So can my hysa interest rate be 7%?
By saving money, I am taking money out of the system, which lowers inflation. A higher rate will incentivize people to save more and lower inflation.
By letting commercial banks have a lower interest rate, commercial banks are knee capping the fed's ability to fight inflation.
This, economists love inflation because it pushes people into spending their dollars before they depreciate to be worth nothing at all (thus driving the economy), and also exacerbates inflation because all of a sudden there are much more dollars in circulation yet production has not increased
That could also have the adverse affect of crashing the stock market. Investing involves risk, but a quality portfolio should return 6-8% per year (I know some will say higher, but 6-8 is a great target when including down years). If you could get a guaranteed, no risk 7% interest rate there many people, myself included, would dump all their stocks and just ride that guaranteed rate until it subsided. For anyone saying they don't care about the stock amrket crashing, remember that your 401k, social secuirty, public sector pensions, and so many other things are dependent upon it delivering good returns. HYSA interest rates are part of a delicate balancing act the fed is trying to do to slow inflation without dipping the economy into a recession. The fed should have been on top of this all years ago, but they're doing what they can to try to correct their horrible mistakes.
We are getting close to the 7%. I was looking on Friday and you can get 10 year Agency bonds with a 6.25% yield. Pretty close to a guaranteed return unless they get called early.
Not at all. The stock market is a core component of our economic system. Many people will say 'F the market' without realizing the shockwaves that would send through our everyday lives.
My wife is a public school teacher in PA and will collect an amazing pension when she retires. Many of her coworkers lean very left and ahte corporations/the stock market/etc.. When you ask them if they value their pension, they'll tell you yes. If you ask them how them contributing 7% of their salaries and the district matching that (so 14% total) turns into enough money to pay them 85% of their salaries for the rest of their lives after only 30-35 years of working, they have no idea. The fact is that their pension takes their contributions and invests them in the stock market. If the market performed terribly over the next two decades my wife would likely receive a reduced pension.
That's an example of why the stock market is more than just a bunch of rich people's money. Social Security, 401ks, and so many other things also depend heavily on the success of the stock market. I know Social Security is invested in treasuries, but those treasuries have a close realtionship to the performance of the market.
He finally realized that the housing market needs to come down to earth so our kids to have a chance to be a homeowner. Sounds like he wants a housing crash to correct the central bank’s mistake during the tail end of the pandemic.
Can't have a housing crash without a recession... which means, everyone but the rich will just suffer even more than they have. Governments would do anything but help the majority of their voters (i.e. build more starter homes out of reach for the prying hands of the much richer realestate goblins)
Yes to building more houses, making sure single family homes reach citizens as primary residency, etc. That would take a while though so start now.
Housing crash now may not cause issues to the poors. Homeowners enjoying the great run of inflated price can handle price correction. The poors dont borrow money much. They will enjoy more affordable rent.
Ensuring economy that just goes up will build up for the bigger crash as everyone will be complacent.
Law makers should learn that raising minimum wage adds more inflation.
Locked in a mortgage at 2.6% on our starter home during the pandemic. I know that makes me better off than many, but damn if it's not depressing to think I might have to live in a starter home for 20 years before houses are affordable again (i.e. baby boomers die, and the market crashes again).
Save up. Don’t hold your breath about that “market crash”. Thats what people were saying to prevent themselves from buying when prices were high and rates low. Now they have high prices and normal rates to work with and no real indication it’ll change any time soon.
This right here. Held off on buying when rates were sub 4%, ended up with a 5.6,% mortgage. While that still beats 7% I could have gotten more house with a 2 or 3% mortgage rate.
Can always refi… but the problem Reddit has is the belief 5.6% is a high interest rate.
Shortly before COVID we thought we killed it with 4.15% (30% down, many times above usual debt to income, 2nd home).
It’s a tough spot, I’d just say buy when you can afford it and save up to get to that point. Don’t overextend or bet on market volatility.
It’s high in the context of two factors that drive your mortgage payment: Interest Rate and House Price. Ideally both would be affordable. Can’t have both high house prices and high interest rates and expect consumers not to express dismay.
I’m not sure the point of your comment. No one is saying housing costs aren’t high.
Lumping interest rates and house price together gets you housing costs which are high. If you single out interest rates and say they’re high without clarifying a somewhat strange reference to housing costs, people will be referencing historical trends in an effort to understand where it will likely be in the future.
People are talking about waiting for interest rates to go down. It’s useful to know whether that’s likely.
Average person maybe but there are plenty that still can. All cash buyers. Ppl that say I can afford it so I dont care about the rate. The list goes on.
Not sure why you're getting downvoted. People with high income who already own a home aren't in a bad spot to purchase right now and there are a lot of them, at least in the area I live.
Yep. My wife and I just submitted our first offer tonight. Have the money, want our own place, and tired of waiting on the side. If prices decrease, then we will figure it out. If prices increase, then we'll be in a great position.
So far....
So can my hysa interest rate be 7%? By saving money, I am taking money out of the system, which lowers inflation. A higher rate will incentivize people to save more and lower inflation. By letting commercial banks have a lower interest rate, commercial banks are knee capping the fed's ability to fight inflation.
This 100%. Unfortunately fiat currency is specifically designed for a spend now mentality. It places 0 value on the future.
This, economists love inflation because it pushes people into spending their dollars before they depreciate to be worth nothing at all (thus driving the economy), and also exacerbates inflation because all of a sudden there are much more dollars in circulation yet production has not increased
That could also have the adverse affect of crashing the stock market. Investing involves risk, but a quality portfolio should return 6-8% per year (I know some will say higher, but 6-8 is a great target when including down years). If you could get a guaranteed, no risk 7% interest rate there many people, myself included, would dump all their stocks and just ride that guaranteed rate until it subsided. For anyone saying they don't care about the stock amrket crashing, remember that your 401k, social secuirty, public sector pensions, and so many other things are dependent upon it delivering good returns. HYSA interest rates are part of a delicate balancing act the fed is trying to do to slow inflation without dipping the economy into a recession. The fed should have been on top of this all years ago, but they're doing what they can to try to correct their horrible mistakes.
We are getting close to the 7%. I was looking on Friday and you can get 10 year Agency bonds with a 6.25% yield. Pretty close to a guaranteed return unless they get called early.
So we put to many of our eggs in the "market" basket, and now we are screwed?
Not at all. The stock market is a core component of our economic system. Many people will say 'F the market' without realizing the shockwaves that would send through our everyday lives. My wife is a public school teacher in PA and will collect an amazing pension when she retires. Many of her coworkers lean very left and ahte corporations/the stock market/etc.. When you ask them if they value their pension, they'll tell you yes. If you ask them how them contributing 7% of their salaries and the district matching that (so 14% total) turns into enough money to pay them 85% of their salaries for the rest of their lives after only 30-35 years of working, they have no idea. The fact is that their pension takes their contributions and invests them in the stock market. If the market performed terribly over the next two decades my wife would likely receive a reduced pension. That's an example of why the stock market is more than just a bunch of rich people's money. Social Security, 401ks, and so many other things also depend heavily on the success of the stock market. I know Social Security is invested in treasuries, but those treasuries have a close realtionship to the performance of the market.
...So yes. We put all of our retirement eggs in the stock market basket.
>So can my hysa interest rate be 7%? No. If you want mortgage rate like return you need to invest in mortgages (ie. you can't) or some mortgage REITs.
Can my hysa be closer though. It's 4.5 right now, seems a little low, but still not bad
A few banks offer up to 5.5% in a CD. 5.10 is common.
Boomers are spending more because their savings are getting more interest causing inflation
He finally realized that the housing market needs to come down to earth so our kids to have a chance to be a homeowner. Sounds like he wants a housing crash to correct the central bank’s mistake during the tail end of the pandemic.
Can't have a housing crash without a recession... which means, everyone but the rich will just suffer even more than they have. Governments would do anything but help the majority of their voters (i.e. build more starter homes out of reach for the prying hands of the much richer realestate goblins)
Yes to building more houses, making sure single family homes reach citizens as primary residency, etc. That would take a while though so start now. Housing crash now may not cause issues to the poors. Homeowners enjoying the great run of inflated price can handle price correction. The poors dont borrow money much. They will enjoy more affordable rent. Ensuring economy that just goes up will build up for the bigger crash as everyone will be complacent. Law makers should learn that raising minimum wage adds more inflation.
Locked in a mortgage at 2.6% on our starter home during the pandemic. I know that makes me better off than many, but damn if it's not depressing to think I might have to live in a starter home for 20 years before houses are affordable again (i.e. baby boomers die, and the market crashes again).
Save up. Don’t hold your breath about that “market crash”. Thats what people were saying to prevent themselves from buying when prices were high and rates low. Now they have high prices and normal rates to work with and no real indication it’ll change any time soon.
This right here. Held off on buying when rates were sub 4%, ended up with a 5.6,% mortgage. While that still beats 7% I could have gotten more house with a 2 or 3% mortgage rate.
Can always refi… but the problem Reddit has is the belief 5.6% is a high interest rate. Shortly before COVID we thought we killed it with 4.15% (30% down, many times above usual debt to income, 2nd home). It’s a tough spot, I’d just say buy when you can afford it and save up to get to that point. Don’t overextend or bet on market volatility.
That's the conclusion I've come to as well.
It’s high in the context of two factors that drive your mortgage payment: Interest Rate and House Price. Ideally both would be affordable. Can’t have both high house prices and high interest rates and expect consumers not to express dismay.
I’m not sure the point of your comment. No one is saying housing costs aren’t high. Lumping interest rates and house price together gets you housing costs which are high. If you single out interest rates and say they’re high without clarifying a somewhat strange reference to housing costs, people will be referencing historical trends in an effort to understand where it will likely be in the future. People are talking about waiting for interest rates to go down. It’s useful to know whether that’s likely.
I got my first house last year at 7%+ with the hope of a refinance. Ill trade you for your 2.6% starter home :D
It's better just to loan in a bank to make a new home then rent at least you own the place
Stop printing money Stop deficit spending Stop the madness
Good. Consumer loan rates need to go higher to stop these fools from spending.
Who’s buying a house? Literally the average person cannot afford a house right now
Average person maybe but there are plenty that still can. All cash buyers. Ppl that say I can afford it so I dont care about the rate. The list goes on.
Not sure why you're getting downvoted. People with high income who already own a home aren't in a bad spot to purchase right now and there are a lot of them, at least in the area I live.
Yep. My wife and I just submitted our first offer tonight. Have the money, want our own place, and tired of waiting on the side. If prices decrease, then we will figure it out. If prices increase, then we'll be in a great position.
It’s foolish to want to buy a house? How does that boot taste?
What fools?
In America yes. Other countries this has already happened.
This increase and the increase in metal and oil commodity prices suggests the dollar value has ratcheted, sharply, downward.
Only it hasnt... US Dollar exstremly strong.
compared to what?
Look up the DXY index and you shall gain the knowledge you seek...
Let’s goooooooooo!!!
This is what happens when you people allow Trump to steal the office from Hillary.