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Analysts Surprised Americans Can’t Afford $400,000 Homes
In news that probably shouldn't surprise anyone, new home sales fell a second month in May, missing estimates in the process, data out Wednesday showed.
The 769,000 annual rate (figure below) was well short of the 865,000 consensus expected and came in near the low-end of the range (775,000 to 920,000).
Revisions lopped 108,000 off the last three months' figures.
The latest read on the (previously) scorching US housing market came just a day after existing home sales logged a fourth consecu
I feel the appropriate quote here would be from Vizzini, the Sicilian, when he said, “inconceivable!”
What is the average & median of the mortgages which correspond to the home sales data? If home builders (and/or the economy “animal spirits”) want to have success in selling more homes to first-time buyers, then building or sourcing homes at an absolute value (e.g. $400,000) and waiting for first-time home buyers to show up seems flawed.
Why not look at reasonable ranges for down payments, then factor in reasonable ranges for percentage of down payment relative to home sale. So, try to avoid assuming a first time home buyer can afford a home because they can scrape up 3% for a down payment – better to use a 10% to 20% range for down payment for estimation. This will probably demonstrate that a $400,000 home will probably not sell too quickly in some areas.
Time for some mortgage shenanigans to shore up the real estate market and quench the thirst for yield!
Long and short economic indicators are hitting an inflection point. Throw out the dot plot and open your mind to a very wide dipersion of outcomes. An infrastructure deal has been passed and there is more probably in the hopper. It is going to be very interesting by the fall this year.