Another article showing concern in the housing market- yet the author may have lacked critical thinking

[alarmguy]

The majority of my post were towards you blaming the younger generation for some reason and it's quite common for you to do so.

Another fabrication on your part. Have you missed all my posts about all my neighbors and young families enjoying life, not complaining?
My own kids, with their own homes, bought with their own labor? My daughter, who worked her way through college, with our help and paid off her student loans in 5 years?
The young couple with VERY young children that just bought our 3200 sq ft house>?
Not at all. I dont know all these young people that I THINK you and others say in here are struggling because the big bad world out there. That is my point.

 

[alarmguy]

You cling to this statement and although true, doesn’t tell the whole story, but it’s convenient to you. What you forget is that these are properties and they accumulate in the market. They get inherited, sold, resold etc. the number will naturally only climb, unless there is a natural disaster that wipes them out.

Also, let’s take a look at the chart you provided. The steep incline batween the red lines is from 1940 to roughly 1975. That’s the time when single family income was the norm. Home ownership was a lot more affordable to an average family. And that was the time when the standard of living increased by a lot. People were also buying cars, tons of them, vacations, flights. All available to the masses for the first time in history. So it’s not like people were only spending money on housing.


View attachment 124001

Im glad you agree, homeownership is at an all time high.

Your words = "but it’s convenient to you"
No its not convenient to me, its convenient to you to skew this to the point that you deny homeownership is at an all time high, then for some reason you try to justify why it is, kind of convoluted *LOL* I deal in facts, others twist facts to prove a point. (Cherry Picking)
Example, picking 1940 to 1975. You do know there was World War 2 right? 10s of thousands of US service men coming home, cheap homes being built to provide housing for them. Typically had 1 bathroom.
Why not take the curve from 1965 before woman took to the workplace? That was almost 60 years ago (sixty years) homeownership was only 3% less than today.

Im done posting ... *LOL* thank god... these are facts, simple stuff, I take offense to the other person PEW saying I blame young people, gosh the way people will twist words. Thats when I call it quits debating someone, its pointless, how silly saying that to someone like me who does everything in his power to help educate, inform and truly cares care about young people and in my life here in the real world I prove it to them all the time.
I do realize that words in a forum can be read differently than intended from both sides of a debate.

 

[mk378]

A huge trend during the post WWII era was people moving out of cities where homes are usually rented to suburbs where homes are usually owned. That drives an increase in home ownership percentage but it may or may not indicate an increase in affluence.

 

[KrisZ]

Not sure what got you so upset as nobody made any personal attacks on you or anything like that.

Why not take the curve from 1965 before woman took to the workplace? That was almost 60 years ago (sixty years) homeownership was only 3% less than today.

And you don’t see anything pointing to the housing being less and less affordable? We have 60 years of women contributing to the household incomes and only 3% home ownership increase. But like you said, it’s at all times high, let’s leave it at that, don’t look any further, full stop.

I agree with most you posted regarding work ethics, one’s willingness to sacrifice and prioritize things in life. There are plenty of young people doing that, no question here.

But your argument is that things are not different than before and affordability is similar to back then, is not based on facts but your feelings. I tried showing facts too and you ignore them or claim I twist them somehow. Oh, well…

Interesting discussion non the less.

 

[Pew]

And you don’t see anything pointing to the housing being less and less affordable? We have 60 years of women contributing to the household incomes and only 3% home ownership increase. But like you said, it’s at all times high, let’s leave it at that, don’t look any further, full stop.

I found an article here from EPI from 2008 that goes over the family income instability. It's a lot of article for me, I got a quarter down the page and went back to the top in order to re-read and try to completely understand it. I'll look after I finish reading the article to see if there's a more current one.

The rise in family income volatility would be less troubling if it was accompanied by dramatic income gains for the middle class. But, of course, this is not what has happened. According to the comprehensive post-tax income series of the CBO, average family income (adjusted for inflation and including public benefits) among the middle fifth of American families rose by 21% between 1979 and 2005. By contrast, the after-tax family income of the richest 1% of Americans increased by 230%. Meanwhile, workers in middle-class families are devoting much more time to paid work, mainly due to the increase work hours of women. Indeed, most of the income gains of the middle class are because of these increased work hours, rather than rising earnings. Even as family incomes are fluctuating more sharply, then, families are working harder for only modestly more income.

and

Until recently, the constraints on family finances posed by these trends were masked by the strong housing market, which allowed families to borrow against their home equity to finance present spending. But with the recent housing slump and credit crunch driven by the proliferation of risky sub-prime loans, this is no longer a ready option. The late Herbert Stein, chairman of Nixon’s Council of Economic Advisers, once reportedly pronounced that “Things that can’t go on forever, don’t.” Families cannot maintain consumption through borrowing forever, and the bill that eventually comes due can devastate family finances.

 

[alarmguy]

But your argument is that things are not different than before and affordability is similar to back then, is not based on facts but your feelings. I tried showing facts too and you ignore them or claim I twist them somehow. Oh, well…

Interesting discussion non the less.

The fact remains the same percentage of people own homes now as they did 40 years ago.

The arguments about affordability are not factual, factual is the percentage of Americans who owned homes 40 years ago is the same as it is now.
Actually if we want to split hairs the percentage of people that own homes now or slightly higher than they were 40 years ago.
Part of this long ridiculous thread was reading peoples posts one person in particular that blames the baby boomers as a negative.
Yet more Americans now own homes then when the boomers were growing up.

 

[Rmay635703]

How many parents today help their children (no adults) buy a house ?

We did with 30% down payment….. no fancy weddings.

What age do typical adult children leave their parents homes for good?

26?

That trend started in the 1980’s and got worse over time.

The fact remains the same percentage of people own homes now as they did 40 years ago.

The arguments about affordability are not factual, factual is the percentage of Americans who owned homes 40 years ago is the same as it is now.
Actually if we want to split hairs the percentage of people that own homes now or slightly higher than they were 40 years ago.

Are they now?
taking your own chart back in time when ownership levels looked pretty terrible the percentage of properties with a mortgage was also low.

The debt to income ratios of “non-business “ individuals was also at record lows

AKA whoever owned the properties “mostly “ didn’t have a mortgage payment , nearly all were owned outright, especially in terms of farms and land.

Which is better
15% of the population having a mortgage but 40% “owning” their home

Or
62% “owning” a home but only 38% being paid off?

Add in the debt to income ratio comparison and it’s doesn’t look great.

That’s why open shut discussions focusing on one metric
“don’t mean much”

Things are different in more ways than one.


The greatest threat to our nation now is the subject you won’t touch, and nobody wants to address and for this reason it will continue to stagnate and fester causing untold damage to future generations.
I don’t have a solution but I know full well ignoring it for the last 20 years has gotten us systemic destructive problems that will get more difficult to address the longer they fester.

 

[Pew]

The fact remains the same percentage of people own homes now as they did 40 years ago.

The arguments about affordability are not factual, factual is the percentage of Americans who owned homes 40 years ago is the same as it is now.
Actually if we want to split hairs the percentage of people that own homes now or slightly higher than they were 40 years ago.
Part of this long ridiculous thread was reading peoples posts one person in particular that blames the baby boomers as a negative.
Yet more Americans now own homes then when the boomers were growing up.

You avoided my questions of:

Why did it level out so fast
Why has every boom resulted in bust
Why didn't we see similar levels of home ownership before WW2
Why has home ownership stayed stagnant for over 60 years (minus some percentages)?

Here's another graph from that website that compares affordability. @Rmay635703 was this a graph you were interested in?

 

[alarmguy]

You avoided my questions of:

Why did it level out so fast
Why has every boom resulted in bust
Why didn't we see similar levels of home ownership before WW2
Why has home ownership stayed stagnant for over 60 years (minus some percentages)?

Here's another graph from that website that compares affordability. @Rmay635703 was this a graph you were interested in?

View attachment 124030

I simply posted that the percentage of Americans who own homes have not changed and that’s what this is about. Furthermore one of you blamed the boomers is on this condition and that is not correct. In fact it’s laughable.
Also debt and who you vote for are free choices and free will, we are who we vote for and we owe who we borrow from.

 

[DejaVue]

The greatest threat to our nation now is the subject you won’t touch, and nobody wants to address and for this reason it will continue to stagnate and fester causing untold damage to future generations.
I don’t have a solution but I know full well ignoring it for the last 20 years has gotten us systemic destructive problems that will get more difficult to address the longer they fester.

haha, I'm happy to address that subject. But you saying it's been ignored for the last 20 years must mean a different, lesser subject, since the main greatest threat started 57 years ago and is currently worse than ever.

 

[zzyzzx]

Cost to the buyer = is the same payment.

Fixed:
Cost to the borrower = the same payment. Cash buyers will be getting housing cheaper. Plus there is the potential for lower property taxes and insurance.

 

[alarmguy]

Fixed:
Cost to the borrower = the same payment. Cash buyers will be getting housing cheaper.

Excellent point!
I have seen first hand in Florida where builders are clearing out some constructed homes in a retirement and one mixed community.
We know these communities well, almost bought there and recently they put a few select homes on clearance with up to 50k off. But in reality more like 30 to 40 and some cases 20 to 30k pre inflated price from the early summer but still a nice deal if paying cash and many do pay cash in Florida.

 

[PimTac]

More signs of a housing slowdown.

Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse​

https://www.cnbc.com/2022/11/02/wel...-for-layoffs-as-us-loan-volumes-collapse.html

 

[zzyzzx]

 

[zzyzzx]

 

[zzyzzx]

 

[KrisZ]

 

[K-Man]

One change in the tax laws in 1997 has led to this massive boom-bust cycle, I believe.

Before 1997 a person or couple either had to pay capital gains tax on profits from selling a primary residence, or roll over the profit into another house. Rolling over could be done repeatedly, deferring any tax. If the profit was rolled over, at age 55+ the person or couple could take a one-time exemption from tax of up to $125,000 when selling the home to downsize or live with other family members.

You got only one shot. Taking any part of that $125K exemption prevented you from using it again. If you were elderly and got only $50K tax-free during the sale, there was no way to recoup the other $75K. The law encouraged trading up as necessary for growing families, while allowing downsizing later in life without much penalty.

In 1997 the code was changed to exempt up to $250,000 per person or $500,000 per couple from capital gains tax during a sale of a primary residence. This exemption could apply as often as every two years, with no need to roll over the profit. You could simply take out the cash. This is the rule today. There are nuances, and the exemption is only for primary residences, not second or vacation homes. But the new law made house sales a bonanza for some people in the right parts of the country and the right market.

I'm convinced that this change led to massive speculation in housing by making "flipping" very easy, and has helped to drive up home prices beyond the reach of many. But as with the stock market, speculation has led to crazy cycles in the housing market and unwarranted appreciation in values that will eventually have to come down. The appreciation is just another form of inflation.

Inflation like this is "okay"—if you benefit from it. Most people don't. Mainly it's speculators who do. This is why rents, taxes, etc., have become unaffordable for the likes of younger people. I look at a house as a place to live, not as an investment instrument, but evidently I'm an exception. Enjoy the coming bust.

 

[zzyzzx]

One change in the tax laws in 1997 has led to this massive boom-bust cycle, I believe.

I think it has more to do with our perpetual zero interest rate policy. With rates at zero or extremely low rent seekers look for rents in lieu of bonds, so they buy real estate to rent out. This causes a bubble which eventually pops. ARMS and low down payment are also part of the problem. Ban ARM's, require 20% down payments, keep loan terms to a max of 30 years, and keep interest rates near historical averages and you won't see housing bubbles, IMO.

 

[zzyzzx]

Opendoor Technologies Inc. (OPEN)
$1.5050/sh -0.2300 (-13.2565%)
As of 10:11AM EST. Market open.