George does a great job explaining this, and it is worth your time to watch if you're interested. If you're too busy though, the summary goes like this. If you're a bank and you go to the Fed, every other bank knows you went to the Fed. So none of them will trust you anymore, and bank runs might start. If you go the FHLB however, that information is kept quiet. It's only reported on aggregate. The kicker is that FHLB data front runs the Fed data, and by looking at it, you can see exactly when there is going to be a problem. And shocker...FHLB loans have just rocketed through their all time high, significantly surpassing the peak of 2008.
Very underrated post. I think it should be stickied, actually. We talk about "ending the Fed" a lot on this Board... and that isn't even the entire banking problem. Until this FHLB is brought into the light, the evil cannot be dispersed.
I'm not good with memes, but I can tell you that we need a meme that explains this.
never listen to them. They lied all the time. If you want to know about the market, watch them and do the opposite. I used to listen to them and lose my pants, and then I got smart. Have been trading and making money ever since. Right now, I am banking on DWAC and crypto and gold/silver (not the paper gold or silver, but the real thing.
If you live in a market where it’s cheaper to buy than rent, it’s always a good idea to buy. Fixed housing costs are awesome in an inflationary environment. When rates eventually drop you can refi and you’ll be sitting pretty.
Otherwise, I’m not sure that prices have corrected enough to accommodate the current interest rates. You really have to track new listings, the average days on market, and sold vs listing price to see if your local market has bottomed out or not. Rates haven’t been ~7% in a long time and that’s going to really increase your mortgage payment vs a few years ago.
How about a market where both buying and renting have already been insanely high (relative to pre clown world salaries) to begin with, where buying was slightly cheaper than renting (1 year of rent was 3% of buy price) but now buying is cheaper than renting (1 year of rent is 4% of buy price) but buying prices are so overheated, there's a chance of a serious correction
Goood points. Plus your insurance and property taxes can go up even if your mortgage payment does not.
Land. Rv. Used lumber (well at least bought cheap from contractors who bought too much and you can speak a bit of Spanish.). Save until you can dig well, septic.
Build your foundation.
Girlfriend doesn’t want to live in an rv until you build her house? See headline of this post and wait.
That is what I am hoping for but are the rates supposed to drop soon at all? Where I am at, renting is only slightly cheaper than buying which makes no sense to me but here we are.
Our mortgage would be ridiculous if we did buy but its something we can do for the time being. Not sure if that is the smartest thing to do or not.
I doubt rates are going to drop anytime soon. The current administration's policies want inflation. That means the Fed has to raise interest rates to try and dry up the money in circulation. The fed is signaling slower rate increases but who knows what they will actually end up doing. They can't identify the source of inflation or even see a recession staring them in the face. But as inflation goes up, so will rents. If the cost is similar you might want to lock in a fixed housing payment instead of being vulnerable to rent increases. You should probably be having this conversation with a trusted real estate friend or a financial advisor.
No forsure, I think what I am looking for here is for someone to tell me that what I am considering doing is a good idea or a completely awful one.
I appreciate you chiming in and I have a lot to think about. I love this community and people like you remind me that I am never alone. Thank you again and God bless you pede.
It’s always faster to rent. Closing takes some time.
Depending on your area and mortgage program you can get that down payment lower. My area is considered rural. You can get down payments down to like 5% but you pay a premium via mortgage insurance. But with almost 70% of the houses in town rentals, rent is very high.
Only you can answer that question, there are just too many factors to consider.
Where do you live, would be a big consideration. Are you in an overheated market or in "fly over" country?
What's your income?
What are your family needs?
How important is it to you to own vs buy?
As others have mentioned, what is the cost of renting vs buying where you are?
Consider hidden costs like insurance, taxes, HOA and condo fees, home maintenance.
Would you enjoy taking care of your home? Honestly, when I was a home owner, I was always stressed about what is going to be the next thing to go wrong that will cost me a bunch of money.
If you don't mind me asking, do you currently own now or are you renting?
Basically I have taken into account most of what you were saying but I just don't know if a better situation will come up for us, or not considering what is supposed to happen for the economy. I am in a position where every option feels wrong but I know its super easy to get lost in your own head. I appreciate the response and happy late 4th.
My life situation is probably a lot different from yours. All kids grown up and independent. My wife left me and we sold our townhouse back in February. So it's just me, myself and I in a rental condo. No plans to buy again.
I understand you don't want to make an expensive mistake, but things always change, there are no perfect solutions.
But I would say, I don't think buying a house is ever a bad idea. I think buying a condo is risky, if anything happens to the building and they have to increase the fees, that directly impacts the value of your property.
TL;DR
George does a great job explaining this, and it is worth your time to watch if you're interested. If you're too busy though, the summary goes like this. If you're a bank and you go to the Fed, every other bank knows you went to the Fed. So none of them will trust you anymore, and bank runs might start. If you go the FHLB however, that information is kept quiet. It's only reported on aggregate. The kicker is that FHLB data front runs the Fed data, and by looking at it, you can see exactly when there is going to be a problem. And shocker...FHLB loans have just rocketed through their all time high, significantly surpassing the peak of 2008.
Who's ready for the collapse?
Silicon Valley Bank was both the largest borrower and shareholder of the San Fran FHL bank.
Very underrated post. I think it should be stickied, actually. We talk about "ending the Fed" a lot on this Board... and that isn't even the entire banking problem. Until this FHLB is brought into the light, the evil cannot be dispersed.
I'm not good with memes, but I can tell you that we need a meme that explains this.
Great summary. Wasn't on my radar at all. We focus on the Fed and there's $1 trillion in circular bad debt just sitting over here.
Can't stress enough that Rebel Capitalist/George gammon (and the like) is a great source to learn about the markets, and generally what is going on.
Similar to watching cnn for news on Ukraine, watching just the stock market (vs bond market) and listening to main stream business news is horrific.
never listen to them. They lied all the time. If you want to know about the market, watch them and do the opposite. I used to listen to them and lose my pants, and then I got smart. Have been trading and making money ever since. Right now, I am banking on DWAC and crypto and gold/silver (not the paper gold or silver, but the real thing.
LOL. Exactly.
Is it worth trying to buy a home at this time?
Sold all three homes last two years. Currently renting and have a camper van if shit hits fan. When/if crashes, ready to buy back in.
What makes you believe that this was the correct move if you don't mind me asking?
Congrats on all the past landholdings though, that is so awesome.
If you live in a market where it’s cheaper to buy than rent, it’s always a good idea to buy. Fixed housing costs are awesome in an inflationary environment. When rates eventually drop you can refi and you’ll be sitting pretty.
Otherwise, I’m not sure that prices have corrected enough to accommodate the current interest rates. You really have to track new listings, the average days on market, and sold vs listing price to see if your local market has bottomed out or not. Rates haven’t been ~7% in a long time and that’s going to really increase your mortgage payment vs a few years ago.
How about a market where both buying and renting have already been insanely high (relative to pre clown world salaries) to begin with, where buying was slightly cheaper than renting (1 year of rent was 3% of buy price) but now buying is cheaper than renting (1 year of rent is 4% of buy price) but buying prices are so overheated, there's a chance of a serious correction
Goood points. Plus your insurance and property taxes can go up even if your mortgage payment does not.
Land. Rv. Used lumber (well at least bought cheap from contractors who bought too much and you can speak a bit of Spanish.). Save until you can dig well, septic. Build your foundation.
Girlfriend doesn’t want to live in an rv until you build her house? See headline of this post and wait.
That is what I am hoping for but are the rates supposed to drop soon at all? Where I am at, renting is only slightly cheaper than buying which makes no sense to me but here we are.
Our mortgage would be ridiculous if we did buy but its something we can do for the time being. Not sure if that is the smartest thing to do or not.
I doubt rates are going to drop anytime soon. The current administration's policies want inflation. That means the Fed has to raise interest rates to try and dry up the money in circulation. The fed is signaling slower rate increases but who knows what they will actually end up doing. They can't identify the source of inflation or even see a recession staring them in the face. But as inflation goes up, so will rents. If the cost is similar you might want to lock in a fixed housing payment instead of being vulnerable to rent increases. You should probably be having this conversation with a trusted real estate friend or a financial advisor.
No forsure, I think what I am looking for here is for someone to tell me that what I am considering doing is a good idea or a completely awful one.
I appreciate you chiming in and I have a lot to think about. I love this community and people like you remind me that I am never alone. Thank you again and God bless you pede.
It’s always faster to rent. Closing takes some time.
Depending on your area and mortgage program you can get that down payment lower. My area is considered rural. You can get down payments down to like 5% but you pay a premium via mortgage insurance. But with almost 70% of the houses in town rentals, rent is very high.
Only you can answer that question, there are just too many factors to consider.
Where do you live, would be a big consideration. Are you in an overheated market or in "fly over" country? What's your income? What are your family needs? How important is it to you to own vs buy? As others have mentioned, what is the cost of renting vs buying where you are? Consider hidden costs like insurance, taxes, HOA and condo fees, home maintenance. Would you enjoy taking care of your home? Honestly, when I was a home owner, I was always stressed about what is going to be the next thing to go wrong that will cost me a bunch of money.
If you don't mind me asking, do you currently own now or are you renting?
Basically I have taken into account most of what you were saying but I just don't know if a better situation will come up for us, or not considering what is supposed to happen for the economy. I am in a position where every option feels wrong but I know its super easy to get lost in your own head. I appreciate the response and happy late 4th.
My life situation is probably a lot different from yours. All kids grown up and independent. My wife left me and we sold our townhouse back in February. So it's just me, myself and I in a rental condo. No plans to buy again.
I understand you don't want to make an expensive mistake, but things always change, there are no perfect solutions.
But I would say, I don't think buying a house is ever a bad idea. I think buying a condo is risky, if anything happens to the building and they have to increase the fees, that directly impacts the value of your property.
I worked for FHLB for years. They get their money from the sales of bonds and banks, which comes from the fed. The do not print money
https://fred.stlouisfed.org/series/BOGZ1FL403069330Q
Fuck.