WASHINGTON (AP) -- The era of record-low mortgage rates is over. The average rate on a 30-year loan has jumped from about 5 percent to more than 5.3 percent in just the past week. As mortgages get more expensive, more would-be homeowners are priced out of the market -- a threat to the fragile recovery in the housing market. And if you wanted to refinance at a super-low rate, you may have missed... [more]
WASHINGTON (AP) -- The era of record-low mortgage rates is over.
The average rate on a 30-year loan has jumped from about 5 percent to more than 5.3 percent in just the past week. As mortgages get more expensive, more would-be homeowners are priced out of the market -- a threat to the fragile recovery in the housing market.
And if you wanted to refinance at a super-low rate, you may have missed your chance. Mortgages under 4 percent are still available, but only for loans that reset in five or seven years, probably to higher rates.
Rates are going up because of the improving economy and the end of a government push to make mortgages cheaper.
http://www.nytimes.com/aponline/2010/04/07/us/AP-US-Rising-Rates.html
Where's spunky?
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Response by darkbird
almost 16 years ago
Posts: 224
Member since: Sep 2009
So wouldn't make the difference to the buyers anyways, the sellers are going to pick up the tab. Confusing title :-)
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Response by w67thstreet
almost 16 years ago
Posts: 9003
Member since: Dec 2008
I have commercial mortgage docs from 1995 at 9.5%.... and I WAS ECSTATIC that it was below 10%..... yep... let's see who's wearing pads with wings when rates go to 7%....
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Response by somewhereelse
almost 16 years ago
Posts: 7435
Member since: Oct 2009
thing is, the gap with jumbo is narrowing... so at the higher end, things are actually improving a bit.
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Response by NYC10013
almost 16 years ago
Posts: 464
Member since: Jan 2007
over the rainbow, you're trying to argue that reduced affordability for the below jumbo mkt is good for the jumbo apt mkt? Right...
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Response by 30yrs_RE_20_in_REO
almost 16 years ago
Posts: 9881
Member since: Mar 2009
"email updates RSS Homebuyers Scramble as Mortgage Rates Jump"
I guess that's a better alternative to getting fried like those who bought during the bubble. Their just trying to keep their sunny side up I think.
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Response by Fluter
almost 16 years ago
Posts: 372
Member since: Apr 2009
Interest rates have to go up, exactly when and how I don't believe anyone really knows. But there are significant macro economic forces in play making this inevitable, in my opinion.
The affect on buyers/sellers depends a little bit on their situations. For many buyers often it's a wash, because higher interest rates push down property prices, so what they don't pay in price they pay in interest. This is because there are fewer buyers at each property price point. So a buyer's actual monthly outlay may not vary much, assuming modest increases in interest rates.
For sellers higher interest rates mean lower prices, period. I really believe prices are heading downward in the NYC metro area overall, but there are micro environments (pockets on the Upper West Side) that may react differently. Sellers are finding this out, too many the hard way.
For buyers with all cash or mostly cash, higher interest rates are great news, because prices will be forced down and there will be good deals to be had.
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Response by Fluter
almost 16 years ago
Posts: 372
Member since: Apr 2009
Sorry, that's "effect" not "affect" in second graf. Can't believe I did that after 20+ years in journalism, yikes.
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Response by NYC10013
almost 16 years ago
Posts: 464
Member since: Jan 2007
Mortgage Rates on 30-Year U.S. Loans Jump to 5.21% (Update2)
April 8 (Bloomberg) -- U.S. mortgage rates jumped to the highest level in almost eight months, increasing borrowing costs for buyers and signaling a threat to the housing market’s recovery as government efforts to spur demand end.
Rates for 30-year fixed loans rose to 5.21 percent for the week ended today from 5.08 percent, mortgage finance company Freddie Mac said in a statement. That’s the highest rate since the week ended Aug. 13. The average 15-year rate was 4.52 percent, according to the McLean, Virginia-based company.
Loan rates are climbing from record lows last year as the economy shows signs of strengthening and after the Federal Reserve completed a program of buying about $1.25 trillion of securities backed by U.S. residential mortgages. Rising borrowing rates and the expiration of homebuyer tax credits this month may reduce demand for homes.
“Higher borrowing costs of course will weigh on affordability,” said Michelle Meyer, U.S. economist at Barclays Capital Inc. in New York. “It is still a low rate relative to the historical average.”
Mortgage rates for 30-year loans may rise to 6 percent -- a level not seen since November 2008 -- by the end of the year, George Mokrzan, senior economist at Huntington National Bank in Columbus, Ohio, said before the data were released. A stronger economy and increased job creation may offset the negative effect on housing demand as consumers become more confident about making large purchases, he said.
U.S. gross domestic product grew at a 5.6 percent annual rate in the fourth quarter, the best performance in six years.
Homes for Sale
The number of existing homes for sale jumped 9.5 percent in February, data from the National Association of Realtors show. Government tax credits for first-time home buyers and some current owners expire April 30.
The Fed’s program of buying mortgage-backed securities, which ended last week, helped reduce rates to a record low of 4.71 percent in December. The average 30-year rate over the past decade is 6.2 percent, with a high of 8.64 percent in May 2000, Freddie Mac data show.
The government bond purchases from Fannie Mae, Freddie Mac and Ginnie Mae, agencies that buy home loans from lenders and package them into securities, brought down yields and allowed lenders to reduce mortgage rates while still selling the bonds at a profit.
The Mortgage Bankers Association’s index of mortgage applications fell 11 percent in the week ended April 2. The portion of refinancings dropped 17 percent. Applications to purchase a home increased 0.2 percent.
To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net.
Last Updated: April 8, 2010 10:38 EDT
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Response by w67thstreet
almost 16 years ago
Posts: 9003
Member since: Dec 2008
Wow. 20+ yrs in journalism. Thatz fantastic, so you like won a bunch of pulitzers, Nobels and are called to appear on national tv to opine on everything but especially on economic policy and the great bubble of 2007! Right?
My god, your analysis is like my first term Econ freshman's. Ya think interest rate is going up? Just a few bps? WTF r u smoking? It's gonna be porportional to the almost complete meltdown of our financial system. Where 3 out of the 7 I banks that applied for jobs after bschool disappeared. You think a person who paid $3mm studio at peak but got a 4% mortgage is equal to $2mm 3bdrm 7%mortgage who bought in 2011 is on equal footing bc their monthlies are the same? You ignore the mix of transactions that the 25% down represents, the burden of ir in a bubble popping housing mkt.
Plz stick to your pulitzer writing journalism career and leave the re to us professionals, oh wait you 'gave' up the high paying editorial job at nytimes to become a re broker, my bad. You are a 'professional'. My for the last umpteenth time, I get it you were a 'journalist' at one point. It's like a 50yo still talking about her 'modeling' profession as a jc Penney toddler gig 47 years ago.
I know you fluter, and your kind. Still talking about how you went to harvard while flipping burgers every chance you get. It makes me cringe when I hear that nycer neurotic 'i'm better than you' conversation starter.
Have a nice day.
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Response by waverly
almost 16 years ago
Posts: 1638
Member since: Jul 2008
w67th - I like you and all, but you don't have to be a dick.
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Response by w67thstreet
almost 16 years ago
Posts: 9003
Member since: Dec 2008
Alright. But I am sick and tired of brokers having a vague notion of this is the beginning of the second leg down, but sugar coat it with net net a buyer is 'gonna' be fine. Yes did I take it out on fluter, absolutely. But it's more my rant against the entire brokerage and pointing out another pet peeve of mine, which is the 'acquaintance' pointing out again how he was like a green beret 30 yrs ago. I get it, but not every conversation needs to startt off with a CV.
So I apologize to fluter, it was a mor general rant on ppl of that ilk. :)
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Response by hfscomm1
almost 16 years ago
Posts: 1590
Member since: Oct 2009
waverly
7 minutes ago
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w67th - I like you and all, but you don't have to be a dick.
Why do you like him? Dick is his only persona online.
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Response by w67thstreet
almost 16 years ago
Posts: 9003
Member since: Dec 2008
Which you are one of.
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Response by hfscomm1
almost 16 years ago
Posts: 1590
Member since: Oct 2009
... But it's more my rant against the entire brokerage and pointing out another pet peeve of mine, which is the 'acquaintance' pointing out again how he was like a green beret 30 yrs ago. I get it, but not every conversation needs to startt off with a CV.
Really, didn't you just tell us about your business school?
Hello 30yrs. Not trying to be a dick. But let me try to explain something about that graph and your remark about 'ho hum' 5.3% interest rate.
What many ppl fail to realize is that rates of return and interest rate (fed) while not impressive as a static # is huge when put into context of compounding. In terms of the economy, I'd liken interest rate to the accelator pedal of a moving vehicle. Let's say our economy is currently going 45mph and our optimal speed is 85mph. At rates of 5% and below, we are adding 5mph every quarter. For every 100bps increase in the rate we are subtracting 5mph of acceleration every quarter. Even if we did nothing but keep rates at 6% for 4 quarters the economy would be traveling at 25mph. The key is the duration of said interest rate. If 4.5% mortgage rates over 3 yrs barely kept us out of the great depression 2.0 and a Complete meltdown of housing then what do you think 5.3% mortgage rates for 2 years would do to the housing mkt?
Why not just add more speed? Back to th car analogy, the fed has used up all of the good fuel at the moment. If we start adding piss water to the fuel, we may permanently break the engine to a point where the cost (inflation) of engine repair is beyond this administration or several administrations to deal with.
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Response by sinkcomm1
almost 16 years ago
Posts: 4
Member since: Apr 2010
w67thstreet
24 minutes ago
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Hello 30yrs. Not trying to be a dick.
Comes naturally?
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Response by 30yrs_RE_20_in_REO
almost 16 years ago
Posts: 9881
Member since: Mar 2009
w67: I think you missed my point entirely. It wasn't "ho hum 5.3% interest rate" as in "big deal that's not going to affect the market. As you say, "If 4.5% mortgage rates over 3 yrs barely kept us out of the great depression 2.0 and a Complete meltdown of housing then what do you think 5.3% mortgage rates for 2 years would do to the housing mkt?". My point is "5.3%? ha! wait till it hits 7% and see what happens".
To further your analogy of "the fed has used up all of the good fuel at the moment. If we start adding piss water to the fuel, we may permanently break the engine to a point where the cost (inflation) of engine repair is beyond this administration or several administrations to deal with. " . It sounds like you are saying (from the entirety of your post) that the fed has used up all the "good" low interest rate capital, so adding "piss in the form of higher interest rate loans". Well, if you have used up all of the "good fuel" (loan capital in the form of less than 5% mortgages), it means you don't have any (yeah, a tautology). So, since you don't HAVE any "good" fuel", and you don't want to put "bad" fuel into your engine, the ONLY answer left is to put NO FUEL into your engine. In other words, since we've used up all the below 5% loan sourcing, and we don't want to ruin our "engine" by putting in 5.3% (or higher) loans as "fuel, the only answer left is.......... no mortgage lending. Gee, I wonder what THAT will do?
But when you do things like lend Goldman Sachs billions of dollars at 0% and then borrow it back from them at 5%, shit like this is bound to happen. Of course the housing market will do better with lower interest rates and worse with higher interest rates, and even just a bump up to 5.3% will have a negative ("slowing") effect on our economic engine. But we've kept interest rates artificially low for a very long time now, and we can't just keep doing that forever, unless we are willing to end up taking wheelbarrows full of cash to the bakery to buy a loaf of bread.
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Response by 30yrs_RE_20_in_REO
almost 16 years ago
Posts: 9881
Member since: Mar 2009
w67: I think you missed my point entirely. It wasn't "ho hum 5.3% interest rate" as in "big deal that's not going to affect the market. As you say, "If 4.5% mortgage rates over 3 yrs barely kept us out of the great depression 2.0 and a Complete meltdown of housing then what do you think 5.3% mortgage rates for 2 years would do to the housing mkt?". My point is "5.3%? ha! wait till it hits 7% and see what happens".
To further your analogy of "the fed has used up all of the good fuel at the moment. If we start adding piss water to the fuel, we may permanently break the engine to a point where the cost (inflation) of engine repair is beyond this administration or several administrations to deal with. " . It sounds like you are saying (from the entirety of your post) that the fed has used up all the "good" low interest rate capital, so adding "piss in the form of higher interest rate loans". Well, if you have used up all of the "good fuel" (loan capital in the form of less than 5% mortgages), it means you don't have any (yeah, a tautology). So, since you don't HAVE any "good" fuel", and you don't want to put "bad" fuel into your engine, the ONLY answer left is to put NO FUEL into your engine. In other words, since we've used up all the below 5% loan sourcing, and we don't want to ruin our "engine" by putting in 5.3% (or higher) loans as "fuel, the only answer left is.......... no mortgage lending. Gee, I wonder what THAT will do?
But when you do things like lend Goldman Sachs billions of dollars at 0% and then borrow it back from them at 5%, shit like this is bound to happen. Of course the housing market will do better with lower interest rates and worse with higher interest rates, and even just a bump up to 5.3% will have a negative ("slowing") effect on our economic engine. But we've kept interest rates artificially low for a very long time now, and we can't just keep doing that forever, unless we are willing to end up taking wheelbarrows full of cash to the bakery to buy a loaf of bread.
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Response by hfscomm1
almost 16 years ago
Posts: 1590
Member since: Oct 2009
how come w67 never responded to 30yrs?
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Response by w67thstreet
almost 16 years ago
Posts: 9003
Member since: Dec 2008
30yrs... I misunderstood your graph... to me, it came across as not a significant increase in bps. I've often said a "national" recovering "jobs" mkt is the worst thing for NYC RE, as it gives cover for Geitner to stop pissing in the gas tank.w/ 20MM under/un employed, it'll be awhile bf the mariachi singer goes ballz deep in residential RE i.e. any increase in "cost" of homeownership will be taken by the seller not the buyer.
So wouldn't make the difference to the buyers anyways, the sellers are going to pick up the tab. Confusing title :-)
I have commercial mortgage docs from 1995 at 9.5%.... and I WAS ECSTATIC that it was below 10%..... yep... let's see who's wearing pads with wings when rates go to 7%....
thing is, the gap with jumbo is narrowing... so at the higher end, things are actually improving a bit.
over the rainbow, you're trying to argue that reduced affordability for the below jumbo mkt is good for the jumbo apt mkt? Right...
"email updates RSS Homebuyers Scramble as Mortgage Rates Jump"
I guess that's a better alternative to getting fried like those who bought during the bubble. Their just trying to keep their sunny side up I think.
Interest rates have to go up, exactly when and how I don't believe anyone really knows. But there are significant macro economic forces in play making this inevitable, in my opinion.
The affect on buyers/sellers depends a little bit on their situations. For many buyers often it's a wash, because higher interest rates push down property prices, so what they don't pay in price they pay in interest. This is because there are fewer buyers at each property price point. So a buyer's actual monthly outlay may not vary much, assuming modest increases in interest rates.
For sellers higher interest rates mean lower prices, period. I really believe prices are heading downward in the NYC metro area overall, but there are micro environments (pockets on the Upper West Side) that may react differently. Sellers are finding this out, too many the hard way.
For buyers with all cash or mostly cash, higher interest rates are great news, because prices will be forced down and there will be good deals to be had.
Sorry, that's "effect" not "affect" in second graf. Can't believe I did that after 20+ years in journalism, yikes.
Mortgage Rates on 30-Year U.S. Loans Jump to 5.21% (Update2)
April 8 (Bloomberg) -- U.S. mortgage rates jumped to the highest level in almost eight months, increasing borrowing costs for buyers and signaling a threat to the housing market’s recovery as government efforts to spur demand end.
Rates for 30-year fixed loans rose to 5.21 percent for the week ended today from 5.08 percent, mortgage finance company Freddie Mac said in a statement. That’s the highest rate since the week ended Aug. 13. The average 15-year rate was 4.52 percent, according to the McLean, Virginia-based company.
Loan rates are climbing from record lows last year as the economy shows signs of strengthening and after the Federal Reserve completed a program of buying about $1.25 trillion of securities backed by U.S. residential mortgages. Rising borrowing rates and the expiration of homebuyer tax credits this month may reduce demand for homes.
“Higher borrowing costs of course will weigh on affordability,” said Michelle Meyer, U.S. economist at Barclays Capital Inc. in New York. “It is still a low rate relative to the historical average.”
Mortgage rates for 30-year loans may rise to 6 percent -- a level not seen since November 2008 -- by the end of the year, George Mokrzan, senior economist at Huntington National Bank in Columbus, Ohio, said before the data were released. A stronger economy and increased job creation may offset the negative effect on housing demand as consumers become more confident about making large purchases, he said.
U.S. gross domestic product grew at a 5.6 percent annual rate in the fourth quarter, the best performance in six years.
Homes for Sale
The number of existing homes for sale jumped 9.5 percent in February, data from the National Association of Realtors show. Government tax credits for first-time home buyers and some current owners expire April 30.
The Fed’s program of buying mortgage-backed securities, which ended last week, helped reduce rates to a record low of 4.71 percent in December. The average 30-year rate over the past decade is 6.2 percent, with a high of 8.64 percent in May 2000, Freddie Mac data show.
The government bond purchases from Fannie Mae, Freddie Mac and Ginnie Mae, agencies that buy home loans from lenders and package them into securities, brought down yields and allowed lenders to reduce mortgage rates while still selling the bonds at a profit.
The Mortgage Bankers Association’s index of mortgage applications fell 11 percent in the week ended April 2. The portion of refinancings dropped 17 percent. Applications to purchase a home increased 0.2 percent.
To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net.
Last Updated: April 8, 2010 10:38 EDT
Wow. 20+ yrs in journalism. Thatz fantastic, so you like won a bunch of pulitzers, Nobels and are called to appear on national tv to opine on everything but especially on economic policy and the great bubble of 2007! Right?
My god, your analysis is like my first term Econ freshman's. Ya think interest rate is going up? Just a few bps? WTF r u smoking? It's gonna be porportional to the almost complete meltdown of our financial system. Where 3 out of the 7 I banks that applied for jobs after bschool disappeared. You think a person who paid $3mm studio at peak but got a 4% mortgage is equal to $2mm 3bdrm 7%mortgage who bought in 2011 is on equal footing bc their monthlies are the same? You ignore the mix of transactions that the 25% down represents, the burden of ir in a bubble popping housing mkt.
Plz stick to your pulitzer writing journalism career and leave the re to us professionals, oh wait you 'gave' up the high paying editorial job at nytimes to become a re broker, my bad. You are a 'professional'. My for the last umpteenth time, I get it you were a 'journalist' at one point. It's like a 50yo still talking about her 'modeling' profession as a jc Penney toddler gig 47 years ago.
I know you fluter, and your kind. Still talking about how you went to harvard while flipping burgers every chance you get. It makes me cringe when I hear that nycer neurotic 'i'm better than you' conversation starter.
Have a nice day.
w67th - I like you and all, but you don't have to be a dick.
Alright. But I am sick and tired of brokers having a vague notion of this is the beginning of the second leg down, but sugar coat it with net net a buyer is 'gonna' be fine. Yes did I take it out on fluter, absolutely. But it's more my rant against the entire brokerage and pointing out another pet peeve of mine, which is the 'acquaintance' pointing out again how he was like a green beret 30 yrs ago. I get it, but not every conversation needs to startt off with a CV.
So I apologize to fluter, it was a mor general rant on ppl of that ilk. :)
waverly
7 minutes ago
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w67th - I like you and all, but you don't have to be a dick.
Why do you like him? Dick is his only persona online.
Which you are one of.
... But it's more my rant against the entire brokerage and pointing out another pet peeve of mine, which is the 'acquaintance' pointing out again how he was like a green beret 30 yrs ago. I get it, but not every conversation needs to startt off with a CV.
Really, didn't you just tell us about your business school?
Rants are always appreciated;)
Wow... AL THE WAY BACK UP TO 5.3%?
http://mortgage-x.com/images/graph/r_arm_frm.gif
Hello 30yrs. Not trying to be a dick. But let me try to explain something about that graph and your remark about 'ho hum' 5.3% interest rate.
What many ppl fail to realize is that rates of return and interest rate (fed) while not impressive as a static # is huge when put into context of compounding. In terms of the economy, I'd liken interest rate to the accelator pedal of a moving vehicle. Let's say our economy is currently going 45mph and our optimal speed is 85mph. At rates of 5% and below, we are adding 5mph every quarter. For every 100bps increase in the rate we are subtracting 5mph of acceleration every quarter. Even if we did nothing but keep rates at 6% for 4 quarters the economy would be traveling at 25mph. The key is the duration of said interest rate. If 4.5% mortgage rates over 3 yrs barely kept us out of the great depression 2.0 and a Complete meltdown of housing then what do you think 5.3% mortgage rates for 2 years would do to the housing mkt?
Why not just add more speed? Back to th car analogy, the fed has used up all of the good fuel at the moment. If we start adding piss water to the fuel, we may permanently break the engine to a point where the cost (inflation) of engine repair is beyond this administration or several administrations to deal with.
w67thstreet
24 minutes ago
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Hello 30yrs. Not trying to be a dick.
Comes naturally?
w67: I think you missed my point entirely. It wasn't "ho hum 5.3% interest rate" as in "big deal that's not going to affect the market. As you say, "If 4.5% mortgage rates over 3 yrs barely kept us out of the great depression 2.0 and a Complete meltdown of housing then what do you think 5.3% mortgage rates for 2 years would do to the housing mkt?". My point is "5.3%? ha! wait till it hits 7% and see what happens".
To further your analogy of "the fed has used up all of the good fuel at the moment. If we start adding piss water to the fuel, we may permanently break the engine to a point where the cost (inflation) of engine repair is beyond this administration or several administrations to deal with. " . It sounds like you are saying (from the entirety of your post) that the fed has used up all the "good" low interest rate capital, so adding "piss in the form of higher interest rate loans". Well, if you have used up all of the "good fuel" (loan capital in the form of less than 5% mortgages), it means you don't have any (yeah, a tautology). So, since you don't HAVE any "good" fuel", and you don't want to put "bad" fuel into your engine, the ONLY answer left is to put NO FUEL into your engine. In other words, since we've used up all the below 5% loan sourcing, and we don't want to ruin our "engine" by putting in 5.3% (or higher) loans as "fuel, the only answer left is.......... no mortgage lending. Gee, I wonder what THAT will do?
But when you do things like lend Goldman Sachs billions of dollars at 0% and then borrow it back from them at 5%, shit like this is bound to happen. Of course the housing market will do better with lower interest rates and worse with higher interest rates, and even just a bump up to 5.3% will have a negative ("slowing") effect on our economic engine. But we've kept interest rates artificially low for a very long time now, and we can't just keep doing that forever, unless we are willing to end up taking wheelbarrows full of cash to the bakery to buy a loaf of bread.
w67: I think you missed my point entirely. It wasn't "ho hum 5.3% interest rate" as in "big deal that's not going to affect the market. As you say, "If 4.5% mortgage rates over 3 yrs barely kept us out of the great depression 2.0 and a Complete meltdown of housing then what do you think 5.3% mortgage rates for 2 years would do to the housing mkt?". My point is "5.3%? ha! wait till it hits 7% and see what happens".
To further your analogy of "the fed has used up all of the good fuel at the moment. If we start adding piss water to the fuel, we may permanently break the engine to a point where the cost (inflation) of engine repair is beyond this administration or several administrations to deal with. " . It sounds like you are saying (from the entirety of your post) that the fed has used up all the "good" low interest rate capital, so adding "piss in the form of higher interest rate loans". Well, if you have used up all of the "good fuel" (loan capital in the form of less than 5% mortgages), it means you don't have any (yeah, a tautology). So, since you don't HAVE any "good" fuel", and you don't want to put "bad" fuel into your engine, the ONLY answer left is to put NO FUEL into your engine. In other words, since we've used up all the below 5% loan sourcing, and we don't want to ruin our "engine" by putting in 5.3% (or higher) loans as "fuel, the only answer left is.......... no mortgage lending. Gee, I wonder what THAT will do?
But when you do things like lend Goldman Sachs billions of dollars at 0% and then borrow it back from them at 5%, shit like this is bound to happen. Of course the housing market will do better with lower interest rates and worse with higher interest rates, and even just a bump up to 5.3% will have a negative ("slowing") effect on our economic engine. But we've kept interest rates artificially low for a very long time now, and we can't just keep doing that forever, unless we are willing to end up taking wheelbarrows full of cash to the bakery to buy a loaf of bread.
how come w67 never responded to 30yrs?
30yrs... I misunderstood your graph... to me, it came across as not a significant increase in bps. I've often said a "national" recovering "jobs" mkt is the worst thing for NYC RE, as it gives cover for Geitner to stop pissing in the gas tank.w/ 20MM under/un employed, it'll be awhile bf the mariachi singer goes ballz deep in residential RE i.e. any increase in "cost" of homeownership will be taken by the seller not the buyer.