More great wins for Bidenomics! https://t.co/0qlGiG8Q2d
— Clay Travis (@ClayTravis) October 19, 2023
Quote:
"Those high home prices have resulted in people needing to leave the Austin metro area for more affordable places, because now locals or even people who moved in during the pandemic, are realizing that it's too expensive to live there," Redfin Chief Economist Daryl Fairweather said.
Fairweather said fewer homebuyers are interested in Austin for several reasons:
Rising home prices
Monthly mortgage payments doubling since before the pandemic
Homebuyers who moved to Austin are leaving
From 1975 to 2000, the median home price was on average 3.6 times the median household income.
— unusual_whales (@unusual_whales) November 1, 2023
Now, it is 5.9 times the median income.
inflation has little to do with it.FTAC2011 said:JobSecurity said:
not really an "inflation" problem, it's a supply and demand problem. Unfortunately with no obvious solution.
If the fed wasn't focused on a soft landing there might be hope, but I don't see this dropping outside of a recession
Huh? It has alot to do with inflation…. prices of goods and labor to build homes significantly increased the past few years which in turn raised the prices of new and used homes. Add in the fed raising interests rates significantly to try and slow inflation and you have high prices and high cost of borrowing.
BREAKING: The housing market is headed back to a 1980s-style recession, Wells Fargo, $WFC, has said.
— unusual_whales (@unusual_whales) November 1, 2023
Investment groups gonna scoop a significant portion up and rent them out. You will own nothing and like it, remember?Logos Stick said:
Sounds like a great opportunity for home builders.
One thing to think about. Boomers own 50% of all single family homes but are about 20% of the population.
The youngest boomer is 60.
At some point soon, there will be a glut of homes on the market as they die and go to retirement homes.
Money supply has been quietly tightening... through Quantitative Tightening. This is happening somewhat quietly and is, to their credit, allowing the Biden admin to work to keep rates from rising ever more to fight inflation.Logos Stick said:
The only way this can be so at these rates is that the money supply is too high. And Biden has done nothing about it.
txaggie_08 said:
Seeing any price decreases? We've been passively watching the housing market around Lake Buchanan for the last year or so, and prices have been decreasing over that time but not a ton. Not enough to make us bite.
nortex97 said:
A correction is going to happen.More great wins for Bidenomics! https://t.co/0qlGiG8Q2d
— Clay Travis (@ClayTravis) October 19, 2023
Lots of people who received COVID stay at home money, extended child tax credits, waivers for student loan repayments, and pauses in mortgages and rents.LMCane said:nortex97 said:
A correction is going to happen.
how many Americans can afford an $80,000 down payment now?!?!
techno-ag said:
What did we ever do back when the interest rates were near 18%?
Logos Stick said:
Sounds like a great opportunity for home builders.
One thing to think about. Boomers own 50% of all single family homes but are about 20% of the population.
The youngest boomer is 60.
At some point soon, there will be a glut of homes on the market as they die and go to retirement homes.
Man...So much of the exact same arguments Im hearing now, I heard in 2008. Like, exactly.Agthatbuilds said:Logos Stick said:
Sounds like a great opportunity for home builders.
One thing to think about. Boomers own 50% of all single family homes but are about 20% of the population.
The youngest boomer is 60.
At some point soon, there will be a glut of homes on the market as they die and go to retirement homes.
As a homebuilder, their are red flags everywhere. Just met with a very well known architect yesterday and half our meeting was about how much today reminds us of 2008. Namely, the inflation in the build cost of a home is challenging any potential reductions from volume
Buck Turgidson said:Maybe the scale of "starter homes" will shrink back closer to long term norms. Cheap capital and low interest rates for decades helped the typical middle class starter home go from a 1,500 sf, 3BR 1-story back in the early 1970's to a 3,000 sf, 4BR, 2-story by the 2010's. I'll bet young couples with good jobs could still go out today and buy a new 1,500 sf, 3BR house without a lot of trouble.tk111 said:
It's really terrible. I know a number of young couples just a few years removed from college that have been very successful and are still absolutely crushed at their prospects of getting a home due to the overwhelming double-whammy that is prices and interest rates.
Hold up. This is not something new by any measure. Again, this is a matter of folks being entitled to affordable housing, cheap rent with low crime and awesome schools.Nanomachines son said:
Starter homes in decent areas basically don't exist. You can't buy a cheaper affordable house in an area with good schools and low crime in virtually any city nowadays. You can either get good schools, low crime, and expensive houses or bad schools, high crime, and cheap houses.
People are bankrupting themselves to get away from bad areas, which is further driving up housing costs. Crime and bad schools have crushed the starter home housing market.
hph6203 said:You have to save 2.5x as long to purchase a home that costs 3x as much monthly. Interest rates are a portion of the equation, but they matter WAY less than price relative to income. Even at 0% interest rates it's more expensive/difficult to buy a home than it was in the early 80's.techno-ag said:
What did we ever do back when the interest rates were near 18%?
Oh yeah, I remember. We saved up for 20% down, didn't buy more than we could afford, and refinanced when rates went down.
1980
Median House Price: 47,200
Median Household Income: 21,000
20% Down: 9,440
Interest Rate: 17%
Tax: 864/yr (72.00/mo)
HOI: 250/yr (20.80/mo)
P&I: 539.00
Total Payment: 631.80
Down payment percent gross income: 45%
Total payment percent of gross income: 16%
2023
Median House Price: 416,000
Median Household Income: 81,500
20% Down: 83,200
Interest Rate: 7.5%
Tax: 7615 (634.59/mo)
Insurance: 2204 (183.67/mo)
P&I: 2327.00
Total Payment: 3145.26
Down payment percent gross income: 102%
Total payment percent of gross income: 46.3%
zoneag said:Nanomachines son said:techno-ag said:I think it's more modern expectations that are out of whack. A young grad expects $100,000 job on day one. Wants a 5 bedroom $750,000 house with 0 down at 3%.Definitely Not A Cop said:hph6203 said:You have to save 2.5x as long to purchase a home that costs 3x as much monthly. Interest rates are a portion of the equation, but they matter WAY less than price relative to income. Even at 0% interest rates it's more expensive/difficult to buy a home than it was in the early 80's.techno-ag said:
What did we ever do back when the interest rates were near 18%?
Oh yeah, I remember. We saved up for 20% down, didn't buy more than we could afford, and refinanced when rates went down.
1980
Median House Price: 47,200
Median Household Income: 21,000
20% Down: 9,440
Interest Rate: 17%
Tax: 864/yr (72.00/mo)
HOI: 250/yr (20.80/mo)
P&I: 539.00
Total Payment: 631.80
Down payment percent gross income: 45%
Total payment percent of gross income: 16%
2023
Median House Price: 416,000
Median Household Income: 81,500
20% Down: 83,200
Interest Rate: 7.5%
Tax: 7615 (634.59/mo)
Insurance: 2204 (183.67/mo)
P&I: 2327.00
Total Payment: 3145.26
Down payment percent gross income: 102%
Total payment percent of gross income: 46.3%
Thanks. Some people's inability to admit that economics were more favorable to them in the past is strange. And that's not to absolve the idiocy towards our current economic policies that this generation is perpetuating. I'm sure the millenials will be gaslighting the 30 year olds the same way in 30 years.
Examples only of course, but you get the point.
You could buy a house back then in a relatively safe area for cheap. Thanks to mass immigration and enormously different demographics, the cheap areas are all crime ridden hellholes. If you want your kids to not get shot at or beaten up daily in school, you're going to have to pay out the ass nowadays.
The situation is nothing at all like it uses to be. People are bankrupting themselves to get away from bad areas of town. They have no choice if they have a family.
Glad someone finally said this. In the midwestern city where I live, former working class neighborhoods with modest starter homes are now crime ridden dumps thanks to runaway third world immigration. The schools are terrible and unsafe. Even in this low cost of living city you need to make well above the median income just to have a chance to buy a home in a decent area with good schools. I'm GenX and am well positioned, but I feel for the young families today because these problems are only going to get worse.
Nanomachines son said:Buck Turgidson said:Maybe the scale of "starter homes" will shrink back closer to long term norms. Cheap capital and low interest rates for decades helped the typical middle class starter home go from a 1,500 sf, 3BR 1-story back in the early 1970's to a 3,000 sf, 4BR, 2-story by the 2010's. I'll bet young couples with good jobs could still go out today and buy a new 1,500 sf, 3BR house without a lot of trouble.tk111 said:
It's really terrible. I know a number of young couples just a few years removed from college that have been very successful and are still absolutely crushed at their prospects of getting a home due to the overwhelming double-whammy that is prices and interest rates.
Starter homes in decent areas basically don't exist. You can't buy a cheaper affordable house in an area with good schools and low crime in virtually any city nowadays. You can either get good schools, low crime, and expensive houses or bad schools, high crime, and cheap houses.
People are bankrupting themselves to get away from bad areas, which is further driving up housing costs. Crime and bad schools have crushed the starter home housing market.
Quote:
It's an unwelcome blast from the past home buyers are facing the most unaffordable housing market since the 1980s, according to a new report.
With mortgage rates at 23-year highs, the monthly principal and interest payment on a median-priced home hit a record high in October. That puts the U.S. housing market at its least affordable since 1984, according to a report by Intercontinental Exchange, or ICE ICE, -0.11%.
Quote:
The last time affordability was this bad in the 80s, rates were in the double digits and the average home was about 3.5 times median income, in stark contrast to today's price-to-income ratio of nearly 6-to-1."
Quote:
Returning the housing market to more affordable levels would require one of three things, ICE said: Either the 30-year mortgage rate needs to fall by 4.4 percentage points, the median household income needs to rise by 62%, or home prices need to fall by 38%.
But "none of which are likely to fully solve today's challenges alone, and none of which tend to move independently of one another," the report stated.
nortex97 said:
A correction is going to happen.More great wins for Bidenomics! https://t.co/0qlGiG8Q2d
— Clay Travis (@ClayTravis) October 19, 2023
