FOMO Housing Market: October Home Prices “Slow” To 19.08% YoY As Mortgage Rates Rise (Phoenix Fastest At 32.3% And Minneapolis And Chicago Slowest At 11.5%)

Confounded Interest ^ | 12/28/2021 | Anthony B. Sanders

[Browns Ultra Fan]

There is a lot going on in the US housing market. Excessive monetary stimulus keeping mortgage rates low, historically low inventory available for sale, and FOMO (fear of missing out … on rapidly rising home prices).

The Case-Shiller repeat sales index for October is out … and the national home price index “slowed” to 19.08% YoY as mortgage rates rose. Note that available inventory of homes for sales remains very low.

By metro area, Phoenix AZ once again leads with 32.3% YoY. Minneapolis MN is the slowest growing metro area in terms of home prices at 11.5% (tied with Chicago, IL).

[Browns Ultra Fan]

Chicago last again. People want to move to Phoenix and Tampa and away from socialist hellholes like Chicago and Minneapolis.

[woodbutcher1963]

I BELIEVE some of the smaller city markets such as Boise and Coeur d’Alene, ID home values have increased by even higher percentages.

I know that Portland, OR was the only major city in the country to actually have lower housing starts in 2021 than 2020.
Philadelphia actually had the largest percentage increase in housing starts from 2020 to 2021.

[Mr. Jeeves]

Less FOMO and more FOBLM, for urban dwellers. The Great Exodus will continue for some time to come, and any housing correction is going to hit Big Blue Urbs much harder.

[Flick Lives]

Back in 2005 - 2006 I kept walking around my neighborhood asking myself how could people afford the prices homes were selling for then. And it kept going higher, and higher. Then it collapsed... unexpectedly.

We’re here again, as the last financial crisis was not fixed, but only papered over by the Fed money printing. The madness of houses going up in price by 20% or 30% year-over-year will go on for who knows how long. The simple mathematics of it makes houses unaffordable for virtually everyone in short order, even if people get 20% or 30% raises, which they of course will not.

[setter]

Homes were cheap in my rural area for years because we had no jobs. We never did experience any of the housing booms.

No with WFH, people from the large cities are moving in and buying up homes and land left and right.

[SaxxonWoods]

“Back in 2005 - 2006 I kept walking around my neighborhood asking myself how could people afford the prices homes were selling for then. And it kept going higher, and higher. Then it collapsed... unexpectedly.”

The same thing happened in 1978 and 1985. Everybody talks about crashes but no one mention what always happens for a longer period in between the crashes. (Booms).

I have a relative who has lived for 25 years in Seattle and has never bought a house because they are either “too high” or “about to crash”. He’s lost a fortune. I’ve owned, bought and sold through all those crashes and made a fortune.

Rural land is what looks good right now, and I’m searching for just the right piece.

[woodbutcher1963]

I bought my first house in 1989 for $125K.
I sold that house in 1995 for $127K after putting about $15k into it. SO, I lost money on my first house.

I bought my second house in 1995 for $175K. I sold it in 2010 for $260. I then bought the my current house for $275. It is probably worth $500-550 now.

This is the longest up trend that I have ever seen. I am in NH. We have continued to see people moving here from the NYC area.
The issue is that people continue to move out of the cities all across the country and move to the suburbs and country.
Eventually, prices will stabilize as the difference in cost from city to country/suburbs equalizes.

I would not want to own a condo in some high rise building in almost any of the major cities.

[bgill]

This will be reflected in everyone’s property tax. Ours has always gone up the legal 10% each year. We’ve never had a raise of 10% (or much of anything). There comes a time when people will no longer be able to keep up with it.

This was the first year we’ve had the option of paying taxes online. Yikes, the “convenience fee” is 2.3%. Who can afford that? Instead, I chose USPS’s convenience fee of 58 cents.