What choice do they have if they want to buy a home?
Yeah I mean the alternative is to just abandon your plans for home ownership altogether. One of my neighbors is in real estate and says people are buying now and hoping the rates come down soon so they can refinance at a lower rate and drop the payment. It’s pretty dangerous since buyers are super stretched until they can refinance and it’s not even close to a guarantee that they will actually be able to get a lower rate anytime soon.
Agreed. Most people buying homes have been planning to do so for a few years, why would they stop now?
Because a few years ago(2019) a 350k home would be a mortgage payment of $1552. Now it is $2293. That’s a 47% increase in monthly payment. Most people didn’t receive 47% increase in compensation since 2019.
Median Home Price is ~420k
I am not sure a matter of survival is “Willing”
People might not be willing to eat french fries off a McDonalds floor. But they will if it is the only food for miles.
Families are eating the extra costs, because they really don’t have a choice, when the other option is homelessness.
I’m skeptical of a 1000 person survey, especially when overall home sales are still down.
That being said, some people may be getting tired of waiting and willing to gamble on refinancing with favorable interest rates in the future.
There was another article a couple of days ago talking about how spending wasn’t down as much as they had been expecting. I wonder if this is part of the same kind of phenomenon.
As far as I can tell - at least in my area - home prices haven’t fallen but there’s fewer houses on the market. They’ve flattened out, but haven’t really come down. I don’t know if it’s a supply contraction keeping the prices up (because few people are willing to trade their 3% mortgages for 8%) or if there’s just enough demand and people are buying less house with the intention of refinancing.
Or investment groups are still buying houses because they don’t have to pay the same rates that individuals would, and then they’re turning them into short term rentals. I just saw an article a couple of days ago about how investors bought a huge chunk of the residential market this year. For all we know, this is just more of the rich grabbing our resources to consolidate them into profits later when we’ve all been squeezed out.
Bubble burst coming in 3…2…1…
Good, the more that people are exposed to the high interest rates, the more pressure that will put on home prices to lower, right?
Also, maybe there is a backlog of homes that people have been holding on to, waiting for prices and interest rates to fall before they move. If they finally cave and move anyways, hopefully that results in more turnover.
