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anon_0k9zlfz6lz9oy
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Simply not true. In fact the opposite is true. We have near the levels mortgage debt levels of all time as youll see in the charts I just posted
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anon_0k9zlfz6lz9oy
Guest
Simply not true? Consumer debt levels are breaking records and higher than pre-pandemic. I have no clue where you get your stats/charts because every news outlet has been talking about consumer debt and mortgage levels.
With inflation running at a 40-year high, 36% of U.S. adults tapped their savings to cover living expenses: Survey
With inflation running at 40-year highs, 36% of adults in a new survey said they have had to turn to savings to cover their living expenses.
More from behind a paywall:
The increase in borrowing, which equals to $312 billion over three months, reflected in part higher prices for homes and cars. Americans also are putting more on their credit cards to cover rising costs amid decades-high inflation.
The main driver was mortgage debt, which accounted for two-thirds of the rise last quarter. And the 13% jump in credit-card debt year-over-year was the sharpest gain in more than 20 years, the New York Fed said in its quarterly report on household debt and credit.
“While household balance sheets overall appear to be in a strong position, we are seeing rising delinquencies among subprime and low-income borrowers with rates approaching pre-pandemic levels,” said Joelle Scally, administrator of the Center for Microeconomic Data at the New York Fed.
Consumers added a record $100 billion in credit-card debt over the last year.
Not as formal as you but based on the valuations and what the historical selling prices have been since 2012. I admit I don’t even know close to what you know but I’ve seen similar run ups prior to 2008 and crazy COVID increases. I have to assume there is some price retreat at some point in the near future. If valuations stay this high, it’s really going to limit buyers at some point.
Large Financial Services company. We handle a lot of corporate plans. A lot. Business for us has been great again this year but as I mentioned our forecast was a lot higher. We would have hit it if the market for IPO’s didn’t tank.
Certainly interesting times ahead. I'm in the food business - we have to monitor what is happening to all consumers to predict what will happen to our topline sales. This also means what they experience in food stores to restaurants to qsrs. Also how travel could impact our chains sales. It's a very negative outlook for 2023 with consumers getting clobbered.
Coincidentally we're also having to monitor all things related to developement (build costs, availability of equipment, technology items etc)
Suppliers are in a panic right now that they built up inventory to meet demand which is now waning. Classic whipsaw effects. Doesn't look good as it can create a huge knock on effect.
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anon_0k9zlfz6lz9oy
Guest
This is becoming a trend now and is starting to confirm my hypothesis that some supply was pulled forward when rates spiked and those who were gonna sell in a few months decided to pull the trigger earlier (I had a few clients who did this as well).
Homebuilders say U.S. is in a 'housing recession' as sentiment turns negative
The National Association of Home Builders/Wells Fargo Housing Market Index has declined for eight straight months.
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anon_0k9zlfz6lz9oy
Guest
They said the same thing in 2018. For builders theyre gonna have to get used to lower margins or stop building. Theyve opted thus far to stop building. Theyre finishing up their started products but pulling back huge on new permits.Homebuilders say U.S. is in a 'housing recession' as sentiment turns negative
The National Association of Home Builders/Wells Fargo Housing Market Index has declined for eight straight months.www.cnbc.com
any times rates go up, for builders it is recessionary for them.
KYK1827 = no clue where you get your insight/data from because you seem desperate to believe that the real estate market isn’t weakening by the day.
Homebuyers are backing out of more deals as high mortgage rates persist and recession fears linger
Homebuilder cancellation rates have more than doubled since April, according to surveys by John Burns Real Estate Consulting.
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anon_0k9zlfz6lz9oy
Guest
Its weaking from 20% YOY price growth, you are correct. Did i say its getting stronger?KYK1827 = no clue where you get your insight/data from because you seem desperate to believe that the real estate market isn’t weakening by the day.
Homebuyers are backing out of more deals as high mortgage rates persist and recession fears linger
Homebuilder cancellation rates have more than doubled since April, according to surveys by John Burns Real Estate Consulting.
KYK1827 = no clue where you get your insight/data from because you seem desperate to believe that the real estate market isn’t weakening by the day.
Homebuyers are backing out of more deals as high mortgage rates persist and recession fears linger
Homebuilder cancellation rates have more than doubled since April, according to surveys by John Burns Real Estate Consulting.
I wouldn't say desperate but you can sense some nervousness. From my anecdotal evidence buyers have come back into the market in August. Most activity I have had since April.
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anon_0k9zlfz6lz9oy
Guest
As ive said, make your call in writing if anyone disagrees. Im predicting 0-3% YOY price growth since this thread started between June 2022 to June 2023 as measures by case shiller index
jumbo rates are at 4.7% (any loan above about 650K) and 7/1 ARM’s can be had for about 4% right now. Only gonna get better. I’ll stick to 0-3% YOY price growth june 2022 to june 2023 but tbh im probably undershooting it as itll likely be higher
this is a 10 minute video worth watching. He does a weekly vid
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Dude you should be smart enough to know that charts and studies mean fvck all. Hell look back 6-12 months ago when the smartest people in Washington and Wall St said no recession, no inflation and every working class person I knew was calling it. Then all of the sudden 3 months ago people are calling recession and oops inflation is a runaway train.
I'm not calling for a crash in housing but the market is softer than it was 6 months ago in my world. Construction materials are dropping and even rental demand is cooling and I have confirmed the cooling rental demand with PMs in multiple sub markets. You can chart yourself to death in this thread if you want. No one really knows but the market is absolutely softer. People don't want to sell their 4% interest rated house and buy one for 6% rn. 0-3% YOY appreciation That's not a grand call to make. That is basically a normal appreciation of real estate. Real estate very rarely goes down in price and when it does it's for a short while.
Overall, this analysis seems pretty bullish for the housing market. Sorry, but no crash is coming:
Down Homepage
www.fidelity.com
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anon_0k9zlfz6lz9oy
Guest
Not sure what we disagree with then. No shit its softer than 6 months ago haha 6 months ago was >20% YOY appreciation a 3% 30 year fixed rate mortgages haha. You nailed it people with 4% and below rates aint selling to buy something at a higher rate/price which is keeping inventory low which is keeping appreciation chugging along. Pair this with builders slowing down big time and you can see why I actually think my 0-3% number will be wrong and will likely be higher.
Real estate is a basic game of supply and demand. Real estate is local so some markets will be better, some markets will be worse. Heres a good chart and yes this chart means something unless you disagree with supply and demand and basic econ
Disagree that it’s just supply and demand. It’s more about affordability.
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anon_0k9zlfz6lz9oy
Guest
If things become unaffordable then home dont sell and sit on the market, supply then grows at which time prices cool big time. And then we come right back to, yes, it is simply supply and demand. Unaffordability would lead to growing supply. Watch this video, its 10 mins
Lots of realtors parroting the same stupid talking point and they're wrong. No one GAS if there is a limited supply of houses if interest rates have made housing a pipe dream for most people.
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anon_0k9zlfz6lz9oy
Guest
Respectfully, youre wrong. The numbers show your wrong. Interest rates arent bad either. You should start getting flyers from mortgage brokers showing that they can get a buyer a house on a 7/1 ARM for right around 4%. And over those 7 years theyll be able to refi into a 30 year fixed around 4%, likely in early to mid 2024
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anon_0k9zlfz6lz9oy
Guest
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anon_0k9zlfz6lz9oy
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Loaded question. For who and where. Why do you think theyre not affordable? And not affordable for who and where?
Why? Base on your logic, homes should be affordable and that’s why demand will outweigh supply to keep the market flat or up.
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anon_0k9zlfz6lz9oy
Guest
Agreed prices will be up until supply hits 6 months inventory. We currently sit at about 2.5 months. Again, you should watch the altos video by mike ive now posted about 3 times and tell me what you disagree with. Well, thats me trying to trap you tbh because theres not really opinion in that video and just cold hard data
why do you disagree with a chart showing the relationship of supply of housing and its correlates to MoM price growth over 40 years?
Not long ago I refi’d at 2% / 15 years. And now we are back to 7/1 ARMs? I remember the days of the ARMs = it DID NOT end well.
I don’t disagree with the chart about supply. I’m pointing to second derivatives that are impacting supply/price growth.
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anon_0k9zlfz6lz9oy
Guest
Youre wrong. It wasnt ARM’s the sent things to shit it was exotic loan structures with super short term teaser rates. We simply have really really tight lending standards post GFC.
If someone took out a 7/1 ARM in 2004, they wouldve gotten a 7/1 ARM at 4.50%. In 2010 they couldve refi’d into a 30 year fixed rate loan at 4.17%. Which would actually lower their monthly payments as both rate and principal payment wouldve gone down. Theres thing to argue with me about and have a chance, this topic isnt one of them
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anon_0k9zlfz6lz9oy
Guest
As i said, if homes are priced unaffordabily the market with speak, not buy said houses, cause supply to grow and therefore prices to slow down or if they get above 6 months, fall
Lots of folks here seem to be desperately hoping for a housing crash. Very weird.
I’m on the side that thinks there will be some mild-moderate depreciation and even I don’t think this is unreasonable. Think we’d have to expect rates to drop again to some extent as the election gets closer, and any depreciation should be temporary if it does happen.
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anon_0k9zlfz6lz9oy
Guest
Dont fall into this trap that the grifters try ok you in a few months with the “PRICES HAVE DROPPED X% SINCE JUNE!!!”. Well yeah, no shit einstein it happens every single year which is why YOY t-12 is the metric to use
I’m more focused on prices vs. last 12-24 for that reason. Wouldn’t be surprised if the activity right now is just that last push before the weather turns.
I think that is related more to a 2nd home market. It's one thing to overpay for your primary home but is a tougher decision to buy for a vacation home if you don't really plan to rent out.
People typically use ARMs when they either can’t afford a 15-year or 30-year or know they won’t carry the property for 15 or 30 years. ARMs are entirely based on the hope that rates go down in the future. If rates go up, all bets are off. The fact that ARMs are becoming popular again means that people are taking on more risk = which may be great for real estate agents trying to close deals but ARMs are not a positive development for the overall real estate market. This is what’s concerning:
US Household Debt Surpasses $16 Trillion on Higher Mortgages
(Bloomberg) -- US household debt increased by 2% to $16.2 trillion in the second quarter, with mortgages, auto loans and credit-card balances all seeing sizable increases, according to a report by the New York Federal Reserve Bank.Most Read from BloombergThis Is How China Could Hit Back Over...
Thank you. Houses aren't widgets on a shelf at Walmart. If a house doesn't sell because it isn't hitting the miracle price, and it doesn't have to sell, it can become a rental. If a huge corp buys it wholesale it gets hidden on a balance sheet somewhere until the market turns around. Builders want rates to fall? From near historic lows? Good luck. What's a builder to do if the Federal Funds Rate approached current inflation rate? What would sales & prices of existing inventory look like? It's all a sham market.
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anon_0k9zlfz6lz9oy
Guest
1) you may wanna take a look into the excess savings built up amongst consumers. Strongest balance sheets of all time and near lowest debt levels as a % of all timePeople typically use ARMs when they either can’t afford a 15-year or 30-year or know they won’t carry the property for 15 or 30 years. ARMs are entirely based on the hope that rates go down in the future. If rates go up, all bets are off. The fact that ARMs are becoming popular again means that people are taking on more risk = which may be great for real estate agents trying to close deals but ARMs are not a positive development for the overall real estate market. This is what’s concerning:
US Household Debt Surpasses $16 Trillion on Higher Mortgages
(Bloomberg) -- US household debt increased by 2% to $16.2 trillion in the second quarter, with mortgages, auto loans and credit-card balances all seeing sizable increases, according to a report by the New York Federal Reserve Bank.Most Read from BloombergThis Is How China Could Hit Back Over...finance.yahoo.com
2) your ARM premise is a nothingburger . First, ARM’s have rate caps and payment caps, theres a max they can go to. Second, after paying it for 7 years a $500K loan balance goes to roughly $400K which means even refi’ing at a rate 2-3% higher than your ARM doesnt change your monthly payment much at all.
I can chart you to death on this if youd like but usually not worth the time with permabears. Im not a bull, im not a bear, im a fact and data driven individual
Not sure that is correct. Many people are purchasing vacation homes with cash and not financing them. They have money and don't want the headache of renting out their vacation home, and/or they plan to use it a lot. Even if the home has a mortgage, not sure what difference that makes if they have the money to pay the mortgage?
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