11–20 of 286 posts
Skewed supply and demand does not a bubble make.
So is this finally the inflation that we were promised for so long? I guess all that money created during covid had to go somewhere. Too bad it's not going into education or healthcare...
In the Sunbelt, I see homes getting bought all cash by the wealthy and retirees (with some or all contingencies waived), driving up values beyond what income driven mortgagees will support. When asked how long this can go on for (by people who, naively, believe this to be a repeat of the 2008 housing bubble and are waiting on the sidelines to acquire property either as a home or investment), I respond "Until that wealth is depleted."
Go look at current and historical prices of homes (as well as appreciation rate velocity) in Dallas, San Antonio, Houston, Tampa, Orlando, Miami, and major North Carolina metros (as well as parts of Western North Carolina such as from Asheville to the NC-TN border) to see this. Rents are no better [1].
[1] https://www.bloomberg.com/news/articles/2021-08-18/housing-h... | https://archive.is/VGtt4 (Bloomberg: Landlords From Florida to California Are Jacking Up Rents at Record Speeds)
So is this finally the inflation that we were promised for so long? I guess all that money created during covid had to go somewhere. Too bad it's not going into education or healthcare...
Don't see the important question being answered: is this price rise accompanied by lax lending standards? Almost every sober analysis of thr 2008 crash involved dysfunction in the mortgage market. Skewed supply and demand does not a bubble make.
You must look at how many people have cash in their banc accounts to cover mortgages if the stock market dives 50% and rates go up 2~4%. Can that generate a cascade of foreclosures?
Name something that costs less in 2021 than in the 2000s?
Name something that costs less in 2021 than in the 2000s?
Name something that costs less in 2021 than in the 2000s?
So is this finally the inflation that we were promised for so long? I guess all that money created during covid had to go somewhere. Too bad it's not going into education or healthcare...
> The average price of American homes, in real terms, is now the highest it's ever been
Of course, you really need to be looking at mortgage rates to understand housing affordability: http://www.freddiemac.com/pmms/pmms30.html
July 2021 average 30-year mortgage rate: 2.87% (with 0.7 points)
2008 12-month average 30-year mortgage rate: 6.03% (with 0.6 points)
To put that in perspective, a $500,000 mortgage (excluding down payment) would require a $2,073 monthly payment today, but a $3,007 monthly payment at 2008's 6% mortgage rates.
In other words: Houses are still way cheaper, in actual out-of-pocket terms for average people, than they were in 2008. Today's interest rates are way too low.
EDIT: Updated with 2008 numbers, thanks to comment below