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The prices have to come down, or workers have to get enormous raises, to afford the increased mortgage rates. Either way, there will be a correction, or something will break in the economy. China's real estate situation is far worse and much more grim than anything we are dealing with at the moment, but if the economy breaks instead of the necessary correction, watch out below... Most of us remember how fast things fall when the bottom lets out.
Quote:
Originally Posted by WiredSponge
A bad year for the homeboys.
It's been a bad year for America. The price of the commodities needed to build anything, including homes, have stayed at highly elevated levels. People were expecting these prices to fall, but that never happened. Turns out "transitory inflation" was just a cheap phrase used to borrow time until the inevitable correction or recession happens.
At any rate, the cost of building a home, or anything is growing by leaps and bounds while the American worker's paychecks have barely budged. In fact, the average American is getting clobbered by the falling purchasing power of their retirements, paychecks, currency, etc.
There are no homes and what they do have is for the rich or wealthy. My sis in real estate 30 yrs. There is no inventory. She knows corporations buying like crazy to rent - but good luck becoming a home owner.
Hey realtor friend of mine told me that there are a lot of people who are pulling out of searching for houses because they are so discouraged by the high prices
But mortgage rates have been artificially low for far too long ... a whole generation of buyers thinks these rates are normal.
They're not.
Exactly!! mortgage rates were way to low for way way way too long largely contributing insanely high rates of home prices appreciation for over 9 years now!!
Its about time mortgage rates become normal when they should have been at this level at least 10 years ago to keep prices more stable from 2010-2012 levels.
Home prices were insanely inflated starting mid 2017 (oh ironically and coincidentally when a horrific ordeal started at my old job no less and through 2019 let alone how severely bad they are inflated now.
Home prices were even modestly inflated in 2014-2016, but not near as bad as 2017-2019 or god forbid now.
About time a correction comes. It was long overdue and needed if it ever happens.
after purchase applications (homebuyers) spiked from 2020 until earlier this year, they've declined to the "normal" market conditions of 2019 and before.
The housing affordability index, while just a national figure and well down from 2020 is still above 100.
Hey realtor friend of mine told me that there are a lot of people who are pulling out of searching for houses because they are so discouraged by the high prices
Yup its crazy and horrible. Bad monetary policy and lack of building for 14 years has caused this.
Home prices were not depressed from 2009 to early 2013. They were fairly valued as they crashed from grossly inflated levels nationwide.
So the whole notion that prices were depressed and needed to rise fast after the crash was beyond absurd and stupid low mortgage rates were to reflate the insane bubble unfairly punishing responsible savers who want to live super frugal or with their parents for a decade who desire to pay cash for a small starter 1000-1200 square foot home or at the very least have a good down payment so they are not drowsing in debt until they are in their 60s and can have it paid off by 40s or early 50s at latest. But all those stupid low rates did is cater to those who do not care about the debt amount, but only about the flippin monthly payment.
Realty is inflation adjusted or even with that it is a bit much home prices now should and in reality should be what they were in 2014-2016 in nominal dollar terms today. But lack of building and horrible monetary policy and lending practices have lead to record after record lowest supply listing of homes since 2013 to today.
Last edited by Wolverine607; 07-20-2022 at 12:40 PM..
But mortgage rates have been artificially low for far too long ... a whole generation of buyers thinks these rates are normal.
They're not.
True.
My parents bought their house in Virginia in 1984... interest was 13%.
$84K brand new... today's prices, $300K
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