Posted on 06/30/2022 5:23:40 AM PDT by Browns Ultra Fan
The Federal Reserve under Berananke, Yellen and Powell kept monetary stimulus out there too long and rates too low, but Powell is now trying to reverse that trend to fight inflation. But how will that impact the housing market?
(Bloomberg – Prashant Gopal) The housing slowdown is helping to solve one of the US real estate market’s most intractable problems: tight inventory.
With fewer buyers competing, the number of active US listings jumped 18.7% in June from a year earlier, the largest annual increase in data going back to 2017, Realtor.com said in a report Thursday. And new sellers entered the market at an even faster rate than before the pandemic housing rally began.
The Federal Reserve is cooling off the red-hot housing market as it fights to curb inflation by driving up interest rates. The resulting spike in mortgage costs is making homes less affordable and pushing would-be buyers to the sidelines. That means properties aren’t selling as quickly and must compete with the growing number of new offerings.
I wonder if it is all the Covid monetary and fiscal stimulus that is finally getting homeowners to put their houses on the market, perhaps fearing the end of the housing price run-up with Fed-induced rate hikes?
Let’s see if The Fed’s Frolic Room (aka, open market committee) keeps driving rates up and home affordability down. Or is it The End for the house price bubble?
(Excerpt) Read more at confoundedinterest.net ...
People selling homes they can’t afford.
Those that bought houses with AMRs need to sell them or lose them. Next great wave of foreclosures coming soon.
Not necessarily. I think there are a lot of people that have been waiting to see where the top is. We found it. It was this spring. Now, you will see more listing come on from people who either own their homes outright or people that have so much equity that a 10-20% price drop does not matter much.
For example, I bought my house ten years ago. It is my third home. It has more than doubled in value since I bought it. I paid it off last year. So, if I had to drop my price $50K to sell it because I wanted to move, it would be no problem.
The homes they can’t afford.
And, in some states, the property taxes they can’t afford.
Good luck to them.
The other thing that is starting to finally show up are all the homes that did not have to make a mortgage payment during covid. These borrowers had 12 months that they potentially made no payments. It takes time for Fannie Mae, Freddie Mac, credit unions and local banks to foreclose on these loans.
I know someone who has worked at Fannie Mae for 35+ years. They explained to me that the delinquent loans they have will not show up in the market until later this year or even 2023. The foreclosures starting to show up now are the loans made by credit unions and banks where they kept the mortgage in house. It also varies by state how fast you can be foreclosed on. So, some states will see more pressure than others.
However, even these houses/condos may not have to be sold at a large discount. Plus the people that owned them may not be off sides on the amount originally loaned because the price of the property has increased so much in the last few years.
In my neck of the NYS woods people can’t sell their homes because buyers don’t want to assume annual property taxes in the four to five figures.
We had a neighbor foreclosed a while back for back taxes.
They lost a modest home that had been in the family for two generations.
I would guess that the refi market has slowed way down.
No worries, I'm not going anywhere. My kids and grandkids are all within an hour's drive, and my commute to work is 15 minutes.
When/if I decide to sell, it will move quickly. There's an elementary school across the street, and our 'burb is one of the favorite settling grounds for "South Asians." I have a surprise planned for them: there will be no negotiation, i.e. take the offer or GTFO. Heard too many stories how their culture argues/negotiates every little thing. Not gonna happen...lol.
And if my price isn't met, no problem. I'm over 65, and my tax rate is frozen.
I was in Westchester County last week for a few days. I stayed in Dobbs Ferry on the East bank of the Hudson. Just for fun I pulled up the local real estate listings. A 1700 sq ft house asking $599K had property taxes of $20k/year. This was just an average house. Some of the mansions advertised in town had taxes of $100K/year.
I thought NH was bad. My taxes are $9K/year. However, I pay no state income tax or sales tax. We do have an 8% rooms and meals tax.
Reduced number of buyers does not equate to an increase in listings.
The Federal Reserve raising interest to curb inflation caused by the Federal Government borrowing money to give to other countries and printing money to make our dollar worth even less.
The U.S. dollar originally was defined April 2, 1792 as as a unit of weight equaling 371 4/16th grains (24.057 grams) of pure silver, or 416 grains of standard silver (standard silver being defined as 1485 parts fine silver to 179 parts alloy). By that definition, with silver currently at $20.71 / troy ounce, the current dollar is worth 0.0373460888459681 of what it was, or 3.73460888459681 cents.
Show me a home without at least a four-figure annual property tax.
But I get it, the Albany Dems screwed Upstate withtheir tax spending and structure.
I am sorry to hear that.
How long did they not pay their taxes?
Wen my mom still lived in WNY her taxes were capped because she had owned the house since 1967 and she was on SS.
It doesn’t take long in NYS.
ADP says it will pause its private-sector employment report as it retools survey
I always find Zillow to be a little optimistic when it comes to property values. Whatever they value my house at, I usually take off 10%.
Can you be more specific.
One year, five, ten?
I find it hard to believe that a township would kick someone out of their home unless they had been delinquent for several years.
This State Has The Highest Foreclosure Rate In America...while foreclosure activity jumped by well over 200% in five states — New York, New Jersey, Colorado, Nevada, and Michigan...
There's no such thing as home ownership in NYS. You rent from the state. And God help you if you miss your payments...
It depends on locale. Red states that have been destinations for blue state escapees will still be short on inventory and will continue to be hot. There are 50,000 people seeking a dwelling in Salt Lake County right now, and the builders can’t keep up.
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