The housing market is F'd because ppl can't even afford to make lateral moves

[FelixTheCat1919]

The housing market has been F'd, and will continue to be F'd for a long time. One thing that hardly ever gets talked about is the fact that many people already in the market can't even afford to make lateral moves. Even if they could get a good chunk of equity from selling their current home, they'd spend it all instantly on a down payment if they tried moving to a new house.

And for what? So they can trade their 2.5% - 3% fixed rate mortgages in for 7%+ on homes that cost 50%+ more than they did 5 years ago? Most people won't go for that unless they absolutely have to. That means a lot less movement in rhe market, because existing home owners are neither looking to buy or sell their own homes as much as they normally would be. Look for things to get really interesting when most of these folks who are on years 3 - 5 of 30-year 2.5% rate mortgages start wanting to move more as the years go by, but many are faced with becoming rentcels or downgrading significantly.

[Harry362]

Its not as significant as you make it out to be. People can choose to move houses but payment can go up a couple grand a month, that is not really a significant hit to a monthly budget in 2024 especially if moving to a different area provides more opportunites to make money. $24k extra in mortgage a year is neglibible

cliffs: stop being poor

[Issobolic28]

The housing market is F'd because ppl can't even afford to make lateral moves

They can try doing front or rear delts.

[JayDigital]

Wouldn't say people can't afford to make lateral moves. Rather they would be foolish to lose their low rate they're locked in at, and pay triple that rate, while moving to a similar house.

Those looking to swap, or even upgrade, are waiting for mortgage rates to be back below 5%. Should get there in about a year.

[Eatforgains]

Its not as significant as you make it out to be. People can choose to move houses but payment can go up a couple grand a month, that is not really a significant hit to a monthly budget in 2024 especially if moving to a different area provides more opportunites to make money. $24k extra in mortgage a year is neglibible

cliffs: stop being poor

You seem out of touch with most peoples reality. Are you being edgy on purpose to sound cool? It’s not working.

[Condo41]

Its not as significant as you make it out to be. People can choose to move houses but payment can go up a couple grand a month, that is not really a significant hit to a monthly budget in 2024 especially if moving to a different area provides more opportunites to make money. $24k extra in mortgage a year is neglibible

cliffs: stop being poor

24k/year isn't negligible

[FelixTheCat1919]

Wouldn't say people can't afford to make lateral moves. Rather they would be foolish to lose their low rate they're locked in at, and pay triple that rate, while moving to a similar house.

Those looking to swap, or even upgrade, are waiting for mortgage rates to be back below 5%. Should get there in about a year.

I pointed out that people being unwilling to make the money losing moves is just as big of a deal as anything else.

[SaviorSelfJT]

When my parents bought their house about 20 years ago they had a mortgage payment about 300 dollars. If you bought it at current market price and rate, the mortgage would be about 3000 dollars. And the area is objectively worse (school rankings have slipped etc)

All that to say I think the CPI is bullchit. In this example the cost went up by 10x in 20 years. If the CPI was right (there is a component of CPI for housing/shelter), the new mortgage would have only about doubled, not 10x’d

Do the same exercise for medical care, tuition, utilities, car insurance, etc. thank goodness the TV I only need to buy once a decade is cheaper to balance it all out

[FastBack6]

Its not as significant as you make it out to be. People can choose to move houses but payment can go up a couple grand a month, that is not really a significant hit to a monthly budget in 2024 especially if moving to a different area provides more opportunites to make money. $24k extra in mortgage a year is neglibible

cliffs: stop being poor

Typical misc response


24 grand is a ****load of money to like 80 percent of Americans.

[MuscleXtreme]

The housing market has been F'd, and will continue to be F'd for a long time. One thing that hardly ever gets talked about is the fact that many people already in the market can't even afford to make lateral moves. Even if they could get a good chunk of equity from selling their current home, they'd spend it all instantly on a down payment if they tried moving to a new house.

And for what? So they can trade their 2.5% - 3% fixed rate mortgages in for 7%+ on homes that cost 50%+ more than they did 5 years ago? Most people won't go for that unless they absolutely have to. That means a lot less movement in rhe market, because existing home owners are neither looking to buy or sell their own homes as much as they normally would be. Look for things to get really interesting when most of these folks who are on years 3 - 5 of 30-year 2.5% rate mortgages start wanting to move more as the years go by, but many are faced with becoming rentcels or downgrading significantly.

Well I wonder how much equity a lot of those individuals actually have. How many pulled out HELOCs to fund their vehicles, vacations, paying off credit card debt? A good chunk of Americans are bad with money, so wouldn’t surprise me if a large chunk don’t have as much available home equity to use as it would seem.

[Harry362]

Typical misc response


24 grand is a ****load of money to like 80 percent of Americans.

Stop being the 80%

[TryingMen]

Yeah it's basically a cluster f*ck like you said OP. It will start to become normal again as more people don't have those 2-3% rates. We've basically started the process with the people buying now and anyone forced to move now. These are the people who will be free to move after they've lived in their recent purchase for a bit. Probably in 5 years or so there will be more movement again.

$24k extra in mortgage a year is neglibible

[OliverHeldens]

Housing is probably fuked for the rest of 2024 and probably 2025, but it will free up a bit. Boomers move, jobs move, etc. There are more catalysts coming for forced sales, and this will free things up and they'll be forced to sell for the current lower prices.

[baldbrah]

People with 2-3% loans are incentivized to rent their old house out and use that additional income to qualify for the bigger loan on their next house. There is absolutely no reason to sell in this type of market.

[TryingMen]

People with 2-3% loans are incentivized to rent their old house out and use that additional income to qualify for the bigger loan on their next house. There is absolutely no reason to sell in this type of market.

You actually think most people can afford another down payment on a house without selling their current house? Just LMAO at misc thought process some times. So out of touch with reality.

[baldbrah]

You actually think most people can afford another down payment on a house without selling their current house? Just LMAO at misc thought process some times. So out of touch with reality.

What do you think most real estate investors do? Only keep one house? How poor are you? I think most people could easily pull money out of an investment account for a down payment.

[-JR]

When my parents bought their house about 20 years ago they had a mortgage payment about 300 dollars. If you bought it at current market price and rate, the mortgage would be about 3000 dollars. And the area is objectively worse (school rankings have slipped etc)

All that to say I think the CPI is bullchit. In this example the cost went up by 10x in 20 years. If the CPI was right (there is a component of CPI for housing/shelter), the new mortgage would have only about doubled, not 10x’d

Do the same exercise for medical care, tuition, utilities, car insurance, etc. thank goodness the TV I only need to buy once a decade is cheaper to balance it all out

Lol at those BS numbers, no way in hell. But I'll agree that CPI is total bullchit. I'm not unconvinced that they're fudging the numbers simply to keep SS COLA increases from breaking the system.

[TryingMen]

What do you think most real estate investors do? Only keep one house? How poor are you?

Because all home owners are real estate investors.....

First some dipsh*t pretending $24k/year is negligible telling everyone they are poor now some bald ph aggot acting like it's a normal thing for most people to own multiple homes telling everyone they are poor.

Willing to bet vast amounts of money this dude is posting from mom and dad's internet plan

[baldbrah]

Because all home owners are real estate investors.....

First some dipsh*t pretending $24k/year is negligible telling everyone they are poor now some bald ph aggot acting like it's a normal thing for most people to own multiple homes telling everyone they are poor.

Willing to bet vast amounts of money this dude is posting from mom and dad's internet plan

All home owners are real estate investors by definition. I have enough money in investments to buy my house over 3-4 times. I certainly dont consider myself wealthy. But keep thinking no homeowners have investments outside of their residence. Lol.

[blissful88]

Typical misc response


24 grand is a ****load of money to like 80 percent of Americans.

The average American doesn't even have $800 in their account right now

[Destor]

It doesn’t seem unreasonable to think rates will come down a bit by the end of this year

Between the rent and price increases incentivizing new builds and rates coming down to some extent, people likely just need to hang on for another 1-2 years

[Weezy32]

This is what most house owner miscers don't understand... they see their property value going up and they celebrate but really the only one benefiting is the government. Here in GA we have had budget surplus for few years in a row now because the average house in my area has gone from about 250-300 k to 450-500k.

If you are thinking that is good for homeowners its not...they dont benefit until they sell however then you still have to get a new house and over pay for it so your **** didnt go up meanwhile you are paying much higher taxes to the state.

[Destor]

This is what most house owner miscers don't understand... they see their property value going up and they celebrate but really the only one benefiting is the government. Here in GA we have had budget surplus for few years in a row now because the average house in my area has gone from about 250-300 k to 450-500k.

If you are thinking that is good for homeowners its not...they dont benefit until they sell however then you still have to get a new house and over pay for it so your **** didnt go up meanwhile you are paying much higher taxes to the state.

Property tax millage rates should really come down if property values in an area go way up, some of the most overpriced areas have low property tax rates partially for this reason (and because people couldn’t afford high millage rates on properties with exploding values while their income falls behind, which would push down prices)

[Nocturnal310]

does higher mortgage rate matter if you can manage to pay up the entire remaining mortgage say in 7-8 years instead of full 30 year ? or if you can refinance it down the line?

[Destor]

does higher mortgage rate matter if you can manage to pay up the entire remaining mortgage say in 7-8 years instead of full 30 year ? or if you can refinance it down the line?

I don’t have a lot of insight into how it works but wouldn’t count on refinancing working the same way after this as it had in the like 20 years of free money

Doesn’t make sense that banks who lent out all this money at current rates would be able to suddenly turn around and refinance it all at much lower rates, the fees are probably gonna be high or it will take time or something

[TugOfPeace]

One typically needs dual income these days to be wealthy IMO. Either that or live below means.

Housing market is a problem.

Someone with a 3% fixed rate who sells their home and makes a nice profit but wants to go into another home at the same price will be paying pretty much twice as much on that mortgage. It makes no sense to do it unless they're paying all cash IMO.

does higher mortgage rate matter if you can manage to pay up the entire remaining mortgage say in 7-8 years instead of full 30 year ? or if you can refinance it down the line?

I don't think it does. This is pretty much my plan, save up for a huge downpayment and then try and pay off as much principal as I can within 5 years and then finance the rest until I'm comfortable paying it off. That accelerates one's position on the amortization schedule and bypasses the payments at the beginning that are like 90% interest.

[havoc00]

Stop being the 80%

you post here u aint in the 20%

[coast2coastam]

This is what most house owner miscers don't understand... they see their property value going up and they celebrate but really the only one benefiting is the government. Here in GA we have had budget surplus for few years in a row now because the average house in my area has gone from about 250-300 k to 450-500k.

If you are thinking that is good for homeowners its not...they dont benefit until they sell however then you still have to get a new house and over pay for it so your **** didnt go up meanwhile you are paying much higher taxes to the state.

And higher insurance premiums, no? In a state like Florida $150k houses are suddenly worth $500k and there's millions of them. Insurance rates are now through the roof and many companies are backing out.

The misc loves making fun of people renting, but those people are truly fuked now. It's hard to feel bad for those that got in and bought before all this nonsense started, even if they can't move as easily and ideally as they used to. Imagine trying to buy into this market and paying $4k a month when your next door neighbor is paying $900 for the same type of house. RIP

[TugOfPeace]

And higher insurance premiums, no? In a state like Florida $150k houses are suddenly worth $500k and there's millions of them. Insurance rates are now through the roof and many companies are backing out.

The misc loves making fun of people renting, but those people are truly fuked now. It's hard to feel bad for those that got in and bought before all this nonsense started, even if they can't move as easily and ideally as they used to. Imagine trying to buy into this market and paying $4k a month when your next door neighbor is paying $900 for the same type of house. RIP

Ehhh it's really the true middle class that's fuked, not all renters. My comp is around $170k and with a wife that earns we break $300k.. we won't be struggling with higher rates. If anything we'll be able to lay low a couple years and save up a huge downpayment so we can bypass the high interest payments that happen early on in the amortization schedule of a mortgage.

[coast2coastam]

Ehhh it's really the true middle class that's fuked, not all renters. My comp is around $170k and with a wife that earns we break $300k.. we won't be struggling with higher rates. If anything we'll be able to lay low a couple years and save up a huge downpayment so we can bypass the high interest payments that happen early on in the amortization schedule of a mortgage.

It's everyone that didn't buy pre-2021. The big issue isn't rates, it's prices.