2024 Macro single family home prices prediction

[Astro14]

Where did I say home-ownership rate is increasing? You literally said it has not changed in 50 years, your article says its clearly decreasing. Dont know what else to say.

That’s not what the article says - it shows a recent decline, after a huge run up - and a rate that is very close to what it was 40 years ago.

Take the agenda elsewhere.

 

[alarmguy]

This is my dream "coastal home". But just a dream as places like this really don't exist, and if they did I would be getting a divorce.

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You're looking in the wrong places then. Here are 7+ pages of one tiny area, new homes 2020 or later. More on the SC side too.

https://www.zillow.com/homes/for_sa...ionId":"6612f65944X1-CR1prlefsdakdkb_18eipo"}

 

[Cujet]

GON, another thought. There is some growth of popularity towards manufactured homes vs. stick built. Manufactured homes are not mobile homes......so we need to first set that record straight.

I grew up in a "Deck House". It was epic! While dated now, in the late 60's and 1970's, it was glorious, open and spacious. Extremely well made. In retirement, I'll prob have to build a house, as prices are insane. I sure wish this kind of "prefab" house was still available.

Ours looked exactly like this, inside and out, without the carport:

 

[goingplacesanddoingstuff]

Home prices are the least affordable now than they have ever been, when considering inflation, interest rates, and prices.

Millennials are driving demand, since they have a large pent up demand from the impacts of student loans and the Great Recession. Owners, including GenX and Boomers, are delaying selling due to having locked in never-to-be-seen-again low interest rates.

Acting like people need to earn more to afford a house is a display of being out of touch with the economy. College is far more expensive than it used to be. Well-paying jobs, while available, often require living in extremely expensive places and/or extensive travel. Wealth generation vehicles are all looking pretty risky right now. Sellers are few and far between.

You can be in your mid to late 30s with 0 debt, a 401k, a few hundred k in assets, a six-figure job, and still have trouble affording a house in many places.

 

[GON]

I grew up in a "Deck House". It was epic! While dated now, in the late 60's and 1970's, it was glorious, open and spacious. Extremely well made. In retirement, I'll prob have to build a house, as prices are insane. I sure wish this kind of "prefab" house was still available.

Ours looked exactly like this, inside and out, without the carport:

The home you posted shows even in a sixty year old home, how windows and tall ceilings can make any size house so welcoming.

 

[The Critic]

GON said:
I suspect the way to get a "value" price on a home is to build it yourself.

I got to agree, production homes in communities to me are very reasonable I think @GON isnt taking into account the land cost and area.
Beautiful homes in incredible communities here in Coastal NC and SC around $200 a sq ft for a well upgraded home, Complete, soup to nuts with land and utilities, out the door price. Amenity Centers the works.
Can be bought for closer to $160 to 180 a sq ft new out the door with less options.

We can probably agree that market cost per square foot can sometimes be different than the cost per square foot to build (new).
Likewise, reconstruction cost is a different can of worms altogether.

I only work with the latter but I still struggle with some of the numbers being claimed in this thread.

 

[SC Maintenance]

On a national basis, adjusted for inflation, were still a fair bit below all time highs - although within reach. Your local market may vary.

My prediction remains the same as previous threads on this topic. Housing prices on average either need to drop, interest rates need to fall, or incomes need to increase. Or some combination.

Well, incomes are rising. So that's positive.

Prices remain below all time highs' when adjusted for inflation. There slightly above on a nominal basis. If inflation persists then this would solve itself over many years. So we shall see.

Interest rates continue to remain high. I honestly don't see this changing. I don't see us below 2% on the 10 year unless there is some sort of economic collapse, which would mean housing prices would also collapse. So mortgages will stay 5 - 6% or so. Given the number of people currently with mortgages in the 3% range - they can't afford to move because the same house under new finance rates would be $500 more a month. So they won't move.

Areas that attract retirees may continue to inflate - since most of those buyers are cash buyers, so they don't care about rates.

New homes continue to sell well - because the builders can buy down the rates. The buy down doesn't show up in the statistics, so it inflates the overall number in a sense.

If we break new inflation adjusted highs this summer, with no macro events, then I will likely shift my prediction to that of @GON.

 

[goingplacesanddoingstuff]

On a national basis, adjusted for inflation, were still a fair bit below all time highs - although within reach. Your local market may vary.

My prediction remains the same as previous threads on this topic. Housing prices on average either need to drop, interest rates need to fall, or incomes need to increase. Or some combination.

Well, incomes are rising. So that's positive.

Prices remain below all time highs' when adjusted for inflation. There slightly above on a nominal basis. If inflation persists then this would solve itself over many years. So we shall see.

Interest rates continue to remain high. I honestly don't see this changing. I don't see us below 2% on the 10 year unless there is some sort of economic collapse, which would mean housing prices would also collapse. So mortgages will stay 5 - 6% or so. Given the number of people currently with mortgages in the 3% range - they can't afford to move because the same house under new finance rates would be $500 more a month. So they won't move.

Areas that attract retirees may continue to inflate - since most of those buyers are cash buyers, so they don't care about rates.

New homes continue to sell well - because the builders can buy down the rates. The buy down doesn't show up in the statistics, so it inflates the overall number in a sense.

If we break new inflation adjusted highs this summer, with no macro events, then I will likely shift my prediction to that of @GON.

Affordability =\ prices. It’s the combination of median income, rates, prices, taxes, etc.

 

[gfh77665]

Life happens. If someone can buy a home, and wants to, then buy it. If not, consider renting. If they hate or resent the owners, rent an apartment even though a corporation likely owns it. Enough of the housing whining.

 

[goingplacesanddoingstuff]

Enough of the housing whining.

What year did you buy your house?

 

[gfh77665]

What year did you buy your house?

Which one? I have 9.

 

[goingplacesanddoingstuff]

Which one? I have 9.

Your first

 

[SC Maintenance]

Affordability =\ prices. It’s the combination of median income, rates, prices, taxes, etc.

Possibly. But first someone has to define "affordability". Just because houses were 3X median income 40 years ago doesn't mean a number higher is unaffordable. It might be. It may not be.

 

[goingplacesanddoingstuff]

Possibly. But first someone has to define "affordability". Just because houses were 3X median income 40 years ago doesn't mean a number higher is unaffordable. It might be. It may not be.

It is a well known, widely-used metric.

 

[SC Maintenance]

It is a well known, widely-used metric.

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No, those are all "indexes" made up by the NAR. Hardly an unbiased group. There goal is to profit from every housing transaction.

Who is to say houses weren't too cheap 40 years ago and they have come to more reasonable levels? Lots has changed since then - for example the overall number of social programs, or number of women who work outside of home - to name a couple trends.

Define a house? I work with a lot of professionals from Europe. They own a 800 square foot "flat". This is common for them. I assume they make similar to what I do. Would owning a 800 square foot condo suffice?

In Italy there giving houses away if you will come and take them and work. They have empty houses because there socialist tendencies have bankrupt there country, and what few young people they have are leaving. Obviously cheap housing hasn't benefited them.

My interest is purely macro-economic. I long since gave up on any type of cause. I am truly curios - how should we define housing affordability? Not how does NAR define it?

 

[goingplacesanddoingstuff]

No, those are all "indexes" made up by the NAR. Hardly an unbiased group. There goal is to profit from every housing transaction.

You aren’t paying attention, then. Only one graph was an index, and it has been calculated the same way for decades, so the implication that it was designed to make today’s situation look a certain way is incorrect. The reality is that house payments are currently at record highs compared with incomes.

The other two graphs were simply ratios of two metrics. Pretty simple.

Who is to say houses weren't too cheap 40 years ago and they have come to more reasonable levels? Lots has changed since then - for example the overall number of social programs, or number of women who work outside of home - to name a couple trends.

If this is the case, then there is no basis for poo-pooing those faced with the unique challenges of buying homes today.

Define a house? I work with a lot of professionals from Europe. They own a 800 square foot "flat". This is common for them. I assume they make similar to what I do. Would owning a 800 square foot condo suffice?

A single-family home, also known as a single-family detached home, is a free-standing residential building designed to be occupied by a single household. It is defined in opposition to a multi-family residential dwelling and typically includes two key elements: "single-family," meaning the building is usually occupied by just one household, and "detached," meaning it is completely separated by open space except for its own garage or shed.

The U.S. Census Bureau's definition of a single-family home may also include certain attached dwellings, such as townhouses, as long as they are separated by a ground-to-roof wall and have their own private utilities.

These types of home offer privacy, space, and the ownership of both the building and the land it sits on, making it suitable for those seeking a standalone residence with no shared walls or utilities.

In Italy there giving houses away if you will come and take them and work. They have empty houses because there socialist tendencies have bankrupt there country, and what few young people they have are leaving. Obviously cheap housing hasn't benefited them.

Italian real estate prices have more to do with this:

My interest is purely macro-economic. I long since gave up on any type of cause. I am truly curios - how should we define housing affordability? Not how does NAR define it?

The housing affordability index is a measure of the degree to which a typical family can afford housing. It compares the median income of a region to the income needed to qualify for a mortgage on a median-priced home.

A value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home, assuming a 20 percent down payment. An index above 100 signifies that such a family has more than enough income to qualify for a mortgage.

Conversely, an index below 100 indicates that the typical family does not have enough income to qualify for a mortgage on a typical home. The HAI is used as an overall indication of the cost of living in an area, with a higher index indicating greater affordability

 

[nickaluch]

I remember buying my first house I saved a down payment by working around the clock hustled any side money I could make. Had zero debt and sold my car bought a beater. Buying a home is doable with sacrifice to get in the door. I don't think the new young ones are willing to sacrifice.

 

[KrisZ]

I remember buying my first house I saved a down payment by working around the clock hustled any side money I could make. Had zero debt and sold my car bought a beater. Buying a home is doable with sacrifice to get in the door. I don't think the new young ones are willing to sacrifice.

Yeah, that’s the common assumption. Yet look at the boomers, literally everything was handed to them on a silver platter. But they worked so hard, unlike those lazy millennials.

 

[Donald]

Awww, that's too bad.

I grew up dirt poor. In the 70's, I was in elementary school, living in a trailer park in Alabama on the north side of Montgomery. I raked pine straw in the winter and mowed the little trailer lot yards for $3 each in the summer. Looked for empty Co-cola bottles your parents threw out of their new car on the side of the road; I'd take them to the grocery store on Saturday when my mother went and cash them in for the deposit, go next door to the drug store or Service Merchandise and buy matchbox cars, fishing lures or something else.

I was raised that I needed to get an education; one that would allow me to obtain a "good" job, that had health insurance, benefits, etc. I also knew that I was poor; my friends at school didn't live like we did. All those people that say they didn't know they were poor growing up, weren't really poor. You d**** well when you are if you have half a brain.

I knew I didn't want to live like I grew up. I wanted all the stuff my friends had. I knew I had to work to get it. Work like a dog. And I did. I'm 52 and I have put in my time. We live in a nice, large home on 10+ acres in an area that will soon be another bustling, over-crowded, over-developed suburb of Atlanta. We won't be here, we will be living in another area that doesn't have street lights either.

If you want something, go to work, make some money and go buy it. If you want some land, figure out how to make the money to buy it. Start now. Yes, you are correct, it's not going to get any cheaper and they don't make any more of it.

When you do, please don't come in here screaming, whining and crying like a little ***** about the property taxes. Those are being collected to pay for stuff for people that don't want to get off their butt and go to work.

I'm not seeing a booming number of people that are out there giving it their best to kill it. I'm seeing a GROWING number of the population that is more interested in face piercings, face, neck and highly visible arm/hand tattoos, going to retail establishments in pajamas, haven't run a comb or brush through their hair, haven't shaved in a month and quite frankly, don't care. These people aren't trying to better themselves. They are just wanting to exist on whatever is handed to them. Their biggest effort is put into ordering from GrubHub, loading up on Redbull, lottery tickets, weed and frozen dinners.

Hey I have not shaved in a month. Mainly because at 70 I don't feel like it. When my wife hints that I am starting to look like a mountain man I will go get beard trimmed and hair cut, but not a lot of hair to cut. Considering letting my hair grow into pony tail.

 

[gfh77665]

Your first

I did something crazy. Back in our late 20's we bought a 3-2-2 in May of 1989. Decent but unspecactular. Paid 57K for it, and our mortgage rate even with very good credit was a whopping 10.5%. Being young and unfamilar with finances, I was shocked seeing the amortization schedule they prinited out for me. I was effectivly throwing away money to carry that mortgage and rate.

However, we did not WHINE and CRY and lament "how unfair" the world was like people do today. We buckled down, lived on one of our two incomes, and paid that thing off in 2.5 years. That set us up well for life!