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In the Western USA $4,140 a mortgage now on the average $641,600 home and that is before utilities, property taxes, insurance, HOA's, updates, private mortgage insurance
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In the Northeast USA $5,000 is now what the mortgage (principle+interest) would be on an average priced home.
I wonder what the property taxes are a $779,000 home in the Northeast, in addition to the $5,000 mortgage and interest alone
I think that the average price is ~$439.5K
A bit higher on the west coast.
Property taxes vary from state to state.
Link to map of median house prices nationwide, by county.
I am in Knox County TN. Median home price $296,000. Map is a bit out of date, as current Median is closer to $310,000.
Scroll down for typical mortgage payment. Knox County is at $1,250 up from $850 a year ago.
This included all existing mortgages so it includes homes that are almost paid for or rates locked in almost 30 years ago on much lower values. This is NOT the typical mortgage payment on that $310,000 median priced home. The value is that it shows the massive increase in typical mortgages from all homes sold in the past year. Prices up. Interest rates up. We are up 50% on average for the entire County. That is a very fast move.
People generally are not affording this. The housing market is dead and transactions are crashing, along with refinancing. Housing is going into hibernation. I just read that 30 year fixed mortgages rates just hit 7% for anybody but those with the highest credit scores. Most people can't afford this.
There is still a steady migration of older retirees moving from high cost states/areas to lower cost states/areas. They have more equity than the price of the homes they are buying, so they are able to buy for cash and avoid the high interest rates. That won't stop anytime soon as more baby boomers retire, so they will continue to buoy the market somewhat. Lots of all-cash transactions these days due to that ability by people with old paid for homes moving to cheaper locations.
For the young, for move-up buyers, for savers who thought they finally had a sufficient down payment, for temporary renters not by choice such as moving around a lot -- they are all getting slammed and can't afford this.
Housing is dead.
They broke the world with Covid, first the long dragged out shut-downs, and then the massive money drop from the Fed printing press (yeah, Treasury. Whatever.)
They broke the world. It will take years to fix, except we will never go back to normal.
Any economist will tell you that the middle class buying power was permanently hurt by the inflation of the 1970s. We are there again. Second time in my lifetime. So I get two shots of decreasing quality of life.
People generally are not affording this. The housing market is dead and transactions are crashing, along with refinancing. Housing is going into hibernation. I just read that 30 year fixed mortgages rates just hit 7% for anybody but those with the highest credit scores. Most people can't afford this.
There is still a steady migration of older retirees moving from high cost states/areas to lower cost states/areas. They have more equity than the price of the homes they are buying, so they are able to buy for cash and avoid the high interest rates. That won't stop anytime soon as more baby boomers retire, so they will continue to buoy the market somewhat. Lots of all-cash transactions these days due to that ability by people with old paid for homes moving to cheaper locations.
For the young, for move-up buyers, for savers who thought they finally had a sufficient down payment, for temporary renters not by choice such as moving around a lot -- they are all getting slammed and can't afford this.
Housing is dead.
They broke the world with Covid, first the long dragged out shut-downs, and then the massive money drop from the Fed printing press (yeah, Treasury. Whatever.)
They broke the world. It will take years to fix, except we will never go back to normal.
Any economist will tell you that the middle class buying power was permanently hurt by the inflation of the 1970s. We are there again. Second time in my lifetime. So I get two shots of decreasing quality of life.
Mortgage rates have been far too low for far too long.
We should’ve been hovering around 7% for years.
But now we just had a tremendous increase in housing prices coupled with low interest rates.
Interest rates will not go down - but housing prices will.
I think we are getting ready to see people walking away from those huge mortgages they took out on houses that will eventually be worth about 1/2 of what they paid.
And they’ll rent from either the private landlord, or more and more likely the corporations who are buying (and building) single family homes and communities.
Those same corps will buy up those foreclosed houses at 1/2 of what they current owners bought them for - and rent them.
Mortgage rates have been far too low for far too long.
We should’ve been hovering around 7% for years.
But now we just had a tremendous increase in housing prices coupled with low interest rates.
Interest rates will not go down - but housing prices will.
I think we are getting ready to see people walking away from those huge mortgages they took out on houses that will eventually be worth about 1/2 of what they paid.
And they’ll rent from either the private landlord, or more and more likely the corporations who are buying (and building) single family homes and communities.
Those same corps will buy up those foreclosed houses at 1/2 of what they current owners bought them for - and rent them.
We bought two years ago, in the middle of the lockdowns. All of this was inevitable. You can't shut down 20% of the economy and not pay a price for that, and since then, they've only been doing things to make everything worse.
Plant a garden. Get chickens. Add solar if you can. Things are going to get complicated.
But a real estate bubble is still a real estate bubble - I don’t care what causes it, but it will pop.
Someone will come in here and tell me I’m wrong for X reason(s) - and I totally could be. But if I was a young family and my $600,000 house that I put $60K down on, and am paying $2500 (w\o taxes & insurance) is now valued below $300K, I just might walk. Especially if I could find a rental for $2K a month, no property taxes, no upkeep and the cost of groceries (and everything else) going up.
That extra $500-$1000 a month savings might make it worth my while.
There is still a steady migration of older retirees moving from high cost states/areas to lower cost states/areas. They have more equity than the price of the homes they are buying, so they are able to buy for cash and avoid the high interest rates. That won't stop anytime soon as more baby boomers retire, so they will continue to buoy the market somewhat. Lots of all-cash transactions these days due to that ability by people with old paid for homes moving to cheaper locations.
The house is the most valuable asset of the Boomer generation. And if there's one thing you can count on the Boomers for, it's that they'll see to themselves. Houses won't depreciate markedly until the boomers have cashed out. But - there are no young buyers? Enter Blackrock.
During the pandemic, the 1% gained about 4.8 trillion. That money has to go somewhere. And housing is a great investment - rent provides a steady income stream. People don't just up and leave on a whim. And ultimately, everybody needs some sort of roof over their head.
It wouldn't be hard to push back. Lower property taxes on your primary dwelling, boom. The attractiveness of a house as an investment just dropped. But that would lead to house prices falling, Boomers losing money, and they're not having that.
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