Why Americans are not buying or selling homes.

[FranklinRoosevelt_FTW]

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Here’s one here it’s $44,000 for the building kit from Home Depot. For a 650 square-foot home. I could imagine the future far left wing Democrats are telling huge percentages of Americans that this is modern and this is cool^ . have your little tiny 600 square-foot home we get to live in mansions.

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^This is not the America the founding fathers imagined and it’s not the America the World War II generation fought for

 

[Marener]

But it should not have been jumped up to 7%.

It’s not. It’s 5.5%.

 

[Thinker101]

There’s another percentage of young Americans, who wanna buy these box homes. Basically these tiny homes that look like sheds, and they think it’s cool, or modern to live in such a travesty.

There’s tons of young people who are totally fine with playing video games all day living in their parents basement. They have headphones on their gaming all day.

But there are those the young generation who are doing the right thing, working out being healthy, working to three jobs, saving up money, doing what they can. It’s a very difficult challenge right now for the young generation.

It is, as you said interesting to look at the real estate development over the past few decades. But it’s always unfortunate with this country hits a really bad economic time like we are today. It’s most unfortunate for young families who have children who are looking to get their own space to get out of a drug infested apartment complex.

Part of what I find interesting is that every generation seems to have just about the exact same experience and every generation thinking this time it's different. I wouldn't be surprised if banks start rolling out the "creative" financing schemes.

 

[FranklinRoosevelt_FTW]

Part of what I find interesting is that every generation seems to have just about the exact same experience and every generation thinking this time it's different. I wouldn't be surprised if banks start rolling out the "creative" financing schemes.

From what I understand and someway there is talk of this happening…. Of banks, giving the same loans to people with lower credit ratings based on their skin color or something absurd like that.

 

[HereWeGoAgain]

Even if you use the proceeds from the previous to buy the next, unless you are down sizing, you are unlikely to have the cash.
We did it the opposite.
The first house we had to pay cash for, since we did not have credit history.
We always take out a mortgage, and then let the tenants pay it and buy the house for us.
Makes no sense to pay cash, because then you could have used the cash for down payments on 5 houses, and made 5 times as much profit.

We paid 74K for it,lived there for 13 years and sold it for a little over 150K.
That along with savings enabled us to pay cash from there on out.

 

[sartre play]

Right now there’s about 1 million homes on the market in the USA. But usually around this time of the year there should be about 4 million homes on the market.

Whatever side of the isle one comes down on. This is certainly an issue. Whatever one might say about what they think about the economy this affects Americans across the country who want to buy a home and pursue the American dream. It is extremely frustrating for Americans, who have new families to look at high interest rates and high home prices …These are the kind of things that might get Trump back into office.

Right now interest rates on a home mortgage loan is around 6 1/2 to 7%. Down from his high is 8%. But still extremely high considering what many Americans are paying right now for their mortgage. under Trump mortgage loan rates were around 2 1/2%.

Another thing affecting our economy , are hospital costs, which have effectively doubled since 1995.

Patrick bet David brings this up on his podcast this morning. Showing us a few factors on why people are not selling or buying homes.

“A few factors why people aren’t selling or buying a house.

92% of Americans have a mortgage below 6% right now

61% are below 4%

23% have a mortgage below 3%
(source @DavidBahnsen)

So what would cause people to start selling & buying:

1. Americans running out of savings

Personal savings in reached $686 Billion in 2022, the lowest figures since 2009.

2020: we had $3 trillion
2021: we had $2.5 trillion
2022: $686 billion
2023: $800 billion (as of April)

We went up slightly but as savings decreases, that panic could cause owners to sell at a lower price.

2. Unemployment.

It’s still at 3.6% ish and hasn’t gone up to the 10% many thought like it did in 2008.

The market expected unemployment to skyrocket if Powell kept increasing rates.

Hasn’t happened yet.

3. Congress has more power than Powell

Everytime Powell increased the rates to help address obsession the govt has with over spending the last 14 years with low interest rates, congress undermined it by delaying the time bomb that was coming to the next generation.

So will anything happen with a massive crash in real estate?

In certain pockets, maybe. But across the country, probably not.

Let the fake success economy continue.

No politician or majority of congress has the brass to actually do what’s best for .

Zero chance of getting elected let alone re-elected.

Our current structure with no term limits will hurt the next 2 or 3 generations.

Someone with brass who doesn’t care about pleasing the majority needs to take the lead.

But can that person get elected?”

DONT know where you live but homes are selling like crazy around here, and at jacked up prices.

 

[Mr Natural]

DONT know where you live but homes are selling like crazy around here, and at jacked up prices.

Same thing here.

 

[sartre play]

I also like the 5% CD rates.
But raising interest rates to 7% was a bad idea.
No one can afford to buy houses any more.
They raised the interest rates to try to stop the price rise, but it does not work that way.
Raising interest rates causes prices to increase, not decrease.
That is because rising prices were cause by the oil shortages when Biden place the illegal economic sanctions on Russia.

Paid 7% for 1st house, good deal then, still good deal.

 

[Papageorgio]

It’s not. It’s 5.5%.

What Is The Prime Rate Today?

The prime rate is one of the main factors banks use to determine interest rates on loans. If you’re in the market for a new variable rate mortgage or a personal loan, understanding the prime rate and how it works can give you a better grasp on how much you’ll pay and the best time to get a loan. Wh

www.forbes.com

What Is the Current Prime Rate?​

As of July 26, 2023, the current prime rate is 8.50%, according to The Wall Street Journal’s Money Rates table. This source aggregates the most common prime rates charged throughout the U.S. and in other countries.

The federal funds rate is currently 5.25% to 5.50%. With that in mind, you can see how the “fed funds plus 3” rule of thumb works: 3 + 5.50 = 8.50.

 

[Burgermeister]

The average mortgage rate did not go under 3% will Aug of 2020.

The prime rate was never under 3% during the Trump admin.

United States Prime Rate History

Prime Rate History

fedprimerate.com

View attachment 807818

Federal funds rate. Not prime rate. You know, the one everyone talks about. Well below 3% until Biden got in office. And it is probably going up again.

 

[OKTexas]

The average mortgage rate did not go under 3% will Aug of 2020.

The prime rate was never under 3% during the Trump admin.

United States Prime Rate History

Prime Rate History

fedprimerate.com

View attachment 807818

I did two refi's during the Trump admin, I guess my current rate of 2.25% is just an illusion according to you. LMAO

.

 

[Papageorgio]

Many did just that because they were cashing on on the sky high prices post pandemic

And then paid sky high prices for their new home!

 

[Thinker101]

From what I understand and someway there is talk of this happening…. Of banks, giving the same loans to people with lower credit ratings based on their skin color or something absurd like that.

I heard of that gimmick, I was wondering when we'll see something like a 7-year ARM. Don't know if those have gone away, banks don't seem to be pushing them...yet.

 

[Blues Man]

Id be interested to see the results of new single family home building compared to rental unit building going on.

Near me I have seen more rental property building in the past 2 years than single family home building in the past 10 years.

Rental properties keep people locked into paying. They cost so much they have a hard time leaving. They also keep people concentrated in a area so they don't leave or go very far.

A few years ago places like California started getting rid of single family home zoning.

What just happened with single-family zoning in California?

Gov. Gavin Newsom signed legislation that allows more than one unit to be built on lots zoned for only one. It sounds technical, but it's a major change in California housing policy. Here's what it means.

www.latimes.com

Building costs are through the roof right now.

It's always been slightly more expensive to build a house but now it's way cheaper to buy

 

[OKTexas]

What solutions do folks here have wrt the housing crisis that we are currently in?

Hate to tell ya, at least in my area, there is no housing crisis. In the last 5 years, there are 13 new subdivisions going in and houses are selling as fast as they can build them. One large 3 story apartment complex has been built in the same time, it just opened a few months ago.

.

 

[AZrailwhale]

Wrong move your ass.

It kept the economy functioning until the virus waned

The virus hasn't WANED to any great extent. Fewer people are dying from it bacause there are recognized treatments now and the media isn't pushing the infection and death rates like it did during the Trump years. It's odd, the second Biden got elected, all the Covid coverage went away like someone flipped a switch.

 

[AZrailwhale]

What solutions do folks here have wrt the housing crisis that we are currently in?

The only long-term solution is to build more housing. When supply goes up, prices fall, that's a natural law.

 

[otto105]

Four years ago under Donald Trump. The interest rates were below 3%. The average cost of a home was $250,000. Now today the interest rate is approaching 7%. And the average cost of a home is 350,000.

From the Pbd podcast

And the shows what?

 

[AZrailwhale]

There’s another percentage of young Americans, who wanna buy these box homes. Basically these tiny homes that look like sheds, and they think it’s cool, or modern to live in such a travesty.

There’s tons of young people who are totally fine with playing video games all day living in their parents basement. They have headphones on their gaming all day.

But there are those the young generation who are doing the right thing, working out being healthy, working to three jobs, saving up money, doing what they can. It’s a very difficult challenge right now for the young generation.

It is, as you said interesting to look at the real estate development over the past few decades. But it’s always unfortunate with this country hits a really bad economic time like we are today. It’s most unfortunate for young families who have children who are looking to get their own space to get out of a drug infested apartment complex.

How much square footage does a young couple just starting out actually need?

 

[FranklinRoosevelt_FTW]

The only long-term solution is to build more housing. When supply goes up, prices fall, that's a natural law.

Thank you. What do you think about the future of interest rates? Do you think they will go up or down?