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What about the income required to get said mortgage? How do people have the income, if they don't have a job? I hear people saying all the time how much worse off people are financially, yet here we are in a historic home buying situation.
Individual familiesare being impacted in vastly dofferent ways by the pandemic. My husband and I have been lucky in that our industries are both essential and nevr shut down. My company had a little dip and had to furlough a small number of people but after six week or so evryone was back at the same time they were before. My husband's company didn't even dip. Then there are some that are doing better than ever, like Amazon and other e-merchants, makers of home office furniture, etc. But then there are a large number of people in the hospitality industry and others who have lost thier jobs and don't know where their rent is going to come from. So when you blend them all together you have a weaker economy overall than we had this time last year but that doesn't mean it is spread evenly over everybody and there's nobody who can qualify for a mortgage. Then add all the incentives previous postrs have indicated such as low initrst rates and it's understandable.
The town I grew up near Cleveland, populations 33K was built up in the 1970s and 80s. It has 38 homes available. Only 8 of them are what one thinks of when one thinks "suburban house from 1970 to 1989." (yes really a Cleveland suburb is basically out of houses)
I do not have a clue how its done, but I believe the stock market has been kept high 'artificially'...its a great way to give people hope, (when it really isnt due).
When we were in the middle of the Covid lockdowns a few months ago, I had to laugh when the stock market remained high, and even gained many days! It should have went down drastically during this time!
The Govt does have the power and authority to take steps like this, especially if the security and safety of the nations economy is at risk, FEMA regulations say they can 'alter or withhold' news or information, ultimately to protect national security, the security/safety of the nations economy.
One of the reasons the stock market is higher is because it only contains a small portion of the total number of companies in the country. The smaller companies that are not in the stock market are the ones most hurt in the shutdowns/restrictions. That commerce then transfers over to the bigger companies that are set up better for a virtual world. Those are the ones traded in the stock market. They end up with more business, thus more people investing into those and that creates higher stock prices.
Cheap credit. The central banks and Governments are propping up the markets by pumping in trillions of dollars of worthless debt- which is unsustainable, warps the economy, diminishes the purchasing power of savers and wage-earners, and will lead to a horrific crash in the near future.
Why have we been able to "get away" with this for so long? People look at Japan and say "well, if they can do it, why can't we?"
Here's the most important x-factor, one that everyone completely neglects: oil.
Oil=the economy. So long as oil production grows, we can "get away" with these grotesque financial manipulations- and global oil production has grown continually since the crash of 08', due mostly to American shale oil.
But the global oil industry is being gutted from within as we speak, due to the thermodynamics of oil depletion. The 2020 medical debacle has only accelerated this.
When oil production peaks and declines, no amount of worthless debt will be able to prop up the market. Paper assets: stocks, bonds, real estate, and fiat currencies, will be worth next to nothing as we witness the mother of all deflations.
Last edited by Taggerung; 10-22-2020 at 04:11 PM..
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
27,606 posts, read 14,619,501 times
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Quote:
Originally Posted by bradnsota
How are builders able to build so many homes? How are low to middle income families able to afford all these homes? If the economy is dancing on the edge of a depression like some believe, how are people affording all these homes? These are not all rich people buying homes. The data shows it is across the board with a special surge in first time home buyers and move up homes.
I don't know who is "affording" these homes, as our prices have now topped the 2006 bubble, affordability is a major issue now here in the Phoenix area. The median home price in the valley is now $350k for a single family home. And rental houses outside the ghettos are now over $2k/month. Cheap compared to NY or LA, but keep in mind, wages aren't high here on average. The median individual earner here makes $28k/year, median household income is around $60k/year. No one making that little can afford what amounts to a $2,500+/month mortgage payment
People can afford more home, people can work remotely, people do not want to go though more shut downs in an apartment, people are getting out of blue cities like SF and NYC.
Nailed it!!
I would only add that some people are thinking that if they EVER want to own their own home, they better do it now because the future in these trying times is VERY uncertain.
It could not be on fire if people didn't have income to get and pay for a mortgage. Obviously low to middle income people are able to come up with the funding, which begs the question of how if things are as bad as some people believe.
MOST people who had jobs before February are not unemployed now.
(However, this is not to dismiss the fact that many people ARE unemployed due to COVID, my husband being one of those people.)
Investors taking advantage of very low interest rates. Not sure why some of you think it is low and middle income familes buying up these homes. Even with stimulus money, that was not enough to cover even a minimal down payment, unless you are talking about a $ 120K house.
Home prices are up as high as 20% in many areas. It is harder harder to get a mortgage since COVID.
How could housing not be on fire when a 30-yr fixed rate is 2.75% with no points?
Bingo. Bought a nice house with some acreage in August, and that’s the rate we got. The timing in our case was based on other factors, but we love the rate.
It could not be on fire if people didn't have income to get and pay for a mortgage. Obviously low to middle income people are able to come up with the funding, which begs the question of how if things are as bad as some people believe.
Why would lower income people all of a sudden have access to these wonderful mortgage loans? Banks are tougher now, not easier.
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