The Dementia Joe Administration in a nutshell. (Or is that the Barack Hussein O'Muslim "Five Days from Fundamentally Transforming the United States of America" Puppet Administration?)
Posted on 06/02/2022 5:22:51 AM PDT by Browns Ultra Fan
Simply unaffordable!
President Biden met with Federal Reserve Chairman Powell to discuss how to control the inflation that is crushing the middle class and low-wage workers.
Here is a good example of why Biden is worried. There is a mid-term election on the horizon and people are angry and scared. Housing, generally the largest asset owned (or rented) by a household is simply unaffordable thanks, in part, to the over-stimulation of the economy by 1) The Federal Reserve in terms of money printing and 2) the Federal government in terms of fiscal stimulus in response to the Covid outbreak in March 2020.
In nominal terms, the gap between US home prices (Case-Shiller National Home Price Index YoY – US Average Hourly Earnings YoY) is near the all-time high.
Yes, home price growth exploded upwards when The Fed rapidly expanded their balance sheet in response to the Covid outbreak … and only now are considering shrinking the balance sheet.
In terms of house prices, CoreLogic has a nice chart depicted the odds of home prices dropping over the coming year. I circled Columbus Ohio because that is where I am moving (knock on wood).
And then we have the 30-year mortgage rate rising with The Fed’s expected tightening of monetary policy. That will certainly make housing even less affordable, unless house price growth cools dramatically.
You might as well face it, we’re addicted to gov.
Doctor, doctor (Yellen), we’ve got a bad case of UNAFFORDABLE HOUSING.
(Excerpt) Read more at confoundedinterest.net ...
He IS controlling it. Or at least his handlers are.
Buy the flat land and build it yourself. I did. Best move I ever made other than marrying my second wife of 32 years.
If mortgage rates are rising fast, wouldn’t we expect the price of homes to soften?
I think that’s one of the Fed’s intent.
The Dementia Joe Administration in a nutshell. (Or is that the Barack Hussein O'Muslim "Five Days from Fundamentally Transforming the United States of America" Puppet Administration?)
Unfortunately, raw land is not available in many places in the country except at a large premium to buying existing homes.
For example, where I live in southern NH a building lot now goes for $150K or more. Add a drilled well, septic, excavation, site work and the actual building construction and your final cost is $650K-700K for a 2000 sq ft house.
An existing home can be purchased for $500-525.
The other issue in places like NH is that most of the decent land to build on already has an existing home on it. A forested piece of land was recently subdivided off of an old dairy farm that had been in a family for over a hundred years. I looked at it because it had enough road frontage to subdivide it into what I thought would be three building lots. This was a sloped lot of at least a fifteen degree drop in elevation right from the road. The back of the lots would have been probably 50’ or more lower than the road elevation.
I passed it two days ago. The builder had cleared four spots along the frontage. He probably end up owning each lot for $75-85K based on the original asking price, plus survey, attorneys, filing, etc. As I said above, I thought there was only enough road frontage for three single family building lots. I guess there was enough for four.
Ronald Reagan inherited the most broken economy this nation had known up to that time in 1981. Housing market was choked off to almost nothing, inflation was raging, and the gas lines at the pumps was almost unending. The “misery index”, which had to be invented to even begin the measure of discontent and gloom that enveloped the nation, was at a high point that could only go down.
Mostly, the supply chain was intact then, with the possible exception of the automobile industry (vehicles were NOTORIOUSLY bad during during that era, with some major companies almost folding up), but even though gasoline was expensive for the time, it was still moving through the various steps to the consumer.
Yes, lumber prices are falling as well.
You aint seen nothing yet, this party is just starting to rock
Good luck finding a house in Columbus. Market is WAY overheated. Over the past 18 months my BIL has said houses have been on the market between ZERO and 5 Days if your lucky. Nobody is getting Asking Price on their homes. It seems they have been getting anywhere from 15% to 35% OVER ASKING.
If houses cost so much, who is buying them? There are some people putting houses of for crazy prices, hoping to sell. I see that in an area of the Florida Market I track. It is up over 100% in 3 years, and I see homes offered at 125% to 150% (that is 2M+ prices). Over the last few weeks nothing is moving and houses that really need to sell, the prices are dropping. I just got a text the other day about a house for sale. Shocked me, since I was getting 5 to 6 calls a day asking if I wanted to sell my house. I expect the Florida Market I am looking at to decline, since not many can buy at those prices. Maybe rest of Florida to stay flat and Texas Markets I track to stabilize back to normal trends.
My cousin wrote this to me a few days ago:
“Did you read that with this economy, predictions are that housing will decrease 20-40% so don’t be in a hurry to buy a house yet”.
I hope she is correct for those buying a home.
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