Posted by retirefire on 19th of Jun 2022 at 01:04 pm
Amazing data here on housing. With the rise in mortgage
rates from 3% up to 6% a stunning 18 million households can no
longer qualify for a $400,000 mortgage.
That’s a 36% reduction in demand. Housing is in deep
trouble.
A lot of interesting angles to all of this; too many for a blog
post. But real demand destruction is likely lower as many of
those households already have a house and mortgage. 6% is
obviously high in recent context, but historically not so much.
It will be interesting to see how the market adjusts.
My realtor was saying folks are starting to downsize
expectations - they're still committed to getting a house, but
going down in price range to make it work. Too early to tell
if that's a reaction or a trend.
Best thing to do near-term would be to immediately roll back the
previous administration's cap on mortgage interest deductions and
state/local tax deductions. It may be the only opportunity
for relief as rates aren't coming down any time soon. Either
way, I won't be voting for JPOW for President; the Fed totally fell
asleep at the wheel.
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Amazing data here on housing.
Posted by retirefire on 19th of Jun 2022 at 01:04 pm
Amazing data here on housing. With the rise in mortgage rates from 3% up to 6% a stunning 18 million households can no longer qualify for a $400,000 mortgage.
That’s a 36% reduction in demand. Housing is in deep trouble.
50% of the folks are already pissed.
A lot of interesting angles
Posted by rjdst on 19th of Jun 2022 at 03:13 pm
A lot of interesting angles to all of this; too many for a blog post. But real demand destruction is likely lower as many of those households already have a house and mortgage. 6% is obviously high in recent context, but historically not so much. It will be interesting to see how the market adjusts. My realtor was saying folks are starting to downsize expectations - they're still committed to getting a house, but going down in price range to make it work. Too early to tell if that's a reaction or a trend.
Best thing to do near-term would be to immediately roll back the previous administration's cap on mortgage interest deductions and state/local tax deductions. It may be the only opportunity for relief as rates aren't coming down any time soon. Either way, I won't be voting for JPOW for President; the Fed totally fell asleep at the wheel.