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Old 08-19-2023, 10:22 AM
 
26,527 posts, read 15,097,583 times
Reputation: 14677

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Monthly payments on the median home has doubled since February 2020, due to rising home prices and rising mortgage interest rates.

Hard times for people wanting to buy a home.

It's as bad as it was at the end of Jimmy Carter's presidency in this regard when comparing monthly payments due to interest rates on a median home with a median income.

https://mishtalk.com/economics/mortg...s-in-pictures/

Last edited by michiganmoon; 08-19-2023 at 10:45 AM..
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Old 08-19-2023, 10:34 AM
 
7,242 posts, read 4,558,383 times
Reputation: 11939
I just can't understand how these things are selling. Who has this kind of money?
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Old 08-19-2023, 10:41 AM
 
Location: South of Heaven
7,929 posts, read 3,481,892 times
Reputation: 11617
Quote:
Originally Posted by Arya Stark View Post
I just can't understand how these things are selling. Who has this kind of money?
I don't get it either but the problem is you have to live somewhere. I feel bad for anyone whose life circumstances are forcing them in to this market.
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Old 08-19-2023, 10:45 AM
 
8,016 posts, read 5,866,246 times
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Quote:
Originally Posted by Arya Stark View Post
I just can't understand how these things are selling. Who has this kind of money?
A surprising number of people do.

A friend of mine just sold his home that he owned free and clear for $800k. He was moving to FL, and purchased a $650k home that he mortgaged for $350k, and used the rest as a down payment.

What you are seeing now is that as supply shrinks, prices will still remain high despite the mortgage rates because demand is still there. Perhaps not as high as 18 months ago, but the shrinking supply keeps the prices high, and they still sell.

I recently sold a home I owned in FL since 1994. There was no mortgage, and it was in a nice, quiet neighborhood in FL. Never in my wildest dreams did I think that I would receive that kind of money, but over 1,000 people a day are moving to FL. Everyone has to have somewhere to live, as the saying goes.
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Old 08-19-2023, 10:58 AM
 
27,667 posts, read 16,156,388 times
Reputation: 19096
Tax assessors are giddy.
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Old 08-19-2023, 11:05 AM
 
Location: Knoxville, TN
11,530 posts, read 6,034,241 times
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I would have said "housing affordability is half what it was in 2020".

It is not that the median home that was $500,000 in 2020 is now $1 million in 2023, it is that the median payment has gone from $2,200 to $4,500 per mo.

3% on a $500k home in 2020 to 7.5% on a a now $700k home today.

The good news is, 2 years from now rates should be under 5%, so that payment can at least be refinanced lower, like $3,500 per month. Still quite high vs the historic 2020 lows in mortgage rates.
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Old 08-19-2023, 11:05 AM
 
Location: West Virginia
5,044 posts, read 2,404,947 times
Reputation: 3590
Quote:
Originally Posted by Arya Stark View Post
I just can't understand how these things are selling. Who has this kind of money?
Part of it is not that many people are selling. With interest rates, if you sell where do you go and what do you get? If you don't have a mortgage it is different but for those with a cheap rate, by the time you pay the realtor, closing costs, taxes and a new rate it doesn't make a lot of sense. Unless you really want to move.
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Old 08-19-2023, 11:06 AM
 
Location: Free State of Florida
25,798 posts, read 12,859,717 times
Reputation: 19359
Quote:
Originally Posted by Arya Stark View Post
I just can't understand how these things are selling. Who has this kind of money?

It's no single group, but I think the largest group are...

...Baby Boomers from the Northeast, Upper Midwest, and West coast, whose homes appreciated a LOT during their decades of ownership. They're leaving the Blue citis/states, & taking their home equity with them, & buying costly homes in the Southeast & Southwest. They are driving the median cost upwards.

These people also made above average incomes, many have pensions, & now are moving to low cost low tax areas, to leverage up their assets/incomes in retirement.

I think the next largest groups are work-from-homers, who are also leaving high cost Blue cities/states for lower cost Red cities/states.

Covid created, expedited, & compressed these trends into an artificially shorter time span then what would have transpired otherwise.

Add to that interest rates nearly doubling, due to the Bullwhip effect of the covid-plagued economy....shut down, then re-start.

Its mostly gov't inflicted. Covid was gov't created, & the covid shutdowns were excessive, & lasted too long.

Young people...1st time home buyers are finding the costs of home ownership are extremely high.

Biden-Obama's economy has the worst housing affordability in decades...maybe ever.
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Old 08-19-2023, 11:19 AM
 
Location: Inland FL
2,532 posts, read 1,868,682 times
Reputation: 4234
"Just work more" they say.
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Old 08-19-2023, 11:20 AM
 
27,667 posts, read 16,156,388 times
Reputation: 19096
On top of it all, Biden implementing a good credit tax to assist bad credit borrowers, really a low blow.
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