Posted on 02/27/2024 7:16:03 AM PST by Kaiser8408a
John Lee Hooker sang it best: Boom, Boom! Home price inflation, that is!
The Case-Shiller National home price index rose in December by 5.54% year-over-year (YoY) while average weekly earnings has remained lower that home price growth since September 2023 (pink box) and from August 2020 to December 2023.
Home prices in America’s 20 largest cities rose for the 11th straight month in December (the latest data released by S&P Global Case-Shiller today), up 0.21% MoM (in line with the 0.20% MoM expected and 0.24% prior).
San Diego reported the highest year-over-year gain among the 20 cities with an 8.8% increase in December, followed by Los Angeles and Detroit, each with an 8.3% increase. Portland showed a 0.3% increase this month, holding the lowest rank after reporting the smallest year-over-year growth.
Given the current level of home prices, here is a picture of the average down payment for a house by state. Florida and Washington DC lead the nation followed by Washington state and California.
Inflation, that hideous strength.
Here is The Animal’s version of Boom, Boom.
(Excerpt) Read more at confoundedinterest.net ...
On the one hand, higher interest rates should have theoretically had a depressing effect on home prices, with the typical buyer able to afford less in the way of monthly payments. But I’ve heard it suggested that that mechanism was offset by a lack of inventory of homes for sale. With homeowners locked in where they’re at with low-rate mortgages, they’re reluctant to move to a new home with a higher monthly payment... and also much higher property taxes, due to the across-the-board asset inflation of Bidenomics.
Most government bodies are thrilled when house prices go up, they get more property tax money. So there is a conflict of interest when governments can make rules and regulations that can effect home prices (such as adding requirements to restricting the number of permits to build new houses).
It is also a reason that most government bodies don’t mind inflation. When things are more expensive, the tax revenue increases.
They have no incentive to end inflation.
My solutions:
1. A ban on non-US citizens or corporations owning single family residential.
2. Double or Triple property taxes on residential units not listed as someone’s primary residence.
3. Mortgages must be backed by some form of collateral (or large downpayment) besides the ‘value’ of the property itself.
Otherwise, we will have two or three generations in a row that will never own a house to start a family, or to have any real stake or connection to their communities.
The other major factor is that most of the Baby Boomers own their house with no mortgage. Interest rates were so cheap 10-15 years ago that they refinanced under 3% and then paid it off. This is where I am currently.
So, unless they want to downsize or move south to retire there is no reason to sell. There is not a big incentive to sell if a piece of crap condo/starter home is worth almost the same as my 2700 sq ft home.
Which is why about 1/3 of current home sales are being done without a mortgage.
Your proposals are mostly un-American. A corporation has always been considered a person under our legal system, and if a corporation can’t own a home, then who gets it if a bank has to foreclose on a non-paying borrower? And your property tax idea? A family with a summer home that’s been in the family for decades now gets completely screwed with 3X property tax? Crap.
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