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Thread: Interest rates in the coming months

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    Default Interest rates in the coming months

    Hello everyone,

    As of yesterday, I am in the midst of closing on my first home. I was pre-approved over the summer at 3.25%, so that is in my contract and I can't get out my current contract unless interest rates jump higher than that.

    On Monday, I was quoted by the bank 2.75% with 1.125 in points. I couldn't lock-in my interest rate because it would expire before our planned closing date and then I would be stuck paying another 1% in extension fee. And the sellers will probably need to extend closing anyway. I am really hoping to keep 2.75% as with the current market I ended up stretching my budget. It's still manageable, but the difference in monthly payment between 2.75 and 3.25 is significant. Today interest rate was 2.75% with 1.25 points. Still not a lot, but it's a jump and making me nervous.

    Now the bank also has me nervous about waiting to lock-in because of the election. Does anyone have any kind of sense of how the election will affect interest rates? The only reason I got my house was because I promised to be 100% flexible on closing, although this 1% fee was a surprise, I thought closing flexibility only meant moving!! Anyway, does anyone have any thoughts about what I should do? I'm generally really good at managing my finances but all this is a bit over my head and I getting a little desperate for any kind of guidance. I have excellent credit and will get the best interest rate available.

    I'm thinking if the election rate is not close, interest rates may stay low or at least steady and if the election is close and goes to court the instability will make interest rates shoot up?

    Thanks in advance.
    Now he said it a third time, and Ona drew a deep breath;

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    God/dess Zofia's Avatar
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    Default Re: Interest rates in the coming months

    Very little depends on the election and a lot depends on the economic recovery. If the Fed starts to sense inflationary pressure, they will raise rates. With 7+% unemployment, no matter how good corporate profits are, the Fed won't raise rates.

    HTH
    Z

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Zofia View Post
    Very little depends on the election and a lot depends on the economic recovery. If the Fed starts to sense inflationary pressure, they will raise rates. With 7+% unemployment, no matter how good corporate profits are, the Fed won't raise rates.

    HTH
    Z
    Thanks. I ended up locking in today at 2.75% with 1.125 points and I am praying to God the sellers don't need to push back closing.
    Now he said it a third time, and Ona drew a deep breath;

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    Default Re: Interest rates in the coming months

    Short term - Stable.
    Long Term- Up , up and away !
    A
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    Teddy Roosevelt

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    Default Re: Interest rates in the coming months

    You got a great rate !

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    Default Re: Interest rates in the coming months

    Sellers pushed back closing a month. Hopefully interest rates stay low so I can let my current lock-in rate expire and get a new one that is as good.
    Now he said it a third time, and Ona drew a deep breath;

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    Default Re: Interest rates in the coming months

    Interest rates are starting to go UP !
    A
    The credit belongs to the man who is actually in the arena... who, at the best, knows in the end the triumph of high achievement, and who, at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those timid souls who know neither.
    Teddy Roosevelt

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    Default Re: Interest rates in the coming months

    The other day, Janet Yellen , Biden's Treasury Secretary, let her slip show concerning interest rates and inflation. She said that inflation would be going up and that interest rates would also rise as a result. The Stock Market reacted with a 300 point drop in the Dow. In an obvious panic and almost bearing visible marks of a quick trip to the woodshed, she tried and failed to walk back her remarks and say that the Biden Administration was not anticipating inflation or increased interest rates. If anyone seriously thinks that injecting 4 , 5 or even 6 Trillion dollars into the economy is not going to result in inflation or even hyper-inflation as we had under Carter, there are several bridges for sale. Cheap ! Oh and a LOT of bonds whose prices are getting ready to collapse.
    Inflation results from too few dollars chasing too few goods. Today; right now, we have shortages of ketchup , chicken , MICROCHIPS among a long list of durable and consumer goods. Other products in short supply from either or both bottlenecks or decreased production include :
    1. Drugs and medications. Both prescription and OTC.
    2. Consumer electronics and appliances
    3. Garlic. GARLIC ? Yep.
    4. Vaping devices
    5.Auto parts and automobiles themselves. Hmmm. Just in time for Summer driving season and graduation presents. Some of the shortfall in car and truck production is a direct result of the microchip shortage.
    6. Solar panels. Uh oh . Better wake Biden up from his morning nap and tell him.
    7. Toys and games. OK, Don't panic. YET ! Black Friday is more than six months away.
    8. T-shirts and socks. What is that about ?
    9. Air Conditioners - both central and window units. Just in time for Summer.
    10. Wood. All kinds of hard and soft woods affecting construction and manufacture of numerous products.
    11. In many parts of the country rents and home prices are way up.
    12. Food prices in general are up substantially.
    13. Getting to the grocery store and other places is more expensive thanks to higher fuel prices.

    Some of the above is a result of manufacturing failing to keep up with demand. A problem magnified when many workers can net more by staying home and collecting a government check than by working. Another big piece of the problem are supply bottlenecks. I saw part of the problem myself a few weeks ago when I was in Ft. Lauderdale. Port Everglades is a large and busy port next door to Lauderdale. Inter alia it is where all the cruise ships tie up. There were not enough berths for all the ships waiting to dock so they would anchor about a mile offshore for DAYS waiting for a slot to open up. In some cases they could dock but would then have to wait DAYS to be offloaded. So rather than pay substantial docking fees they chose to anchor offshore. Another big problem is we have a shortage of truck drivers. We are about 25% below what we need. Again , many drivers can make more sitting at home than on the road.

    Fasten your seatbelts and please return your flight attendant to his or her upright position lol.
    Last edited by Eric Stoner; 05-07-2021 at 08:51 AM.
    A
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    Teddy Roosevelt

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    Default Re: Interest rates in the coming months

    Told you. Told you. CPI is up 5%. Keep those seatbelts fastened.
    A
    The credit belongs to the man who is actually in the arena... who, at the best, knows in the end the triumph of high achievement, and who, at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those timid souls who know neither.
    Teddy Roosevelt

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    Default Re: Interest rates in the coming months

    Yep, the unemployment rate is falling. 5.8% last month. Unemployment benefits are keeping some people from filling jobs that are out there, so pay is rising. In about half the states, supplemental unemployment benefits are ending this month, so we will see if that helps or hurts the unemployment numbers. If the numbers continue to fall, as I expect they will, I expect the Federal Reserve to start raising interest rates in late summer or early fall.

    Z

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    Told you. Told you. CPI is up 5%. Keep those seatbelts fastened.
    This was expected. There's been major disruptions in the supply chain, due to the pandemic.

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Zofia View Post
    Yep, the unemployment rate is falling. 5.8% last month. Unemployment benefits are keeping some people from filling jobs that are out there, so pay is rising. In about half the states, supplemental unemployment benefits are ending this month, so we will see if that helps or hurts the unemployment numbers. If the numbers continue to fall, as I expect they will, I expect the Federal Reserve to start raising interest rates in late summer or early fall.

    Z
    This will also probably depend on whether or not prices stabilize, especially with microchips.

    https://www.cnbc.com/2021/05/07/chip...sequences.html

    Also, from what I've read, it could take a year or more for the housing supply to catch up with demand.

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    Default Re: Interest rates in the coming months

    One product that has not only not gone up in price, but prices have plummeted over the past year, are Trump condominiums. Some are selling now, for less than what they were selling for ten years ago.

    https://apnews.com/article/donald-tr...66fdd5332e71ce

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by eagle2 View Post
    One product that has not only not gone up in price, but prices have plummeted over the past year, are Trump condominiums. Some are selling now, for less than what they were selling for ten years ago.

    https://apnews.com/article/donald-tr...66fdd5332e71ce
    Wtf does that have to do with anything that affects the readers of THIS board ? We all know you have a pathological hatred for anything and everything Trump. Btw, does that include the Covid vaccines ?

    Trump's properties were all overpriced anyway. Now that his name has lost its cachet and is even a negative , apartments and condos in Trump labeled buildings have gone down in price. Except in Florida.
    A
    The credit belongs to the man who is actually in the arena... who, at the best, knows in the end the triumph of high achievement, and who, at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those timid souls who know neither.
    Teddy Roosevelt

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by eagle2 View Post
    This was expected. There's been major disruptions in the supply chain, due to the pandemic.
    There are a few kernels of truth there . The truck driver shortage ( we are down 25% ) is certainly causing shortages of goods. Couple short supplies with too much money sloshing around the economy and you get classic inflation. Oil prices have gone up because the Bidenettes have restricted supply.
    A
    The credit belongs to the man who is actually in the arena... who, at the best, knows in the end the triumph of high achievement, and who, at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those timid souls who know neither.
    Teddy Roosevelt

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    Wtf does that have to do with anything that affects the readers of THIS board ? We all know you have a pathological hatred for anything and everything Trump. Btw, does that include the Covid vaccines ?

    Trump's properties were all overpriced anyway. Now that his name has lost its cachet and is even a negative , apartments and condos in Trump labeled buildings have gone down in price. Except in Florida.
    There could be people here who are interested in how Trump's businesses are doing, or if anyone is looking to buy a condo at a very low price, condos in buildings with the Trump name on it can be bought at a price way below market value. My reaction to Trump is the reaction of any normal person to all of the horrific things he's said and done. That's why nobody wants to by a condo in a building with the Trump name on it.

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    There are a few kernels of truth there . The truck driver shortage ( we are down 25% ) is certainly causing shortages of goods. Couple short supplies with too much money sloshing around the economy and you get classic inflation. Oil prices have gone up because the Bidenettes have restricted supply.
    You said the same thing about the money supply ten years ago, and inflation never exceeded 2 or 3 percent. Biden hasn't restricted any supply. Oil production in March was higher than it was in any of the five previous months.

    https://www.eia.gov/dnav/pet/pet_crd...adc_mbbl_m.htm

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by eagle2 View Post
    There could be people here who are interested in how Trump's businesses are doing, or if anyone is looking to buy a condo at a very low price, condos in buildings with the Trump name on it can be bought at a price way below market value. My reaction to Trump is the reaction of any normal person to all of the horrific things he's said and done. That's why nobody wants to by a condo in a building with the Trump name on it.
    Trump's buildings are not the only ones with overpriced units that are going begging. Harry Macklowe is having major trouble moving units in 1 Wall Street. Downtown Manhattan has shifted since 9/11 from business and commercial to residential. Many office buildings including some well known iconic addresses ( 40 Wall ; 70 Pine ) were converted to condos.
    A
    The credit belongs to the man who is actually in the arena... who, at the best, knows in the end the triumph of high achievement, and who, at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those timid souls who know neither.
    Teddy Roosevelt

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by eagle2 View Post
    You said the same thing about the money supply ten years ago, and inflation never exceeded 2 or 3 percent. Biden hasn't restricted any supply. Oil production in March was higher than it was in any of the five previous months.

    https://www.eia.gov/dnav/pet/pet_crd...adc_mbbl_m.htm
    John Catsimatidis who is IN the oil biz ( among several others ) predicted $70 a barrel oil months ago and has been proven right. Are you seriously saying that cancelling the Keystone pipeline and restricting drilling is NOT going to affect oil prices ? And higher oil prices affect other prices because it costs more to move goods and those prices are passed along to the consumer.
    A
    The credit belongs to the man who is actually in the arena... who, at the best, knows in the end the triumph of high achievement, and who, at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those timid souls who know neither.
    Teddy Roosevelt

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    Default Re: Interest rates in the coming months

    Another "Told You ". The Producer Price Index for May jumped up 6.6 %. This means inflation will get worse. Much worse.
    A
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    Teddy Roosevelt

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    Another "Told You ". The Producer Price Index for May jumped up 6.6 %. This means inflation will get worse. Much worse.
    Again, this was expected, due to issues in supply chains. A major factor is the microchip shortage.

    https://www.cnet.com/news/whats-real...n-will-it-end/

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    John Catsimatidis who is IN the oil biz ( among several others ) predicted $70 a barrel oil months ago and has been proven right. Are you seriously saying that cancelling the Keystone pipeline and restricting drilling is NOT going to affect oil prices ? And higher oil prices affect other prices because it costs more to move goods and those prices are passed along to the consumer.
    It's not. There was no Keystone Pipeline last year when gas was $2.40 a gallon, and oil producers have the same access to domestic oil fields as they did last year, when gas was $2.40 a gallon.

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by eagle2 View Post
    It's not. There was no Keystone Pipeline last year when gas was $2.40 a gallon, and oil producers have the same access to domestic oil fields as they did last year, when gas was $2.40 a gallon.
    What about the restrictions on drilling ?

    Cancelling the Keystone pipeline just means that the oil will be shipped by train or truck. More expensive ways of moving the same product.
    A
    The credit belongs to the man who is actually in the arena... who, at the best, knows in the end the triumph of high achievement, and who, at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those timid souls who know neither.
    Teddy Roosevelt

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