Like I said, you can find any statistic to back up whatever you like, for example cherry pick at the end of each decade.
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Another article showing concern in the housing market- yet the author may have lacked critical thinking
- Thread starter GON
- Start date
Yeah, but we can’t take personal experiences of a handful of people and apply them across the board. We have to use national statistics.
Your dad got a house super cheap and at the same time you’re quoting prices for one as much is 400,000 when you can buy homes in nice areas for 200,000
All I’m saying is we can’t say one experience and apply across the board, but I can understand your feelings
Also, as far as your dad salary using generalizations and he may not have been a typical person but here’s a quick reference $10 an hour in 1973 was over 500% above the New York State minimum wage which was $1.85 an hour
In today’s world, that would translate into $70 an hour as New York State minimum wage today is $14 an hour.
I bought a house in 1980. Rates that year were skyrocketing to around 16%. I bought rental real estate in 1984-5. Rates for those properties were around 12%. That Rocket Mortgage chart is complete misinformation.
Oh, BTW, in 1980 I avoided the high rates by buying an existing house, assuming a first and second mortgage, and having the seller take back a third. My payments were almost exactly half of my take home pay. Salaried military job, paid overtime not an option nor was a second job. Did what I had to do to own a house.
This may be one of those periods where it's a bit more difficult to buy because of interest rates, but I don't buy the argument that it's fundamentally worse for this generation that the last two.
Oh, BTW, in 1980 I avoided the high rates by buying an existing house, assuming a first and second mortgage, and having the seller take back a third. My payments were almost exactly half of my take home pay. Salaried military job, paid overtime not an option nor was a second job. Did what I had to do to own a house.
This may be one of those periods where it's a bit more difficult to buy because of interest rates, but I don't buy the argument that it's fundamentally worse for this generation that the last two.
You do know why don’t you?
Homebuyers select more and more options in their home and buy bigger homes.
Homes were less affordable according to your chart in 1955 when you think of the lack of options, they came with nothing if you were lucky you got one bathroom, three bedrooms, and sometimes an attic that you could finish on your own.
Homes are very affordable or else they would not sell. Just because on the national average, someone may spend more of their income on a home, does not mean they cannot afford it simply because they are buying them.
That’s all that chart shows you people electing to spend more on their home.
Depends on the region. $400k is affordable here according to the realtors.
. As for that house my dad bought, that was the cost of houses back then. About 1700sf, two story tudor style with a full basement. 3BR, 1.5 bath. If I had to give a range I would say $15,000 to $25,000 was typical for an average home.
Times have changed. Here is one example not too far from that house.
https://www.redfin.com/WA/Tacoma/3522-S-Ainsworth-Ave-98418/home/2977884
So I was driving lots this weekend and one of the podcasts I happened to be listening to about broader market things discussed housing for a bit. This seems to tie back to the original topic of this thread.
The host and guest's take
-- We are 3M housing units short on supply - is what they housing industry says
-- 10+M houses are vacant - either 2nd and 3rd homes, many of which are airbnb, etc. Its well known people piled into those during the pandemic when interest rates were in the 3's.
So they speculated that maybe builders don't want to get fully on board with new developments because if there is any system shock - anywhere in the market that all those empty houses might end up for sale - and everyone will be trying to get out the door at once. So the compressed supply keeps the market price relatively high.
I have no idea how likely this is - and the speakers are experts in other parts of the market so they were simply speculating in general - but anyway if you want to listen its Wealthion - "Is a Global Margin Call in the Making? - with guest Michael Gayed". Michael Gayed has his own podcast - lead lag live - and was why I was listening to this one in the first place. Most of the discussion is about global bond and credit markets - not housing. The Housing stuff is very near the middle - its about an hour podcast so you may want to jump to there.
Interesting data I hadn't heard elsewhere. Given that Michael Gayed runs two smaller mutual funds I don't see him making numbers up - so I believe them.
The host and guest's take
-- We are 3M housing units short on supply - is what they housing industry says
-- 10+M houses are vacant - either 2nd and 3rd homes, many of which are airbnb, etc. Its well known people piled into those during the pandemic when interest rates were in the 3's.
So they speculated that maybe builders don't want to get fully on board with new developments because if there is any system shock - anywhere in the market that all those empty houses might end up for sale - and everyone will be trying to get out the door at once. So the compressed supply keeps the market price relatively high.
I have no idea how likely this is - and the speakers are experts in other parts of the market so they were simply speculating in general - but anyway if you want to listen its Wealthion - "Is a Global Margin Call in the Making? - with guest Michael Gayed". Michael Gayed has his own podcast - lead lag live - and was why I was listening to this one in the first place. Most of the discussion is about global bond and credit markets - not housing. The Housing stuff is very near the middle - its about an hour podcast so you may want to jump to there.
Interesting data I hadn't heard elsewhere. Given that Michael Gayed runs two smaller mutual funds I don't see him making numbers up - so I believe them.
That's plausible but builders aren't looking to build starter homes. One problem is that many vacant homes are located in areas of the country which have experienced insurability shock and it's only going to get worse.
https://todayshomeowner.com/general/guides/highest-home-vacancy-rates/
Well said, and I agree but let me add. It's not worse for new home buyers, they just expect to much for too little.
It's easy to buy a home but they dont want to settle like people used too.
The people who buy homes are the ones who settle for less than move up later in life.
All this housing stuff is modern day social media and so called news media. Dont you know, there is never a good day in America anymore? Nothing is different except life has never in the history of mankind been more easy than it is today. But people dont tune into good news so the media will make you feel like a victim to keep you tuned in, while all your friends buy homes or move to a place they can afford one. It's laughable, I still for the last decade do not know anyone, young or old who could not buy a home. But you wont hear those stories of the tens of thousands that buy every year.
The post was an overall comment to the overall thread regarding house pricing and shortage. Yes, AirBNB or vacation homes are almost never starter homes but the shortage spans far more than starter homes. The the affordability debate was a very recent detour on a thread that has been active almost a year now, so as mentioned my comment was to the original post in this thread.
Of course everything is about location. According to the article you linked - which was quite interesting - in Asheville 16% of all homes are currently for sale. That's crazy. There are a few in my neighborhood that aren't moving either - which is a relatively recent phenomenon - like the last 4 or 5 months.
As for the insurance shock - Florida is one of the places with that problem and housing starts there continue to be strong. Not sure that has registered yet, although it might in the future?
https://fred.stlouisfed.org/series/FLBP1FH
A good demonstration of someone who is new to homeownership.
I look at this as a positive. It allows people who want to buy some breathing room for the limited inventory. The majority is usually wrong.
I wonder what percentage of mortgages are held by the GSE’s - Fannie Freddie FHA VA? More importantly what percentage written in the last 3 years. Whatever they own we all own - like it or not.
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