What Happnes when we see 9 or 10 percent mortgage rates

Quote from lasner:

I was too young back then but I'm assuming nobody bought back then...and nobody sold unless they had to. I can't imagine anyone buying a house a normal price at a 20% mortgage rate
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I was in kid in the 70s. But my parents moved 3 times. Assumable mortgages were big. I specifically remember my Dad saying he would buy a particular house if he could get a 9% mortgage. (it was during carter's time.) The democrats drove the misery index higher and higher until Volker and Regan changed things.
 
US mortgage rates never hit 15% in the 80's or at any other time. Under Volcker's watch The Fed pushed the prime rate to 21.5%.

You are confusing 20 and 30 year money with 90 day money.


Quote from jprad:




You obviously aren't old enough to remember the early 80's when mortgage rates were well above 15% and peaked at over 20%.

Real estate prices didn't plummet then...
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Quote from Swan Noir:

US mortgage rates never hit 15% in the 80's or at any other time. Under Volcker's watch The Fed pushed the prime rate to 21.5%.

You are confusing 20 and 30 year money with 90 day money.
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Nope.

Here's the FreddieMac weekly rates. Spot rates according to locale and lender were higher.

http://www.nahb.org/search_simple.a...rest+rate&submit.x=0&submit.y=0&submit=submit

Weekly Mortgage Rates 15 and 30 Year

Here's the dates when their rate went above 15%, the peak, and when it dropped back below.

01/30/81 15.07%
10/09/81 18.63%
10/01/82 15.13%
 
Quote from peilthetraveler:

a 200k home at 5% interest rates has the same payment as a 100k home at 10% interest rates.
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No it's not, not even close. That's the problem with this board, too many ignorant know-it-alls.
 
Quote from lasner:

I was too young back then but I'm assuming nobody bought back then...and nobody sold unless they had to. I can't imagine anyone buying a house a normal price at a 20% mortgage rate
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I bought my first house in the late 70s as I recall. 20% down. I looked around for a mortgage, most of the rates were around 12%+....but I finally found a savings & loan where the rate was 11.75 %, which I snapped up. I felt like I screwed them. LOL. The rates went up from there. My brother bought his first house with 14% interest rate. A few years later I sold my house for a small profit, to a guy who assumed my loan. My rate was a bargain.

OldTrader
 
Quote from OldTrader:

I bought my first house in the late 70s as I recall. 20% down. I looked around for a mortgage, most of the rates were around 12%+....but I finally found a savings & loan where the rate was 11.75 %, which I snapped up. I felt like I screwed them. LOL. The rates went up from there. My brother bought his first house with 14% interest rate. A few years later I sold my house for a small profit, to a guy who assumed my loan. My rate was a bargain.

OldTrader
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Though I was a kid in the 70s, I do have experience in the mortgage industry and heard a lot from "old timers." :D

Anyway, I remember hearing that assumable mortgages were quite common, and in the end, the banks suffered for it. Imagine being a bank, lending on a home at 9%, and then rates go to 15%. Your borrower assigns the mortgage/note to someone else, and the bank loses out on a potential higher rate loan.

Since then, all mortgages - except for some VA I believe - have a "due on sale" clause. That is, the entire note is callable when ownership is transferred.
 
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