over 18%. And for 100 years prior to the housing market crash, you could get 4.25% in any passbook savings account -- and that was 3% over the inflation rate. I'm finally making 5% again in the money market, with inflation running about the same. It ought to be more like 7-8% in this inflation. I can't imagine why anyone thinks a 3% mortgage is normal. For crying out loud, my grandfather's $5000 mortgage on his 2-bedroom 1910 Craftsman was 5%, 85 years ago!

Abnormal has been a disaster. How about we try NORMAL again?

I had a College Professor say to my class that, "Interest rates have ALWAYS been 3% above inflation."

[jimjamuser]

Originally Posted by Randall55

When you purchase a home you have tax issues in the form of property taxes and bond. No one is going to escape taxes. Renting is not for everyone but it does have many advantages when interest rates are high. Our social security checks pay for all of our expenses. We have not had to spend a dime of our savings and it is earning great interest. Not likely home prices are going to surge anytime soon. If they do, we will simply buy a small home. We sold our larger home with a pool for a sizeable profit and downsizing has not been an issue for us. We are loving the maintenance-free life.

There are more things to consider in the rent or own scenario than just the financial angle. I like to cut my own grass, many people do not. If I rented and I wanted to plant a large tree or do ANY LANDSCAPING, I could NOT. In order to paint a driveway, I have to OWN that driveway. What if I want a medium large dog and my rental agreement says, "NO DOGS". Many people like to spend LARGE amounts of time playing golf, so they pay for a lawn service to give them the time.......I do NOT.

[jimjamuser]

Originally Posted by Randall55

We sold our home for double the amount we paid. We KNOW that was nothing but a stroke of luck. At this time, we are not willing to spend our money in real estate because we believe home prices will continue to fall. Everyone chooses what they believe is best for them. We are enjoying a maintenance free life and travelling. We will have no regrets no matter which way home prices go.

A perfect example - traveling is educational and exciting, but it is usually expensive. Each person picks slightly different priorities.

[jimjamuser]

Originally Posted by JRcorvette

The reckless way our Government is spending and wasting money our dollar will be devalued and will no longer be the world’s currency. We spend money on so many stupid things and have not had a Budget since I can’t remember. You all better be out of debt in your personal life if you want to survive what’s going to happen!

We will be long DEAD and the DOLLAR will STILL be the world's currency.