He said "you want to see who controls the housing market? Look at the bank buildings, in every city the banks are the tallest buildings."
We were driving downtown. I looked. He was right.
The one that looks like a church particularly caught my eye.
Posted on 10/18/2023 5:42:30 AM PDT by Red Badger
TAMPA, Fla. (WFLA/NEXSTAR) — Buying a house in the U.S. isn’t cheap, and according to a report from Redfin, it is now harder than ever to afford one.
Sky-high mortgage rates and rising home prices have made it more difficult than ever, especially for first-time home buyers, Redfin said in the report, which was released Tuesday.
The average rate on the benchmark 30-year home loan rose to 7.57% from 7.49% last week, mortgage buyer Freddie Mac said earlier this month. It’s the highest level in more than two decades.
To afford a median-priced U.S. home now, Redfin said buyers must earn $114,627, up 15% ($15,285) from a year ago and up more than 50% since the start of the pandemic. The real estate website said a typical household earns about $40,000 less than that.
“Hourly wages have risen in 2023, but not nearly as fast as the income necessary to afford a home is rising: The average U.S. hourly wage has increased by about 5% over the last year,” Redfin reported.
“In a homebuyer’s ideal world, rising mortgage rates would push demand and home prices down enough to make up for high-interest payments. But that’s not what’s happening now: Although new listings are ticking up slightly, inventory is still near record lows as homeowners hang onto their low mortgage rates – and that’s propping up prices,” said Redfin Economics Research Lead Chen Zhao.
With a median home sale price of more than $1.48 million, you’ll need the greatest annual income — $404,332 — in San Francisco. When ranked based on the necessary income for homebuyers, seven California cities ranked at the top of the list. After San Francisco, it was San Jose, Anaheim, Oakland, San Diego, Los Angeles and Oxnard.
Another West Coast city, Seattle, also landed in the top 10, followed by New York City and Boston.
If you’re looking for a cheaper option, you’ll want to shop in the Midwest. Detroit had the lowest necessary annual income in Redfin’s report at $51,793: a median home costs just less than $190,000 in the Michigan city. Three Ohio cities — Akron, Dayton and Cleveland — were close behind, all requiring an income of around $60,000.
The interactive table below shows the annual income you’d need to earn to afford a median-priced home in the largest U.S. metros, as well as the median home-sale price, courtesy of Redfin.
Full list here:
https://www.redfin.com/news/homebuyer-income-afford-home-record-high/
Redfin said the data is based on an analysis that compared median monthly mortgage payments in August 2023 and August 2022. To be considered affordable, a homebuyer must spend no more than 30% of their income on housing.
The elevated rates combined with a near-historic low level of homes for sale nationally has worsened homebuyers’ affordability crunch by keeping home prices near all-time highs even as sales of previously occupied U.S. homes have fallen 21% through the first eight months of this year versus the same stretch in 2022.
“Though buyers have shown signs of adjusting to the higher-rate environment, limited inventory has kept home prices elevated, cutting further into the buying power of shoppers hoping to find a suitable home,” said Hannah Jones, senior economic research analyst at Realtor.com.
If you are looking to buy a home, Zhao recommends thinking outside the box.
“Consider a condo or townhouse, which are less expensive than a single-family home, and/or consider moving to a more affordable part of the country or a more affordable suburb.”
Mortgage rates have been climbing along with the 10-year Treasury yield, which lenders use as a guide to pricing loans. Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.
The central bank has already pulled its main interest rate to the highest level since 2001 in hopes of extinguishing high inflation, and it indicated last month it may cut rates by less next year than earlier expected.
The home at 1 Typical Lane is sold for $350,000.
The Buyers shall pay $200,000 of the purchase price with a 7% loan.
The Buyers furthermore will pay for an additional $50,000 interest when mortgage rates fall below 6.1%.
The Buyers furthermore will pay for an additional $50,000 interest when mortgage rates fall below 5.1%.
The Buyers furthermore will pay for an additional $50,000 interest when mortgage rates fall below 4.2%.
Then after you buy that house, no matter how small it is, you get four-hundred-dollar-a-month electric bills to look forward to. At least in Florida.
3D printed homes will be the future. Much less labor cost with an overall 45% price saving. Plus they’re stronger than wood frame homes.
My electric bills run around $100 a month................
He said "you want to see who controls the housing market? Look at the bank buildings, in every city the banks are the tallest buildings."
We were driving downtown. I looked. He was right.
The one that looks like a church particularly caught my eye.
Banks own massive real estate, as do insurance companies as they both need to retain massive capital reserves which comes from the buildings.
Article:
“Hourly wages have risen in 2023, but not nearly as fast as the income necessary to afford a home is rising”
This is the elephant in the room.
Under Bidet and the Democrats Americans are getting poorer in real (inflation adjusted) dollars.
“To be considered affordable, a homebuyer must spend no more than 30% of their income on housing.”
That percentage is quite antiquated. It dates from the 1950s I believe - 70 years ago. It dates from when the majority of American households finally became car owners and could buy a crackerjack Pimmit Hills-style suburban house. At that time, the DC suburbs extended to the newly built Wheaton. In 1948, the Shirley Highway ran through undeveloped land. The Pentagon was not far from farmland.
The only ones who can afford to buy homes are millionaires and the illegal aliens and welfare cheats with Section 8 housing vouchers. The first group because they have enough money, the second group because the banks love all that entitlement income that is a sure bet. And the feds guarantee it. If you are anyone else you can forget about it because your income is needed to pay the taxes that support all this _______(insert your own choice of scatological descriptive here).
That building may be a great symbol—particularly if many of the floors are vacant.
Bank financial statements are legal lying.
They are not required to show the liquidation value of their assets—which means that in a time of crisis (coming eventually) they will not be able to meet their obligations and (most likely) .gov (that is you and me) will be required to bail them out—again.
They are the drunk uncles hiding in the attic.
Banks typically have access to the cheapest money - that of the typical American.
It historically made sense to use some of that to own a large, first class office building.
You calling me a liar? Or do you just like being a contrary Mary?
I hate Regions bank.
A man gave me a check to pay for a debt and his bank was Regions Bank.
I took the check to his bank and tried to cash it and they wanted to charge me 10% fee because I didn’t have an account with them.
I took the check across the parking lot to my bank and deposited it..................
We live in the Panhandle.....................
“They are not required to show the liquidation value of their assets”
Buying assets to sell them in times of crisis at bottom dollar is a stupid idea.
I remember about 13 years ago when houses were being sold off dirt cheap in large lots to the investor class.
The formula has a bunch of issues.
Imho the most important one is that it is too conservative for wealthy people and too risky for poor people.
The reason is that there are some relatively fixed costs associated with homeownership that are not in the formula—those include utilities, repairs and maintenance (including appliances), and furnishings (including maintenance).
A wealthy homeowner can easily handle these fixed costs while they can be catastrophic for a poor family.
“I didn’t have an account with them”
Before the clearing house system developed, one had to go to the person’s bank to get the money. Checks say “Pay to the order of” for a reason.
Problem is you are bidding against people from all over the world now for houses. Folks with money want a house in the US as a safe haven.
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