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| How Hard is it to Buy a House, Relatively Speaking |
Seems like everyone in my family is wrapped up in houses these days, so this is mostly for them, but maybe some others will be interested. From chartr:
Perfect stormLast week the average rate on a 30-year fixed mortgage passed 7%, compounding the misery for would-be homeowners who now face a perfect storm of higher borrowing costs and still-elevated home prices.That combination has sent the National Association of Realtors' housing affordability index down to 95.5 in the latest quarterly figures. A reading of 100 on the index means that a median income family will have exactly enough to qualify for a mortgage on a median priced home. The data shows that this is the least affordable housing market for nearly 40 years, with a lower reading not seen since the mid 1980s.The theory is that higher rates will cool demand, and house prices will fall — but few things translate from the textbook to reality that quickly. It may take months for sellers to realize they aren’t getting the offers they require before slashing prices, and a construction slowdown has meant that the market isn't currently flooded with new homes either.As spring fast approaches, a time when young families often try to find houses before summer and a new school year, many prospective homebuyers may find themselves scrolling a lot further down on Zillow to find a house they can actually afford.
Yep, mortgage rates to continue to increase, I’m wondering about how high taxes are going to shoot up to catch up to skyrocketing infrastructure costs. The sky is falling….so roofing costs will go through roof.
ReplyDeleteMy Nicaraguan housing connection disappeared, so I’ll have to move on to plan C.
Meanwhile I have a new house share in Forest Grove.
Quote: "The data shows that this is the least affordable housing market for nearly 40 years, with a lower reading not seen since the mid 1980s."
ReplyDeleteWe must always remember that the "housing market" is not a market in any recognizable sense. It is distorted to the point where it's almost a public torture device. Every report I read is by some blowhard saying that the housing supply in City X is short by N-thousand units. Well, who's going to invest in housing when some government entity already owns most of the land, and won't sell it, driving up land prices. And the same government entities place all kinds of bullshit restrictions on what you can build and where; how many square feet, how many toilets, how many parking spaces, etc. There is no such thing as actual affordable housing any more; that is, housing that can be bought for a "below market" price because it's old, or small, or run down. No, in the modern jargon, affordable housing means "below market" because the government won't let you sell all of your $300,000 houses for $300,000. If you want to sell $300,000 houses, you are required to sell some of them for $200,000. So then you must sell some of them for $400,000, so you can afford to do that. In Bellingham, you must pay the city a $45,000 "utility hookup fee" before they will give you a building permit. Some large percentage (30%?) goes straight o the parks department. So, two consequences: first, I am not a builder, but I'll bet you're not gonna build a $100,000 "affordable" house after paying that fee; maybe $450,000. Second, every house built takes money out of the buyers' hands and sends it to the parks department. I don't know about you, but while I totally agree we have a housing shortage, I don't think we have a parks shortage.
I agree city/county NIMBY restrictions/regulation/fees make it impossible to build affordable housing. That's driving contractors to find land further into rural areas where they buy farms that used to provide food, and which are usually fairly flat and easy to build on with fewer legal hurdles. They price the next generation of farmers out of the market. Now this newly extended sub-suburb needs roads to carry all the traffic to join with the suburb's traffic of people going to work.
ReplyDeleteWhat confuses me about that chart is Median income family and Median home price for where?
A median income in Iowa is not the same as Median in NY or AL. Neither are the home prices.
So are they saying Median income and price for wherever you are or nationally?