Mortgage rates are moving higher

[CDDP]

Fed is going to start Quantitative tightening and will sell a ton of mortgage bonds now. Prayers sent for the homebuilder stocks.

 

[TopHook]

Probably get up to 8%. Just refied down to 3% last Friday for another 20 years. Until there's a crash I won't finance again. Just cash to then.

 

[QuanChi]

Shit is about to hit the fan

 

[America 1st]

Eye smell an opportunity two bye REITs

 

[BLatta12]

Fed is going to start Quantitative tightening and will sell a ton of mortgage bonds now. Prayers sent for the homebuilder stocks.

Can’t wait for the crash.

 

[ChicagoFats]

Eye smell an opportunity two bye REITs

Can you explain?

Rising interest rates means that its more expensive to purchase real estate and thus should cause prices to come down.

 

[America 1st]

Can you explain?

Rising interest rates means that its more expensive to purchase real estate and thus should cause prices to come down.

Copied from an article butt well written sough:

“Higher interest rates can affect REITs in two main ways. One is a secondary way, it makes their funding tougher or more expensive. Most REITs require or depend at least on some borrowed money to finance their growth strategy, like how real estate investors take out mortgages to buy properties, same idea with REITs. As interest rates rise, those get more expensive it adds to their cost of capital.

No. 2 and more significantly, income stocks like REITs their yields generally move in tandem with risk-free rates. Specifically, the 10-year treasury is a really good benchmark. As treasury yields rise, investors expect that risk premium meaning the difference between what they can get on a risk-free investment, and a so-called risky investment, like a REIT to roughly stay the same.

As REIT yields get pushed higher by rising rates, yields and share prices have an inverse relationship, so it puts pressure on their stock prices. All that said, as I said at the top of the show, it's all about expectations. Right now the expectation is that the federal funds rate is going to rise to roughly two percent by next year.”

 

[ChicagoFats]

Copied from an article butt well written sough:

“Higher interest rates can affect REITs in two main ways. One is a secondary way, it makes their funding tougher or more expensive. Most REITs require or depend at least on some borrowed money to finance their growth strategy, like how real estate investors take out mortgages to buy properties, same idea with REITs. As interest rates rise, those get more expensive it adds to their cost of capital.

No. 2 and more significantly, income stocks like REITs their yields generally move in tandem with risk-free rates. Specifically, the 10-year treasury is a really good benchmark. As treasury yields rise, investors expect that risk premium meaning the difference between what they can get on a risk-free investment, and a so-called risky investment, like a REIT to roughly stay the same.

As REIT yields get pushed higher by rising rates, yields and share prices have an inverse relationship, so it puts pressure on their stock prices. All that said, as I said at the top of the show, it's all about expectations. Right now the expectation is that the federal funds rate is going to rise to roughly two percent by next year.”

Yeah, you bolded the part that says higher rates should "put pressure on stock prices" i.e. they should come down.

So are you saying you want to buy an investment as it gets cheaper? OK, but the long term trend for rates seems to be higher and thus the stock will trend lower (making its yield higher).

Maybe you expect rates to go back down (some people don't think the Fed has the gall to keep raising rates as it will bring recession)?

You could be right, we have known about the coming rising rate environment for a while and the chart is trending higher ..... just curious your thought process or trade thesis

 

[America 1st]

Yeah, you bolded the part that says higher rates should "put pressure on stock prices" i.e. they should come down.

So are you saying you want to buy an investment as it gets cheaper? OK, but the long term trend for rates seems to be higher and thus the stock will trend lower (making its yield higher).

Maybe you expect rates to go back down (some people don't think the Fed has the gall to keep raising rates as it will bring recession)?

You could be right, we have known about the coming rising rate environment for a while and the chart is trending higher ..... just curious your thought process or trade thesis

View attachment 91856

Yes eye wood bye them as the prices drop and the yield is higher.

Rates aren’t going two stay high forever and REITs were already attractive befour the rate hikes.

 

[CDDP]

5% could be months away if this pace keeps up.

 

[TopHook]

Eye smell an opportunity two bye REITs

Eye agree.

 

[Rebarcock.]

Shit is about to hit the fan

Relatively yes
But when Carter was ores a mortgage rate was 18%+
More so than that will be food production. Go ahead and start buying directly from farmers and grow you garden. I have seen forecast as high as 5x TODAYS price. I'm not a scared pepper but if you aren't prudent you will end up a zombie searching for food. Buy seeds and Mason jars. The supply chain for food is dying fast. Local sourcing retailers like Publix have the best chance imo.
And buy weed seeds. That will be worth more than gold

 

[CDDP]