According to the article, the biggest causes are higher mortgage rates, elevated construction costs, and consumers losing confidence in the housing market, which does not surprise me.
The types of lumber preferred and graded for construction grow in great abundance across the beautiful, albeit vastly uninhabited areas of the Canadian expanse (softwood coniferous and the like). Those trees of course exist in abundance here, but the difference in costs between expanding that type of forestry/processing here and simply importing immediately from existing industry with a trusted partner was always negligible due to the very favorable conditions of former North American trade partnerships. Obviously that is all moot now as our lovely northern friends are now our bitter trade rivals for....some reason.
Except they are facing upwards pressure on price since inputs/fuel are going up. They want to increase prices, not reduce them.
The Iran war and tariff wars are wrecking all of these markets. At some point companies just can't afford to do business anymore since the demand is not matching up to supply at an agreeable price.
To buy a house right now you basically need to have cash in hand as well as a good reason to buy (like needing to move), or the demand isn't there. That's limiting the market a lot.
We’ve seen that the usual expectations of supply and demand simply do not matter at this time, since 2022. Reason? Asset hoarding and a carefully coordinated, curated, housing market.
Put simply- stubborn pricing by sellers and their agents. Not entirely undue.
And why does it continue to hold up? 4.2% unemployment, that’s why.
No its the same. Demand is low because mortgage prices are high. Supply is low because people cant move.
I sold my dads house when he passed. The agent wanted to put it at 700K. After 3 months and lowering it to 675K. I did FSBO and pricesd it at 615K and sold it for 590K. I could have got more but I was just tired of owning it.
Not so much the materials. How much steel is used in building the average house? How much lumber is used in building the average data center? There is some shared materials but less then you might think
Anecdotally my partner and I were looking for a townhome to buy this year. We started with a 4 month gap until we HAD to move with my lease being up. We put in offers on 3 homes and each one fell through. The first one had a special assessment for $60,000+, and there was going to be more. And the 60k had to be paid in 90 days apparently, we we backed out of the sale on that one. The second one would have needed a ton of cosmetic work. They had painted nails sticking out of their closet wall they were using as hangers. The home was listed 80k too high. And the third one the HOA refused to give out the master insurance policy for the community so no lender would approve a loan because of that. We ended up having to rent a place because we ran out of time to look for another place
The feds could lower interest rates to help young adults, who lost hundreds of thousands of dollars in wealth they would have acquired, but for the unnecessary COVID lockdowns.
How could someone besides like a night club owner possibly have lost hundreds of thousands of dollars due to the covid lockdowns? The people out of work due to them were almost 100% the lowest paid people, and anyone with investments has seen those skyrocket over the last 5 or so years
Learning loss, developmental delays such as social skills and eye contact, depression, isolation, loneliness, poor communication, debt, unemployment, foreclosures (snapped up by investors), job losses when COVID money dried up, drug addiction, remote work, supply chain shortages, bailouts, all things that are holding young people back from acquiring good jobs.
Something like half of homeowners have a rate at 4% or under. There is no way anyone with a rate like that would move in the current market unless it was involuntary.
We got in just as the Ukraine war escalated a few years ago, and our interest rate ducked under 4% on the news.
We're high earners so we're saving for another home we'd like to build in a few years but I also can't quite imagine how much we'll be limited by these rates. Thankfully, the house we currently live in as a great house so we get to move from a position of stability regardless of what happens.
I was actually morbidly curious about what would happen if all the corporate real estate debt went belly up lol 😂
This was part of why Trump was put back into office, he pushed hard on the return to office side of the Fed jobs, at one point I think it was like 20-30% or all Fed employees were remote.
IIRC office buildings are extremely expensive to convert to residential primarily due to plumbing and HVAC. They also have significant interior volume which makes giving all residential units exterior windows more difficult as well.
Even if you have to move for work or personal reasons, people may choose to rent out their old house rather than selling it if they're locked into a Covid-era mortgage.
Same, I'm so glad we kept our sub 3 house and rented it out. We initially tried to sell but didn't get an offer. Thought we wanted a bigger house but the grass wasn't greener and the extra costs weren't worth it. After 2 years of living in the new house, we want to go back. Feels bad kicking out the tenants but we absolutely have to do it. I'm so glad we didn't throw that interest rate away. We can make the smaller house work and I want to stick with it forever now haha.
I’m guessing this is beyond the normal, September is the end of the summer house buying season. Also, yeah, no kidding, it’s a really scary time to buy a house. Imagine wrapping a lot of your money that was once more fluid in a savings account, into a down payment on your house. Then what if everything you buy like gas and groceries doubles in price again? I understand why people do not feel confident. I have been saving for a house, and thinking about it makes me feel nauseous.
I try to ask my mom for advice, she was buying a house during the 1970’s. She said it’s all so much worse and different now. She doesn’t know what to tell me. I do know she was a restaurant manager, a single mother not getting child support, yet she was able to buy a comfortable starter home in a nice neighborhood through being frugal. She also drove a new car. That’s not how it works now.
Based on what you said your mom is a gem because she is being honest with you about realities from her youth and today and not echoing off some boomer nonsense.
Yeah people keep acting like they will just build more houses and everything will be fine. Except for the tarrifs on lumber and everything to build a house getting so expensive because it travels on trucks. It also seems like home builders are only interested in building McMansions ordinary people couldn't afford anyway.
I agree as well. Cash, for those of us who need it, is our lifeline. It has been for several years now.
A non-existent job market, constant whipsawing from a socio-political standpoint, and stubborn price levels that now seem curated to be held up, make a heavy cash position the absolute best solution for any of us who exist in this economy.
Makes absolutely zero sense for a first time home buyer to be buying right now. The cost of renting vs owning is so large that if you sit down and do the math it is a terrible investment.
Now, not saying you shouldn't buy a home, but you should be buying it as a lifestyle choice. Buying it as an investment today is a terrible investment.
Thats been mathematically correct for a while in metro markets. The problem is we have decades of " conventional wisdom" telling people home ownership is the path to wealth building.
I would argue that it's not even an asset, which is a term borrowed from business, where an asset has the ability to generate income or a return on investment. While there is the opportunity to have the house be worth more over the long term, when you cash out you still need to spend money on housing, so your not getting the full gain.
Stack mortgage interest, property taxes, repairs, upgrades, landscaping if you have a yard, cosmetic changes, etc., and your still under water. Owning a home is a lifestyle choice. If you want a home to be an investment, buy a property to flip or rent a home, that's an investment.
Even dropping rates real low and setting a measly investment return rate with this calculator, it says you're still better off renting most of the time.
Yep. I’m renting a house for $2300/mo. I looked up the house value on Zillow, and if I bought this house with 20% down (which I don’t even have at the moment), the mortgage would be $2600/mo, $2300 of which would be interest, insurance, taxes, HOA fees (aka money “getting thrown down the drain). And that’s just the monthly payments; that doesn’t even include closing costs, annual maintenance costs, etc.
Long term, buying a house is the right move. But if you’re only going to live in the house for a few years, you will likely lose more money by owning the home than you would be renting a comparable one.
If you find a house that you will be able to live in for 7+ years and can actually afford it, then it makes financial sense to buy it. But like you said, in this current market, if you’re buying a house, you should absolutely not view it as an investment but rather as a lifestyle choice.
This isn’t 2010-2022 anymore. We live in different world now, one that isn’t recovering from the greatest housing market crash in a century and isn’t going to experience a global pandemic which cuts off global supply lines and causes the federal reserve to slash interest rates to zero to keep the economy afloat, all of which caused the housing prices to skyrocket. That isn’t happening again.
Who would have thought that arbitrarily raising the price of all construction goods to placate the ego of a mad king who doesn’t understand trade deficits would be so disastrous. Not nearly enough economists that tend to lean more to the right are standing up to this stupidity. Why must every economic media outlet dance around the elephant in the room? Too scared to call a spade a spade, Donald Trump is the biggest drag on our economy right now. The war in Iran, Ukraine, inflation, consumer confidence, these are all symptomatic of the larger issue, bad leadership.
Well, one of those things wouldn’t exist without Trump. I don’t think Kamala would have dragged us into a crusade in Iran. That makes the other two way more manageable as evidenced by the Biden admin stability.
Why do we control inflation via the housing market? Essentially we raise and lower a tax on housing that adds or removes money from the economy. Just give the federal reserve a vat that it can move a limited amount each quarter that way everything is affected instantly rather than trickling through the economy as housing starts ramp up or down.
We briefly looked at houses with a realtor in September in Colorado and stopped after seeing like seven houses. The houses in our budget are poorly maintained and don't really fit what we're looking for. Some of that is the housing stock where we live. It's just a lot of the same type of house and it's not what we want. But we also had a huge bubble run up during covid and it's slowly deflating now. I would rather wait till after the midterms and maybe till next year because I just have a feeling that once whatever is going to happen happens, the housing market is going to nosedive.
I'm just guessing but I think if Democrats regain power, the mindless enthusiasm in the stock market is going to halt because they realize that Mommy and Daddy are home again and the party has to stop. Trump has the most corrupt presidency in the history of America and of course that led to a historic stock market. It will all come crashing down.
The Democrats can sweep both, and it won't really matter much, unfortunately. The Trump regime has so severely tilted the power toward the executive that the same BS is going to continue mostly unabated after the election. That's why the GOP didn't even try to do many things to help themselves.
What I don't understand about the housing market is how anyone can afford to purchase real estate. My Dad was a nurses aide and part-time janitor. He was able to pay cash for a newly constructed house and support a stay at home mom and 5 kids in a Philly suburb. He wasn't the only person of his generation I am aware of who could do that. I was never able to and I sure most people aren't able and will never be able to do that either.
True, and neither are the spending habits. I make $120K a year and live like I am making $50K or less. America has a money problem but a big part of that is a spending problem. When I spend my money I feel like I am getting ripped off most of the time because I am. You should feel the same way too.
As much as people talk about income and wealth inequality, I don't think they really appreciate the reality of it. There are a lot of people for whom a $5k airplane ticket, a $100k car, or a $1M house are not significant expenses.
I'm not talking about the 1%. The minimum to be considered top 10% in the US is $1.8M net worth or $210k annual income. That's 1 in every ten people - almost 35 million people. There is an enormous amount of housing equity in the market. A third of homes are owned mortgage-free.
I believe that number is for household income, so normally a 2 income household. Doesn’t seem that extravagant when you put it in that frame of mind. Although even at that income it wouldn’t be financially responsible to pay a million for a home or 100k for a car but plenty of people do it I guess
lol no. You cited household statistics on the top 10% so it’s not 35M people that each have that. That’s double counting. And most of the wealth of those people is in retirement funds or home equity, so a $5k ticket or $100k car absolutely is a significant expense. I don’t even know how you came up with this fantasy.
The houses that were recently constructed behind mine are going for $750K each. I would not be able to afford a house like this on my single state government worker salary.
But if I was married to someone making about the same as me, we might be able to pull it off provided we had large enough savings (or the proceeds for a home sale), no debt, and no qualms about being mortgaged to the hilt.
I am guessing the houses will get scooped up by young professional couples who have parents willing to help with the down payment.
Your salary expectations for the roles listed above are completely disconnected from reality, you're talking just about just the very very highest earners in those fields (except for the doctor)
You said it. He never made that much money . However he lived like Gen Z . He lived at home until he got married and saved his money in the meantime. Even someone did today what he back in the day, there's no way most people could save that kind of money today. Perhaps someone can pay off their student loans or come up with a down payment but certainly not pay cash for a house especially not working as a nurses aide.
Even in NY and California, those numbers are far above the median incomes for those professions.
I am seriously sick of people hiding behind HCOL to try to justify absurd numbers when we can Google it and see that even in expensive states, most people don’t make that kind of money.
Did you know the median household income in NYC is only about $80,000?
That's great and all, but clearly the market itself shows that those aren't a lot of people. Hell, if they already have a house, now's an awful time to move.
It’sa nightmare out there. It took 6 months for us to sell, closed in sept. Granted it was a condo. SoCal San Diego 2 blocks from the water.
1st deal came quick, cash $25k under. We said yes. They found an issue with inspection but because they wanted to close in two weeks we wouldn’t be able to fix, they would have to so we agreed to help pay for it. They cancelled.
Next offer didn’t come for about 5 months. In between we lowered the price a couple times. We were priced at an attractive price point in the beginning, enough to get a lot of interest. Anyway, we sold, still managed to get what we thought was enough for a very healthy down payment.
With that and a generous gift we just received means we could put down almost 300k on a house. It’s a hcol area but also rural and the monthly amount for a modest home without a lot of land is eye watering considering we could pay just over half of a 500k house with deposit.
There is absolutely zero way anybody normal can pay these prices with these rates with only 20% down
So not only that but MANY of these places are in rough shape. Updated 30 years ago and not touched since in many cases. Ancient mechanicals, bad roofs etc etc.
Things are clearly changing where we are looking though, but it’s slow. Sellers are still putting insane prices on these places.
If you are buying it’s time to negotiate hard. At this point what do you even have to lose?
I know people hate this response, and not everybody has the option, but move to lower COL areas. Here in the Midwest I was able to get a 5bd4ba on 5 acres for 200k in 2019. Obviously thats now retailing in the 400k range, but still a steal. Is the Midwest the greatest, absolutely not. But can you actually live and live comfortably, absolutely.
Bro I’m locked in at 2.3 and am almost done paying it off. It’s a humble 1970s home with all kinds of issues but we can’t even dream of getting a bigger or more modern place because there’s no way in traditional hell that I will give up this rate. And I grew up poor so I don’t give a crap about impressing people at all so there won’t be money spent on major remodels or trying to make my house look better than anyone’s either. Only cosmetic stuff and right now it’s perfect for us. There’s an older smaller home next to us that is really cute but it’s literally just a kitchen because of its weird layout and the people that bought it some 5 years ago did it with the intention to flip it and they wanted to sell it for half a million dollars. This is a property with huge power lines in our backyards due to power easement….1/2 a million dollars for 3 beds a garage and a kitchen. Not even a covered porch or anything and huge old trees that are dying around it. Theres a whole ass lake that forms at the front of the house every time it rains hard but yeah 500k. 😂
We moved for a job last year with high rates. Didn’t have too much trouble buying or selling. We did count on rates lowering though, and were able to refinance a percentage lower right before we bombed Iran and rates shot back up. I’m not sure I’d be as hopeful and jump in now.
We went from 2.75 to 6.75 and it hurt, but the increase in salary covered the increase in mortgage. So I guess we’re the kind of people who trade a low mortgage for a higher one. If we didn’t have to relocate, we would have stayed in our last house forever, even if it wasn’t everything we wanted. We did have a lot of equity, which helped.
having interest rates artificially low for 14 years and then having interest rates normalize after that lengthy 14 year period is what caused the market to freeze
I'm laying on the side line with cash (own a house, title in hand), seeing if any of the homes near me that I like hit the market, I'll take advantage of this situation and either hold the house until my kids needs one or just sell it as soon as I can make $150K.
It’s a perfect time for blackstone to keep buying homes… less homes being built, every one they own or buy goes up in value. Anyone born post 2000 will never own a home, and if they do they have their daddy’s money
The 21st Century ROAD to Housing Act, which became law on July 11, prohibits BlackRock and other large institutional investors from purchasing or acquiring single-family homes (structures containing two or fewer residential units).
I doubt any institution is buying homes right now, especially in certain markets, texas, florida, etc. where prices are falling, yea, I don't see them doing that at all right now.
They're all reducing their supply of housing anyway because the economics aren't working in their favor. Many bought at very high prices and are now holding the bag. I don't feel sorry for them, but as of right now and for the foreseeable future they don't have an incentive to expand their housing portfolios and most are actively dumping them at a loss.
DavidTheJohnson | 7 hours ago
According to the article, the biggest causes are higher mortgage rates, elevated construction costs, and consumers losing confidence in the housing market, which does not surprise me.
BoomerSooner1982 | 7 hours ago
At some point you would think that construction costs and materials would decrease given the decrease in demand.
VonDukez | 7 hours ago
Not with a major lumber supplier currently in a trade war for no reason with the US
Yellowdog727 | 7 hours ago
I suspect the major ice crackdowns have also probably impacted labor costs in construction
VonDukez | 7 hours ago
Also true
PressWearsARedDress | 3 hours ago
You mean the crack down on slavery?
FearlessPark4588 | 4 hours ago
do we not have enough trees or tree processing facilities
Caressticles | 4 hours ago
The types of lumber preferred and graded for construction grow in great abundance across the beautiful, albeit vastly uninhabited areas of the Canadian expanse (softwood coniferous and the like). Those trees of course exist in abundance here, but the difference in costs between expanding that type of forestry/processing here and simply importing immediately from existing industry with a trusted partner was always negligible due to the very favorable conditions of former North American trade partnerships. Obviously that is all moot now as our lovely northern friends are now our bitter trade rivals for....some reason.
SidewaysFancyPrance | 7 hours ago
Except they are facing upwards pressure on price since inputs/fuel are going up. They want to increase prices, not reduce them.
The Iran war and tariff wars are wrecking all of these markets. At some point companies just can't afford to do business anymore since the demand is not matching up to supply at an agreeable price.
To buy a house right now you basically need to have cash in hand as well as a good reason to buy (like needing to move), or the demand isn't there. That's limiting the market a lot.
lost-American-81 | 7 hours ago
Not when you put tariffs on soft wood lumber.
British_Rover | 7 hours ago
Long tail on that supply chain. Contracts for new home builds get signed well in advance.
Carrera_996 | 7 hours ago
All the trucks that deliver the materials run on diesel. Seen diesel prices? Whoah.
Dangerous_Junket_773 | 7 hours ago
Not because of the data center boom. A lot of material and labor resources are getting diverted there.
Ezpz_commentz | 3 hours ago
Maybe, but not when your government keeps randomly increasing taxes on those materials.
Hairy-Relief9379 | 2 hours ago
A big factor in construction costs is labor costs, all the way down the supply chain.
082426grateful | 7 hours ago
We’ve seen that the usual expectations of supply and demand simply do not matter at this time, since 2022. Reason? Asset hoarding and a carefully coordinated, curated, housing market.
Put simply- stubborn pricing by sellers and their agents. Not entirely undue.
And why does it continue to hold up? 4.2% unemployment, that’s why.
StunningCloud9184 | 3 hours ago
No its the same. Demand is low because mortgage prices are high. Supply is low because people cant move.
I sold my dads house when he passed. The agent wanted to put it at 700K. After 3 months and lowering it to 675K. I did FSBO and pricesd it at 615K and sold it for 590K. I could have got more but I was just tired of owning it.
Round-Ad3684 | 6 hours ago
All of the construction materials and labor are being sucked up by data centers.
zephalephadingong | 4 hours ago
Not so much the materials. How much steel is used in building the average house? How much lumber is used in building the average data center? There is some shared materials but less then you might think
willstr1 | 2 hours ago
>How much lumber is used in building the average data center?
I see you have never been to an Amish server farm /s
poison-bilberry | 2 hours ago
Anecdotally my partner and I were looking for a townhome to buy this year. We started with a 4 month gap until we HAD to move with my lease being up. We put in offers on 3 homes and each one fell through. The first one had a special assessment for $60,000+, and there was going to be more. And the 60k had to be paid in 90 days apparently, we we backed out of the sale on that one. The second one would have needed a ton of cosmetic work. They had painted nails sticking out of their closet wall they were using as hangers. The home was listed 80k too high. And the third one the HOA refused to give out the master insurance policy for the community so no lender would approve a loan because of that. We ended up having to rent a place because we ran out of time to look for another place
Rugaru985 | 6 hours ago
Wait, so everything about the industry?
LoInfoVoter | 5 hours ago
The feds could lower interest rates to help young adults, who lost hundreds of thousands of dollars in wealth they would have acquired, but for the unnecessary COVID lockdowns.
ExpertConsideration8 | 4 hours ago
Yay! Inflation for everything.. finally, we'll all be driving 100k cars!
zephalephadingong | 4 hours ago
How could someone besides like a night club owner possibly have lost hundreds of thousands of dollars due to the covid lockdowns? The people out of work due to them were almost 100% the lowest paid people, and anyone with investments has seen those skyrocket over the last 5 or so years
LoInfoVoter | 4 hours ago
Learning loss, developmental delays such as social skills and eye contact, depression, isolation, loneliness, poor communication, debt, unemployment, foreclosures (snapped up by investors), job losses when COVID money dried up, drug addiction, remote work, supply chain shortages, bailouts, all things that are holding young people back from acquiring good jobs.
CarsonWentzGOAT1 | 7 hours ago
Buzzword, buzzword, and buzzword. These are the obvious reasons.
ThatThar | 7 hours ago
Why are you in the Economics subreddit if you're going to call everything a buzzword? None of these are buzzwords.
QuesoMeHungry | 7 hours ago
Something like half of homeowners have a rate at 4% or under. There is no way anyone with a rate like that would move in the current market unless it was involuntary.
Trimshot | 7 hours ago
Exactly; we hate our condo but we’re locked in at 3.7%. Moving anywhere else without it being a homestead type situation is just financial suicide.
QuesoMeHungry | 7 hours ago
Yep it’s insane. I’m paying less for a 4 bedroom house than a friend is for a 1 bedroom apartment in the same city. Housing is just insane now.
Its_Pine | 6 hours ago
My 1 bedroom rent is almost double my brother’s 3 bedroom house mortgage. Different states absolutely factor into it, but still it’s wild.
Raise_A_Thoth | 7 hours ago
We got in just as the Ukraine war escalated a few years ago, and our interest rate ducked under 4% on the news.
We're high earners so we're saving for another home we'd like to build in a few years but I also can't quite imagine how much we'll be limited by these rates. Thankfully, the house we currently live in as a great house so we get to move from a position of stability regardless of what happens.
Atomic-Avocado | 6 hours ago
If only America was capable of building more homes on vacant lots, or god forbid apartment buildings. But then there might be traffic!!
Erosun | 4 hours ago
Trust me this isn’t it. The bigger issue is people are locked into cities or jobs to movement is way tougher.
I’m pretty nomadic and the people I talk to who would move out of the cities if jobs went back to offering fully remote is staggering.
holymacaronibatman | 4 hours ago
Building more houses and actually embracing remote work would solve a good portion of our housing issues.
Erosun | 3 hours ago
I was actually morbidly curious about what would happen if all the corporate real estate debt went belly up lol 😂
This was part of why Trump was put back into office, he pushed hard on the return to office side of the Fed jobs, at one point I think it was like 20-30% or all Fed employees were remote.
holymacaronibatman | 2 hours ago
IIRC office buildings are extremely expensive to convert to residential primarily due to plumbing and HVAC. They also have significant interior volume which makes giving all residential units exterior windows more difficult as well.
Grabsch | 6 hours ago
They are.
DeliciousPangolin | 6 hours ago
Even if you have to move for work or personal reasons, people may choose to rent out their old house rather than selling it if they're locked into a Covid-era mortgage.
SuccotashOther277 | 7 hours ago
I stupidly did. Wife wanted a new home . Of course I can’t sell my old home now with these interest rates.
happyelkboy | 7 hours ago
People need to learn to tell their less financially inclined partners no
coleman57 | 6 hours ago
Congratulations on becoming a landlord.
NutzNBoltz369 | 7 hours ago
A no hire no fire economy also means a reduction in those involuntary moves.
Ididntevenscreenlook | 6 hours ago
We moved voluntarily with a 2.9…. But we kept the house and have tenants in it. I’m not letting that shit go.
Equipoisonous | 3 hours ago
Same, I'm so glad we kept our sub 3 house and rented it out. We initially tried to sell but didn't get an offer. Thought we wanted a bigger house but the grass wasn't greener and the extra costs weren't worth it. After 2 years of living in the new house, we want to go back. Feels bad kicking out the tenants but we absolutely have to do it. I'm so glad we didn't throw that interest rate away. We can make the smaller house work and I want to stick with it forever now haha.
Erosun | 4 hours ago
I did but I had to move for work, I made a decent dent on my down payment so worth it but those 2010s rates are gold.
082426grateful | 7 hours ago
4.2% unemployment. This keeps the consumer, the homeowner, in a position of strength.
SimpleVegetable5715 | 7 hours ago
I’m guessing this is beyond the normal, September is the end of the summer house buying season. Also, yeah, no kidding, it’s a really scary time to buy a house. Imagine wrapping a lot of your money that was once more fluid in a savings account, into a down payment on your house. Then what if everything you buy like gas and groceries doubles in price again? I understand why people do not feel confident. I have been saving for a house, and thinking about it makes me feel nauseous.
I try to ask my mom for advice, she was buying a house during the 1970’s. She said it’s all so much worse and different now. She doesn’t know what to tell me. I do know she was a restaurant manager, a single mother not getting child support, yet she was able to buy a comfortable starter home in a nice neighborhood through being frugal. She also drove a new car. That’s not how it works now.
CptIskarJarak | 7 hours ago
Based on what you said your mom is a gem because she is being honest with you about realities from her youth and today and not echoing off some boomer nonsense.
[OP] One-Emu-1103 | 7 hours ago
Considering tarrif related inflation and that the price of oil is at or near it was at the start of this war I have to agree
iamjdoza | 7 hours ago
Yeah people keep acting like they will just build more houses and everything will be fine. Except for the tarrifs on lumber and everything to build a house getting so expensive because it travels on trucks. It also seems like home builders are only interested in building McMansions ordinary people couldn't afford anyway.
082426grateful | 7 hours ago
I agree as well. Cash, for those of us who need it, is our lifeline. It has been for several years now.
A non-existent job market, constant whipsawing from a socio-political standpoint, and stubborn price levels that now seem curated to be held up, make a heavy cash position the absolute best solution for any of us who exist in this economy.
Special_Regret_6805 | 7 hours ago
Makes absolutely zero sense for a first time home buyer to be buying right now. The cost of renting vs owning is so large that if you sit down and do the math it is a terrible investment.
Now, not saying you shouldn't buy a home, but you should be buying it as a lifestyle choice. Buying it as an investment today is a terrible investment.
RockHardSalami | 7 hours ago
Any property that you live in is not an investment. At best it is a forced savings account.
lizardman49 | 7 hours ago
Thats been mathematically correct for a while in metro markets. The problem is we have decades of " conventional wisdom" telling people home ownership is the path to wealth building.
RockHardSalami | 7 hours ago
Its mathematically correct for all markets. Non-metro markets tend to see less appreciation so financial outcomes are even worse.
lizardman49 | 7 hours ago
It is now. Pre 2021 price explosion in rural areas you could save money long term by buying but forget it now.
analytix_guru | 7 hours ago
I would argue that it's not even an asset, which is a term borrowed from business, where an asset has the ability to generate income or a return on investment. While there is the opportunity to have the house be worth more over the long term, when you cash out you still need to spend money on housing, so your not getting the full gain.
Stack mortgage interest, property taxes, repairs, upgrades, landscaping if you have a yard, cosmetic changes, etc., and your still under water. Owning a home is a lifestyle choice. If you want a home to be an investment, buy a property to flip or rent a home, that's an investment.
Akiraooo | 6 hours ago
The issue is that after the 2008 mbs crash. The banks got bailed out and are still using the housing market as collateral for their bad investments.
Suitable-Economy-346 | 6 hours ago
> The cost of renting vs owning is so large that if you sit down and do the math it is a terrible investment.
It has been true for a pretty long time, at least in bigger metro areas.
https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html
Even dropping rates real low and setting a measly investment return rate with this calculator, it says you're still better off renting most of the time.
emoney_gotnomoney | 2 hours ago
Yep. I’m renting a house for $2300/mo. I looked up the house value on Zillow, and if I bought this house with 20% down (which I don’t even have at the moment), the mortgage would be $2600/mo, $2300 of which would be interest, insurance, taxes, HOA fees (aka money “getting thrown down the drain). And that’s just the monthly payments; that doesn’t even include closing costs, annual maintenance costs, etc.
Long term, buying a house is the right move. But if you’re only going to live in the house for a few years, you will likely lose more money by owning the home than you would be renting a comparable one.
If you find a house that you will be able to live in for 7+ years and can actually afford it, then it makes financial sense to buy it. But like you said, in this current market, if you’re buying a house, you should absolutely not view it as an investment but rather as a lifestyle choice.
This isn’t 2010-2022 anymore. We live in different world now, one that isn’t recovering from the greatest housing market crash in a century and isn’t going to experience a global pandemic which cuts off global supply lines and causes the federal reserve to slash interest rates to zero to keep the economy afloat, all of which caused the housing prices to skyrocket. That isn’t happening again.
McCool303 | 7 hours ago
Who would have thought that arbitrarily raising the price of all construction goods to placate the ego of a mad king who doesn’t understand trade deficits would be so disastrous. Not nearly enough economists that tend to lean more to the right are standing up to this stupidity. Why must every economic media outlet dance around the elephant in the room? Too scared to call a spade a spade, Donald Trump is the biggest drag on our economy right now. The war in Iran, Ukraine, inflation, consumer confidence, these are all symptomatic of the larger issue, bad leadership.
StunningCloud9184 | 2 hours ago
>The war in Iran, Ukraine, inflation, consumer confidence, these are all symptomatic of the larger issue, bad leadership.
ooof hard to imagine but all that would have been good under kamala.
McCool303 | 2 hours ago
Well, one of those things wouldn’t exist without Trump. I don’t think Kamala would have dragged us into a crusade in Iran. That makes the other two way more manageable as evidenced by the Biden admin stability.
[OP] One-Emu-1103 | 7 hours ago
Pending home sales in September dropped 7.3% from August and were down 11.3% year-over-year.
Housing starts fell 4.56% to 859,000 annualized.
Homebuilder sentiment hit a 14-year low.
fairfaxgator | 7 hours ago
Wait. What does Kevin HASSETT say? He’s the know all, end all!
[OP] One-Emu-1103 | 7 hours ago
Love your sense of sarcasm
cybercuzco | 7 hours ago
Why do we control inflation via the housing market? Essentially we raise and lower a tax on housing that adds or removes money from the economy. Just give the federal reserve a vat that it can move a limited amount each quarter that way everything is affected instantly rather than trickling through the economy as housing starts ramp up or down.
Stabbysavi | 7 hours ago
We briefly looked at houses with a realtor in September in Colorado and stopped after seeing like seven houses. The houses in our budget are poorly maintained and don't really fit what we're looking for. Some of that is the housing stock where we live. It's just a lot of the same type of house and it's not what we want. But we also had a huge bubble run up during covid and it's slowly deflating now. I would rather wait till after the midterms and maybe till next year because I just have a feeling that once whatever is going to happen happens, the housing market is going to nosedive.
I'm just guessing but I think if Democrats regain power, the mindless enthusiasm in the stock market is going to halt because they realize that Mommy and Daddy are home again and the party has to stop. Trump has the most corrupt presidency in the history of America and of course that led to a historic stock market. It will all come crashing down.
Dadoftwingirls | 5 hours ago
The Democrats can sweep both, and it won't really matter much, unfortunately. The Trump regime has so severely tilted the power toward the executive that the same BS is going to continue mostly unabated after the election. That's why the GOP didn't even try to do many things to help themselves.
[OP] One-Emu-1103 | 7 hours ago
What I don't understand about the housing market is how anyone can afford to purchase real estate. My Dad was a nurses aide and part-time janitor. He was able to pay cash for a newly constructed house and support a stay at home mom and 5 kids in a Philly suburb. He wasn't the only person of his generation I am aware of who could do that. I was never able to and I sure most people aren't able and will never be able to do that either.
Venous | 7 hours ago
It was cheap to support an okay living back then. Standards got higher, disposable income got lower. Rent got higher. Things are different.
jackson_montague | 7 hours ago
A lot of people have a lot of money. Your lived experience is important, but not universal.
FoolOnDaHill365 | 4 hours ago
True, and neither are the spending habits. I make $120K a year and live like I am making $50K or less. America has a money problem but a big part of that is a spending problem. When I spend my money I feel like I am getting ripped off most of the time because I am. You should feel the same way too.
DeliciousPangolin | 6 hours ago
As much as people talk about income and wealth inequality, I don't think they really appreciate the reality of it. There are a lot of people for whom a $5k airplane ticket, a $100k car, or a $1M house are not significant expenses.
I'm not talking about the 1%. The minimum to be considered top 10% in the US is $1.8M net worth or $210k annual income. That's 1 in every ten people - almost 35 million people. There is an enormous amount of housing equity in the market. A third of homes are owned mortgage-free.
Still_Ambassador5555 | 3 hours ago
I believe that number is for household income, so normally a 2 income household. Doesn’t seem that extravagant when you put it in that frame of mind. Although even at that income it wouldn’t be financially responsible to pay a million for a home or 100k for a car but plenty of people do it I guess
Scrandon | 15 minutes ago
lol no. You cited household statistics on the top 10% so it’s not 35M people that each have that. That’s double counting. And most of the wealth of those people is in retirement funds or home equity, so a $5k ticket or $100k car absolutely is a significant expense. I don’t even know how you came up with this fantasy.
Unkechaug | 2 hours ago
More expensive and less stability. Aren’t we lucky?
autotelica | 7 hours ago
The houses that were recently constructed behind mine are going for $750K each. I would not be able to afford a house like this on my single state government worker salary.
But if I was married to someone making about the same as me, we might be able to pull it off provided we had large enough savings (or the proceeds for a home sale), no debt, and no qualms about being mortgaged to the hilt.
I am guessing the houses will get scooped up by young professional couples who have parents willing to help with the down payment.
WeekendAtMadoffs | 7 hours ago
"What I don't understand about the housing market is how anyone can afford to purchase real estate"
what if a cop made $250K and his wife, a RN made $175K
or if a doctor made $465K and his wife, a high school principal made $300K
or if a AI Security Engineer made $900K and his wife a Corporate trainer made $250K?
one of my clients, a billionaire once said to me "Why do you think everyone is broke?" 😄
teshh | 7 hours ago
What are you even talking about. Are you a Russian bot?
082426grateful | 7 hours ago
Maybe, but more likely 🦅🇺🇸🔴.
[OP] One-Emu-1103 | 7 hours ago
I certainly am not a bot and I am an American
WeekendAtMadoffs | 7 hours ago
i'm answering his question
just because HE does not understand how people are buying does not mean millions are not doing better than EVER.
"My Dad was a nurses aide and part-time janitor."
I made more than this in 1996 btw
SghettiAndButter | 7 hours ago
The amounts you posted for the jobs is like the top 5% earners of their field
WeekendAtMadoffs | 6 hours ago
So?
Are you saying a person in Texas or Kansas making half can't afford a house that is 1/3 as much as Westchester or Marin County?
My point of reference is NY.
SghettiAndButter | 5 hours ago
I don’t really get your point at all. For every rich af person there is a handful more people who aren’t rich af
Clear_Command_8925 | 7 hours ago
Your salary expectations for the roles listed above are completely disconnected from reality, you're talking just about just the very very highest earners in those fields (except for the doctor)
[OP] One-Emu-1103 | 7 hours ago
You said it. He never made that much money . However he lived like Gen Z . He lived at home until he got married and saved his money in the meantime. Even someone did today what he back in the day, there's no way most people could save that kind of money today. Perhaps someone can pay off their student loans or come up with a down payment but certainly not pay cash for a house especially not working as a nurses aide.
WeekendAtMadoffs | 6 hours ago
yes i'm talking about NY and CA, only 2 states I have lived since adulthood.
Pick the town in the Lower and i'll compare home prices to what those jobs pay there.
LazyIllustrator6946 | 6 hours ago
You know you can look up median incomes, right?
Even in NY and California, those numbers are far above the median incomes for those professions.
I am seriously sick of people hiding behind HCOL to try to justify absurd numbers when we can Google it and see that even in expensive states, most people don’t make that kind of money.
Did you know the median household income in NYC is only about $80,000?
WeekendAtMadoffs | 6 hours ago
median incomes do not matter.
it's assumed they will rent in an apt complex and live with section 8
if a 2 bedroom apt is $1695 a month and a mortgage is $3,200 a month with property tax why does the median income matter?
that's a basic home in stockton, ca btw
https://www.trulia.com/builder-community-plan/cannery-park-avila-2058238709
2+ hours commute from San Fran
a comparable town in NY is Levittown
https://www.trulia.com/home/114-stonecutter-rd-levittown-ny-11756-31296840
SghettiAndButter | 5 hours ago
They don’t matter? In what way do they not matter?
LazyIllustrator6946 | 6 hours ago
This is r/Economics, and you’re going to sit here and try to tell me that ‘median incomes do not matter’???
Hilarious.
Paetolus | 6 hours ago
That's great and all, but clearly the market itself shows that those aren't a lot of people. Hell, if they already have a house, now's an awful time to move.
kneedeepballsack- | 7 hours ago
It’sa nightmare out there. It took 6 months for us to sell, closed in sept. Granted it was a condo. SoCal San Diego 2 blocks from the water.
1st deal came quick, cash $25k under. We said yes. They found an issue with inspection but because they wanted to close in two weeks we wouldn’t be able to fix, they would have to so we agreed to help pay for it. They cancelled.
Next offer didn’t come for about 5 months. In between we lowered the price a couple times. We were priced at an attractive price point in the beginning, enough to get a lot of interest. Anyway, we sold, still managed to get what we thought was enough for a very healthy down payment.
With that and a generous gift we just received means we could put down almost 300k on a house. It’s a hcol area but also rural and the monthly amount for a modest home without a lot of land is eye watering considering we could pay just over half of a 500k house with deposit.
There is absolutely zero way anybody normal can pay these prices with these rates with only 20% down
So not only that but MANY of these places are in rough shape. Updated 30 years ago and not touched since in many cases. Ancient mechanicals, bad roofs etc etc.
Things are clearly changing where we are looking though, but it’s slow. Sellers are still putting insane prices on these places.
If you are buying it’s time to negotiate hard. At this point what do you even have to lose?
gunsandgardening | 6 hours ago
I know people hate this response, and not everybody has the option, but move to lower COL areas. Here in the Midwest I was able to get a 5bd4ba on 5 acres for 200k in 2019. Obviously thats now retailing in the 400k range, but still a steal. Is the Midwest the greatest, absolutely not. But can you actually live and live comfortably, absolutely.
redfour0 | 4 hours ago
Mortgage rates and prices were way different in 2019 than where they are today.
gunsandgardening | 25 minutes ago
Agreed, and thats why I stated it as such.
thepinkdread2026 | 4 hours ago
Bro I’m locked in at 2.3 and am almost done paying it off. It’s a humble 1970s home with all kinds of issues but we can’t even dream of getting a bigger or more modern place because there’s no way in traditional hell that I will give up this rate. And I grew up poor so I don’t give a crap about impressing people at all so there won’t be money spent on major remodels or trying to make my house look better than anyone’s either. Only cosmetic stuff and right now it’s perfect for us. There’s an older smaller home next to us that is really cute but it’s literally just a kitchen because of its weird layout and the people that bought it some 5 years ago did it with the intention to flip it and they wanted to sell it for half a million dollars. This is a property with huge power lines in our backyards due to power easement….1/2 a million dollars for 3 beds a garage and a kitchen. Not even a covered porch or anything and huge old trees that are dying around it. Theres a whole ass lake that forms at the front of the house every time it rains hard but yeah 500k. 😂
BrightAd306 | an hour ago
We moved for a job last year with high rates. Didn’t have too much trouble buying or selling. We did count on rates lowering though, and were able to refinance a percentage lower right before we bombed Iran and rates shot back up. I’m not sure I’d be as hopeful and jump in now.
We went from 2.75 to 6.75 and it hurt, but the increase in salary covered the increase in mortgage. So I guess we’re the kind of people who trade a low mortgage for a higher one. If we didn’t have to relocate, we would have stayed in our last house forever, even if it wasn’t everything we wanted. We did have a lot of equity, which helped.
manofjacks | 6 hours ago
having interest rates artificially low for 14 years and then having interest rates normalize after that lengthy 14 year period is what caused the market to freeze
IKillZombies4Cash | 5 hours ago
I'm laying on the side line with cash (own a house, title in hand), seeing if any of the homes near me that I like hit the market, I'll take advantage of this situation and either hold the house until my kids needs one or just sell it as soon as I can make $150K.
082426grateful | 7 hours ago
Big shocker. Someone post that St Louis Fed data graph showing mortgage activity, and not just across big lenders.
It’s barely registering at all.
Housing is 13% of the US economy, in its entirety. And it’s now reserved only for the most well-off, a sliver of 10% of the population.
Jimmyskis77 | 5 hours ago
It’s a perfect time for blackstone to keep buying homes… less homes being built, every one they own or buy goes up in value. Anyone born post 2000 will never own a home, and if they do they have their daddy’s money
LoInfoVoter | 4 hours ago
The 21st Century ROAD to Housing Act, which became law on July 11, prohibits BlackRock and other large institutional investors from purchasing or acquiring single-family homes (structures containing two or fewer residential units).
Glum-Tuna1366 | 4 hours ago
I doubt any institution is buying homes right now, especially in certain markets, texas, florida, etc. where prices are falling, yea, I don't see them doing that at all right now.
thepinkdread2026 | 4 hours ago
Yeah and they probably have already maneuvered 27 loopholes into it that they can exploit.
Sadly_NotAPlatypus | 4 hours ago
They're all reducing their supply of housing anyway because the economics aren't working in their favor. Many bought at very high prices and are now holding the bag. I don't feel sorry for them, but as of right now and for the foreseeable future they don't have an incentive to expand their housing portfolios and most are actively dumping them at a loss.