https://fred.stlouisfed.org/series/CSUSHPINSA
https://finance.yahoo.com/news/home-prices-set-record-in-july-140213592.html
Enjoy your high priced home at 8% interest. We've obviously got inflation well under control.
11:34a, 9/26/23
https://fred.stlouisfed.org/series/CSUSHPINSA
https://finance.yahoo.com/news/home-prices-set-record-in-july-140213592.html
Enjoy your high priced home at 8% interest. We've obviously got inflation well under control.
11:51a, 9/26/23
It's really terrible. I know a number of young couples just a few years removed from college that have been very successful and are still absolutely crushed at their prospects of getting a home due to the overwhelming double-whammy that is prices and interest rates.
12:13p, 9/26/23
I had an assignment for new construction of a townhome in Denver not long ago. Closed around $1.7MM for 1 unit... don't remember where I came in but it was over.
Housing market has gone full stupid.
Housing market has gone full stupid.
Anyone who chooses to ride a bicycle in the street is a threat to themselves, and others. If a vehicle strikes you accidentally, YOU are at fault; and the laws of physics supercede all else when you're in the path of a 2 ton killing machine. Know your place, stay off the road.
12:21p, 9/26/23
not really an "inflation" problem, it's a supply and demand problem. Unfortunately with no obvious solution.
If the fed wasn't focused on a soft landing there might be hope, but I don't see this dropping outside of a recession
If the fed wasn't focused on a soft landing there might be hope, but I don't see this dropping outside of a recession
12:21p, 9/26/23
What did we ever do back when the interest rates were near 18%?
Oh yeah, I remember. We saved up for 20% down, didn't buy more than we could afford, and refinanced when rates went down.
Oh yeah, I remember. We saved up for 20% down, didn't buy more than we could afford, and refinanced when rates went down.
Buy a man eat fish, he day, teach fish man, to a lifetime.
- Joe Biden
I think that, to be very honest with you, I do believe that we should have rightly believed, but we certainly believe that certain issues are just settled.
- Kamala Harris
- Joe Biden
I think that, to be very honest with you, I do believe that we should have rightly believed, but we certainly believe that certain issues are just settled.
- Kamala Harris
12:25p, 9/26/23
In reply to JobSecurity
Huh? It has alot to do with inflation…. prices of goods and labor to build homes significantly increased the past few years which in turn raised the prices of new and used homes. Add in the fed raising interests rates significantly to try and slow inflation and you have high prices and high cost of borrowing.
JobSecurity said:
not really an "inflation" problem, it's a supply and demand problem. Unfortunately with no obvious solution.
If the fed wasn't focused on a soft landing there might be hope, but I don't see this dropping outside of a recession
Huh? It has alot to do with inflation…. prices of goods and labor to build homes significantly increased the past few years which in turn raised the prices of new and used homes. Add in the fed raising interests rates significantly to try and slow inflation and you have high prices and high cost of borrowing.
12:25p, 9/26/23
In reply to techno-ag
Except home prices were much closer to wages back then. Big difference.
12:41p, 9/26/23
I will listen to complaints when it hits 10%.
These high rates will also help to bring down prices when demand decreases. Just wait a few years and collect 5% on your down payment savings for now. There will be a switch. High inflation will cause people to sell
These high rates will also help to bring down prices when demand decreases. Just wait a few years and collect 5% on your down payment savings for now. There will be a switch. High inflation will cause people to sell
12:42p, 9/26/23
In reply to techno-ag
We'd love to do that. You had an attractive job market and your grocery bills didn't double every few years from inflation.
There's no saving up for a down payment right now. Prices are increasing faster than wages
techno-ag said:
What did we ever do back when the interest rates were near 18%?
Oh yeah, I remember. We saved up for 20% down, didn't buy more than we could afford, and refinanced when rates went down.
We'd love to do that. You had an attractive job market and your grocery bills didn't double every few years from inflation.
There's no saving up for a down payment right now. Prices are increasing faster than wages
12:45p, 9/26/23
In reply to techno-ag
Edited for historical context.techno-ag said:
What did we ever do back when the interest rates were near 18%?
Oh yeah, I remember. We saved up for 20% down (about 12k for the average house costing app. $61k), didn't buy more than we could afford, and refinanced when rates went down.
12:51p, 9/26/23
In reply to HDeathstar
How is high inflation going to cause people to sell? They're locked in to a 3% mortgage based on a home value that was 30%+ less than it's worth today. So inflation is going to cause them to sell and move where.. an apartment that is equally as expensive as their home? Or downsize to a smaller home for an even higher mortgage?? Many people couldn't even afford to buy their current home at market prices and rates
There are two ways supply will increase
1) rates fall. This will not lower prices as demand will increase proportionately if not more so than supply. Ie values rise further in desirable areas
2) mass unemployment causing an inability to pay existing mortgages with low rates. No evidence this is coming whatsoever
HDeathstar said:
I will listen to complaints when it hits 10%.
These high rates will also help to bring down prices when demand decreases. Just wait a few years and collect 5% on your down payment savings for now. There will be a switch. High inflation will cause people to sell
How is high inflation going to cause people to sell? They're locked in to a 3% mortgage based on a home value that was 30%+ less than it's worth today. So inflation is going to cause them to sell and move where.. an apartment that is equally as expensive as their home? Or downsize to a smaller home for an even higher mortgage?? Many people couldn't even afford to buy their current home at market prices and rates
There are two ways supply will increase
1) rates fall. This will not lower prices as demand will increase proportionately if not more so than supply. Ie values rise further in desirable areas
2) mass unemployment causing an inability to pay existing mortgages with low rates. No evidence this is coming whatsoever
12:54p, 9/26/23
In reply to techno-ag
I remember, a lot of people walked out of their homes in the early 80's due to our economy that depended on a strong oil economy. The home I bought in 82 for 62k dropped to around 33k in 2 years, it was terrible. There were some very lean years going forwards. Not a lot of jobs, much doom and gloom. Our economy is diversified now but this administration is screwing with everything and I don't know if we will ever have it as good as in the last 40 years. For my families sake I hope and pray! I truelly feel bad for not just young Ag families but all families trying to teach and do the right things for their own.
techno-ag said:
What did we ever do back when the interest rates were near 18%?
Oh yeah, I remember. We saved up for 20% down, didn't buy more than we could afford, and refinanced when rates went down.
I remember, a lot of people walked out of their homes in the early 80's due to our economy that depended on a strong oil economy. The home I bought in 82 for 62k dropped to around 33k in 2 years, it was terrible. There were some very lean years going forwards. Not a lot of jobs, much doom and gloom. Our economy is diversified now but this administration is screwing with everything and I don't know if we will ever have it as good as in the last 40 years. For my families sake I hope and pray! I truelly feel bad for not just young Ag families but all families trying to teach and do the right things for their own.
12:55p, 9/26/23
In reply to JobSecurity
This is truth. I am one of those trying to sell a home but it wont be leaving the market anytime soon. I am probably going to be renting it out against my better judgement. Someone with 10% down on my house is still looking at a $4000/mo note.
1:01p, 9/26/23
In reply to Sims
My A&M degree got me a $950/month job at a bank during that time so saving $12K was not an easy thing to do.Sims said:Edited for historical context.techno-ag said:
What did we ever do back when the interest rates were near 18%?
Oh yeah, I remember. We saved up for 20% down (about 12k for the average house costing app. $61k), didn't buy more than we could afford, and refinanced when rates went down.
1:04p, 9/26/23
In reply to techno-ag
1980
Median House Price: 47,200
Median Household Income: 21,000
20% Down: 9,440
Interest Rate: 17%
Tax: 864/yr (72.00/mo)
HOI: 250/yr (20.80/mo)
P&I: 539.00
Total Payment: 631.80
Down payment percent gross income: 45%
Total payment percent of gross income: 16%
2023
Median House Price: 416,000
Median Household Income: 81,500
20% Down: 83,200
Interest Rate: 7.5%
Tax: 7615 (634.59/mo)
Insurance: 2204 (183.67/mo)
P&I: 2327.00
Total Payment: 3145.26
Down payment percent gross income: 102%
Total payment percent of gross income: 46.3%
You have to save 2.5x as long to purchase a home that costs 3x as much monthly. Interest rates are a portion of the equation, but they matter WAY less than price relative to income. Even at 0% interest rates it's more expensive/difficult to buy a home than it was in the early 80's.techno-ag said:
What did we ever do back when the interest rates were near 18%?
Oh yeah, I remember. We saved up for 20% down, didn't buy more than we could afford, and refinanced when rates went down.
1980
Median House Price: 47,200
Median Household Income: 21,000
20% Down: 9,440
Interest Rate: 17%
Tax: 864/yr (72.00/mo)
HOI: 250/yr (20.80/mo)
P&I: 539.00
Total Payment: 631.80
Down payment percent gross income: 45%
Total payment percent of gross income: 16%
2023
Median House Price: 416,000
Median Household Income: 81,500
20% Down: 83,200
Interest Rate: 7.5%
Tax: 7615 (634.59/mo)
Insurance: 2204 (183.67/mo)
P&I: 2327.00
Total Payment: 3145.26
Down payment percent gross income: 102%
Total payment percent of gross income: 46.3%
.
1:14p, 9/26/23
In reply to tk111
What has changed between 1997 and 2023, besides increases in construction costs, insurance costs, taxes and massive interest rate manipulation by the Fed?
4 years removed from college I made my first home purchase (was a townhouse, but you get the drift). I paid 20% down and signed a note for 8.5%. This was in 1997, and I was thrilled.tk111 said:
It's really terrible. I know a number of young couples just a few years removed from college that have been very successful and are still absolutely crushed at their prospects of getting a home due to the overwhelming double-whammy that is prices and interest rates.
What has changed between 1997 and 2023, besides increases in construction costs, insurance costs, taxes and massive interest rate manipulation by the Fed?
People think I'm an idiot or something, because all I do is cut lawns for a living.
1:21p, 9/26/23
In reply to hph6203
Thanks. Some people's inability to admit that economics were more favorable to them in the past is strange. And that's not to absolve the idiocy towards our current economic policies that this generation is perpetuating. I'm sure the millenials will be gaslighting the 30 year olds the same way in 30 years.
hph6203 said:You have to save 2.5x as long to purchase a home that costs 3x as much monthly. Interest rates are a portion of the equation, but they matter WAY less than price relative to income. Even at 0% interest rates it's more expensive/difficult to buy a home than it was in the early 80's.techno-ag said:
What did we ever do back when the interest rates were near 18%?
Oh yeah, I remember. We saved up for 20% down, didn't buy more than we could afford, and refinanced when rates went down.
1980
Median House Price: 47,200
Median Household Income: 21,000
20% Down: 9,440
Interest Rate: 17%
Tax: 864/yr (72.00/mo)
HOI: 250/yr (20.80/mo)
P&I: 539.00
Total Payment: 631.80
Down payment percent gross income: 45%
Total payment percent of gross income: 16%
2023
Median House Price: 416,000
Median Household Income: 81,500
20% Down: 83,200
Interest Rate: 7.5%
Tax: 7615 (634.59/mo)
Insurance: 2204 (183.67/mo)
P&I: 2327.00
Total Payment: 3145.26
Down payment percent gross income: 102%
Total payment percent of gross income: 46.3%
Thanks. Some people's inability to admit that economics were more favorable to them in the past is strange. And that's not to absolve the idiocy towards our current economic policies that this generation is perpetuating. I'm sure the millenials will be gaslighting the 30 year olds the same way in 30 years.
1:23p, 9/26/23
We tried this same strategy in the late 70's, didn't work. Has to be a full attempt to stop inflation, and it's going to be very painful. Bank failures, home industry bankruptcies, huge unemployment. 18% interest will crush the growth. Probably be a depression.
1:27p, 9/26/23
In reply to Definitely Not A Cop
How about there be some honesty in what that average home bought you in 1980 vs 2023 and then there can be a discussion. Until then, its a bunch of hooey as most millenials wouldn't let their cats live in what the average home was in 1980.Definitely Not A Cop said:
Thanks. Some people's inability to admit that economics were more favorable to them in the past is strange. And that's not to absolve the idiocy towards our current economic policies that this generation is perpetuating. I'm sure the millenials will be gaslighting the 30 year olds the same way in 30 years.
1:32p, 9/26/23
In reply to jja79
If you add a 0 to both of those numbers, it's a bit closer to what graduates face today. Except most students coming out of college nowadays may take home about $4000 a month rather than $9500.
It is significantly harder for recent college grads to save nowadays than it has been before. Also, there are very, very few starter homes available to buy with reasonable commutes.
It is significantly harder for recent college grads to save nowadays than it has been before. Also, there are very, very few starter homes available to buy with reasonable commutes.
1:32p, 9/26/23
In reply to Definitely Not A Cop
Examples only of course, but you get the point.
I think it's more modern expectations that are out of whack. A young grad expects $100,000 job on day one. Wants a 5 bedroom $750,000 house with 0 down at 3%.Definitely Not A Cop said:hph6203 said:You have to save 2.5x as long to purchase a home that costs 3x as much monthly. Interest rates are a portion of the equation, but they matter WAY less than price relative to income. Even at 0% interest rates it's more expensive/difficult to buy a home than it was in the early 80's.techno-ag said:
What did we ever do back when the interest rates were near 18%?
Oh yeah, I remember. We saved up for 20% down, didn't buy more than we could afford, and refinanced when rates went down.
1980
Median House Price: 47,200
Median Household Income: 21,000
20% Down: 9,440
Interest Rate: 17%
Tax: 864/yr (72.00/mo)
HOI: 250/yr (20.80/mo)
P&I: 539.00
Total Payment: 631.80
Down payment percent gross income: 45%
Total payment percent of gross income: 16%
2023
Median House Price: 416,000
Median Household Income: 81,500
20% Down: 83,200
Interest Rate: 7.5%
Tax: 7615 (634.59/mo)
Insurance: 2204 (183.67/mo)
P&I: 2327.00
Total Payment: 3145.26
Down payment percent gross income: 102%
Total payment percent of gross income: 46.3%
Thanks. Some people's inability to admit that economics were more favorable to them in the past is strange. And that's not to absolve the idiocy towards our current economic policies that this generation is perpetuating. I'm sure the millenials will be gaslighting the 30 year olds the same way in 30 years.
Examples only of course, but you get the point.
1:33p, 9/26/23
One way to drive down home prices is by zoning for smaller homes (800-1000 sq ft) in areas that have space to build them. It would allow singles and young couples to purchase at 80-150k, get the tax advantages and start building a wealth base. Putting people in small crappy apartments with no ability to generate equity is stupid and hopefully, some smart town or city on the outskirts of a major metro area will figure this out.
It is better to light a flamethrower than to curse the darkness- Sir Terence Pratchett
“ III stooges si viveret et nos omnes ad quos etiam probabile est mittent custard pies”
“ III stooges si viveret et nos omnes ad quos etiam probabile est mittent custard pies”
1:35p, 9/26/23
Many vacant lots on recently completed developments up here in DFW and feels like its gonna stay that way for a while
1:37p, 9/26/23
In reply to ABatt18
I graduated A&M in 2000 and went to work in Big 4/5 accounting. And lived frugally in order to save. And spent an hour each way commuting to that dump apartment.
Next.
Drive a used car. Live in a dump apartment. Have a used iPhone X not iPhone 15 Pro Max with matching Ultra 2 watch. Brew your coffee at home. Eat ramen. Vacation on surfside beach sleeping in a tent.ABatt18 said:
If you add a 0 to both of those numbers, it's a bit closer to what graduates face today. Except most students coming out of college nowadays may take home about $4000 a month rather than $9500.
It is significantly harder for recent college grads to save nowadays than it has been before. Also, there are very, very few starter homes available to buy with reasonable commutes.
I graduated A&M in 2000 and went to work in Big 4/5 accounting. And lived frugally in order to save. And spent an hour each way commuting to that dump apartment.
Next.
1:37p, 9/26/23
In reply to carl spacklers hat
hph showed the math a lot better than I probably would've
Not sure if you were being facetious because of that last part...carl spacklers hat said:4 years removed from college I made my first home purchase (was a townhouse, but you get the drift). I paid 20% down and signed a note for 8.5%. This was in 1997, and I was thrilled.tk111 said:
It's really terrible. I know a number of young couples just a few years removed from college that have been very successful and are still absolutely crushed at their prospects of getting a home due to the overwhelming double-whammy that is prices and interest rates.
What has changed between 1997 and 2023, besides increases in construction costs, insurance costs, taxes and massive interest rate manipulation by the Fed?
hph showed the math a lot better than I probably would've
1:39p, 9/26/23
In reply to hph6203
The reason I ask is that I bought my first house back in 1982 and it was right at that medium price. However, it had been built in 1920, did not have central air, the heat was 2 gas furnaces in the floor with no ductwork, shag carpet that was already out of date and tacky, one bath, a tiny kitchen, and so forth.
To make sure that apples are being compared to apples, what are the square footages of the average houses in 1980 & 2023? My guess is that 2023 is substantially larger. Also, what amenities are in each house? Does the 2023 house include granite countertops, 10' ceilings, luxury master baths, etc.?hph6203 said:You have to save 2.5x as long to purchase a home that costs 3x as much monthly. Interest rates are a portion of the equation, but they matter WAY less than price relative to income. Even at 0% interest rates it's more expensive/difficult to buy a home than it was in the early 80's.techno-ag said:
What did we ever do back when the interest rates were near 18%?
Oh yeah, I remember. We saved up for 20% down, didn't buy more than we could afford, and refinanced when rates went down.
1980
Median House Price: 47,200
Median Household Income: 21,000
20% Down: 9,440
Interest Rate: 17%
Tax: 864/yr (72.00/mo)
HOI: 250/yr (20.80/mo)
P&I: 539.00
Total Payment: 631.80
Down payment percent gross income: 45%
Total payment percent of gross income: 16%
2023
Median House Price: 416,000
Median Household Income: 81,500
20% Down: 83,200
Interest Rate: 7.5%
Tax: 7615 (634.59/mo)
Insurance: 2204 (183.67/mo)
P&I: 2327.00
Total Payment: 3145.26
Down payment percent gross income: 102%
Total payment percent of gross income: 46.3%
The reason I ask is that I bought my first house back in 1982 and it was right at that medium price. However, it had been built in 1920, did not have central air, the heat was 2 gas furnaces in the floor with no ductwork, shag carpet that was already out of date and tacky, one bath, a tiny kitchen, and so forth.
1:40p, 9/26/23
In reply to UTExan
Fun fact, VDLs exist in many older communities located within commuting distance, particularly in places like Houston.
I have spent copious amounts of times looking at the situation you describe. Even when the numbers work from an affordability, the market is simply not there (even entry level home buyers demand the best schools, newest features, short commute).
Resetting expectations is the biggest challenge.
Even if you got the lot for free your numbers are not workable. Well, maybe in Colony Ridge.UTExan said:
One way to drive down home prices is by zoning for smaller homes (800-1000 sq ft) in areas that have space to build them. It would allow singles and young couples to purchase at 80-150k, get the tax advantages and start building a wealth base. Putting people in small crappy apartments with no ability to generate equity is stupid and hopefully, some smart town or city on the outskirts of a major metro area will figure this out.
Fun fact, VDLs exist in many older communities located within commuting distance, particularly in places like Houston.
I have spent copious amounts of times looking at the situation you describe. Even when the numbers work from an affordability, the market is simply not there (even entry level home buyers demand the best schools, newest features, short commute).
Resetting expectations is the biggest challenge.
1:41p, 9/26/23
In reply to fka ftc
Down payment percent gross income: 45%
Total payment percent of gross income: 16%
Average house size: 1800 sqft
2023
Down payment percent gross income: 102%
Total payment percent of gross income: 46.3%
Average house size: 2500 sqft
So the house size has increased 40%, while the down payment compared to income is more than twice the amount. Economics were favorable in the 80's.
Total payment percent of gross income: 16%
Average house size: 1800 sqft
2023
Down payment percent gross income: 102%
Total payment percent of gross income: 46.3%
Average house size: 2500 sqft
So the house size has increased 40%, while the down payment compared to income is more than twice the amount. Economics were favorable in the 80's.
1:44p, 9/26/23
We're locked in at 3% with our starter home.
Would love to get something larger - but can't do that with the current interest rates and inflated prices. If we sold, we wouldn't be ably to get something as nice.
Thanks, Democrats.
Would love to get something larger - but can't do that with the current interest rates and inflated prices. If we sold, we wouldn't be ably to get something as nice.
Thanks, Democrats.
I know a lot about a little, and a little about a lot.
1:45p, 9/26/23
In reply to fka ftc
What if you have very small lots in parts of a town considered less than desirable? Granted it would be high density, but if you located these homes in places 50-70 miles from large city limits, would there not be sufficient housing demand for them? A first time buyer's other option is a condominium.
fka ftc said:Even if you got the lot for free your numbers are not workable. Well, maybe in Colony Ridge.UTExan said:
One way to drive down home prices is by zoning for smaller homes (800-1000 sq ft) in areas that have space to build them. It would allow singles and young couples to purchase at 80-150k, get the tax advantages and start building a wealth base. Putting people in small crappy apartments with no ability to generate equity is stupid and hopefully, some smart town or city on the outskirts of a major metro area will figure this out.
Fun fact, VDLs exist in many older communities located within commuting distance, particularly in places like Houston.
I have spent copious amounts of times looking at the situation you describe. Even when the numbers work from an affordability, the market is simply not there (even entry level home buyers demand the best schools, newest features, short commute).
Resetting expectations is the biggest challenge.
What if you have very small lots in parts of a town considered less than desirable? Granted it would be high density, but if you located these homes in places 50-70 miles from large city limits, would there not be sufficient housing demand for them? A first time buyer's other option is a condominium.
It is better to light a flamethrower than to curse the darkness- Sir Terence Pratchett
“ III stooges si viveret et nos omnes ad quos etiam probabile est mittent custard pies”
“ III stooges si viveret et nos omnes ad quos etiam probabile est mittent custard pies”
1:51p, 9/26/23
In reply to Definitely Not A Cop
Nitpicking...but the median is 2200 sqft. (hph was using medians not means, which is better because it is less thrown around by the weight of ridiculously huge houses). Sorry..im a statistician...I can't help myselfDefinitely Not A Cop said:
Down payment percent gross income: 45%
Total payment percent of gross income: 16%
Average house size: 1800 sqft
2023
Down payment percent gross income: 102%
Total payment percent of gross income: 46.3%
Average house size: 2500 sqft
So the house size has increased 40%, while the down payment is more than twice the amount. Economics were favorable in the 80's.