The Fed's efforts to create a re set in the overheated real estate market have taken us to rarefied air.
Media is reporting rates at 8%, the highest in 23 years, but actually it's worse than that. I priced out a loan yesterday on some units im doing due diligence on, 20% down, 790 Fico rate was 8.625% 30 year fixed. Owner occupied 8%. Hard to cash flow unless prices start dropping by at least 20%. Which is not happening right now. I support the Feds efforts to bring prices and rents down but higher rates aren't going to create more inventory. I see a slight tightening of underwriting but no credit crunch in residential lending. An increase in widespread layoffs is still the missing ingredient.
On the flip side of the rate increases, sun is shining on investors, I saw a CD being advertised at 6.50% yield the other day. And the 10 year T Bill at is 4.98% and predicted to blow past the 5's soon. I have always said I'm not a CD guy but these rates are getting attractive.
Saw this vid after I posted below. If you have a few minutes, could you tell me what you think? Thanks
Not a gloom n doom guy, IMO. More of 'what if.'