Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
don't disagree that perhaps the size of homes has gotten out of hand, but found it funny how poster claimed people should downsize to settle for 2500 sq ft when in many part of the US that's an almost 7 figure house, before rates jumping.
To quote one of my favorite posters :
“320 million people
1538 separately functioning economies
5000 labor markets
3,007 different costs of living. “
Real estate is even more local, down to the neighborhood and block.
Weird, I own my own home, and have a great job putting me in the top 20% of income.
Now while thats all great for me, it was more about good timing. One of my GF's makes even more then I do, and with local houses being 1/2 a million is struggling to realistically afford it. This isnt a Democrat or Republican issue, this is the simple fact that housing is being bought up rapidly by corporations and wealthy individuals, and the resulting rent increases are rapidly sucking the money out of folks. If your rent eats your income, you arent likely to buy soon. Which is great for those of us who own a home.....not so great for everyone else.
Supply and demand will balance that out. If you have a localized rental supply shortage then it will take a little while for supply to catch up.
It's a little early to be in a panic. I just checked, and Wells Fargo is advertising 30 years at 4.876%. Historically, that's a steal. Unfortunately, buyers often make decisions based on payments rather than value, so home prices are a bit inflated. All that does is extend the time you have to hold the property to reach the break-even point.
Home prices are highly variable within and across zip codes throughout the US.
One guy’s perception of an inflated price is another guy’s perception of a sluggish market.
Rising interest rates at this point are a good thing, and a sign of a growing, and improving economy. Money is a commodity, and demand for it is very high, and that is a good think to an extent. The trick is to balance the money supply with demand so we don't get out of control inflation along with the economic growth. That is why the Fed is tightening, not easing as they did during the entire Obama Admin which needed easing to historically low interest rates just to keep somewhat afloat.
How will higher interest rates keep people from buying a house they can't afford? People will still stretch to a payment they can barely afford. It's just as interest rates rise that same payment will pay for less house.
I wrote a nice response to your earlier questions explaining that and other issues.
I think you're missing a few things that might help it all make more sense.
don't disagree that perhaps the size of homes has gotten out of hand, but found it funny how poster claimed people should downsize to settle for 2500 sq ft when in many part of the US that's an almost 7 figure house, before rates jumping.
I was thinking the same thing. A 2500 sq ft home is huge to me, LOL. I can't imaging one thinking they are somehow making a large sacrifice living in a home that large.
Making things up for disinformation purposes isn't very flattering.
The average mortgage rate is presently 4.8% and isn't expected to reach 5% until 2019.
People with stellar credit are paying less than 4.8%, and those with average credit around 4.8%, and those whose credit isn't so good are probably paying over 5%, exactly as it should be.
Mortgage rates are a function of Federal Reserve interest rates, and not the government or the "plutonomy."
Since 2006 when BLS started compiling data, wages have increased 34.6% from $20.04/hour to $26.98/hour and CPI-W has only increased 26.7% over the same period.
So, your propaganda false claim that wages haven't risen more than 1% is debunked, since they've actually risen 7.9%.
Gasoline prices typically rise in Summer, because only California, Kentucky and a couple of other States require reformulated gasoline year-round. The other 40+ States only require reformulated gasoline typically between May and September to reduce smog.
Reformulated gasoline costs more to produce than non-reformulated gasoline.
The State EPAs generally prohibit reformulated gasoline from containing more than 2% non-reformulated gasoline by volume.
That requires all of the tank farms along the Mississippi, Missouri, Ohio, Allegheny and Monongahela Rivers, and along the Great Lakes, and out in the middle-of-nowhere in the Plains States to near totally exhaust their supply of non-reformulated gasoline before taking reformulated gasoline.
That creates a shortage of gasoline which drives up the price. The tank farms spend the rest of Summer trying to play catch-up. That's easy to do for tank farms along the major rivers, since a single barge can transport 10 Million gallons of gasoline or more.
The Plains States, and a few States in the southeast and New England don't have barge service, so they rely on tanker trucks, which can only carry 8,000 gallons of gasoline, or rail cars, which can carry a little over 34,000 gallons to replenish their stocks. They never catch-up until the end of Summer.
Every single housing market has recovered, and you can't prove otherwise.
Demand for housing changes over time, and changes heavily based on demographics and other factors.
The fact that a particular housing market was "hot" before and not now is not proof of anything, except that consumers are no longer interested in that market.
There is no Law of Economics that says once a housing market is "hot" it must remain so indefinitely.
With the exception of a handful of gentrifying neighborhoods, most of Chicago Metro has not recovered.
Many home offices have relocated from the suburbs or other states to Chicago. They made huge investments in increase their ability to attract and retain professional millennial talent who have thus far, been resistant to suburban living. They are passionate about their gentrifying city neighborhoods, schools, recreation and so on.
They seem willing to live in smaller spaces on small parcels of land for convenience.
With the exception of a handful of gentrifying neighborhoods, most of Chicago Metro has not recovered.
Many home offices have relocated from the suburbs or other states to Chicago. They made huge investments in increase their ability to attract and retain professional millennial talent who have thus far, been resistant to suburban living. They are passionate about their gentrifying city neighborhoods, schools, recreation and so on.
They seem willing to live in smaller spaces on small parcels of land for convenience.
In fairness though, Mircea mentions that the "recovery" depends on the attractiveness of the market. Meaning that if an area goes down hill it's not like real estate hasn't recovered but that the specific area has other issues going on.
While I love Illinois....it has a lot of issues going on that would prevent an apples to apples recovery in all areas.
P.S. Both myself and my cousin in St. Louis have looked at moving back to IL in retirement (next 5-10 years) and it's an emphatic pass due to the states financial situation.
It's making me rethink giving up my 3.2% interest rate on my current house.
Same. Makes me never want to leave my home. 3.25% percent fixed no pmi. (va)
My friend just bought a house and paid 5% (not the best credit) but damn. rates gone up a lot.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
