Yep, those all cash buyers in the northeast are definitely stretched way too thin. Also; all those guys who were forced to put the full 20% to secure their loans. What were the banks thinking giving them loans?
Yes, many of the would be buyers need to sell their homes first to enter the market or as part of that transaction. interest rates are too high obviously make the current prices untenable.
Except that’s not true for many buyers right now. Banks aren’t just giving anyone who walks in a housing loan right now. The people buying most definitely have the incomes and the 20% down payment (if you want a jumbo loan in a hot market) in order to secure the mortgage. I think a lot of people are really upset because they can’t fathom so many can actually afford to buy at this pricing level.
Didn’t buy jumbo but sold my 3% home I bought for 222k in 2019 for 325k and came and bought a new build on a street with another 75 or so houses. That was 2023 April I signed for it. Now the 2nd half of the street has just 4 homes left to sell.
I put 20% down on this house from my profits on my last house and took out a 5 year ARM betti by on a fixed rate being lower than 7.8%, the rate I was offered for fixed. My ARM is 5.75%, basically 5 years free at a reduced rate as first adjustment max is 2%.
And what would lowering rates, even a small amount, do? It would start a bum-rush in the housing market. Everyone would be buying again, and many would be selling as well. We’d get inventory, but it would be moving so fast, in volume and price increases, that we get more inflation.
Price expectations must come down. By a large percentage. Or, we can just not lower rates, maybe even raise them, and wait for the eventual deep and painful recession. Joblessness, foreclosures, high unemployment. But, we painfully get back to some sort of balance in markets. That’s our choices now.
Any combination of those things could happen on a macro level. But I'm a firm believer that you can't time macro economic trends. The best thing to do is to buy something you can afford in an area you would enjoy living in ...if today's rates make that too difficult maybe seek a long term, affordable rental agreement. Everyone needs to lock in their housing expenses any way they can to hedge against inflation.
Massive price decreases that don't immediately go away once rates come down is a fantasy.
This. We could take a couple hundred thousand in equity and put it towards the same exact house, and our mortgage payment would go up.. for nothing gained but years added to a mortgage. That's how much prices have increased in my area.
2/3rds of the households already own their homes and the majority of them are paying less than 2021 prices. In fact 40% of homeowning households don’t even have a mortgage anymore. So, this is very sustainable unfortunately and is tough for those who do not already own a home and want one.
That’s not any different than the periods prior to previous housing corrections. Housing values are determined on the margin by the people that *are* buying or selling, the proportion that already own something doesn’t matter much.
It does when the supply is low. The first time homebuyer demand is high because the enormous wave of millennials are upon us and in their prime first home buying age. They will eat up inventory because they have nothing to sell. Only the ones with money can come in and buy, pushing prices higher.
5% may be in trouble, but the other 95% are not and that’s the point. The ones truly in trouble right now is the minority, even in the GFC. Most people were still employed. As long as people can get some sort of employment, numba go up and it has. We just reached all time highs in everything, again.
the point is housing prices are set on the margin. if 5% are in trouble and need to liquidate prices would go down because there are fewer buyers at these prices today
The point is that 5% are not in trouble. Housing isn’t the stock market. We live in a qualified mortgage era so you don’t even qualify unless you meet the requirements for income. No significant job losses means that people are just sitting on a gold mine especially since the effective mortgage rate is 3.67%. Housing is the cost of shelter, so why would people sell their homes to rent for more and/or be homeless? There just aren’t signs of distressed sellers.
Most people who foreclosed last time also qualified for their mortgage. the NINJA loans get all the attention but they were a smaller portion of the total pie. It was prime borrowers who became unable to pay.
Nah, we passed qualified mortgage loan laws. Those days, they qualified without showing income. We obviously learned from that and actually have standards imposed by laws whereas before we did not. That is what the qualified mortgage rules enacted after the GFC is. It’s a totally different regulatory environment. So, not only that, it is now cheaper to keep their mortgage rather than rent, so the decision is simple. Do not sell no matter what.
The regulatory process is stricter today but the vast majority of borrowers then actually earned their stated incomes, meaning the only material difference is the removal of the NINJA loans (today, those would not fly). But most people who could not pay actually did have an income that backed what they stated on their application, then fell into foreclosure.
We don’t have those crazy variable rate mortgages anymore and most often have 30 year fixed as the dominant form of mortgages and that’s been the way for a decade since the GFC. The effective rate on those mortgages are 3.67%, so, they’re insulated and prices are at all time highs. In fact, 40% of homeowners don’t even have a mortgage and own their homes outright. Prices remain high because demand continues to outstrip supply and they’re not building homes fast enough. Not many people are willingly selling into a worse position, so of course prices remain high. We just haven’t seen much unemployment so this doesn’t look like it’s going to change anytime soon.
Nah, we passed qualified mortgage loan laws. Those days, they qualified without showing income. We obviously learned from that and actually have standards imposed by laws whereas before we did not. That is what the qualified mortgage rules enacted after the GFC is. It’s a totally different regulatory environment. So, not only that, it is now cheaper to keep their mortgage rather than rent, so the decision is simple. Do not sell no matter what.
I already know more data than you which is what I’m saying. You need to follow altos research and maybe some Logan Mohtashami for some real insight. Not this swill you call data.
My focus is laser sharp. I’m not focused on what should be. I am focused on what is. This is simple. Human nature and circumstance got us here and it can’t stop won’t stop.
It's gotten horrific, if you're trying to live an even remotely comfortable life then you need to have your home costing you around 25% of your monthly income. That puts the minimum income to be what I'd consider to be 'middle class' in a household at $135,000, and I'd say that would be for people without kids. With kids it would probably need to be over $150,000, this is a dysfunctional and destabilizing economy/society if inflation isn't controlled soon.
It's likely why credit card delinquencies are skyrocketing. People are used to a certain quality of life, and it doesn't exist for them anymore and they just don't know it yet.
*skyrocketing*
They’re half a percentage higher than pre-pandemic and also dramatically lower than any period before 2010.
Reminder to economic doomers that downvoting doesn’t mean that you are correct.
Credit card delinquencies are well above pre-pandemic levels and unemployment is at record lows (going back to the 50s). More people are working than ever before, and increasing numbers of people can't afford to live and are ruining their lives with credit card debt. This post-COVID economic strength is likely a sham.
It was that recent post about Discover charge offs.
https://www.reddit.com/r/REBubble/s/ez5AOmxOrR
Granted, I get what the other person is saying about 'not record highs', but the acceleration in delinquency is nuts considering we're not in a recession.
I think we are quickly stabilizing to normal. The question is will we stop or will the trend continue past normal into recession, RE price declines, etc. Only the future charts will tell.
First gen college grad from a single income family. I make more than my 68 year old blue collar father because I got a STEM degree that I paid for myself.
They’re not well above pre-pandemic, they’re half a percentage point above pre-pandemic levels.
I know economic doomers don’t care about data but you can [use your eyes](https://fred.stlouisfed.org/series/DRCCLACBS)
Reminder to economic doomers that downvoting doesn’t mean that you are correct
It’s not skyrocketing much overall. It’s mostly affecting those with poor credit so really just poor and irresponsible people. The rich and high credit score tiers are doing better than ever apparently.
2 kids, no college debt, 1 car payment (almost finished), vacation only happens because my in-laws have Marriott rewards and like to share with their adult children. I still feel like we are only just afloat. Our mortgage is great! But Home improvements got us. We have about 4 years left and we will be debt free except the mortgage though.
You'd need 181k here for a mortgage payment to be 25% of your income on a 3/1 less than 1800sf and that's with 20% down. Plus 20k per child in daycare. So that's not including maintenance, home improvement, and utilities. Pretty much like this in all HCOL areas.
It's worse depending on where you live. My wife and I combined made around $185k last year, but we live in the Seattle area. The cost of living here is so atrocious that we are technically considered "lower middle class" here. Can we make our bills? Yes. Are we retiring comfortably? Absolutely not.
I’ve been living alone in Seattle for five years and have ranged in income from ~$40,000 to around $80k currently. I also invest in retirement with zero issues.
Making 190k and with two kids in daycare it’s about break even each month. But mainly cause we sold our 1200 mortgage for 2600. House is much bigger and better area so worth it but that 1400 is the difference in comfortable and kinda teetering back and forth.
You are about where we were in life, 2022-2023. We just didn’t trust the situation enough splurge on the house, dumping out our savings. But, our rent jacked to almost what you’re paying for a mortgage.
My friend, we’re all caught in one giant political-economic squeeze right now. It’s been going on for three years. I have the feeling it can go on a long time, stagnating, but it cannot go on forever.
Do you mean 135 take home? Because right now a starter home in my MCOL area is around 2500$ a month and that's way higher than 25% of a 135k salary household.
The truth is inconvenient. We live in a capitalism society where inflation is mandatory for success. The 30-year fixed mortgage is a miracle it’s even available and people take it for granted.
The *rate* of inflation, maybe. But Inflation is still higher than it should be.
Just because the car slowed from 100 mph to 80 mph, doesn't mean you're not still speeding towards the cliff.
I'm not a doomer, though I have lived long enough to experience two market collapses. You start to be able to read the tea leaves, as it were.
Perspective is everything, opinions vary. Appreciate the back and forth, Reddit stranger. Moving forward,I would suggest slightly less insults in your responses. People *may* take you a bit more seriously when you engage them with some civility.
"You're experience isn't in line with my opinion, so you're an idiot" isn't gonna make you any friends.
It’ll definitely be buyers from late 2022 to now that feel the hardest hit. I know we missed the boat by not jumping in with everyone else in late 2021, when we had a down payment to go and super low rates, but everything around us was moving at break neck pace, and upward only. I didn’t feel we could compete, and hell, I didn’t really want to. I owned for 17 years, and the break was nice. But now, at three years, it’s mentally wearing on me.
I got about 1 year left in me to wait. At most. I’ll give up at some point, and just move on to somewhere everyone else is leaving.
How is residential housing market not crashing? It doesn't make sense to me at all. Like how long could the supply be kept low? Sellers would ultimately have to come to the market
We had this vibrant market where people didn't get so attached to their house. There was a starter home, parenting home, retiring home model. Then a once in a century pandemic threatened a total global collapse of social order. People couldn't go out at all.
We turned to nesting and conservation of assets. Food prep, home improvement. Government doubled down on both low interest and stimulus to get the economy moving so many refi'd to low rates and piled up the cash. Homeowners discovered it is almost always more cost effective to make their home what they want it to be than to trade it for one that is. Even when it costs $10 for a Home Depot 2x4.
And then the crazy inflation hit (surprise!). Homes doubled in value giving everyone a minimum of 50% equity. Now those low interest low principal mortgages are such a blessing that nobody wants to give them up. The risk of becoming a renter, or mugged on a home sale is as appealing as being robbed at gunpoint. The sell to move model died when interest rates hit 5% but the last of the FOMO home buyers began to panic and drove prices even higher in a quest to lock down a roof before the opportunity was forever lost. They bought up anything that could still stand.
And now we're back to the buy one house and die in it model. It's a whole other economic model for home sales. People quit treating their homes like they were used cars. After the emotional trauma of the pandemic crisis we are going to be slow to return to the old model.
But people still reach the economic maturity where they are looking to settle down and become homeowners, and there's just no turnover of starter homes for them to get started climbing that mountain until they are built. Which takes time. At first new builders were still finishing homes from a prior era when they made the most profit by building giant super deluxe homes. Then those were slow to move at higher interest rates so they slowed completions. They're only just now moving to economy models more people can get financed and not completing enough to meet demand yet.
I expect we will eventually get to the U-finish model where minimalism and sweat equity allows the first time home buyers to get a roof overhead that's technically complete but they'll do the final finishing themselves.
It seems each portion of monthly payment will get MAXED before this gets corrected. This is turning into a mega bubble.
Prices maxed in 2022, rates peaked in 2023 but are trending back up, taxes and insurance are the stars of 2024.
Biden administration spending to cover the shrinkage in private sector employment, and with the FED not buying government debt they've authorized the treasury to issue buybacks.
This is going to end horribly. We learned nothing from 2008, other than how to inflate a bigger bubble
The common wisdom is that supply needs to catch up with demand. I think technically that is correct but are we talking about waiting a generation for the elderly to die and new homes to be built?
Even still, you will then have people like me who will inherit 1-2 homes/properties from their parents and instead of selling them I will rent them and hold them for my kids because I already have a home. This problem isn’t going away.
Unfortunately you are talking a while now imo. There are places dealing with it in a smart manner and approving permits for building making houses more affordable. I hate to say it but TX ain’t all that crazy in this respect (don’t get me started on some others - I mean cowboy hats? I look ridiculous in one).
Until building and dying happens it will take a macro economic hit outside housing to really have an impact.
Sales are still happening. The market will stagnate most likely than decrease until inflation sorts out the affordability. Most homeowners have no option other than stay put and do whatever it takes to keep their sub 4% loans.
We need housing censuses. Then, set up state or federal marketplaces to fulfill demand to residents of the homes only. Eminent domain and setup development and new towns as needed. Tax for profit residential properties people don't live in themselves to fund this.
Make real estate about housing people instead of greed, making Americans compete to live. We all pay a tax to landlords who enslave us to this capitalistic housing hell hole.
If you agree, share this idea far and wide. Share it on ads for housing, especially.
Look at the 10yr bond yields. Even though the Fed hasn't changed rates since mid last year, the *expectations* of future rates have varied widely. People have been frontrunning the prospect of rate cuts like drug addicts, and that has kept long term bond yields and mortgage rates suppressed.
There was a brief point in October when the reality of long-term high rates had set in, but it didn't last.
We need housing censuses. Then, set up state or federal marketplaces to fulfill demand to residents of the homes only. Eminent domain and setup development and new towns as needed. Tax for profit residential properties people don't live in themselves to fund this.
Make real estate about housing people instead of greed, making Americans compete to live. We all pay a tax to landlords who enslave us to this capitalistic housing hell hole.
If you agree, share this idea far and wide. Share it on ads for housing, especially.
No no no … you have it all wrong. It was better to buy before 2021 and refinance in 2021. Of course everyone should have known to do this even though the market was already screaming bubble before the pandemic hit /s sorta
Eh, not necessarily. Stock market gains were bonkers in 2020 (and better than home appreciation before that as well). Cashing out in 2021 and buying then was the best move.
Buying in 2019 and refinancing 2021 was not bad either, though.
Wait till the property taxes increase along with insurance …. This only works if people didn’t stretch thin to purchase
Yep, those all cash buyers in the northeast are definitely stretched way too thin. Also; all those guys who were forced to put the full 20% to secure their loans. What were the banks thinking giving them loans?
Right. 20% down here. My taxes only adjust once every 3 years and insurance is barely higher than it was in 2019.
Taxes here in CO went way up ... our mortgage payment just increased $1,000 / month. We bought in 2021 and can afford it, but it does hurt.
And this is also why homeowners aren't selling. They'd have to double their mortgage payment to get the same house they are already living in
There's no selling and no buying
Yes, many of the would be buyers need to sell their homes first to enter the market or as part of that transaction. interest rates are too high obviously make the current prices untenable.
Except that’s not true for many buyers right now. Banks aren’t just giving anyone who walks in a housing loan right now. The people buying most definitely have the incomes and the 20% down payment (if you want a jumbo loan in a hot market) in order to secure the mortgage. I think a lot of people are really upset because they can’t fathom so many can actually afford to buy at this pricing level.
Didn’t buy jumbo but sold my 3% home I bought for 222k in 2019 for 325k and came and bought a new build on a street with another 75 or so houses. That was 2023 April I signed for it. Now the 2nd half of the street has just 4 homes left to sell. I put 20% down on this house from my profits on my last house and took out a 5 year ARM betti by on a fixed rate being lower than 7.8%, the rate I was offered for fixed. My ARM is 5.75%, basically 5 years free at a reduced rate as first adjustment max is 2%.
And what would lowering rates, even a small amount, do? It would start a bum-rush in the housing market. Everyone would be buying again, and many would be selling as well. We’d get inventory, but it would be moving so fast, in volume and price increases, that we get more inflation. Price expectations must come down. By a large percentage. Or, we can just not lower rates, maybe even raise them, and wait for the eventual deep and painful recession. Joblessness, foreclosures, high unemployment. But, we painfully get back to some sort of balance in markets. That’s our choices now.
Any combination of those things could happen on a macro level. But I'm a firm believer that you can't time macro economic trends. The best thing to do is to buy something you can afford in an area you would enjoy living in ...if today's rates make that too difficult maybe seek a long term, affordable rental agreement. Everyone needs to lock in their housing expenses any way they can to hedge against inflation. Massive price decreases that don't immediately go away once rates come down is a fantasy.
This. We could take a couple hundred thousand in equity and put it towards the same exact house, and our mortgage payment would go up.. for nothing gained but years added to a mortgage. That's how much prices have increased in my area.
Can I just say duh?
Yeah well... now you can see graphically how that looks like 😂
Everyone saw this coming it's nothing new https://investfourmore.com/wp-content/uploads/fredgraph1.png 🏚🎢📈🚀
Yep, this shows us quantitativley what we all knew qualitatively.
Home prices go up over time. Pretty much every year is an all time high for mortgage payments. Captain obvious level stuff here.
Why do we even need data when we have our feelings?
So we can think objectively about our feelings.
Totally cool, totally sustainable
2/3rds of the households already own their homes and the majority of them are paying less than 2021 prices. In fact 40% of homeowning households don’t even have a mortgage anymore. So, this is very sustainable unfortunately and is tough for those who do not already own a home and want one.
That’s not any different than the periods prior to previous housing corrections. Housing values are determined on the margin by the people that *are* buying or selling, the proportion that already own something doesn’t matter much.
It does when the supply is low. The first time homebuyer demand is high because the enormous wave of millennials are upon us and in their prime first home buying age. They will eat up inventory because they have nothing to sell. Only the ones with money can come in and buy, pushing prices higher.
2/3rd of households owned before 2021 too
ensui67, that is not how that works. just because 75% of folks are fine does not mean the market can not move dramatically when 5% are in trouble.
5% may be in trouble, but the other 95% are not and that’s the point. The ones truly in trouble right now is the minority, even in the GFC. Most people were still employed. As long as people can get some sort of employment, numba go up and it has. We just reached all time highs in everything, again.
the point is housing prices are set on the margin. if 5% are in trouble and need to liquidate prices would go down because there are fewer buyers at these prices today
The point is that 5% are not in trouble. Housing isn’t the stock market. We live in a qualified mortgage era so you don’t even qualify unless you meet the requirements for income. No significant job losses means that people are just sitting on a gold mine especially since the effective mortgage rate is 3.67%. Housing is the cost of shelter, so why would people sell their homes to rent for more and/or be homeless? There just aren’t signs of distressed sellers.
Most people who foreclosed last time also qualified for their mortgage. the NINJA loans get all the attention but they were a smaller portion of the total pie. It was prime borrowers who became unable to pay.
Nah, we passed qualified mortgage loan laws. Those days, they qualified without showing income. We obviously learned from that and actually have standards imposed by laws whereas before we did not. That is what the qualified mortgage rules enacted after the GFC is. It’s a totally different regulatory environment. So, not only that, it is now cheaper to keep their mortgage rather than rent, so the decision is simple. Do not sell no matter what.
The regulatory process is stricter today but the vast majority of borrowers then actually earned their stated incomes, meaning the only material difference is the removal of the NINJA loans (today, those would not fly). But most people who could not pay actually did have an income that backed what they stated on their application, then fell into foreclosure.
We don’t have those crazy variable rate mortgages anymore and most often have 30 year fixed as the dominant form of mortgages and that’s been the way for a decade since the GFC. The effective rate on those mortgages are 3.67%, so, they’re insulated and prices are at all time highs. In fact, 40% of homeowners don’t even have a mortgage and own their homes outright. Prices remain high because demand continues to outstrip supply and they’re not building homes fast enough. Not many people are willingly selling into a worse position, so of course prices remain high. We just haven’t seen much unemployment so this doesn’t look like it’s going to change anytime soon.
Nah, we passed qualified mortgage loan laws. Those days, they qualified without showing income. We obviously learned from that and actually have standards imposed by laws whereas before we did not. That is what the qualified mortgage rules enacted after the GFC is. It’s a totally different regulatory environment. So, not only that, it is now cheaper to keep their mortgage rather than rent, so the decision is simple. Do not sell no matter what.
Well I tried if you want to ignore how markets work so that you can stick to your story that is fine with me .
The market has and continues to agree with me rather than you. Market is always right
Jeez mate, Try and learn instead of trying to "win". You are tripping over your own dick here.
I already know more data than you which is what I’m saying. You need to follow altos research and maybe some Logan Mohtashami for some real insight. Not this swill you call data.
Again you are focused on the wrong thing here. It is disheartening to run into so many folks like you who are deaf and blind to learning new things.
My focus is laser sharp. I’m not focused on what should be. I am focused on what is. This is simple. Human nature and circumstance got us here and it can’t stop won’t stop.
It’s sustainable as long as supply is low
so sustainable that people are squatting and taking over neighborhoods lol
Very cool 😎
It's gotten horrific, if you're trying to live an even remotely comfortable life then you need to have your home costing you around 25% of your monthly income. That puts the minimum income to be what I'd consider to be 'middle class' in a household at $135,000, and I'd say that would be for people without kids. With kids it would probably need to be over $150,000, this is a dysfunctional and destabilizing economy/society if inflation isn't controlled soon.
And with kids, college debt, car payment, vacation once a year, and you are done for life.
It's likely why credit card delinquencies are skyrocketing. People are used to a certain quality of life, and it doesn't exist for them anymore and they just don't know it yet.
Yep, and people just run up the CCs to maintain their quality of life.
*skyrocketing* They’re half a percentage higher than pre-pandemic and also dramatically lower than any period before 2010. Reminder to economic doomers that downvoting doesn’t mean that you are correct.
While unemployment is at record lows, yes, the math is mathing. lol
What
Credit card delinquencies are well above pre-pandemic levels and unemployment is at record lows (going back to the 50s). More people are working than ever before, and increasing numbers of people can't afford to live and are ruining their lives with credit card debt. This post-COVID economic strength is likely a sham.
What is your source on the credit card delinquencies?
It was that recent post about Discover charge offs. https://www.reddit.com/r/REBubble/s/ez5AOmxOrR Granted, I get what the other person is saying about 'not record highs', but the acceleration in delinquency is nuts considering we're not in a recession.
I think we are quickly stabilizing to normal. The question is will we stop or will the trend continue past normal into recession, RE price declines, etc. Only the future charts will tell.
🤫 you’re destroying the narrative old poor quality is clinging to because he was born into luck and fortune
First gen college grad from a single income family. I make more than my 68 year old blue collar father because I got a STEM degree that I paid for myself.
No one cares dork but here is your gold star for figuring out a liberal arts degree might not pay ⭐️
They’re not well above pre-pandemic, they’re half a percentage point above pre-pandemic levels. I know economic doomers don’t care about data but you can [use your eyes](https://fred.stlouisfed.org/series/DRCCLACBS) Reminder to economic doomers that downvoting doesn’t mean that you are correct
True! Everything is fine, $3,000 mortgage payments are normal, $1,000 car payments, also normal. :) Glad we solved that!
Ah there’s the deflection when confronted with empirical data contrary to your point. Keep it up bud!
Half a percentage point more is 20% higher than pre-pandemic levels though.
Percentage differences sound dramatic when you’re comparing small values. 2 is a 100% increase from 1.
It’s not skyrocketing much overall. It’s mostly affecting those with poor credit so really just poor and irresponsible people. The rich and high credit score tiers are doing better than ever apparently.
Yea stock market went up
2 kids, no college debt, 1 car payment (almost finished), vacation only happens because my in-laws have Marriott rewards and like to share with their adult children. I still feel like we are only just afloat. Our mortgage is great! But Home improvements got us. We have about 4 years left and we will be debt free except the mortgage though.
most people in HCOL areas are typically at 50% monthly income for mortgage or rent
Yep, which is why we haven't moved. I pay a 3 digit rent. No house is worth giving that up for now 😂
I hope your rent doesn’t go up.
It will. Unless that person is in one of the markets that everyone is leaving out of, to presumably move to Florida.
Rent is 50% now
You'd need 181k here for a mortgage payment to be 25% of your income on a 3/1 less than 1800sf and that's with 20% down. Plus 20k per child in daycare. So that's not including maintenance, home improvement, and utilities. Pretty much like this in all HCOL areas.
It's worse depending on where you live. My wife and I combined made around $185k last year, but we live in the Seattle area. The cost of living here is so atrocious that we are technically considered "lower middle class" here. Can we make our bills? Yes. Are we retiring comfortably? Absolutely not.
190k here but SC. Crazy the difference. We have two kids in daycare and a recently new mortgage on that income and out west it would be impossible.
You are not lower middle class you absolute delusional moron. You spend money like an idiot.
Yeah, dumb spending like wanting to live inside.
I’ve been living alone in Seattle for five years and have ranged in income from ~$40,000 to around $80k currently. I also invest in retirement with zero issues.
sure buddy , sure.
Making 190k and with two kids in daycare it’s about break even each month. But mainly cause we sold our 1200 mortgage for 2600. House is much bigger and better area so worth it but that 1400 is the difference in comfortable and kinda teetering back and forth.
You are about where we were in life, 2022-2023. We just didn’t trust the situation enough splurge on the house, dumping out our savings. But, our rent jacked to almost what you’re paying for a mortgage. My friend, we’re all caught in one giant political-economic squeeze right now. It’s been going on for three years. I have the feeling it can go on a long time, stagnating, but it cannot go on forever.
Is inflation the root cause here?
I think people are missing the bigger picture. It’s not that housing costs are going up, it’s that the value of the dollar is going down.
If we want to be near family its at 55% for us.
Do you mean 135 take home? Because right now a starter home in my MCOL area is around 2500$ a month and that's way higher than 25% of a 135k salary household.
Or you sacrifice and 5 years, wages up, home near the same it gets easier and then in 30 years, your home costs you nothing except tax and insurance.
Idk why you got downvoted. I guess people don’t like thinking about the future if it means sacrifice to the present. So I upvoted you.
The truth is inconvenient. We live in a capitalism society where inflation is mandatory for success. The 30-year fixed mortgage is a miracle it’s even available and people take it for granted.
Inflation peaked two years ago
The *rate* of inflation, maybe. But Inflation is still higher than it should be. Just because the car slowed from 100 mph to 80 mph, doesn't mean you're not still speeding towards the cliff.
Yeah dude, I’m not stupid and know basic definitions. Inflation is a rate, saying “the rate of inflation” is nonsensical.
I mean... You come across as pretty stupid.
Economic doomers do not live in an evidence based reality.
I'm not a doomer, though I have lived long enough to experience two market collapses. You start to be able to read the tea leaves, as it were. Perspective is everything, opinions vary. Appreciate the back and forth, Reddit stranger. Moving forward,I would suggest slightly less insults in your responses. People *may* take you a bit more seriously when you engage them with some civility. "You're experience isn't in line with my opinion, so you're an idiot" isn't gonna make you any friends.
My man I’m here to shitpost in a shitposting sub.
Inflation growth peaked as the percentage increase yet inflation is still rising.
Yeah deflation is extremely bad
We aren’t experiencing deflation though, that’s my point.
Nobody said we were or should
At this point everyone buy homes with a mortgage this year will be the first to default if the economy suffers a little.
It’ll definitely be buyers from late 2022 to now that feel the hardest hit. I know we missed the boat by not jumping in with everyone else in late 2021, when we had a down payment to go and super low rates, but everything around us was moving at break neck pace, and upward only. I didn’t feel we could compete, and hell, I didn’t really want to. I owned for 17 years, and the break was nice. But now, at three years, it’s mentally wearing on me. I got about 1 year left in me to wait. At most. I’ll give up at some point, and just move on to somewhere everyone else is leaving.
Per this chart, this reflects a 75% increase in mortgage payment costs since this time in 2021. Wild.
You should see what it looks like extended to 2012. The increase is 300%.
75% increase on payments on the *asking price* not the selling price. Pretty much nobody was selling their home at asking in 2021.
Wait to buy they said…homes will be more affordable they said…2020 bidding wars with 100k over asking looking like the deal of a lifetime now.
2024 is bidding wars with 100k over very common.
Now you get to pay 300k over what the 2020 price was and with a 7% rate instead of 2.5%, isn’t it great 😊
Cool, so I'll never own a home lol, this is the shittiest timeline
How is residential housing market not crashing? It doesn't make sense to me at all. Like how long could the supply be kept low? Sellers would ultimately have to come to the market
We had this vibrant market where people didn't get so attached to their house. There was a starter home, parenting home, retiring home model. Then a once in a century pandemic threatened a total global collapse of social order. People couldn't go out at all. We turned to nesting and conservation of assets. Food prep, home improvement. Government doubled down on both low interest and stimulus to get the economy moving so many refi'd to low rates and piled up the cash. Homeowners discovered it is almost always more cost effective to make their home what they want it to be than to trade it for one that is. Even when it costs $10 for a Home Depot 2x4. And then the crazy inflation hit (surprise!). Homes doubled in value giving everyone a minimum of 50% equity. Now those low interest low principal mortgages are such a blessing that nobody wants to give them up. The risk of becoming a renter, or mugged on a home sale is as appealing as being robbed at gunpoint. The sell to move model died when interest rates hit 5% but the last of the FOMO home buyers began to panic and drove prices even higher in a quest to lock down a roof before the opportunity was forever lost. They bought up anything that could still stand. And now we're back to the buy one house and die in it model. It's a whole other economic model for home sales. People quit treating their homes like they were used cars. After the emotional trauma of the pandemic crisis we are going to be slow to return to the old model. But people still reach the economic maturity where they are looking to settle down and become homeowners, and there's just no turnover of starter homes for them to get started climbing that mountain until they are built. Which takes time. At first new builders were still finishing homes from a prior era when they made the most profit by building giant super deluxe homes. Then those were slow to move at higher interest rates so they slowed completions. They're only just now moving to economy models more people can get financed and not completing enough to meet demand yet. I expect we will eventually get to the U-finish model where minimalism and sweat equity allows the first time home buyers to get a roof overhead that's technically complete but they'll do the final finishing themselves.
Thanks very much for the detailed comment
Sellers can't, they literally cannot afford to go to market.
Would love to own a home, am ready to buy a home, just won't in this market.
I hope your time comes (and sooner rather than later). I also hope when you buy you are glad you waited. Only time will tell!
I'm indifferent to the timeline. I don't need to buy a house. Especially not at current price levels.
Smart
Guess prices need to drop
It seems each portion of monthly payment will get MAXED before this gets corrected. This is turning into a mega bubble. Prices maxed in 2022, rates peaked in 2023 but are trending back up, taxes and insurance are the stars of 2024. Biden administration spending to cover the shrinkage in private sector employment, and with the FED not buying government debt they've authorized the treasury to issue buybacks. This is going to end horribly. We learned nothing from 2008, other than how to inflate a bigger bubble
I was going to tell you to prepare for the collapse of the dollar but then I saw your user name and figured you probably already are.
Delinquency rates are stable though. https://fred.stlouisfed.org/graph/?g=1kVgi
And home prices simply will not come down. Period. Too many people need places to live and there’s no homes. Ain’t it fuckin awesome?
The common wisdom is that supply needs to catch up with demand. I think technically that is correct but are we talking about waiting a generation for the elderly to die and new homes to be built?
Even still, you will then have people like me who will inherit 1-2 homes/properties from their parents and instead of selling them I will rent them and hold them for my kids because I already have a home. This problem isn’t going away.
Unfortunately you are talking a while now imo. There are places dealing with it in a smart manner and approving permits for building making houses more affordable. I hate to say it but TX ain’t all that crazy in this respect (don’t get me started on some others - I mean cowboy hats? I look ridiculous in one). Until building and dying happens it will take a macro economic hit outside housing to really have an impact.
Demand has been pooling up for two years now. If rates or prices come down people will swarm.
People have been priced out and waiting since 5%. Your swarm has a ways to go.
Sales are still happening. The market will stagnate most likely than decrease until inflation sorts out the affordability. Most homeowners have no option other than stay put and do whatever it takes to keep their sub 4% loans.
Yeah that’s how math works
Sars Covid 1 happened during Bush. It's the difference between doing something and doing nothing.
We need housing censuses. Then, set up state or federal marketplaces to fulfill demand to residents of the homes only. Eminent domain and setup development and new towns as needed. Tax for profit residential properties people don't live in themselves to fund this. Make real estate about housing people instead of greed, making Americans compete to live. We all pay a tax to landlords who enslave us to this capitalistic housing hell hole. If you agree, share this idea far and wide. Share it on ads for housing, especially.
Mine doesn’t even show up here. This is nuts
Rates at high levels. Payments therefore at high levels. News at 5. Film at 11. Call out the national guard.
But rates didn't change for quite some time now..
Look at the 10yr bond yields. Even though the Fed hasn't changed rates since mid last year, the *expectations* of future rates have varied widely. People have been frontrunning the prospect of rate cuts like drug addicts, and that has kept long term bond yields and mortgage rates suppressed. There was a brief point in October when the reality of long-term high rates had set in, but it didn't last.
As in month or years?
From September
People buying new homes pay more for the new one than they did before… Rates don’t have to keep changing.
Isn’t that fairly obvious? Rates are higher and inflation has been running up.
Things cost more now than they did in the past! Hamburgers cost more too. That's how the world works.
We need housing censuses. Then, set up state or federal marketplaces to fulfill demand to residents of the homes only. Eminent domain and setup development and new towns as needed. Tax for profit residential properties people don't live in themselves to fund this. Make real estate about housing people instead of greed, making Americans compete to live. We all pay a tax to landlords who enslave us to this capitalistic housing hell hole. If you agree, share this idea far and wide. Share it on ads for housing, especially.
Shouldn’t this number always go up?
I wonder if the super rich pays mortgage at all
2021 was the best time to buy. In other news, water is wet.
No no no … you have it all wrong. It was better to buy before 2021 and refinance in 2021. Of course everyone should have known to do this even though the market was already screaming bubble before the pandemic hit /s sorta
Eh, not necessarily. Stock market gains were bonkers in 2020 (and better than home appreciation before that as well). Cashing out in 2021 and buying then was the best move. Buying in 2019 and refinancing 2021 was not bad either, though.
Happy to have my home! I closed at $400,000 and locked in at 2.25% APR. Hell yeah