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Prices Still Rising In ‘Out Of Whack’ US Housing Market
US home prices continued to rise, worsening an affordability crisis which, according even to housing
I can understand why sellers are slow to adjust. If I sold my home now and put all the proceeds in a money market account it would yield me 1/3 of what it would cost to rent my house.
And that’s for a house that I paid cash for in 2010 but couldn’t afford to get a mortgage on today.
A truly mixed up situation that makes me feel bad for the young working class out there.
Admittedly, I’m in the “build, baby, build” camp out here in California, but the most consistent refrains I here arguing against more building and repealing prop 13 are about the maintaining the “character” of the neighborhoods and making sure grandma doesn’t lose her house.
Apparently, the image of granny losing her home is a more powerful image than the young working class folks who will never be able to afford a home in the first place. Of course, it’s really just self-interest disguised as saving granny from living on the streets.
In CA, “build baby build” means infill housing to increase density in existing residential areas. Almost no BBB is to build single family houses. A few projects are rowhouses or condos. Almost all BBB is for apartment buildings. BBB has nothing much to do with building homes for people to buy and thus nothing much to do with house prices. It is a rental market effort.
Despite rising mortgage rates, house prices have been supported by high employment and hence strong demand, and high building costs (construction and land) and hence limited supply.
The latter is likely to continue, but the former is not.
Prices are rolling over in some locations (Austin, Tampa, Phoenix, etc). More locations are slipping into negative YOY each quarter.
Mortgage rates are not likely to go down much until a significant recession hits, then lower rates won’t help.
I think the last hurrahs are in for this house price upcycle.