Housing prices will never come down below 2020 prices. Why? There are many reasons but the biggest driver is inflation.
During 2020 thru most of 2021, mortgage rates were the lowest they have ever been. As low as 2.0% on a 30 year fixed at the dead bottom in January 2021. Anyone who bought or refinanced during that time locked in an insane, once in a lifetime rate that will never come back. So, there is no way they are going to sell and go from 2.5% rate to a 5-6% rate, which is where rates are going to get inflation under control.
Just as an example, a $500k mortgage at 2.5% with regular property taxes for my area will cost you $2,959/month. The same house and mortgage at 5% will cost you $3,667, so 23.92% more for the exact same thing.
This is why inventory will stay low for years to come. No one wants to spend 25% more each month, so they are going to stay put. People in desirable areas, even more so. Plus, with inflation at 8%, that same homeowner at 2.5% mortgage is essentially get a 5.5% return every year without his house even appreciating. Factor in private equity, increased immigration, commodity prices on raw materials, increased immigration, bans on single family homes, most new builds being high density development, etc., and it is literally lights out.
You're an idiot if you actually believe that. Once you have no one to sell to, that's when the market will crash. Simply wait for everyone to be priced out, and enjoy the shit show that awaits. Also, the feds will be raising interest rates up until 2024. Let's see how current prices and the increase of rates attracts new home buyers lol.
>For millennials who did take the housing plunge, the average age of first-time homebuyers was 27 years old for young millennials (1990-1998) and 34 years old for older millennials (1980-1989).
>In terms of household income, for buyers aged 22-30, the median income was $80,000 and for buyers aged 31-40, it jumped to $105,600.
>Interestingly, across all age groups, significantly more single women purchased homes than their single male counterparts in 2021 (let’s go, girls!). In total, 18% of homebuyers were single women, whereas only 9% were single men.
Chase Rivera
Isn’t giving loans to uncreditwortgy people what created the last crisis.
You’re proving my point. Feds will continue to raise rates while those who locked into a 2-something % rate will hold onto it like it’s their fucking balls. Even if there is a correction, it will probably not be more than 20% which is what most homes went up in the last year. Plus, factor in what their return is on a 2-something % rate when inflation is at 10%. Again, lights out.
Jose Thompson
Dated information but still interesting. Boomers had it made.
What the fuck?! Median household income in the US is $67k while the median house price is $360k. So almost 6 times the annual median household income, while boomers bought homes for 1.4 times the annual median income. Wtf?! Wtf?!
Jeremiah Baker
They are also the largest asset holders and voting block in the US. They hold all the houses and all the cards. Yet another reason why the housing market isn’t going anywhere but up anytime soon. They already got theirs.
Charles Morales
>Isn’t giving loans to uncreditwortgy people what created the last crisis. Cool it with the antisemitism.
No, I am not. You are stating that housing prices will not reduce in value. I am stating the EXACT opposite, whilst providing actual proof and a summary of the announcement by the FOMC from last week. Taking all of this into consideration, picture yourself as a young person attempting to buy a home. The average household income is about 40-50k (depending on your location). Home prices have seen AT LEAST 100% price rises within the last 2 years. Add this, along with current wages AND hiked intrest rates, and you have yourself a group of people that cannot purchase homes. When this group makes up the majority of the work force later down the road, you will begin to see that although the demand for purchasing homes are "there", it will not be financially possible (or wise). Thus, they will opt to rent/live at home with parents. As homeowners (and real-estate agencies) attempt to sell these homes, they will see that although there is a demand, they will not be able to sell due to the fact that no one will be able to afford it. Thus, you have the start of a crash that is already long overdue. Do you remember 2008? It will be like this, but on a greater scale. You think homes will max drop 30%? Think again. You'll witness at least 50% drops in prices. Anyone who has purchased a home within the last 2-3 years, will be eternally fucked. And if you think I'm lying or full of it, ask yourself this; "is the current housing market sustainable at this current rate?" I'm sure we'll all come to the same answer.
Alexander Rodriguez
Home ownership is going to get factored into mate selection. Chad will own the keys to his place.
