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U.S. home prices are the most unaffordable they've been in nearly 100 years

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Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#41

Post by rootusrootus »

RDaneel0livaw wrote: post #12
whitemary wrote: post #9

Earlier quoted context omitted.

> as the population ages, who is going to buy all the McMansions? The McMansions will be unlivable by that point. They weren't built to last.

ENTIRE vinyl villages of McMansions will be unlivable. They aren't even built to last the standard 30y mortgage because the builders know the initial buyers will sell and move on. Cheapest possible 2x4's with worst insulation ever known, all covered up in plastic siding. But hey, it's 10k sq ft right?

That's a bit hyperbolic. Inspections are a thing, and modern houses are generally built just fine. And nobody uses plastic siding on a brand new house (well, almost nobody, you can probably find rare examples). A modern house uses hardieplank fibercement siding probably 99% of the time. These days vinyl siding is mostly a retrofit choice, not new construction.

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#43

Post by pzo »

superkuh wrote: post #10

From 1950 to 2008 the USA built ~25 million homes per (edit, not year) decade. From 2008 to 2018 it was about 7 million. In recent years building rates have mostly recovered but there's still that gap in production combined with everything else the last handful of years. This isn't to discount the shift of ownership from human persons to corporate persons, that's a factor too. But just numbers of available houses ver…

So in those 7 decades there has been build 175 million houses. Population of usa is around 350 million. Most people probsbly also not living alone and some houses that were build before 1950 probsbly still are in use just maybe modernized.

Not familiar with USA market but wondering: Are current houses just more fragile and fell apart within 50 years?

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#44

Post by paul7986 »

danielmarkbruce wrote: post #28
superkuh wrote: post #10

From 1950 to 2008 the USA built ~25 million homes per (edit, not year) decade. From 2008 to 2018 it was about 7 million. In recent years building rates have mostly recovered but there's still that gap in production combined with everything else the last handful of years. This isn't to discount the shift of ownership from human persons to corporate persons, that's a factor too. But just numbers of available houses ver…

This is important and few seem to look at the simple supply/demand. It explains the housing crises in 06/07/08 and the subsequent situation too.

Yes and with supply not meeting demand at least here in York county pa and Baltimore county md.. bidding wars just started to be the norm again and prices are increasing. I bid on a 200k home (a real fixer upper to flip in two years after living in it & remodeling it) last weekend it had 20 bids and I lost out to an all cash offer(supposedly per my real estate agent). That same weekend a 40 year old log cabin ($430k) had an open house where 30 showed up and it was sold within 8 hours.

Up until this month prices in this market were declining and homes sitting on the market for weeks to a month or more with lots of price drops.

It's weird spring comes around with interest rates just as high and we are back to bidding war frenzy that was 2021/half of 2022.

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#45

Post by jahewson »

xupybd wrote: post #14
zxexz wrote: post #8

Earlier quoted context omitted.

You sound very confident. Not that I disagree, necessarily, but do you care to elaborate?

The forces that drove prices are over. Low interest rates, and low productivity due to COVID-19. As interest rates rise people will no be able to afford their mortgages. Prices will fall in response.

Less than 10% of mortgages are variable rate. And why would anybody sell their house with a 2% mortgage? They’d need to be paid a significant premium to justify this.

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#46

Post by phil21 »

rootusrootus wrote: post #33
xupybd wrote: post #14

Earlier quoted context omitted.

The forces that drove prices are over. Low interest rates, and low productivity due to COVID-19. As interest rates rise people will no be able to afford their mortgages. Prices will fall in response.

> As interest rates rise people will no be able to afford their mortgages I really wonder how many people in the last 10 years actually felt like buying a variable rate mortgage was a good idea? People on fixed rate mortgages are staying put, and watching inflation deflate the value of their debt.

> I really wonder how many people in the last 10 years actually felt like buying a variable rate mortgage was a good idea?

Probably not very many. But I wonder how many people don't realize the psychological issues of being put into a "golden cage" for 30 years.

Times will certainly be interesting indeed over the next 5-10 years.

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#47

Post by irrational »

pzo wrote: post #43
superkuh wrote: post #10

From 1950 to 2008 the USA built ~25 million homes per (edit, not year) decade. From 2008 to 2018 it was about 7 million. In recent years building rates have mostly recovered but there's still that gap in production combined with everything else the last handful of years. This isn't to discount the shift of ownership from human persons to corporate persons, that's a factor too. But just numbers of available houses ver…

So in those 7 decades there has been build 175 million houses. Population of usa is around 350 million. Most people probsbly also not living alone and some houses that were build before 1950 probsbly still are in use just maybe modernized. Not familiar with USA market but wondering: Are current houses just more fragile and fell apart within 50 years?

How many of those homes are second/third homes?

There are a lot of old abandoned homes. I would never live in a home built before 1978. Almost certainly that home is full of lead-based paint and asbestos.

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#48

Post by CydeWeys »

pzo wrote: post #43
superkuh wrote: post #10

From 1950 to 2008 the USA built ~25 million homes per (edit, not year) decade. From 2008 to 2018 it was about 7 million. In recent years building rates have mostly recovered but there's still that gap in production combined with everything else the last handful of years. This isn't to discount the shift of ownership from human persons to corporate persons, that's a factor too. But just numbers of available houses ver…

So in those 7 decades there has been build 175 million houses. Population of usa is around 350 million. Most people probsbly also not living alone and some houses that were build before 1950 probsbly still are in use just maybe modernized. Not familiar with USA market but wondering: Are current houses just more fragile and fell apart within 50 years?

You're making too many assumptions from such broad data. No, houses don't generally fall apart within 50 years. But most houses built 50+ years ago are small by modern standards, and many have been torn down and redeveloped since then. For the ultimate peek into this phenomenon look at Tokyo, where the lifespan of a house is short and any given plot of land is rebuilt several times per century.

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#49

Post by noisenotsignal »

dangus wrote: post #18
chiefalchemist wrote: post #2

This is to be expected. Sellers are always reluctant to be reasonable when they are on the wrong side of a peak. The raising of interest rates means prices have to adjust. But after so many years of increasing prices sellers are not yet rational. And yes, some more inventory would help. That said, as the population ages, who is going to buy all the McMansions? Price not only need to adjust to interest rate but demogr…

Prices actually have adjusted and have fallen somewhat. What life event would cause someone who currently owns a home at a It’s a once in a generation type of rate. You’d have to be a complete fool or have some kind of crazy life circumstance to sell. Over 30% of employers in the US exclusively hire remote employees. Post-pandemic it’s hard for me to imagine someone in the home ownership socioeconomic class giving up…

This seems a bit extreme. If you can afford to move, does interest rate really factor in? If rates get worse you’ve still locked a better rate, if rates get better you refinance. Besides, there’s plenty of reasons to move besides for a job (and not everyone can work remotely or get a remote job with comparable compensation).

Yeah, you’re going to pay some more interest if you get a new mortgage, but don’t you just adjust your monthly finances and eat it? As long as you can hit your long-term financial goals, the “once in a generation” rate doesn’t seem so important.

Re: U.S. home prices are the most unaffordable they've been in nearly 100 years

#50

Post by nostromo »

pzo wrote: post #43
superkuh wrote: post #10

From 1950 to 2008 the USA built ~25 million homes per (edit, not year) decade. From 2008 to 2018 it was about 7 million. In recent years building rates have mostly recovered but there's still that gap in production combined with everything else the last handful of years. This isn't to discount the shift of ownership from human persons to corporate persons, that's a factor too. But just numbers of available houses ver…

So in those 7 decades there has been build 175 million houses. Population of usa is around 350 million. Most people probsbly also not living alone and some houses that were build before 1950 probsbly still are in use just maybe modernized. Not familiar with USA market but wondering: Are current houses just more fragile and fell apart within 50 years?

Families/households are also smaller so we need more homes, all else being equal.
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