CBS: Homes "unaffordable" in 99% of nation for average American

[1srelluc]

Homes "unaffordable" in 99% of nation for average American

Home prices have jumped so much that Americans must pay a third of their income on housing, according to one study.

www.cbsnews.com

The typical American cannot afford to buy a home in a growing number of communities across the nation, according to common lending standards.

That's the main takeaway from a new report from real estate data provider ATTOM. Researchers examined the median home prices last year for roughly 575 U.S. counties and found that home prices in 99% of those areas are beyond the reach of the average income earner, who makes $71,214 a year, according to ATTOM.

Housing experts point to couple trends driving up housing costs. Mortgage rates have topped 7%, adding hundreds of dollars per month to a potential house payment. At the same time, homeowners who locked in at lower mortgage rates during the pandemic have opted not to sell out of fear of having to buy another property at today's elevated rates, depleting the supply of homes for sale.

But here's the kicker.....Ironically, if mortgage rates were to drop, that would increase demand for purchasing and thereby drive the prices of homes up even higher.....Same with rent....The only solution is a deflationary event.

We saw in 2008 what happens when debt gets monetized and integrated with other investment vehicles. Who knows what vehicles are now being used to leverage risky mortgages.

True they only did about 600 counties but they reflect the 71K income.....Much like my AO, and I can tell you straight up that is the case....Both homes and rent are sky high.

Right now there are only 9 rental homes available in my town....Average 3 BR price per month is $2.5K....2BR $2K a month....There are no apartments for rent.

 

[DGS49]

The real estate market in this country is inexplicable. Prices are sky-high, and interest rates are higher than they have been in decades and yet...

There is a SHORTAGE of desirable existing homes, and houses selling at or above asking price is the NORM. In most cases, contingencies in offers disqualify the offer because others are bidding with NO CONTINGENCIES at all, often taking the risk of having a period with TWO mortgage payments.

Often, people who "cannot afford" a house are buying it anyway with creative financing strategies or help from parents.

In past generations, NOT buying a house as soon as possible was a self-harming strategy because the house you want will cost more next year (or later). I'm not sure that is the case right now, because prices are grossly inflated, and those houses might be CHEAPER in a year or two. And interest rates will surely come down as soon as we can get that zombie out of the White House.

Still, renting for the long term is still cheaper than owning a home... paying the Mortgage loan, taxes, and upkeep, as well as the inevitable expensive repairs.

 

[MisterBeale]

BlackRock, other investment firms 'killing the dream' of home ownership, journalist says

Risk and investment management titan BlackRock is among several firms pushing working families out of the housing market and into rentals journalist Pedro Gonzalez told "Tucker Carlson Tonight."

www.foxnews.com

Investment Firms Aren’t Buying All the Houses. But They Are Buying the Most Important Ones.

Invitation Homes bought 90 percent of the homes for sale in some ZIP codes in Atlanta in the early 2010s.

slate.com

This one, you need to be a subscriber;

If You Sell a House These Days, the Buyer Might Be a Pension Fund

Yield-chasing investors are snapping up single-family homes, competing with ordinary Americans and driving up prices.

www.wsj.com

. . . but I think this might be the entire thing licensed with ads here, b/c it was so popular and important.

If you sell a house these days, the buyer might be a pension fund

From individuals with smartphones and a few thousand dollars to pensions and private-equity firms with billions, yield-chasing investors are snapping up single-family houses to rent out or flip.

www.foxbusiness.com

It was mentioned in this video;

BlackRock is Buying All Our Real Estate???​

Here is that Vox article that is playing PR for the institutional investors, if you folks care.

BlackRock isn’t to blame for the dumpster fire housing market

The boogeyman isn’t who you want it to be.

www.vox.com

 

[DudleySmith]

Over half the home sales here are to corporations, and most are rented or leased, causing a shortage. Of course when it became possible to get 10 year, then 20 year, then 30 year mortgages it was definitely clear they were getting unaffordable, and that was decades ago. No problem, since the Feds insure a lot of them, so feel free to speculate and gamble, knowing you will never have to pay for your losses. Who cares what they cost?

All that free money the Feds loan out at zero or less interest to big companies has a lot to do with it. Of course the right wingers love that part, so nothing will be done about that; our 'problems' are some kids getting $50 a month in food stamps and old people, right?

 

[Mr Natural]

More people are working from home now so the ones making the big bucks near the expensive cities can now move elsewhere where home prices are (were) way more affordable.

 

[Blaster]

I live in a community where homes are very affordable.

 

[Harpy Eagle]

I live in a community where homes are very affordable.

Which means nobody wants to live there

 

[Harpy Eagle]

More people are working from home now so the ones making the big bucks near the expensive cities can now move elsewhere where home prices are (were) way more affordable.

And then the home prices explode.

See Boise Id as an example

 

[Harpy Eagle]

Plus most home builders are not building what we once called starter homes.

 

[Blaster]

Which means nobody wants to live there

You are wrong again. We have seen an upsurge in new home buyers.

 

[Harpy Eagle]

You are wrong again. We have seen an upsurge in new home buyers.

Prove it

 

[Blaster]

Prove it

I don't need to prove anything to you. You are just a contrarian with nothing worth posting. Go troll another thread.

 

[Synthaholic]

But here's the kicker.....Ironically, if mortgage rates were to drop, that would increase demand for purchasing and thereby drive the prices of homes up even higher.....Same with rent....The only solution is a deflationary event

They call this "Capitalism".

 

[The Duke]

Too much corporate ownership of single family homes. I don't think that used to be allowed.

It started after the our government bailed out the big banks instead of people.

It's a sure loser for the little people because investment funds and banks have practically unlimited capital,

and that's who everyone is competing with for homes.

It shouldn't be allowed at all.

 

[Harpy Eagle]

Too much corporate ownership of single family homes. I don't think that used to be allowed.

How can it be prevented

 

[1srelluc]

More people are working from home now so the ones making the big bucks near the expensive cities can now move elsewhere where home prices are (were) way more affordable.

Ha! Yeah that the ticket till they ship your job to a mud hut in India.

 

[1srelluc]

Over half the home sales here are to corporations, and most are rented or leased, causing a shortage. Of course when it became possible to get 10 year, then 20 year, then 30 year mortgages it was definitely clear they were getting unaffordable, and that was decades ago. No problem, since the Feds insure a lot of them, so feel free to speculate and gamble, knowing you will never have to pay for your losses. Who cares what they cost?

All that free money the Feds loan out at zero or less interest to big companies has a lot to do with it. Of course the right wingers love that part, so nothing will be done about that; our 'problems' are some kids getting $50 a month in food stamps and old people, right?

The SCOTUS "corporations are people too" ruling bites us in the ass.

 

[DudleySmith]

The SCOTUS "corporations are people too" ruling bites us in the ass.

Yes, that and expanding 'limited liability' privileges to all corporations, something the Founders didn't endorse at all, except to certain businesses that served a public function like canals, or roads, docks, etc., or railroads that were 'public carriers', but that soon got heavily abused, and in fact they were the court suits that got the 'corps are people too' scams ruled by the by 1872. The Chase Court was one of the most corrupt SC in U.S. history,

 

[MisterBeale]

Too much corporate ownership of single family homes. I don't think that used to be allowed.

How can it be prevented

Pass a law that prevents institutional investors from using their investment exemptions when, "investing," on single family homes, so they don't have an advantage over the general public on pooling capital for purchasing homes?

Thus, if we make the regulations burdensome to these institutional investment corps., to buy what is an American birthright, the cost of doing business in this area, might make it not worth it?

I don't know much about finance and investing, so I don't know if that will help? Maybe someone more knowledgeable could analyze the issue, and say if nixing these exemptions for these institutional investments on family homes, would decrease the incentivization on purchasing them?

This isn't exactly my wheel house, TBH.

Overview​

". . .Because of their sophistication, institutional investors may be exempt from certain securities laws. For example, in the United States, institutional investors are generally eligible to purchase private placements under Rule 506 of Regulation D as "accredited investors".[14] Further, large US institutional investors may qualify to purchase certain securities generally restricted from retail investment under Rule 144A.. . . "

Institutional investor - Wikipedia

en.wikipedia.org

Rule 506 of Regulation D​

https://www.investor.gov/introduction-investing/investing-basics/glossary/rule-506-regulation-d

SEC Rule 144A - Wikipedia

en.wikipedia.org

 

[DudleySmith]

On of the major causes of the Depression was no regulations on trusts and monopolies. The New Dealers, rich speculators themselves, pass a lot of anti-trust legislation and reined in banks' ability to gamble on stocks. With the election of JFK these regulations began to be rolled back an the boom and bust bubbles returned. The 'corporate personhood' scam makes sure these big financiers can walk away from these deals with no consequences if they go bad, which they always do in a few years, leaving outsiders holding the bag, which always happens as well; then the trillion dollar bailouts come along.