Posted on 09/22/2022 5:19:33 AM PDT by Oldeconomybuyer
Southern California’s homebuying market collapsed this summer to the slowest sales pace on record. And it’s no stunner considering the typical house payment jumped by almost 50% in a year.
From June through August, 54,416 residences were sold in the six-county region. That’s 20% below the same period in 2021, and the lowest count since at least 1988.
That’s even slower than the bubble-bursting days around the Great Recession, and it’s slower than the often-forgotten deep homebuying slump of the early 1990s.
The summer’s house hunters balked as the typical Southern California monthly payment rose by $1,055 in a year — a 47% jump — to $3,318 on the $740,000 median-priced residence. Please note that the median price, by itself, is up 9% over 12 months.
(Excerpt) Read more at ocregister.com ...
Getting the results of their democrat party vote...good and hard.
What did they expect after inflation cuts into household budgets? The next shoe to drop is the price of homes will drop and there will be layoffs consequently unemployment will rise.
It’s worth it though. It’s California. They got the MTV. /s
I have a very liberal friend who sees personal sacrifice and suffering as him doing his part to help his causes.
He’s proud of getting kicked in the balls and looks down on those that don’t feel the same way.
——the typical house payment jumped by almost 50% in a year.-—
This is a lie. The typical house payment did not jump 50%.
Only payments on newly purchased houses changed upward when compared to payments a year ago.
Something not mentioned is the impact on adjustable rate mortgages.
“...getting kicked in the balls and looks down”
I’d say he looks up.
Interest rates on adjustables are going up, so this could be a huge problem. That time bomb may be going off in the months and years ahead. If payments rise, and real estate values fall, could we see another real estate bubble collapse, as people just can’t keep up and are upside down on the mortgage?
True, although since 2008 lending standards have improved and ARMs are now roughly just 10% of all mortgages in the United States.
Its gonna be a much bigger problem in the UK though, where most mortgages are adjustable and much shorter term.
Which is why I would never get one.
A foolishly optimistic coworker got one back in the 80s and had to sell his house when the rates adjusted because he could no longer afford the payments.
The article is not about homes already sold under past mortgages.
The article is about homes now up for sale that will be financed under present rates.
Even so, anyone who has an adjustable rate mortgage will feel the pain.
But it is much worse than depicted in the article. No lender is going to lend money to anyone, rich or poor, without examining credit history in minute detail and many who apply for a loan will be turned down, even those with good jobs and money in the bank.
For instance you can have a good income and lots of cash in the bank and zero debt and be turned down
That makes no sense, so the first question is “Why”?
Because you have never borrowed before or have borrowed very little and infrequently. Therefore no history as a borrower.
Weird. When I was in business I cultivated customers who had lots of cash and no debt and in more than 50 years had only two small losses..
But the big guys dance to a different tune.
The point is that there will be real obstacles for home buyers.
And the old saw about craziness originates in California and spreads East is going to be true in this matter as well.
90% of American mortgages are fixed rate which is good news, but much more prevalent are homeowners with home equity loans or home equity lines of credit with a balance outstanding. This could become a real headache for homeowners if inflation persists, especially coupled with a recession and the loss of jobs.
Not to worry though, there's a crack team of government experts working on the problem...
Amen
“I have a very liberal friend who sees personal sacrifice and suffering as him doing his part to help his causes.”
Explain to him that if it is taken rather than given, it is robbery, and there is no virtue in pretending otherwise, only cowardice.
Interest rates are going to return the housing market to reality soon...
Decade plus of 3%ish interest rates has created an insane bubble... now that we are at 6% pool of buyers shrinks drastically... prices will have to fall to keep in line.
Well its mostly relevant to folks wanting to sell or buy.
3% mortgage allows for a much bigger principle for the same monthly payment than a 6% mortgage.
Anyone who bought recently and needs to sell will find they may end up underwater.
If you are in a fixed rate loan, none of this affects you until you need to sell and the price you have to sell for is much less than it was a year or two ago.
That's the demand side, but I believe we still have a "shortage" of houses.
You don’t see prices fall when you have shortages...
Prices are falling, and will continue to do so.
It’s regional: https://www.nar.realtor/research-and-statistics/housing-statistics/housing-shortage-tracker
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