Posted on 08/29/2022 7:16:57 AM PDT by millenial4freedom
A majority of new American homeowners say they’re “house rich and cash poor,” according to a new U.S. News & World Report survey.
The survey, conducted by the third-party survey platform Pollfish, asked 2,000 new homeowners in the U.S., who purchased their first home between 2021 and 2022, how they currently feel about their financial situation.
More than half of them — 59% — answered that “house rich and cash poor describes my situation.” It’s a sentiment that “reflects both the rising sales prices of homes across the country as well as some of the unexpected costs of homeownership that first-time homebuyers encounter,” according to the U.S. News and World report.
When you’re offering thousands over asking and sometimes sight unseen you may be taking part in a feeding frenzy. I hope at least they’re not surprised.
WIth increased mortgage rates, their monthly payments would likely be the same now, even with a lower house price.
Happened in 2008 when the subprime bubble burst.
Droves of people found themselves underwater on home mortgages and just walked away.
Short sells were the order of the day back then. The difference today is that there isn’t any cheap rentals to move into, so sure you can abandon your underwater mortgage, but there’s nowhere to go.
Yep, might be time to start looking at snapping up some properties on the cheap.
There were a lot of small houses going on the local market with ridiculous asking prices. People hoping to get lucky, I guess.
Exactly.
We’ve learned to not jump houses but to stay in one for an extended period of time. This assumes, of course, that you don’t have to move for job or family reasons.
If you buy a house and know you can make the $3,000 mortgage payment each month, then you can still make that payment if the house price drops. Assuming, of course, you don’t lose your job due to BidenRecession.
We’ve weathered three or four 10% to 20% declines in house value, but it has always recovered. Just take a long view and count on the market recovering. Plus figure out how to improve your skills and marketability to a new employer if your current one hits a rough patch.
“unexpected costs of homeownership that first-time homebuyers encounter”
Had a neighbor like that.
No idea how to take care of a yard or even much of a grasp on even basic home maintenance.....but they had those shiny cars in the driveway though.
And eventually the house went into foreclosure. SMH
I’m beginning to see “open house” signs from realtors lately.
So some definite slowing.
Our middle daughter got married this summer and she and her husband bought a new house.
Both she and our eldest daughter are really good with tools and are unafraid to tackle any job around the house. I’m really proud of them for having learned those skills growing up. It’s important to teach your kids which end of the hammer to pick up.
These new homeowners who were caught up in the “feeding frenzy” shall soon be caught by a complete surprise, if they have not already been.
I have seen these mushrooming housing builds and busts before, tied to an economic collapse, though never to the levels most recently reached. There is still money to be be made when the cycle falls to its lowest price per housing unit, and an investor buys in. Banks do NOT like to hold real estate, and will auction their real estate holdings off to highest remaining bidders.
If you know what a “silent auction” is, that is where the seller has a price set on a property, then keeps reducing the price by increments. The first bid made aloud is the price, and it is sold at that price.
Always remember, price does not equal value. The unwise bidder may still get stung.
Around ‘08 people that had no business getting home loans got ‘em and then couldn’t or wouldn’t fulfill their end of the deal ......”you mean I gotta pay a mortgage?????.....every month????”
Some people just shouldn’t own a home....that’s why apartments were invented.
Another part of the problem is Banks offering you loan amounts that you technically qualify for, but realistically leave you pinching pennies to pay your bills and groceries. First time home buyers don’t see that picture. They just get caught up in “more is better”. It’s not.
I worked with Pajama Boy at my last job. Manager had to show him how to read a tape measure.
But he DID learn. I wouldn’t give up on anybody too easily.
The apartment complexes are getting away with this for two reasons. Shortage of apartments and the State pays rent for section 8 housing recipients to move into apartments because they lack section 8 housing.
Locally they stopped building apartments and built only single family homes. Because the market was so hot. Now there is a shortage of apartments.
Great point. I learned a lot of home maintenance skills and tips from my dad while growing up......maybe this is at least in part just one more casualty of the deterioration of the nuclear family....no dad around to pass those skills on.
Older homes in my area are selling at over $100K. A half-dozen years ago, those same houses were selling for $40K.
New subdivisions have price tags of $250K to nearly $500K.
The town has grown from 8,500 in the mid-2000s to 25,000 now. I don’t know where the money is to support that growth and housing costs but they are building homes and strip shopping centers as fast as the city council can approve the plats.
Tyson HQ 20 miles away and Walmart HQ 25 miles away are the corporations behind the growth.
It will be interesting to see what impact the Biden inflation/recession has in the next few years. Typically, following economic booms comes economic busts.
“If you know what a “silent auction” is, that is where the seller has a price set on a property, then keeps reducing the price by increments. “
That is NOT a silent auction.
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