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> On the other hand, if prices come down then the broader economic engine will grow ornery and stagnate A rather small part of the economy relies on high long

by ch4s3 1y ago

> On the other hand, if prices come down then the broader economic engine will grow ornery and stagnate A rather small part of the economy relies on high long term returns on housing. You can build homes and sell them for rather small margins and that's good business. Many types of businesses happily run on profit margins that are single digit percentages. > Only a small subset of prepared buyers will be able to take advantage of these lower prices before investors snatch most of them up and raise prices again anyway. In 2024 87% of homes in the US were bought by people who intended to live in them or use them as a second home. If you only want to count primary homes the number is still close to 80%. > but a symptom of a larger dysfunctional economic engine that simply does not work for the majority. Factually the majority of US families live in homes they own, about [65% of US families own their homes])https://fred.stlouisfed.org/series/RSAHORUSQ156S https://fred.stlouisfed.org/series/RSAHORUSQ156S) that is not only a majority but nearly 2/3.

stego-tech 1y ago
You’re cherry-picking stats without offering a counter-argument, as if they alone dismantle the whole of the argument. > A rather small part of the economy relies on high long term returns on housing. Directly, yes, but don’t forget the wider array of businesses dependent upon this minority to survive: hardware stores, contractors, many tradespersons, mortgage companies, real estate agents, brokers, closers, lawyers, and more, all of whom get paid/earn less if housing prices come down in the short term (until theoretical volume makes up for the drop of individual transaction values). It’s a wider web that shores up a market valued at ~$50tn. That’s hardly a minority. > In 2024 87% of homes in the US were bought by people who intended to live in them or use them as a second home. If you only want to count primary homes the number is still close to 80%. Taking those numbers at face value means a full 13% to 20% aren’t purchasing a home to live in them, which is problematic in a housing crisis. The fact you included second homes paints an even more distressing picture, because to have a second home means you not only have a primary home, but also the excess capital for a secondary domicile in the middle of a housing crisis. Furthermore, those numbers - if true - are almost certainly national figures. Local ones can vary substantially, and the statistics show that affordable housing is predominantly being bought by investors for rent, not homebuyers to build equity. > Factually the majority of US families live in homes they own, about [65% of US families own their homes]) That’s a grossly misleading statistic on its face, because it ignores demographic data to make the case that somehow a full third of the country simply doesn’t want to own a home. It does so by hiding the average age of homebuyers (which only goes up, indicating only those on the property ladder already are buying homes in large enough numbers to drive the average upward), the types of homes being bought (what about mobile homes/trailers? Or people who live entirely on the road in RVs? Why is it “ownership” if they’re still paying a mortgage to someone? Etc, etc), and regional or local policies that affect these demographics. FRED data is awesome, don’t get me wrong, but that figure is like pulling the U-1 for unemployment and saying everything is rosy. Don’t come in here to blindly spout numbers without a competing or complimenting narrative of your own.
- ch4s3 1y ago
  The counter argument is that your assessment is wrong and the real need here is to simply build more. > Directly, yes, but don’t forget the wider array of businesses dependent upon this minority to survive: hardware stores, contractors, many tradespersons, mortgage companies, real estate agents, brokers, closers, lawyers, and more, all of whom get paid/earn less if housing prices come down in the short term (until theoretical volume makes up for the drop of individual transaction values). These parties mainly reply on home construction, renovation, or just home sales. None of those things require housing as an investment to have returns near equities. Home builders will build homes even at lower levels of price growth, as they did in earlier decades. In fact we'd see more construction but for regulation. Really only lenders and agents/brokers are taking a big hit if home prices drop. Builders would probably net out just fine because home prices and land value are so closely linked. > It’s a wider web that shores up a market valued at ~$50tn. That’s hardly a minority. You're mistakenly quoting the total asset value of all US housing, the US has a GDP of $30tn. Home building accounted for ~$0.8tn last year. Home building, sales, and associated industries account for about 15% of GDP. Higher supply and therefor lower prices could easily net out to a similar amount while freeing up more money for other uses by consumers. The economy isn't zero-sum and high housing costs are drags on productivity in other areas. This is pretty well established. > Taking those numbers at face value means a full 13% to 20% aren’t purchasing a home to live in them, which is problematic in a housing crisis. You should take those numbers at face value because they come from FRED, and you can verify them. Most of the 13% who are investors are buy a single building to then rent out. Some people prefer to rent rather than buy, and some prefer to rent a house rather than an apartment. The solution to a housing crisis remains more supply. > Local ones can vary substantially, No one argued otherwise, but it's useful that have a macro figure as a benchmark. It also may surprise you to learn the Texas has about the 5th highest share of institutional purchasers[1] while seeing prices fall in Austin, Dallas, San Antonio, and Houston all at once. So the data doesn't align with your expectations. > it ignores demographic data to make the case that somehow a full third of the country simply doesn’t want to own a home. I said no such thing. It's just roughly the norm for many years[2] and has never fallen below 62% or gone above 69%[3] for as long as stats have been kept. It's a useful stat for framing the discussion. IMHO we should be more concerned about the rent burden for the other ~30% and should build more to alleviate that problem. >Don’t come in here to blindly spout numbers without a competing or complimenting narrative of your own. Here's the competing narrative, you're spouting populist crap about a subject where you had literally 0 grasp of the actual fact, so I gave you some of them as a start. [1] https://www.axios.com/local/dallas/2025/02/12/investors-still-buy-up-texas-houses https://www.axios.com/local/dallas/2025/02/12/investors-stil... [2] https://fred.stlouisfed.org/series/USHOWN https://fred.stlouisfed.org/series/USHOWN [3] https://en.wikipedia.org/wiki/Homeownership_in_the_United_States#History_of_homeownership_rate https://en.wikipedia.org/wiki/Homeownership_in_the_United_St...
doctorpangloss 1y ago
> A rather small part of the economy relies on high long term returns on housing. Uh, my dude, real estate is the #1 sector in the Los Angeles and San Francisco economies...
- ch4s3 1y ago
  It accounts for about 15% of GDP, and like other sectors you can sell more units for fewer dollars and still make the same amount of money while providing more value to your consumer. High housing costs drag on the economy.
- stego-tech 1y ago
  They’re just blindly quoting what they’ve heard instead of actually studying the data and environment to form a conclusion. Anyone under fifty in the US who has tried to buy a home since 2019 knows first-hand what the situation is right now, at least in their area. Those of us who have been “in the game” longer see these same patterns repeating elsewhere, suggesting the issue isn’t local regulations so much as a fundamentally systemic problem with how housing is treated in America.

by ch4s3 1y ago

stego-tech 1y ago

You’re cherry-picking stats without offering a counter-argument, as if they alone dismantle the whole of the argument. > A rather small part of the economy relies on high long term returns on housing. Directly, yes, but don’t forget the wider array of businesses dependent upon this minority to survive: hardware stores, contractors, many tradespersons, mortgage companies, real estate agents, brokers, closers, lawyers, and more, all of whom get paid/earn less if housing prices come down in the short term (until theoretical volume makes up for the drop of individual transaction values). It’s a wider web that shores up a market valued at ~$50tn. That’s hardly a minority. > In 2024 87% of homes in the US were bought by people who intended to live in them or use them as a second home. If you only want to count primary homes the number is still close to 80%. Taking those numbers at face value means a full 13% to 20% aren’t purchasing a home to live in them, which is problematic in a housing crisis. The fact you included second homes paints an even more distressing picture, because to have a second home means you not only have a primary home, but also the excess capital for a secondary domicile in the middle of a housing crisis. Furthermore, those numbers - if true - are almost certainly national figures. Local ones can vary substantially, and the statistics show that affordable housing is predominantly being bought by investors for rent, not homebuyers to build equity. > Factually the majority of US families live in homes they own, about [65% of US families own their homes]) That’s a grossly misleading statistic on its face, because it ignores demographic data to make the case that somehow a full third of the country simply doesn’t want to own a home. It does so by hiding the average age of homebuyers (which only goes up, indicating only those on the property ladder already are buying homes in large enough numbers to drive the average upward), the types of homes being bought (what about mobile homes/trailers? Or people who live entirely on the road in RVs? Why is it “ownership” if they’re still paying a mortgage to someone? Etc, etc), and regional or local policies that affect these demographics. FRED data is awesome, don’t get me wrong, but that figure is like pulling the U-1 for unemployment and saying everything is rosy. Don’t come in here to blindly spout numbers without a competing or complimenting narrative of your own.

ch4s3 1y ago
The counter argument is that your assessment is wrong and the real need here is to simply build more. > Directly, yes, but don’t forget the wider array of businesses dependent upon this minority to survive: hardware stores, contractors, many tradespersons, mortgage companies, real estate agents, brokers, closers, lawyers, and more, all of whom get paid/earn less if housing prices come down in the short term (until theoretical volume makes up for the drop of individual transaction values). These parties mainly reply on home construction, renovation, or just home sales. None of those things require housing as an investment to have returns near equities. Home builders will build homes even at lower levels of price growth, as they did in earlier decades. In fact we'd see more construction but for regulation. Really only lenders and agents/brokers are taking a big hit if home prices drop. Builders would probably net out just fine because home prices and land value are so closely linked. > It’s a wider web that shores up a market valued at ~$50tn. That’s hardly a minority. You're mistakenly quoting the total asset value of all US housing, the US has a GDP of $30tn. Home building accounted for ~$0.8tn last year. Home building, sales, and associated industries account for about 15% of GDP. Higher supply and therefor lower prices could easily net out to a similar amount while freeing up more money for other uses by consumers. The economy isn't zero-sum and high housing costs are drags on productivity in other areas. This is pretty well established. > Taking those numbers at face value means a full 13% to 20% aren’t purchasing a home to live in them, which is problematic in a housing crisis. You should take those numbers at face value because they come from FRED, and you can verify them. Most of the 13% who are investors are buy a single building to then rent out. Some people prefer to rent rather than buy, and some prefer to rent a house rather than an apartment. The solution to a housing crisis remains more supply. > Local ones can vary substantially, No one argued otherwise, but it's useful that have a macro figure as a benchmark. It also may surprise you to learn the Texas has about the 5th highest share of institutional purchasers[1] while seeing prices fall in Austin, Dallas, San Antonio, and Houston all at once. So the data doesn't align with your expectations. > it ignores demographic data to make the case that somehow a full third of the country simply doesn’t want to own a home. I said no such thing. It's just roughly the norm for many years[2] and has never fallen below 62% or gone above 69%[3] for as long as stats have been kept. It's a useful stat for framing the discussion. IMHO we should be more concerned about the rent burden for the other ~30% and should build more to alleviate that problem. >Don’t come in here to blindly spout numbers without a competing or complimenting narrative of your own. Here's the competing narrative, you're spouting populist crap about a subject where you had literally 0 grasp of the actual fact, so I gave you some of them as a start. [1] https://www.axios.com/local/dallas/2025/02/12/investors-still-buy-up-texas-houses https://www.axios.com/local/dallas/2025/02/12/investors-stil... [2] https://fred.stlouisfed.org/series/USHOWN https://fred.stlouisfed.org/series/USHOWN [3] https://en.wikipedia.org/wiki/Homeownership_in_the_United_States#History_of_homeownership_rate https://en.wikipedia.org/wiki/Homeownership_in_the_United_St...

doctorpangloss 1y ago

> A rather small part of the economy relies on high long term returns on housing. Uh, my dude, real estate is the #1 sector in the Los Angeles and San Francisco economies...

ch4s3 1y ago
It accounts for about 15% of GDP, and like other sectors you can sell more units for fewer dollars and still make the same amount of money while providing more value to your consumer. High housing costs drag on the economy.
stego-tech 1y ago
They’re just blindly quoting what they’ve heard instead of actually studying the data and environment to form a conclusion. Anyone under fifty in the US who has tried to buy a home since 2019 knows first-hand what the situation is right now, at least in their area. Those of us who have been “in the game” longer see these same patterns repeating elsewhere, suggesting the issue isn’t local regulations so much as a fundamentally systemic problem with how housing is treated in America.