The truth renters can't stomach: home prices will not fall back so they can be "affordable" for you. In many cities the opportunity to own is gone forever. When prices fall due to affordability they will stop falling the moment someone is wealthy enough to afford them. There are a lot of wealthy people on earth and additionally there are lots of folks ready to leverage themselves to max to buy the house they want. These are the buyers the sellers are targeting, not your broke ass hoping for a "deal". With the rebound in real estate we seeing now the affordability adjustment has already happened. Although house prices are cheaper in value from April 2022 peak the actual cost of ownership is much more expensive due to rate hikes and it will remain that way. 1. Sellers have no incentive to sell when they have low rates. Infact they have incentive not to sell. This keeps inventory low. 2. Builders don't want to build in a market where there is a large risk of equity loss. Buyers are reluctant to buy new construction since they have to wait long periods for house to be built and risk being unable to close. Another massive factor keeping inventory low. 3. Buyers that won't buy are priced out by buyers that willing to buy. Renters that can't afford to buy need to accept that they are renters for life now. In the long run, this is Americas future: https://allthatsinteresting.com/cage-homes-hong-kong If it's accepted by renters there it will be accepted here. House prices becoming cheaper due to rate hikes won't change the reality of "rent only goes up". Oh and just wait what happens when Democrats enact open border policy like Canada 💰
Wow… interest rates will drop some day again… there will be opportunities again. It’s been cyclical. What are you smoking?
Nope. Don't see a low rate environment happening again without a full economic collapse and system much more resilient to these now than in the past. We have learned from mistakes.
bruh you talk as if you can see the future. Covid was just couple years ago and no one predicted the impact and the govt response to it . Black swans can happen. You & I dont know shit .
That’s what they said about the stock market in 2021. Remember “to the moon”, HODL?
Remember “stocks only go up” lol
They do. Long term. Not ALL stocks ofc but generally, it be like that. HODL with your index funds and cry into your millions in 30 years while you make fun of 20 somethings that haven't figured out yet not to bet on the market short term
For these folks buying a home was never feasible and it will never be.
TC or gtfo
Remember what said they said oil prices in 2020? Never go above $50. It went up to $130 last year
I rent where I live and I also own 6 rental properties. Remember, if you live in the property you own then it's not an investment.
"if you live in the property you own then it's not an investment" This needs to be said more often. Best case it's a hedge against increasing rent payments. I'm renting and have never owned real estate, so I look it as: Option 1: Rent + utilities in a reasonable place in a HCOL area for $4400/month so I can keep a high paying job at Google Option 2: Put $400k as a down payment, end up with a $1.2M loan and $8k/month mortgage + utilities payment so I can keep a high paying job at Google Option 1 let's me invest more money in ETFs and makes it easy for me to relocate for a better a job if one become available. Eventually at some point I'll want to buy - but it's gonna be a nice 5 Bed 3 Bath 3500 sq ft+ house with a 3 car garage
So you are really saying you MUST rent, to support your job. Otherwise, locking in a fixed burn for 30 at a low rate is ideal. Also low risk. Option 3. Buy where you aren't obviously overweight. Pay 3k, forever. Continue your rentals as is.
Flawed argument. By your logic, price correction is a myth. Well builders dont stop building suddenly. They have projects at various stages all the time. Inventory will go down but that is temporary. People have reasons to sell apart from just upgrading to a bigger one. Specially old people, when they need to sell, they will sell whatever is the market situation. Majority of Renters were priced out already so I don’t disagree with that but price correction is happening already and you can check Redfin data to see that
Price correction isn't a myth but it adjusting down to proportional to rate hikes is the myth. Price correction happened from peak but houses are less affordable than even at peak if you aren't a rich cash buyer. Yet we see that the moment mortgage rates fall housing markets start heating up. Simply so much demand from people desperate to buy and these people are very effective at defining price floor.
Frustrated buyers who entered the market in late 2021 and early 2022 who couldn’t buy at that time due to bidding wars. They kept on accumulating more money all this time to finally buy house. Their point of reference is obviously different from someone who bought last house in 2018-2019. These buyers will buy no matter What. I know many friends who had kids in last 3 years and bought last year or going to buy this year because they need it now and have decent Downpayment ready hoping for refinance later. Is their decision wise? I would say yes because they are going to stay there for a long time. Are they taking risk? Yes very big risk.
Why is there a risk of equity loss if prices will not fall back?
HK birth rate is 0.87 per woman. Less than half of replacement. Once old geezers die off, there will be plenty of empty property selling or renting for peanuts. Also, US is not HK, plenty of places to build.
Thing is they all don’t die at once. And they probably have written them off to their family in their wills.
They die eventually on a fairly predictable actuarial table. Overall demand will continue halving with that birth rate. Meaning higher vacancies and tanking prices. Any status quo that results in 0.87 kids per woman is unsustainable by definition.
I’m not saying I disagree with you but I can’t let you sling it around without TC