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Tired of Waiting

15-Year Fixed-Rate Mortgage: 2.64%p.a.

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Average interest rate on a 15-year fixed-rate mortgage in the USA is now 2.64%p.a.

Could it happen here too?

IIRC the FED is supporting mortgages directly. Would Carney go for a similar policy?

In America these policies boost the construction industry, but here, with our planning bottleneck, they would just push house prices up IMO.

fredgraph.png?&id=MORTGAGE15US&scale=Left&range=5yrs&cosd=2008-04-18&coed=2013-04-18&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Weekly%2C+Ending+Thursday&fam=avg&fgst=lin&transformation=lin&vintage_date=2013-04-21&revision_date=2013-04-21

http://research.stlouisfed.org/fred2/graph/?g=hEc&utm_source=Twitter&utm_medium=SM&utm_campaign=Twitter

Edited by Tired of Waiting

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I think the FED has always supported mortgages in the US. I could be wrong but I think that is what Fanny Mae and Freddy Mac were set up for. It seems unfair to me because the wealthier people get supported by the poorer.

But the UK seems to be heading in that direction and if low interest rates continue, as seems likely, then it could happen here.

MIRAS was a sort of support for mortgages here and I believe that was blatently unfair.

I don't know much about US though, so perhaps I should shut up.

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I think the FED has always supported mortgages in the US. I could be wrong but I think that is what Fanny Mae and Freddy Mac were set up for. It seems unfair to me because the wealthier people get supported by the poorer.

But the UK seems to be heading in that direction and if low interest rates continue, as seems likely, then it could happen here.

MIRAS was a sort of support for mortgages here and I believe that was blatently unfair.

I don't know much about US though, so perhaps I should shut up.

I think you are right about Fanny Mae and Freddy Mac. I haven't been following the American case too closely neither. I'm just a bit concerned this Carney guy could try a similar thing here, underestimating the blockage in our planning system.

Not sure mortgage support helps mainly the rich over there though, as virtually everybody there can can afford a house - under normal circumstances. I think the sub-prime problem there was an exception, a consequence of this credit bubble, with people buying beyond their means.

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I think you are right about Fanny Mae and Freddy Mac. I haven't been following the American case too closely neither. I'm just a bit concerned this Carney guy could try a similar thing here, underestimating the blockage in our planning system.

Not sure mortgage support helps mainly the rich over there though, as virtually everybody there can can afford a house - under normal circumstances. I think the sub-prime problem there was an exception, a consequence of this credit bubble, with people buying beyond their means.

With the decrease of earnings in the middle class (US definition - households with annual incomes within 50 percent of the national median) and the increase in low-paid and / or temporary work, how many will be able to afford a house in future?

In 2012, 35% of households in the US were already renting.

Edit: splung

Edited by Snugglybear

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With the decrease of earnings in the middle class (US definition - households with annual incomes within 50 percent of the national median) and the increase in low-paid and / or temporary work, how many will be able to afford a house in future?

In 2012, 35% of households in the US were already renting.

Edit: splung

Over there house prices and interest rates are lower, and wages are higher.

Amongst those 35% many probably choose to rent, for practical reasons, such as flexibility.

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Over there house prices and interest rates are lower, and wages are higher.

Amongst those 35% many probably choose to rent, for practical reasons, such as flexibility.

and 10% of the population receive food stamps....god knows what percentage households that is.

In addition, there are huge property taxes that we dont pay, and tough lending criteria are now normal over there...IF what I read is true.

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and 10% of the population receive food stamps....god knows what percentage households that is.

In addition, there are huge property taxes that we dont pay, and tough lending criteria are now normal over there...IF what I read is true.

Rather interesting article from February last year "The End of Ownership: Why Aren't Young People Buying More Houses?" here http://www.theatlantic.com/business/archive/2012/02/the-end-of-ownership-why-arent-young-people-buying-more-houses/253750/

Check out the graphs.

How much has the situation changed in the last 15 months, I wonder. Oh, here we go for median household income http://www.aei-ideas.org/2013/03/us-median-annual-income-falls-1-1-in-february-down-6-since-the-start-of-the-recovery/ (from 2000 to 2013)

It must also be remembered that roughly 25% of the households in the US earn less than $25,000 dollars.

So it's not true that "virtually everybody" can afford to buy a house.

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America on the TV/media does not equal America on the ground.

saying that, widescreen has helped get more in shot.

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and 10% of the population receive food stamps....

That much? Are you sure?

god knows what percentage households that is.

Unless households on food stamps have less members than the average family, it will also be 10%, or lower.

In addition, there are huge property taxes that we dont pay, and tough lending criteria are now normal over there...IF what I read is true.

Tenants also pay the same property taxes, through the landlords.

I don't have any info about their lending criteria though.

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Rather interesting article from February last year "The End of Ownership: Why Aren't Young People Buying More Houses?" here http://www.theatlantic.com/business/archive/2012/02/the-end-of-ownership-why-arent-young-people-buying-more-houses/253750/

Check out the graphs.

How much has the situation changed in the last 15 months, I wonder. Oh, here we go for median household income http://www.aei-ideas.org/2013/03/us-median-annual-income-falls-1-1-in-february-down-6-since-the-start-of-the-recovery/ (from 2000 to 2013)

It must also be remembered that roughly 25% of the households in the US earn less than $25,000 dollars.

So it's not true that "virtually everybody" can afford to buy a house.

Interesting article, thanks.

But it is a bit biased on the pessimist side. For instance, the chart on marriage, "based on adults ages 18 and older", may be distorted by people getting married later, and by more people just living together now. The earnings chart was for men only, and ignores the increased number of double income households.

See the house prices chart - back on trend.

Add to that 15-Year Fixed-Rate Mortgage at 2.64%p.a. and affordability may well be at an all time high.

Besides, I think Americans are much more mobile than us, and people do move across the country for a better job - and probably for cheaper house prices as well.

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Interesting article, thanks.

But it is a bit biased on the pessimist side. For instance, the chart on marriage, "based on adults ages 18 and older", may be distorted by people getting married later, and by more people just living together now. The earnings chart was for men only, and ignores the increased number of double income households.

See the house prices chart - back on trend.

Add to that 15-Year Fixed-Rate Mortgage at 2.64%p.a. and affordability may well be at an all time high.

Besides, I think Americans are much more mobile than us, and people do move across the country for a better job - and probably for cheaper house prices as well.

AFFORDABILITY is what killed the golden goose.

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Even on a long term fixed rate? How?

getting it in the first place....remember

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getting it in the first place....remember

Just aim at what you can afford, low price / earning. Win-win all over the place.

Remember that America doesn't have our planning blockage, and the credit/HP bubble triggered a huge construction boom there. Their housing supply is huge, and prices are much lower than here.

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Just aim at what you can afford, low price / earning. Win-win all over the place.

Remember that America doesn't have our planning blockage, and the credit/HP bubble triggered a huge construction boom there. Their housing supply is huge, and prices are much lower than here.

There was also a huge move away from long term fixes in the run up to failure...OPtion ARMS were common with low teaser rates to get you on the ladder....all just fine as in two years, when the rate reverted, if you couldnt afford it, you simply moved to a new teaser or sold up with cash in hand.

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  • 238 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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