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Annual Home Price Growth Picks Up First Time In Eight Months
Homes. They're expensive! Half a million dollars worth of expensive if you want something half-decen
Future price growth will likely lag nominal incomes. Also my guess is mortgage rates will fall some. Expect to see 5% or less within the next 1-2 years. Affordability probably slowly improves.
People who are set to buy houses just don’t factor in what the total cost is. I bought a brand new 3000sq’. 4BR, 3.5BA house for $360k in 2009. In the first three years to make it livable for me I had to spend $7k replacing various appliances, fixtures, and carpeting; $12k to upgrade landscaping and lot drainage, and repair the roof for $13k. I also upgraded the HVAC system and water heater for $16k, installed a whole house standby generator for $10k. So my house actually cost me ~ $420k or so. Then there are taxes ($6k/yr); insurance $3k/yr; and upkeep (mostly lawn and garden) $15k/year. I’m 80, have no debt, and live off life annuities so this wasn’t/isn’t a hardship for me, though I do have some looming issues in my fully furnished basement. Houses ain’t cheap. And plan on steady maintenance of at least 3-5% of the home’s value annually (cash money) plus taxes and insurance (both will be rising).