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Existing Home Prices Soar To New Record. Sales Torpedoed
Surprise! Existing home sales in the US fell far more than expected last month, according to Wednesd
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So if new construction is oversupplied (which I assume is a combination of unaffordability – rates and construction costs – and location) and existing supply is constrained, we will continue to see new starts lag. Are we setting ourselves up for more whiplash when rates drop (they have to go down eventually, right)? Is there another leg up in prices coming in the next couple years when Trump finally gets the lower rates he wants?
This hurts in another way as well. My Silent Generation mother’s house, which her and my father built and bought in 1964 just got a tax assessment increase. In one year, the house that has never been bought or sold in over half a century just had yearly property tax go up $4000 a year. Yes, she is in a high tax state, but the county assessed the value of the house rose $250k in 2 years to be paid by the same fixed income…
I don’t know what state you are in but my state caps the annual tax increase at 2% so when there is a run up in housing prices, the tax bill continues to increase for years after the market peaks. This causes a lot of discontent from people who don’t understand how this works.
Home ownin’
https://www.tiktok.com/@jessewelles/video/7407448801465699614
Nominal home price gains are running behind inflation, nominal incomes and mortgage rates. The market is now pretty much flat and is in the process of correcting in real terms. That is the kindest correction. Imagine if we got a major nominal correction? That kind of deflation is not good for anyone- banks, sellers and yes buyers. The backdrop in that scenario is a major recession. A sharp correction is in the category of the cure being worse than the disease.