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The Masked Tulip

Us Average Mortgage Payments Shoot Up 40% In The Past Month

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I think that is what this Zerohedge article is saying - I admit to only glancing the article as I am fed up seemingly being told to buy gold whenever I go to ZH.

Anyhow, apparently the average payment has shot up from 800 bucks per month to 1100 - 40% increase.

http://www.zerohedge.com/news/2013-07-29/chart-day-monthly-home-payment-soars-40-2008-levels

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I think that is what this Zerohedge article is saying - I admit to only glancing the article as I am fed up seemingly being told to buy gold whenever I go to ZH.

Anyhow, apparently the average payment has shot up from 800 bucks per month to 1100 - 40% increase.

http://www.zerohedge.com/news/2013-07-29/chart-day-monthly-home-payment-soars-40-2008-levels

Bear in mind that this is for a 30-year fixed rate mortgage..

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Housing isn't the economy....

Still why would you want to spend $300 in the wider economy when you can give it to the nice banker to speculate with?

So to get the payments affordable again prices need to decline?

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I think that is what this Zerohedge article is saying - I admit to only glancing the article as I am fed up seemingly being told to buy gold whenever I go to ZH.

It is a little tedious I grant you.

However,they do have some stimulating lines of thought.

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Business Insider 22/7/13 have a different emphasis on what must be the same report.

'From Credit Suisse's Neal Soss:

Rising mortgage rates have done nothing to slow down momentum in home buying, in our view. If anything, this may be propelling those sitting on the fence. June existing home sales should hit the highest non-homebuyer tax credit level in six years. June new home sales should rise to a five-year high.'

Edited by Sancho Panza

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I think that is what this Zerohedge article is saying - I admit to only glancing the article as I am fed up seemingly being told to buy gold whenever I go to ZH.

Anyhow, apparently the average payment has shot up from 800 bucks per month to 1100 - 40% increase.

http://www.zerohedge...-40-2008-levels

you should stock up on gold

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Business Insider 22/7/13 have a different emphasis on what must be the same report.

'From Credit Suisse's Neal Soss:

Rising mortgage rates have done nothing to slow down momentum in home buying, in our view. If anything, this may be propelling those sitting on the fence. June existing home sales should hit the highest non-homebuyer tax credit level in six years. June new home sales should rise to a five-year high.'

Oh yeah, right...banker selling mortgages says sales will boom...except:

http://www.bloomberg.com/news/2013-07-29/u-s-stock-index-futures-drop-before-house-sales-report.html

BREAKING NEWS

U.S. Stocks Decline as Pending Home Sales Slipped in June

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I think that is what this Zerohedge article is saying - I admit to only glancing the article as I am fed up seemingly being told to buy gold whenever I go to ZH.

Anyhow, apparently the average payment has shot up from 800 bucks per month to 1100 - 40% increase.

Just a note, for those who have bought, they are on 30 years fixed and the payment stays the same for 30 years. It is someone who tries to buy now who will suffer from the new rates.

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Bear in mind that this is for a 30-year fixed rate mortgage..

That thought occurred to me, too. The vast majority of mortgages in the US are fixed rate for 15 years or more: usually for the length required to pay off the entire mortgage. Although homeowners will 're-fi' (i.e. transfer their existing mortgage to a new lender) if there is an attractive enough deal for them to do so, they sure as hell won't if there isn't. So is this quoted increase in the average payment what people are actually paying, or the monthly payments on the new mortgages being lent here and now as distinct from those being lent this time last month? I'm assuming that it has to be the latter.

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Just a note, for those who have bought, they are on 30 years fixed and the payment stays the same for 30 years. It is someone who tries to buy now who will suffer from the new rates.

Straight over the head.

People are buying on Affordability...

So a person that could afford a $300,000 house, now has the ability to only buy a $240,000 house. ( something like that)...a leveraged asset loses value at the rate that newcomers can afford to pay

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That thought occurred to me, too. The vast majority of mortgages in the US are fixed rate for 15 years or more: usually for the length required to pay off the entire mortgage. Although homeowners will 're-fi' (i.e. transfer their existing mortgage to a new lender) if there is an attractive enough deal for them to do so, they sure as hell won't if there isn't. So is this quoted increase in the average payment what people are actually paying, or the monthly payments on the new mortgages being lent here and now as distinct from those being lent this time last month? I'm assuming that it has to be the latter.

This was one of the causes of the original sub prime/mortgage modification problems in that some less astute customers signed off their thirty year fix from Fannie to take a product with an enticing two year teaser rate.Then,a few years later,negative amortization had ramped up the principal and where once there was a near prime/prime mortgage with a 30 year fix,there was a sub prime junkie with a bleeding PAY Option ARM,needing a fix.

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