[Topspinmo]

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

8% piece cake to 25% increase in maintenance fees in certain district. Next year it will be more.

[Topspinmo]

Originally Posted by coralway

Deficits don't matter ............ Dick Cheney

Well they sure don’t matter now do they.

[Normal]

Originally Posted by coralway

Deficits don't matter ............ Dick Cheney

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

[Boomer]

Originally Posted by vintageogauge

Over the years I had plenty of mortgages well over 8%, one was 14%, you go with the flow and re-finance later. The economy survived then and it will survive now.

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

[Shipping up to Boston]

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, so not sure.)

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 iseems to be the name of a game recently. (sigh)

Boomer

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

[Pairadocs]

Originally Posted by Dusty_Star

Jamie Dimon - meh. Jamie Dimon's interest rate calls haven't panned out too well in the past.
https://news.futunn.com/en/post/4057...redictions-for

True. At one time I followed him, his career, and predictions/comments. In the recent past years, while he is still active as CEO of Chase, to me he now often acts like many faded politicians; desperately grasping to make himself relevant, a headliner, once again make the covers of leading business publications. Movie stars and politicians seem to do that same once they are no longer THE focus of the moment. Just think these types get addicted to "fame", and subsequently will make attention getting statements... !

[Pairadocs]

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.

Yes, national debt is a separate subject that Dimon's or anyone else's remarks concerning their own personal opinions. As for national debt, for decades regardless of party in power, they have just "kicked the can" further down the street. The people speak, they change the party in power (as our form of government is set up to do), and again, no SERIOUS attempts are made to address the problem and INEVITABLE conclusion of this, and all, Ponzi schemes. Both political parties, like ALL politicians around the world, depend on the people fighting and arguing among themselves as to which party is to blame. It is 100% effective, always has been, rather Germany, Russia, Italy, etc. It proves you can "fool all of the people all of the time" because issues like this one, national debt, just keep rolling, and there are always very genuine "excuses", such as Covid, or the 911 attack, and so on. There will always be a serious situation, so (perhaps) there will always be a growing national debt ! ?

[Boomer]

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

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

[Pairadocs]

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.

It is ! I have never in my experience heard so many home owners who have long ago paid off their mortgages, tell me they are considering NOT purchasing their retirement homes, but intend to rent indefinitely. Many advantages true, however, seems like that would also present a lot of tax issues ? ? Would take a lot "pencil pushing" to come up with an accurate answer to which is the "best" financially !

[Shipping up to Boston]

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

Agree

[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?

[rjm1cc]

The higher the interest rate the more home prices will be depressed as their is only so much a buyer can spend each month.
But then the builder may buy down the rate and increase the price of the home. Since the home is new and does not need a new roof or painting the new homes could be a better deal than a resale so resale prices maybe depressed.
At any rate as the interest rate goes up costs will go up.

[kkingston57]

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

To answer your ? probably zero. Most people in TV do not have mortgages. Conservative investors will get 5-6% on super safe investments. etc

[tophcfa]

Dimon is prediction 8% UST rates, which would translate to about 9.5 - 10% mortgage rates. Very high by averages since around 2008, but not very high relative to long term averages before then (when individuals, the country, and most of the developed world were not addicted to unsustainable levels of debt). I read an interesting analogy correlating inflation to weight. It's very easy to get addicted to the lifestyle that both fuels inflation and makes one overweight, but very difficult to have the long term discipline to keep both under control. Just like an unpleasant diet that helps one loose weight, the necessary steps to bring down inflation are also difficult to cope with. And just like a diet, when the weight comes off, one can't go back to the same old lifestyle or it will just come roaring back. High interest rates aren't necessarily a bad thing, they are just the result of many years of undisciplined fiscal and monetary choices. When inflation finally does come under control, the knee jerk reaction to again lower rates to historically low levels is a very bad idea.

[Randall55]

Originally Posted by Pairadocs

It is ! I have never in my experience heard so many home owners who have long ago paid off their mortgages, tell me they are considering NOT purchasing their retirement homes, but intend to rent indefinitely. Many advantages true, however, seems like that would also present a lot of tax issues ? ? Would take a lot "pencil pushing" to come up with an accurate answer to which is the "best" financially !

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.