Share this page!

Enter URL or ID to Unroll

You can paste full URL like: https://x.com/threadreaderapp/status/1644127596119195649
or just the ID like: 1644127596119195649

How to get URL link on X (Twitter) App

  1. On the Twitter thread, click on or icon on the bottom
  2. Click again on or Share Via icon
  3. Click on Copy Link to Tweet
  4. Paste it above and click "Unroll Thread"!
  5. More info at Twitter Help
Ron Butler Profile picture
@ronmortgageguy
Nov 10 • 5 tweets • 2 min read Twitter logo Read on Twitter
What Does "Higher Rates" Actually Mean? Just Not Crazy Low Anymore

Deputy Governor Rogers just said out loud what rational people in the Mortgage Business have known since the Bank of Canada started raising its Rate

No more ultra low Mortgage Rates

2/
 financialpost.com/news/economy/b…
The Zero Interest Rate Program from 2008 onwards is now understood to be stupid and dangerous even though no one at Central Banks talk about it because they were all involved in it

This week's near failure at the US Teasury Auction indicates cheap debt may be totally over

3/
Let's just cut to the chase: Bank of Canada Rate at 2.75% = 4.95% Bank Prime and a Variable Mortgage Rate at 3.90% and HELOC at 5.45% and 5 - Yr Fixed at 4.45% to 4.75%

This is guesswork to a certain extent on the Fixed but pretty accurate on Prime

Nothing like 2008 - 2021

4/
When all rates all started with a 2 or a 3

This is VERY IMPORTANT: if a RE Agent or Mortgage Broker tells you Canada will have Mortgage Rates at 2.99% by this Summer please tell them to Eff Themselves

Assume Rates in the 4% range are the realistic outcome for 2024 or 2025

5/
What does that mean for house prices?

Easy Answer: lower than peak Q1 2022

Rates in the 4% range means $1.2M houses in St. Thomas & $1.8M houses in North Pickering or Agassiz don't work

And planning on owning 6 rental properties is a pipe dream

Different RE World coming

• • •

Missing some Tweet in this thread? You can try to force a refresh
　

Keep Current with Ron Butler

Ron Butler Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @ronmortgageguy

Ron Butler Profile picture
Nov 8
Ron Goes To Parliament! Hard To Believe! PART 1

Amazingly thing: not one swear word!

I was asked to present to the Finance Committee's investigation into house prices & rents in Canada

I've been very interested in politics & government my whole life, this was a real honor

2/
I mean it, I raise Hell with the Government every 3rd Post but I love Canada, I love Democracy & I love politics so I really felt honored to be there

Here's what you find out when you meet politicians: they're nice people

They're gracious, friendly, clearly smart

3/
You gotta separate policy from people & that's hard because we're all tribal & we can end up loving our tribe and hating the other guys

Once you meet the MPs you find out they work hard. The session didn't end till 7:45

They're all people you'd like to have a drink with

3/
Read 6 tweets
Ron Butler Profile picture
Nov 7
Fixed Mortgage Rates May Fall But Recession May Be Here: What Happens In Real Estate?

Truth is I don't know because these are 2 totally contrasting factors

In a neutral economic period we know lower mortgage rates stimulate RE purchases

We watched that happen this year

2/
When Fixed Mortgage Rates fell in Jan / Feb 2023 RE activity surged, houses sold & prices which had fallen rose quickly

Although not at 2021 levels RE in Ontario, BC & Alberta was clearly heating up

Then the BoC hiked Rates Bond Yields soared and the Housing Market tanked

3/
Today it's dismal

Looks like the BoC & the US Fed may be done rate increases does this mean Fixed Mortgage Rates will drop in 2024 and the Spring RE Market will roar back to life again?

Well, there's the Recession thing

Every day it seems more certain the Recession is here

4/
Read 5 tweets
Ron Butler Profile picture
Nov 3
New Fresh Hell In Mortgage World: Parents Fixing Huge Renewal Rate Increases

More craziness at the intersection of Batshit Crazy House Prices & the fastest, steepest Mortgage Rate Increases in history

New Twist: parents supply huge lump sum payments at Renewal

2/
I had heard about this a few times in the last 3 months but in the last 2 weeks I actually got details

In one case the 5 - yr Renewal happens & borrowers are faced with a 41% payment increase, they had 2 children in those 5 years and budgets were tight, higher payments no go

3/
They requested re-amortization from 25 years back to 30 years and it was granted but even then a 31% payment increase

Parents stepped in with a $130K lump sum payment at renewal to get the payments down further

A week later I am speaking to an older couple at a Wedding

4/
Read 5 tweets
Ron Butler Profile picture
Nov 1
Private Mortgage Lending Grows More Common: Good Thing or Bad Thing?

Lots of news in the last few months about the growth of Non-Institutional Private Mortgage Lending

That's a Mortgage from sources other than Banks, Trusts, Credit Unions or Mortgage Finance Corps

2/
What's bad about this Mortgage Lending growing?

It's always more expensive for the borrower, the availability of Renewal at the end of the term is uncertain & sometimes contract clauses might be viewed as predatory
Although many private mortgages have very fair contracts

3/
In a way the growth of Private Mortgages is a real indictment of our whole Real Estate system in Canada

House prices at such a high multiple of average family incomes the mortgages required are too high for banks to offer a loan

Maybe some underwriting rules are too tough

4/
Read 6 tweets
Ron Butler Profile picture
Oct 31
What Does A Canadian Recession Mean For House Prices? Nothing Good

The narrative of a Hard Economic Landing is growing in Canada

Higher Unemployment
Business Failures
Economic Contraction

Week by week bad Economic and Employment news piles up

Construction projects stalled

2/
Employers eliminating contractors, then moving on to actual employee layoffs

Memos going out to look under every rock for expense reduction it's a downward spiral

But how does it specifically effect Real Estate and House prices?

Unemployment is key to this

3/
We all understand the importance Canadians place on paying their mortgage

We see it in our business, we seen it in the ultra low Mortgage Default Rates in Canada that have only started to edge up very recently & not even meaningfully

Dispite big Variable Rate increases

4/
Read 6 tweets
Ron Butler Profile picture
Oct 30
Car Prices Go Nuts: Is It Just Interest Rates & Inflation? Or Something Else?

Hey, I know I am MortgageGuy not CarGuy but it's impossible to miss the wild increase in car prices for new vehicles, the wild increase in car payments and the lack of inventory of some models

2/
Sure: easy explanation for the increase in car payments: those car loan interest rates have tripled in 20 months driving the payments much higher

I get there's inflation on car prices but it seems like it may be 15% or 20% in 2 years which is like Steak inflation

3/
But the shortages in some models seems baffling to me

Is it possible that some car companies learned a lesson from the Covid Lock Down when the cars people wanted weren't available

Could they have learned that people will wait until the make & model they want shows up?

4/
Read 5 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!

Send Email!

:(