Posted on 04/25/2024 7:10:58 AM PDT by ChicagoConservative27
It is more expensive than ever to buy a home in the U.S., according to a new report from the real estate company Redfin.
The median home price hit a record $383,725 during the four week period ending April 21. That’s up 5.2 percent from a year ago, Redfin found, one of the largest leaps in home prices since October 2022.
The average 30-year fixed mortgage rate hit 7.1 percent this week, the highest it’s been since November 2023. Mortgage rates dipped briefly at the end of last year after the Federal Reserve signaled it would cut interest rates this year, but have steadily climbed as strong economic data has extended the timeline for those initial rate cuts.
The median monthly housing payment also jumped to a record $2,843, up 13 percent from the same period last year.
(Excerpt) Read more at thehill.com ...
In my neighborhood in Austin houses are selling for $750 - $775 per square foot. It will be interesting to see how the Austin City Council’s plan to destroy the single family home will have on home prices.
We have a 3 bdrm starter home, fine for 2 seniors. Until Biden, value remained about the same, Tax Assessment doubled, taxes went up, Insurance went up. Same for the 2 cars, one is driven once a month or so and is 13 years old. They are garaged. A big reason we are the next city, next county over from Memphis, and crime has gone up. Mostly burglaries, and shoplifting. Covington actually has a higher violent crime rate. While still the same county, has a more liberal crime policy than we do.
The Millennial Generation is now the largest generation, over 72 million people and they need homes, this was forecast over 12 years ago, Covid sped up the timeline.
I appreciate your response. There was a lot of value in it for me, thank you.
The home we are looking to build has really two purposes.
Our current home we will own outright in about 2 weeks when I pay it off.
We have bought waterfront land on the coast of NC back in 2018. (we own that outright as well)
The two purposes we want to build this 2nd home are:
1) A vacation home for us and our kids.
2) An airbnb when we are not using it.
As for the Airbnb...I know that is not a guarantee for success, and as such, our finances will allow us to comfortably afford the new home if it literally never rents...ever. If it does rent, we see it as a bonus, not an imperative.
These are the things that are keeping me up at night.
1) If we go forward with building now, if the housing market DOES do a 20%-30% correction, we will have spent wll over 100k more then we had to to buy the proerty. That will hurt, just knowing that that money could have been invested elsewhere.
or
2) WE Wait.....and then the house market continues to climb without out end(or maybe even spikes when interest rates go down), and just becomes progressively more and more expensive, and we end up spending 125k(or more) anyway because we waited , attempting to “Time the market”
The is risk in both...and by my estimation...as I said, I THINK the market is going to go with option#2 (continue to go up)....
I guess in the end, I share your sentiment when you say “The fact that our home had suddenly decreased in value was of little concern as it was our primary residence in a community we wanted to live in and we were planning to live there a long time.”
I think ultimately we will have the same approach...hence going forward with construction this summer.
“By 2024, median income had doubled, and is now $44,225. But the median home price is up 500% to $384,500. So it will take you about 9 years to pay for your home.”
The below site shows medium household income going from $20k to $75k thus now the ratio is 5 years to pay off.
https://www.multpl.com/us-median-income/table/by-year
I totally agree with you and purchased my home a month ago. I lucked out and got it at asking price before others could come in and bid above. I, like you, don’t see housing prices falling anytime soon.
If you move, odds are your property tax bill will skyrocket, and that’s one reason why people are not moving from their homes.
For 50+ years, wages have *never* kept up with home prices...
Not to mention, they likly have an interest rate on a 30 year note in the 2-3% range.....and will pick up a 7% rate if they move.
They entire housing universe right now seems like it is compelling homeowners to stay put
Congrats on your new home, and getting it “Cheap”....meaning you didn’t have to get into a bidding war for it.
We have a family friend who is in her mid 40s..and she and her husband literally just spent 90k over asking price on a 500k home in Massachusetts.
I guess they reason they went all in is because they see it as the forever home, and the last two attempts they made to purchase a home in the last year, they were bid up buy another buyer until they backed out. On this last one...they said “Screw it”
100%
It's hard to believe the government still gets away with that corrupt robbery scheme.
Government has become so greedy with property taxes, they're now stopping millions from selling, moving, buying up or down, all because they can't afford the government taxes.
It's outrageous!
Yes I believe that will happen. We have have two houses empty as my husband tries to Reno them. A tenant of 13 years always on time had been hosting many ferals inside and outside. We are like Jethro and Ellie Mae getting them out before another litter hits. Done with that finally ..6 months of 2500 monthly income lots more ahead drywall , resurfacing flooring etc. other house in Tyler sits… another major project. Just read Biden wants Capitol gains at over 50%…. Think that will complicate matters. We are thinking our twenty something kiddos may need these shelters one day.
“We are thinking our twenty something kiddos may need these shelters one day.”
We are actually looking long term in the same way.
We have two kids....oldest is 13, but we see them getting a house each from us when we go on the possibility that they could never afford one otherwise when they grow up given the trajectory of the housing market.
I foresee eventually they will try to add a huge property tax for people over 65 to try to force them to move into retirement homes, and out of their houses.
You are right on your reasons home prices will not go down.
One situation where housing will make a correction downwards, is where the government pays down the federal debt. Another is where there are massive tax cuts across the board. Another is where the government changes monetary value and exchanges all paper money for newly valued dollars (old $1 is now one penny, old $100 bill is now $1, etc.). But none of these are going to happen until the nation collapses.
“But none of these are going to happen until the nation collapses.”
Lol...and as I guess they say, my 401k and investments wont matter much anyway at that point.
Guns and ammo would be the new 401k.
Hope it works out for you, seriously. Here in California, they changed the law regarding passing on your home to adult kids when you pass. The property gets re-appraised at current property tax values - a big hurdle for adult kids to pay. The exception is if the kids continue living in the home after your passing. If you have two kids, one of them will lose out. California is after all your money if you pass. Don't know about other states, but some follow what California does in order to get your money.
California is off the chain.
Im in North Carolina....but who knows where things will be in the future, so I cant say NC will never be like CA.
Ive been looking into Property Trust funds, that might be a way to go....but I dont know.
There absolutely “should be” a crash. Despite believing otherwise, the Boomers will not live forever. They are the largest generation, if they are gone then who will fill those homes?
Seats are fought over in musical chairs because there are less chairs than there are butts. There arent enough people needing a house “right now” to create the demand necessary to float the present price. Yes, younger generations want a house but if all Boomers were whisked away tomorrow, would all the M/Z be able to run out and move in at the present price? Would they actually want to when they realized paying a mortgage means no Grubhub delivered avocado toast?
When I read what was happening in Japan it made me think that the plan to make sure you owned nothing and enjoyed it was to turn homes into disposable consumer goods like they have in Japan. As the population fell there, houses started standing empty. To make sure that people didnt just live mortgage free they started coming up with more and more environmental rules for homes. The rules are too expensive to comply with so there is no point in maintaining a home. No point in maintaining a home if it will be obsolete within 20 years. Either buy new or rent.
If you mean demand as in every M/Z wants one then there is demand but if you mean who can afford to buy a half million mcmansion then demand has absolutely nothing to do with anything. Half a million, thats actually pretty cheap for many locations these days. Where are all these Walmart employees going to come up with that? The new job they get when boomers actually stop showing up for work? You think that this shelf stocker is going to move overnight to a job selling freighters of goods to be able to afford such a thing?
Then I heard that Blackrock was buying up everything here and losing money doing it. I also have learned that places like NY are paying ridiculous amounts of money (I dont remember, Im using $387 as a place holder) per day to house immigrants. There are bonuses on top for housing whole families and other things.
Let me see here, if I build a 200 unit apartment building and support candidates encouraging replacement then when my new immigrants get here...200 times $387...minus bribes and campaign funds...carry the one...
That is the only way that prices could even possibly stay where they are let alone go up.
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