Pending home sales drop to a record low, even worse than during the financial crisis
Pending home sales drop to a record low, even worse than during the financial crisis
Mortgage rates in October rose sharply, with the average on the 30-year fixed loan briefly eclipsing 8%.
Even less people are buying homes, but prices won't drop and mortgage are rising. Great. Seems like a healthy system.
I mean… it happens like this at the end of every credit cycle.
The most desperate sellers take price cuts. Prices slowly come down a teeny bit while inflation eats away at the affordability problem and rates gradually fall back down.
In 3 years the market will be healthy again.
We bought a home in 2018. Not huge, but still a 3 bedroom with a big yard for the dogs to run around in and in a safe and relatively affluent neighborhood. The mortgage is a 3-point-something percent fixed-rate APR. We don't like living in this town. We would love to move. But we couldn't possibly afford a mortgage at the rates they have them now. The house is in my wife's name because she has impeccable credit. The idea that she would even be considered for a fixed-rate APR mortgage at this point is risible.
By the way, this was the first home we ever owned. My wife and I are the same age. We were 41 when we bought that house and it was pretty much the cheapest house in the neighborhood in a town that isn't especially desirable and a depressed community with not a huge number of jobs. Back in 2018 before all of this really got ridiculous.
People younger than us? No fucking chance.
Am 35. Looking. Friend just closed.
It's awful. It's hard to walk away from my rental right now, all things considered.
The good news is that price homes are finally coming down. Not much, but folks entering the market with a 250k home asking 400k are going down to about 375k right now.
It's a start...
Yeah we are looking in NH to move out of Florida and closer to family, but going from $775k to $749,999 isn't a huge help. Hope the trend continues.
In the same boat. 38 and wanted to buy a house, riiight when COVID started. So waited so we didn't die, then prices shot up so waited for them to go down, but they didn't and rates are now too high to even consider. And no one can really sell because of what you said.
So if the government wanted to be sure no one could get a loan and the only people able to buy houses were corporations with cash on hand...good job government?
Corporations, for the most part, seem to be shirking the interest rates too! The minute they come down it's going to be a feeding frenzy..
Are you me? Seriously though, we're in an almost identical situation. How are people supposed to buy homes under these conditions? Prices are insane, rates are sky high. Our home value on paper went through the roof but we're never gonna see any of the value because we're basically stuck. The only effect the value increase has is that we pay more property tax. I can't imagine the difficulty younger millennials and Gen z are going to have getting a home.
oh thank goodness we're no longer in a financial crisis. Im sure people not having homes shouldnt be a metric for what constitutes one. As long as the rich people are still making money.
They really buried the lede on this one. Tight supply and high mortgage rates is leaving a lot of pent up demand. We can keep hoping for a correction, but I'm not being on one quite yet.
There is no supply because private equity is buying so many homes
But they're still building.... 650ft² "luxury" condos for $2600/mo. Utilities and renting shitty "common room" all extra of course.
Banks gotta stop clawing back their $800B loss in corporate real estate by way of residential home buyers and car owners.
Kinda opening the door for a private equity enslavement of the citizenry.
Anyone that bought when rates were still 2-3% isn’t selling unless they’re being forced. Why would they, considering their real interest rate is negative at this point.
This is a non-headline because it’s reporting on something that was expected to happen when interest rates rose.
That being said, this does suck for those who have yet to purchase their first home. Property investors buying with cash have no incentive to stop buying. This is where government should step in and regulate. Those conversations should be headlining instead.
What property investors are buying with cash? The extreme leveraging is one of the main things that makes real estate investing attractive.
I think folks might be confused about the term "cash offer" when buying/selling houses. This generally doesn't mean that someone is literally buying the property without debt involved, but that they can make the purchase without involving the mortgage process. Usually with a line of credit or similar funding.
The buyer pressure was largely rental buyers, and they are completely out building up capital for a collapse. That’s my read on this.
So, buy now and have high interest rates, or wait til they drop and have to compete with dozens of other people, and pay 10-20k above asking?
Paying above asking will cost a lot less than an extra 4% over 30 years.
What if you just refinance when the rate drops
Overbidding at the start of a run up in prices is a lot less risky than overbidding at the top of the cycle.
Unfortunately it’s hard to tell where you are except in hindsight.
Nice burrito bro
Thank you so much
The latter. I can't house hunt if I can't afford to house hunt.