Posted on 05/14/2021 3:07:53 PM PDT by blam
A recent report in the Wall Street Journal that cited data from the National Association of Realtors and Fannie Mae caught our eye by highlighting an unfortunate reality of low interest rates: while they initially help even the playing field and make homes more affordable for more Americans, after a while, price appreciation will ultimately make housing less accessible for middle- and working-class Americans.
Using data combined with anecdotes from home buyers, WSJ illustrated how the rapid pace of price appreciation over the last year is affecting the outlook for the housing market, as high prices negate the impact of mortgage rates that are still near record lows.
Nationwide, the median existing-home sales price rose 16.2% in the first quarter to $319,200, a record high in data going back to 1989, NAR said.
Prices are rising so rapidly that they are outweighing the benefit of rock-bottom borrowing rates. In the first quarter, the typical monthly mortgage payment rose to $1,067, from $995 a year earlier, NAR said, even as mortgage rates declined.
Of course, the frenzied state of the American real estate market is nothing new.
The other day, we reported that home sales prices in the country’s hottest markets had risen by their widest level since 2006, according to the Case-Shiller Home Price Index, a closely watched measure of home prices in the US which offers a breakdown by region, as well as nationally. According to Case-Shiller, US home prices in 20 major cities are up a shocking 11.10% year-over-year.
But outside the major metro markets, demand was even stronger, translating into the biggest YoY increase in median sales since 2006.
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(Excerpt) Read more at zububrothers.com ...
Does this mean my mobile home value is soaring too?
Well, like many things in life…”you snooze, you lose”. Mom was right when she preached that.
There were a bunch of houses being build around my neighborhood but the construction stopped hard about a month or so ago. I think it’s because of the skyrocketing price of lumber.
Can somebody smarter than me explain the cause of rising interest rates for mortgages, and when you see that happening under this economy-wrecking administration?
Just wait until the interest rates kick in, and you watch prices fall like a rock.... a 2000 monthly payment at 3% is a lot bigger mortgage amount than a 2000 monthly payment at 6% or 8%....
And its coming folks, its coming...
I track my net wealth on a monthly basis and I use Zillow as a guide to assign a value to my home. My home went up nearly $30,000 in value over the past couple months. I plug the values in but I'm expecting a downturn at some point. No way is this real.
Tell me. I bought a newly built house in 1980 at 13% interest. My neighbor had 18%.(They eventually abandoned the house)
I bought my mortgage down.
Interest rates directly affect sale price... lower the rate, the more house folks can afford on loan....
Just an example:
100k borrowed, 30 year term, 3% = 422 per month
100k borrowed, 30 years term 4% = 477 a month (more than a 10% jump in payment)
100k borrowed, 30 years, 5% = 537 a month... payment has more than 25% the rate only going up 2 points...
When interest rates rise, and they will, you are going to see housing prices collapse... much of the rise is not from people buying homes, it’s investors trying to find places to put their money because they know the market is about to burst.
Inventory in my town is lowest its ever been in my lifetime and the main reason is non local buyers.
General rule of thumb I live by, when a trend/fad hits pittsburgh, its on its last legs... and the Real Estate frenzy has hit Pittsburgh in the last 6-12 months, so, get ready for the collapse, its coming.... not much longer now.
Home prices rising means too many people wanting to buy homes = too many mortgage applications = high demand for mortgages = rates creeping up. How that’s happening in the Harris economy is another matter but the fact is people are buying homes.
In my neck of the woods migrating people from other states is a factor. Another big factor is hedge funders (backed by Chinese money) looking to invest.
Here, too. I can't believe how little there is to buy. Do you think that when COVID hit people yanked their properties off the market just out of fear?
I had a mortgage in 1982 @ 18.25%.
I paid $110K for the house, now worth >$1 M, but I found a woman who hated me and gave it to her.
Boobs and a vagina
Funny how that works...
It’s like a weird credit card never denied
That’s not an issue here, its outside money, they know the market is a bubble looking for somewhere else to park it.
Right, but real estate on a long-term, fixed rate mortgage at today’s rates is a slam-dunk in an inflationary scenario.
Real estate, except for rare exceptions, if you are in it long term you are going to be fine.... Inflation will eventually push the price back up no matter how far it falls... question is how much time do you have.
Can property taxes be far behind?
I bought my first and only house in 1989(13.5%?), got laid-off in 92, did a (so-called)-0- cost refi to bring the rates down a couple points(-0- cost meaning...no upfront cost, the costs were rolled into the loan...after paying 3 years principle ended up where I started). Ended up with a deed in lieu of foreclosure which closed on the day of my dad’s funeral in ‘95. good times.
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