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Real US Home Values Keep Shrinking. Deal Cancellations Soar
Home prices are still rising in America, but real housing wealth contracted a sixth month towards th
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Usually when rates are high Fannie/Freddie buy ARMs but that hasn’t happened once rates moved up to 7. A 5/7 year ARM in the lower 5s would help.
I have heard from several real estate agents, that in part because of K-shaped economy, many folks simply aren’t keeping-up their homes as well as they used to. Because affordability is such an issue, much of the activity in real estate is on the lower cost end of the spectrum. Home inspections now frequently uncover real issues in these homes that need to be addressed. Issues, such as: broken and outdated HVAC systems, septic problems, mold, roofing issues, and the like. They even have a term for this. It’s called: “living off the depreciation of your home.” It has been an issue ever since COVID ended, and home inspections become more common once again. That could partly explain the trend in cancellations.
“. . . and home inspections BECAME more common once again.” Sorry.
H-Man, as people like me (a baby boomer) move on to the next level, our children/heirs/money grabbers will liquidate our homes at any price in order to convert an illiquid asset into cash and move for the exits. I don’t see a lot of homeowners in the next generation.
Inspection period is also when the prospective buyer gets clarity on home insurance, HOA and property taxes. These did not used to be budget busters but today they can be. Especially some status such as Florida, Texas, California and other mountain west areas.