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Thread: US mortgage rates jump to 2-year high of 4.46 pct.

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    Default US mortgage rates jump to 2-year high of 4.46 pct.

    http://www.boston.com/business/perso...N/story-1.html

    By MARCY GORDON and ALEX VEIGA / AP Business Writers / June 27, 2013
    WASHINGTON (AP) — U.S. mortgage rates have suddenly jumped from near-record lows and are adding thousands of dollars to the cost of buying a home.

    The average rate on the 30-year fixed loan soared this week to 4.46 percent, according to a report Thursday from mortgage buyer Freddie Mac. That’s the highest average in two years and a full point more than a month ago.

    The surge in mortgage rates follows the Federal Reserve’s signal that it could slow its bond purchases later this year. A pullback by the Fed would likely send long-term interest rates even higher.

    In the short run, the spike in mortgage rates might be causing more people to consider buying a home soon. Rates are still low by historical standards, and would-be buyers would want to lock them in before they rise further.

    But eventually, more expensive home loans could price some people out and slow the housing market’s momentum, which has helped drive the U.S. economy over the past year.

    ‘‘People are getting off the fence a little bit more or choosing to buy now instead of choosing to buy three months from now,’’ said Anthony Geraci, a Cleveland real estate broker-owner who says he’s seeing more sales activity lately in his market.

    Mortgage rates are rising because they tend to track the yield on the 10-year Treasury note, a benchmark for most long-term interest rates. The 10-year yield began rising from near-record lows in May after speculation grew that the Fed might be closer to reducing its bond purchases.

    In early May, the average rate on a 30-year mortgage was 3.35 percent, just above the record low of 3.31 percent.

    But rates began to surge — and stocks plunged — after Fed Chairman Ben Bernanke made more explicit comments last week about the Fed’s plans. He said the Fed would likely scale back its bond buying later this year and end it next year if the economy continued to strengthen.

    The rate on 30-year loan soared from 3.93 percent last week to 4.46 percent this week — the biggest one-week jump in 26 years.

    The effect on buyers’ wallets in just the past two months is striking.

    A buyer who locked in a 3.35 percent rate in early May on a $200,000 mortgage would pay $881 a month, according to Bankrate.com. The same mortgage at a 4.46 percent rate would run $1,008 a month.

    The difference: $127 more a month, or $45,720 over the lifetime of the loan. Those figures don’t include taxes, insurance or initial down payments.

    Jed Kolko, chief economist at Trulia, a real estate data analysis firm, thinks many would-be buyers will start to take note.

    ‘‘Some buyers will reconsider jumping into the market; others will speed up their (home) purchases before rates go higher,’’ Kolko said.

    The rate hike comes at a critical time. Low mortgage rates have helped fuel a housing recovery that has kept the economy growing modestly despite higher taxes and steep federal spending cuts.

    In May, completed sales of previously occupied homes surpassed the 5 million mark for the first time in 3½ years. And those sales could rise further in June because the number of people who signed contracts to buy homes rose last month to the highest level since December 2006. There’s generally a one- to two-month lag between a signed contract and a completed sale.

    Greater demand, along with a tight supply of homes for sale, has driven up home prices. It’s also led to more home construction, which has created more jobs and contributed to economic growth.

    Lower rates have also inspired a refinancing boom over the past two years. Many homeowners have locked in rates below 4 percent. That has lowered their monthly payments, leaving them with more cash to spend elsewhere and fuel more economic growth.

    The average rate on a 15-year fixed mortgage, a popular refinancing instrument, soared this week to 3.50 percent — its highest point since August 2011 — from 3.04 percent last week.

    A report this week suggested that the economy might not be as strong as some had thought. The government cut its growth estimate for the January-March quarter to an annual rate of just 1.8 percent — much lower than the 2.4 percent rate it estimated a month ago.

    A key reason for the downgrade was that consumers spent less than previously thought. Less spending has led some economists to predict that growth will stay weak through the summer and fall short of the Fed’s more optimistic forecast of 2.3 percent to 2.6 percent growth for all of 2013.

    The downgrade for economic growth has cast some doubt on the likelihood that the Fed will reduce its stimulus later this year. Several Fed voting members have stressed in recent days that Bernanke’s comments made clear that any pullback in bond purchases would hinge on the economy’s performance, not a calendar date.

    hose reassurances and solid, if not spectacular, economic data have helped boost stocks in recent days and reverse a jump in long-term interest rates. The yield on the 10-year Treasury note fell Thursday to 2.47 percent, down from its two-year high of 2.66 percent on Monday.

    Geraci says he doesn’t think higher mortgage rates will hurt a housing market in which there aren’t nearly enough available homes in many areas.

    ‘‘So buyers that find a nice home, no matter what the rates are, are going to move on it,’’ Geraci said. ‘‘If there’s enough supply, people might sit and wait a little bit and see if the rates come down.’’

    Rising rates motivated Alex Backus to act two weeks ago and sign a contract on a $365,000 three-bedroom house in the Seattle suburb of Edmonds, Wash.

    Backus, 30, had searched listings for two months before signing the contract. He locked in a 30-year loan at a fixed rate of 4.125 percent.

    ‘‘Seeing that interest rates were starting to come back up, it seemed like now was the time to really start to get serious about buying a home,’’ said Backus, an aerospace engineer.

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    http://money.msn.com/home-loans/news...27&id=16646194

    Similar news reported in msn.


    Will Singapore follow USA ?

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    Finally! Crash is coming!

    Price correction is arriving.

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    Quote Originally Posted by yowetan
    Finally! Crash is coming!

    Price correction is arriving.
    Hi, why are you so happy?
    You will also be affected, unless you don't need to take mortgage loan.

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    Quote Originally Posted by princess_morbucks
    Hi, why are you so happy?
    You will also be affected, unless you don't need to take mortgage loan.
    I am preparing for the worst.

    I will be using employee staff loan.

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    Quote Originally Posted by princess_morbucks
    Hi, why are you so happy?
    You will also be affected, unless you don't need to take mortgage loan.
    At least he know he is not the sucker to buy at the highest price... hahaha.. It really feel bad to buy at the peak... It mean you feel so stupid...

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    Quote Originally Posted by yowetan
    I am preparing for the worst.

    I will be using employee staff loan.
    Dun be too happy...who know may be you will be axed by then... !
    "Anyone who has not made a mistake has never tried anything new"

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    Quote Originally Posted by CondoWE
    Dun be too happy...who know may be you will be axed by then... !
    The transformation of raising interest rates is due to robust and recovery of economy. In fact, my job will even be safer than before!

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    Quote Originally Posted by yowetan
    Finally! Crash is coming!

    Price correction is arriving.
    price already crashed if you have noticed.
    The next will be 2020. Yes sure, price crash sure come as predicted by "experts"

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    Quote Originally Posted by 3C
    price already crashed if you have noticed.
    The next will be 2020. Yes sure, price crash sure come as predicted by "experts"
    What he is looking for is 50% and below.. !
    "Anyone who has not made a mistake has never tried anything new"

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    Quote Originally Posted by 3C
    price already crashed if you have noticed.
    The next will be 2020. Yes sure, price crash sure come as predicted by "experts"
    Already crash?? How many percent? 20 or 30%?
    Can get my Luxus Hills at $2-million over this weekend already?

    Few year ago.. your so-called expert oso predicted crash.. Predicted from Luxus Hills 1.7-m.. Predicted till now Luxus Hills 3-m.. Still predicting crash

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    Quote Originally Posted by yowetan
    Finally! Crash is coming!

    Price correction is arriving.
    MAS new rules will reduce resources needed for mid office staff esp loans dept, banks should be retrenching mid office staff soon ...

    crashed!

    DKSG

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    Quote Originally Posted by Rysk
    Already crash?? How many percent? 20 or 30%?
    Can get my Luxus Hills at $2-million over this weekend already?

    Few year ago.. your so-called expert oso predicted crash.. Predicted from Luxus Hills 1.7-m.. Predicted till now Luxus Hills 3-m.. Still predicting crash
    dun understand your logic...

    does it mean that because it ran up from 1.7m to 3m, the crash is less likely now??


    duh....

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    Quote Originally Posted by DKSG
    MAS new rules will reduce resources needed for mid office staff esp loans dept, banks should be retrenching mid office staff soon ...

    crashed!

    DKSG
    Hi...I am not in loan department. If I am, I would have granted myself a good loan package then.

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    Quote Originally Posted by yowetan
    Hi...I am not in loan department. If I am, I would have granted myself a good loan package then.
    If dare to do it, I am sure gov will ask u to lim kopi liao... !
    "Anyone who has not made a mistake has never tried anything new"

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    Quote Originally Posted by wind30
    dun understand your logic...

    does it mean that because it ran up from 1.7m to 3m, the crash is less likely now??


    duh....

    Imagine if a space craft crashes in outer space, it will never return back to earth.

    So even if there is a crash, Luxus won't return to 1.7m.

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    Quote Originally Posted by wind30
    dun understand your logic...

    does it mean that because it ran up from 1.7m to 3m, the crash is less likely now??

    duh....
    You still don't understand what I mean??

    When Luxus Hills climbed to 2m.. the so-called expert said will crash soon.. When reached 2.4m.. again the expert again said will crash soon..
    The 'expert' keep repeating crash soon.. repeated till Luxus Hills now 3m..

    Now I heard someone said "already crash".. saying the 'expert' said so..
    But till now the 'expert' haven't answer me how many percent (crash) already.. 20-30%??

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    Quote Originally Posted by Rysk
    You still don't understand what I mean??

    When Luxus Hills climbed to 2m.. the so-called expert said will crash soon.. When reached 2.4m.. again the expert again said will crash soon..
    The 'expert' keep repeating crash soon.. repeated till Luxus Hills now 3m..

    Now I heard someone said "already crash".. saying the 'expert' said so..
    But till now the 'expert' haven't answer me how many percent (crash) already.. 20-30%??
    No point arguing with the ignorant. They will only bring you to their level of intelligence.

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    rates are going to increase in singapore, brace ourselves for it. Those who bought at the high like those j gateway and sky habitat goonies will start sweating soon. Always buy properties that can collect immediate rental n not wait few years down the road, especially when developer prices are future pricing.

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    There seems to be a "Greater Fool theory" at work in private property market. Though prices are alreadly high amid the cooling measures and the upcoming rise in interest rates, people are still very optimistic...buying at high prices thinking that another fool will buy from him/her at even higher prices...we just dunno who will be the last fool :P
    Miracle is just another name for Effort.

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    >>>Speaking to reporters after the European Central Bank left key interest rates unchanged, central bank president Mario Draghi said rates wouldn't rise for "an extended period."<<<

    everyone play a fool at least once. if there is no fool, how do you sell your property?? and dont be a fool buying from another fool to be.

    QUOTE=priorityqueen]There seems to be a "Greater Fool theory" at work in private property market. Though prices are alreadly high amid the cooling measures and the upcoming rise in interest rates, people are still very optimistic...buying at high prices thinking that another fool will buy from him/her at even higher prices...we just dunno who will be the last fool :P[/QUOTE]

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