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It is worth noting interest rates are around where they were 3-4 years ago.
I wanted to post another response so that people could see the actual numbers.
Median home price January 2018 = $240,964.28
Median home price January 2022 = $357,837.38
Assuming the same interest rate, here are the monthly payments for buying the same median home.
January 2018 Median home monthly payment = $1,293.55
January 2022 Median home monthly payment = $1,920.95
That is $627.40 more per month to buy the same home 4 years later.
Do you think $627.40 more per month to buy the same home will price out more families? Mind you, property taxes are up, property taxes are up and not factored in. If you think that the average family can't afford to pay $627.40 more per month to buy the same median home, then you agree with me.
It is worth noting that home prices are about 30 up percent over the last 4 years.
You do realize that monthly payments are impacted by the interest rate AND loan amount?
This is why the St. Louis Fed says that home affordability has took a 23% turn for the worse.
Let's be honest and not do political BS spin. It is harder for more and more people to buy a home.
As someone who works in the industry and is currently in the market to purchase a home, I certainly get the impact. Home prices have been rising for years, and the market continues to get hotter with supply and demand being so tight. Rates drastically dropped during COVID and reached record lows that was completely unsustainable.
As someone who works in the industry and is currently in the market to purchase a home, I certainly get the impact.
So, why make a misleading point when you knew that I was 100% correct? Prices rising faster than income with rising interest rates means people are getting priced out. It doesn't matter that if interest rates are the same as they were 4 years ago, if prices shot up.
So, why make a misleading point when you knew that I was 100% correct? Prices rising faster than income with rising interest rates means people are getting priced out. It doesn't matter that if interest rates are the same as they were 4 years ago, if prices shot up.
I made a point because of the comment about mortgage rates being doubled under Biden. Neither the housing market nor the mortgage market have anything to do with Trump or Biden. Rates hit historic lows late in 2020 due to Covid, the drop in the federal funds rate along with the Fed buying more MBS. That was completely unsustainable are rates are now back to where they were in late 2018.
I made a point because of the comment about mortgage rates being doubled under Biden. Neither the housing market nor the mortgage market have anything to do with Trump or Biden. Rates hit historic lows late in 2020 due to Covid, the drop in the federal funds rate along with the Fed buying more MBS. That was completely unsustainable are rates are now back to where they were in late 2018.
Rates had been on a 40 year downward trend - this preceded Covid-19. They are now rising due to inflation fears.
Mortgage interest rates on the 30 year have doubled under Biden.
Few saw the last bubble. Peter Schiff was mocked and even called a communist when he correctly called the last top. He sees another top.
The biggest problem is the huge holding companies that are buying every house that comes on the market and either flipping them or raising the rents in their respective areas by 30-50%. Individual buyers don’t have reserves to compete with them.
This is what happens when too much wealth is concentrated in the hands of too few. We need a Teddy Roosevelt to do some trust busting.
The biggest problem is the huge holding companies that are buying every house that comes on the market and either flipping them or raising the rents in their respective areas by 30-50%. Individual buyers don’t have reserves to compete with them.
This is what happens when too much wealth is concentrated in the hands of too few. We need a Teddy Roosevelt to do some trust busting.
The biggest problem is that the Federal Reserve has manipulated the market.
Pushing interest rates lower, which pushed home prices higher.
Buying up $2,700,000,000,000 in mortgage assets, which pushed home prices higher.
Buying up bonds of companies, which in part enabled what you are talking about.
Rates had been on a 40 year downward trend - this preceded Covid-19. They are now rising due to inflation fears.
Rates in the latter half of 2020 and early 2021 were completely unsustainable. Rates in early 2020 were actually on par with what they were in the summer of 2016, however during that 3.5 year stretch there were various peaks and valleys with interest rates
Rates in the latter half of 2020 and early 2021 were completely unsustainable. Rates in early 2020 were actually on par with what they were in the summer of 2016, however during that 3.5 year stretch there were various peaks and valleys with interest rates
I'm sure I'm not the only one who stood in line for a low 10.9% mortgage in 1985 when my friends had mortgages for 18%. I don't pay 6% now, but I also see that it could be a reality again.
Back to the liar loans, the non-stop commercials in California to get no doc mortgages with no down payments and an extra 5-10% to pay off your credit cards or buy furniture were quite enticing to many. Had friends that jumped into the mortgage origination biz, writing up loans for huge commissions.
It's nothing like that now.
Everyone who says that boomers had everything easy wasn't around in the late 70's. My parents bought their first house in '71. 1100 sq feet, 3 bedroom, 1 and 1/2 bath. By 1980 when my sister came along we had outgrown it, but it was 1985 before rates came down enough for them to get a plausible construction loan for a house twice as big. I remember the entire family had to get in our Sunday best and spent an entire day down at the bank proving to them that our family was worthy of the loan. Different times.
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