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I hate articles like this. -- It paints the entire country as one real estate market, but real estate is local. -- Interest rates are still super low by histo

I hate articles like this. -- It paints the entire country as one real estate market, but real estate is local. -- Interest rates are still super low by historic standards. If we have a small recession this spring it will likely benefit buyers. If interest rates go up, suddenly seller carry contracts and private lending becomes attractive again (IE: buyers have even more options to attain capital) -- Cities aren't the entire country. If you want to buy a house and you can work remotely, there are a whole lot of very nice small towns and cities around the US where the quality of life is surprisingly high, they are great places to raise a family, and real estate is still very affordable. -- Inventory - again, totally depends on your market. Locally everybody says there aren't any houses, but what they really mean is that there aren't any turn key houses that have all the amenities they want. Builders are building a lot of crap that isn't what buyers want - that is a problem. But there are a lot of older homes that someone could put in some sweat equity and have a great home at a reasonable price - but nobody wants to be first into those neighborhoods or to do the work. -- First time buyers have more support than they realize. Not only are there FHA and USDA programs to help them, but states also have down payment assistance and various first time buyer programs.

ipnon 4y ago
Low interest rates seem to have made housing more unaffordable. Instead of enabling low capital intensive personal loans, they have enabled high capital intensive investment banking. This is because the marginal cost of investment was budged a few tens of thousands of dollars for households, but millions or even billions of dollars for investment banks and private equity firms. Less capital was available for personal mortgages as a share of the total capital market.
Supermancho 4y ago
Anything built in the last 10 years is going to be skyhigh, even when considering the different markets. The strategy for a first time buyer is the same as the last 50 years. Buy a mobile home or an older starter home.
- lazide 4y ago
  In many markets, all older starter homes and even tear downs are impossible to finance for the median resident. By a large margin.
- vinyl7 4y ago
  The increase in flipping means that there are no starter homes. All the starter homes got renovated and relisted at much higher prices
  - Supermancho 4y ago
    Relisted at a much higher price from a low price is still ok: https://www.zillow.com/homedetails/318-1st-Ave-E-West-Fargo-ND-58078/66552518_zpid/ https://www.zillow.com/homedetails/318-1st-Ave-E-West-Fargo-... with 30k down, you can have a mortgage around 750$ mo, which is about the same as a single room rent in the area. Yeah, it probably needs more work than what the flipper put on it, but they are out there.
namelessoracle 4y ago
The amount of money you need to get an first time FHA loan is relatively low. You can easily get a 250k loan for about 11k down, and your mortgage payment is gonna be about the same as your rent payment. (except you at least have something building equity now). Yeah the PMI sucks, but current interest rates are so low that even with PMI your rate is probably pretty favorable. My nephew did exactly what I talked about 2 years ago and is already sitting on 50k of equity. Rent for a 2 bedroom in his area is more than his mortgage......
- mushbino 4y ago
  Where can you get a house for $250k?
  - floxy 4y ago
    Zillow seems to think there are more than 500 in California: https://www.zillow.com/ca/?searchQueryState=%7B%22pagination%22%3A%7B%7D%2C%22usersSearchTerm%22%3A%22CA%22%2C%22mapBounds%22%3A%7B%22west%22%3A-135.214852125%2C%22east%22%3A-109.50684431250001%2C%22south%22%3A31.780408958800567%2C%22north%22%3A45.74906755913145%7D%2C%22regionSelection%22%3A%5B%7B%22regionId%22%3A9%2C%22regionType%22%3A2%7D%5D%2C%22isMapVisible%22%3Atrue%2C%22filterState%22%3A%7B%22price%22%3A%7B%22min%22%3A150000%2C%22max%22%3A250000%7D%2C%22mp%22%3A%7B%22min%22%3A634%2C%22max%22%3A1057%7D%2C%22sort%22%3A%7B%22value%22%3A%22globalrelevanceex%22%7D%2C%22ah%22%3A%7B%22value%22%3Atrue%7D%7D%2C%22isListVisible%22%3Atrue%2C%22mapZoom%22%3A6%7D https://www.zillow.com/ca/?searchQueryState=%7B%22pagination...
    - mushbino 4y ago
      These are mostly trailers and condos or far away from population centers (jobs and other resources).
  - namelessoracle 4y ago
    Many places, especially American Southeast or Midwest. Choosing to live in California or New York is a poor choice for many people.
deleted 4y ago
[deleted]
aaomidi 4y ago
> Interest rates are still super low by historic standards. This is disingenuous when interest rates are literally only a portion of the problem. The cost of houses are way up, which means those interest rates are now __far more painful__. The other part of this is, we were in infinite growth/consume mindset when interest rates were that high. We now know that is not sustainable, and interest rates may in fact out run how fast the economy is growing compared to "when the interest rates were high". So, no, historical lenses don't really put anything into perspective here except make you realize the situation is far far worse. > -- Cities aren't the entire country. If you want to buy a house and you can work remotely, there are a whole lot of very nice small towns and cities around the US where the quality of life is surprisingly high, they are great places to raise a family, and real estate is still very affordable. Except cost of houses are up nearly everywhere. Not everyone can work remotely. And what you end up doing with this is just increase the price of housing in that one area. For example, the entirety of the north east rural areas. Also, people live within a community, and these "cheap affordable areas" have no diversity and most of the time no tolerance for "others". > -- First time buyers have more support than they realize. Not only are there FHA and USDA programs to help them, but states also have down payment assistance and various first time buyer programs. You use this and your offer is going to be rejected. These programs HAVE to be disclosed when buying a house, and the second a seller sees it they're going to take a lower offer that doesn't have these. It's far more likely to close with a normal loan.

ipnon 4y ago

Low interest rates seem to have made housing more unaffordable. Instead of enabling low capital intensive personal loans, they have enabled high capital intensive investment banking. This is because the marginal cost of investment was budged a few tens of thousands of dollars for households, but millions or even billions of dollars for investment banks and private equity firms. Less capital was available for personal mortgages as a share of the total capital market.

Supermancho 4y ago

Anything built in the last 10 years is going to be skyhigh, even when considering the different markets. The strategy for a first time buyer is the same as the last 50 years. Buy a mobile home or an older starter home.

lazide 4y ago
In many markets, all older starter homes and even tear downs are impossible to finance for the median resident. By a large margin.
vinyl7 4y ago
The increase in flipping means that there are no starter homes. All the starter homes got renovated and relisted at much higher prices
- Supermancho 4y ago
  Relisted at a much higher price from a low price is still ok: https://www.zillow.com/homedetails/318-1st-Ave-E-West-Fargo-ND-58078/66552518_zpid/ https://www.zillow.com/homedetails/318-1st-Ave-E-West-Fargo-... with 30k down, you can have a mortgage around 750$ mo, which is about the same as a single room rent in the area. Yeah, it probably needs more work than what the flipper put on it, but they are out there.

namelessoracle 4y ago

The amount of money you need to get an first time FHA loan is relatively low. You can easily get a 250k loan for about 11k down, and your mortgage payment is gonna be about the same as your rent payment. (except you at least have something building equity now). Yeah the PMI sucks, but current interest rates are so low that even with PMI your rate is probably pretty favorable. My nephew did exactly what I talked about 2 years ago and is already sitting on 50k of equity. Rent for a 2 bedroom in his area is more than his mortgage......

mushbino 4y ago
Where can you get a house for $250k?
- floxy 4y ago
  Zillow seems to think there are more than 500 in California: https://www.zillow.com/ca/?searchQueryState=%7B%22pagination%22%3A%7B%7D%2C%22usersSearchTerm%22%3A%22CA%22%2C%22mapBounds%22%3A%7B%22west%22%3A-135.214852125%2C%22east%22%3A-109.50684431250001%2C%22south%22%3A31.780408958800567%2C%22north%22%3A45.74906755913145%7D%2C%22regionSelection%22%3A%5B%7B%22regionId%22%3A9%2C%22regionType%22%3A2%7D%5D%2C%22isMapVisible%22%3Atrue%2C%22filterState%22%3A%7B%22price%22%3A%7B%22min%22%3A150000%2C%22max%22%3A250000%7D%2C%22mp%22%3A%7B%22min%22%3A634%2C%22max%22%3A1057%7D%2C%22sort%22%3A%7B%22value%22%3A%22globalrelevanceex%22%7D%2C%22ah%22%3A%7B%22value%22%3Atrue%7D%7D%2C%22isListVisible%22%3Atrue%2C%22mapZoom%22%3A6%7D https://www.zillow.com/ca/?searchQueryState=%7B%22pagination...
  - mushbino 4y ago
    These are mostly trailers and condos or far away from population centers (jobs and other resources).
- namelessoracle 4y ago
  Many places, especially American Southeast or Midwest. Choosing to live in California or New York is a poor choice for many people.

deleted 4y ago

[deleted]

aaomidi 4y ago

> Interest rates are still super low by historic standards. This is disingenuous when interest rates are literally only a portion of the problem. The cost of houses are way up, which means those interest rates are now __far more painful__. The other part of this is, we were in infinite growth/consume mindset when interest rates were that high. We now know that is not sustainable, and interest rates may in fact out run how fast the economy is growing compared to "when the interest rates were high". So, no, historical lenses don't really put anything into perspective here except make you realize the situation is far far worse. > -- Cities aren't the entire country. If you want to buy a house and you can work remotely, there are a whole lot of very nice small towns and cities around the US where the quality of life is surprisingly high, they are great places to raise a family, and real estate is still very affordable. Except cost of houses are up nearly everywhere. Not everyone can work remotely. And what you end up doing with this is just increase the price of housing in that one area. For example, the entirety of the north east rural areas. Also, people live within a community, and these "cheap affordable areas" have no diversity and most of the time no tolerance for "others". > -- First time buyers have more support than they realize. Not only are there FHA and USDA programs to help them, but states also have down payment assistance and various first time buyer programs. You use this and your offer is going to be rejected. These programs HAVE to be disclosed when buying a house, and the second a seller sees it they're going to take a lower offer that doesn't have these. It's far more likely to close with a normal loan.