I wonder if the trade hostilities are affecting foreign (particularly Chinese) real estate purchases in the US. I suspect this is the case, but it's probably not enough to significantly contribute to the slowdown (at least not more so than rising mortgage rates and overheated prices)
US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
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Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#62I can put some perspective on this. We got priced out of the market in Feb. According to the bank, we can't get a mortgage where the overall cost of the payments on all our debt can't exceed 41% of our pre-tax income. Given that our student loans eat about 20% of our pre-tax income, that means we only have 20% of our income left for housing. Rising interest rates means that more of our house payment goes to interest…
if youre paying 20% of your income to student loans, buying a house isnt exactly the best play. Student loan interest is a scam. Dig deep and pay that jam off as quickly as a you can.
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#63I can put some perspective on this. We got priced out of the market in Feb. According to the bank, we can't get a mortgage where the overall cost of the payments on all our debt can't exceed 41% of our pre-tax income. Given that our student loans eat about 20% of our pre-tax income, that means we only have 20% of our income left for housing. Rising interest rates means that more of our house payment goes to interest…
With a tight budget like that, imagine you had bought the house and then the tax code changes and now the math doesn't work anymore.
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#64Earlier quoted context omitted.
Yes, 75% of rent can be used. It is called "market rent", according to Fannie Mae. Remaining 25% is used for Vacancies, etc. In California markets, rental properties are not profitable, when you consider 20% downpayment, 75% rent, etc. There are 4 kinds of buyers in this market: 1. First home buyers: renters becoming buyers. 2. Second home buyers: thanks to the appreciation of their primary residence, people have bou…
Right, flippers aren’t taking conventional housing loans on the properties they are flipping. They are getting short term lines of credit instead because they don’t expect to have the house for more than a few months.
I'm not sure what kind of flippers you are referring, but usually there are no loans. Cash purchases - 100% for the entire value of the property.
Source: my parents are prof. flippers.
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#65The upcoming changes in the tax code certainly did not help the housing market: - The new SALT cap is extremely low, particularly if you own a home in the Bay Area. 10K! Mitigative solution: Stay put and keep current tax base, hampering both supply and demand (for a nicer home) - The doubled standard deduction made owning with a mortgage less attractive (But a win overall once your loan is paid off enough). - Mortgag…
This is all true, but the mortgage interest deduction should be $0, particularly in the rich cities that refuse to let enough homes get built and fix things like zoning. It's an awful distortion that's a handout to the wealthy to the penalty of renters (generally less well off)
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Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#66Earlier quoted context omitted.
State and local taxes should also not reduce your federal taxable income at all. High tax states can tax themselves all they want to, but that shouldn’t reduce their federal tax burden.
Why not? The high tax states are also paying more in Federal taxes than they receive. The low tax states are already subsidized by the federal government.
That might be accidentally true in some case, but not true in principle. There are states like Washington, which have zero income tax but which still contribute more in federal taxes (73.3B [1]) vs federal spending they receive (72.9B [2]). So it still doesn't make sense to deduct local taxes.
[1] https://en.wikipedia.org/wiki/Federal_tax_revenue_by_state
[2] https://en.wikipedia.org/wiki/Federal_taxation_and_spending_...
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#67I closed on a condo in Seattle literally this morning. Did I buy at the exact worst possible time?
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#68I closed on a condo in Seattle literally this morning. Did I buy at the exact worst possible time?
Only if you're concerned about external validation of your purchase -- i.e., you might be moving and the market tanks.
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#69At some point you hit the cap of what people can possibly spend. Depressed earnings in all but a tiny sector, and incredibly inflated house prices. Perpetual growth is unsustainable in this manner, but is expected by investors. I hope the market corrects. Not for my sake (I live in Sweden and have no US desires) but for those who hope to have a life and family near their ancestral home. I am not preaching to the choi…
I don't know how the housing market doesn't affect you - Stockholm is one of the most expensive real estate markets in the world. Much move expensive than most US cities.
Who said I live in Stockholm? I live in Malmö. The housing market is pretty dire in most of the westernised-European capitals.
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#70Earlier quoted context omitted.
This is all true, but the mortgage interest deduction should be $0, particularly in the rich cities that refuse to let enough homes get built and fix things like zoning. It's an awful distortion that's a handout to the wealthy to the penalty of renters (generally less well off)
I'm a homeowner and I think it's an absolute crime my mortgage interest is tax deductible yet rent isn't. If we believe, at a philosophical level, that interest payments should be tax deductible, ok, then make ALL interest paid tax deductible - credit cards, personal loans, auto loans, payday loans, etc. It's shameful. That being said, with the new tax bill, 90+% of both owners and renters will be taking the standard…
If we believe, at a philosophical level, that interest payments should be tax deductible, ok, then make ALL interest paid tax deductible - credit card, personal loans, auto loans, etc.
Exactly. In fact all interest was deductible until the 1986 tax reform. Unfortunately the mortgage interest deduction survived due to lobbying from the real estate industry.
with the new tax bill, 90+% of both owners and renters will be taking the standard deduction this year. It is my opinion that's a good thing.
It's a very good thing for fairness, economic efficiency, and saving taxpayer time.