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It just sounds like many people want to see a huge crash in home-prices.........and they are ignoring all the reasons/dynamics why it just may not happen.
Try comparing apples to apples. Housing prices have gone up, but so has income. Relatively speaking, it's all the same....
Adjusted for inflation, wages have not increased enough to match the run-up in home prices. Homes today are priced at historic multiples of wages, and in most markets it’s over a thousand dollars a month cheaper to rent than buy the equivalent house. These are signs of a bubble in RE.
Adjusted for inflation, wages have not increased enough to match the run-up in home prices. Homes today are priced at historic multiples of wages, and in most markets it’s over a thousand dollars a month cheaper to rent than buy the equivalent house. These are signs of a bubble in RE.
Maybe, but not nearly enough to trigger a disaster like the OP is warning about.
Try comparing apples to apples. Housing prices have gone up, but so has income. Relatively speaking, it's all the same....
Just on inflation $28k in 1980 is $103k now. I bought my house in 2011 for a fraction of what my neighbors paid many years prior, plus it’s already tripled what I paid in twelve years.
Although the interest rates were high, the home prices were not.
Neither were the wages.
If you don't understand that a $30,000 wage and $150,000 house is the same thing as a $50,000 wage and a $250,000 house then you need to REDO FROM START.
when i got married in the 1970 a home was 30-35k in suffolk county long island..
i had about 225 a week coming in from my job so a home was about 2-1/2 times yearly income
today it can be 5 x income or more
And that's the problem. Too many people have spent too much money on a house that they were BARELY able to afford when interest rates were around 3%. Now that interest rates have doubled and then some, these people can't afford it anymore.
In addition to the higher interest rates, Bidenflation has also greatly increased the cost of nearly everything we buy. People who were barely scraping by 2 or 3 years ago are now finding themselves "underwater" every month when it comes to paying their bills.
Consequently, many are maxing out their credit cards in an attempt to stay afloat. Once their credit cards are maxed out and they've borrowed/bummed money from their family, then the next step is to sell the house and move in with Mom and Dad or a cheap apartment somewhere.
If you don't understand that a $30,000 wage and $150,000 house is the same thing as a $50,000 wage and a $250,000 house then you need to REDO FROM START.
Scary how many people can't get this simple salient point.......
Anyone thinking there will be a crash is a clown. Maybe if rates go past an stay at 10% and wages start to tank for 5+ years.
The US is short 6.5 million + homes at present. I don't think many of you clowns understand what that means. Currently, home prices are being set by the most marginal of buyers. In this case, "marginal" meaning strongest hand. This is what has been going on in NYC for 30+ years and home prices keep chugging up and up. There are people paying the prices that they are not because they want to but because they can.
It's simple supply and demand. How do you fix a 6.5 million home shortage? You either build at a much greater rate than being short 6.5 million homes (population is growing not declining) to close the gap fast (the average for the past 10 years has been ~800K home starts) OR you need to break demand on the order of a Great Depression. Neither of these two scenarios will happen anytime soon.
Home starts will probably average 500 - 600K over the next 5 years and that means we'll still be short something like 4 million homes.
Anyone thinking there will be a crash is a clown. Maybe if rates go past an stay at 10% and wages start to tank for 5+ years.
The US is short 6.5 million + homes at present. .
I agree with you generally. But where did you get your numbers?
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