patrick.net

"Why can't we raise wages"

Sure, if you want Denny's and Bealls to be too expensive and medicare to go bankrupt.

"I demand $6.99 Moon over My Hammy AND my wife to get 3 blouses for $20 at Beall's AND my ass wiped 24-7 for $9/hr... but my primary Al Bundy special home I need to sell at $420,000 for muh retirement" "

The only way to save America is to reduce housing costs.

AD says

Home Depot exec says Americans may soon embrace sky-high mortgage rates as ‘the new normal’ and invest in housing anyway

https://fortune.com/2025/02/25/home-depot-high-mortgage-rates-new-normal-housing-richard-mcphail-ted-decker/

The 30 yr mortgage rate is 6.85%, which likely means 6.35% for a VA mortgage, so I'd get the VA mortgage and buy 4 discount points to lower it to 5.35%

https://www.freddiemac.com/pmms

1) But I was told here on PatNet that mortgage levels would go down!

2) Home Depot CEO must say bullshit like this. But wait! Why? See #1.

Glock-n-Load says

Inventory. Where is it?

https://www.resiclubanalytics.com/p/housing-market-where-inventory-is-above-pre-pandemic-housing-inventory-levels

Back in August 2024, only 4 states had returned to or surpassed pre-pandemic 2019 active inventory levels.

By October 2024, that number grew to 8 states.

In December 2024, that number was 9 states: Arizona, Colorado, Florida, Idaho, Oklahoma, Tennessee, Texas, Utah, and Washington.

States likely to join that list soon include Oregon (which crossed it in November, only to slip back under in December), Alabama, Nebraska, Hawaii, and Georgia.

Keeping in Mind the Texas and Florida are the 2 most populous states after California and together they have many more millions than California does.

OkDOGEisAmountingToSomething says

1) But I was told here on PatNet that mortgage levels would go down!

Quote. I don't recall seeing that at all. I frankly don't want lower rates.

WookieMan says

OkDOGEisAmountingToSomething says

1) But I was told here on PatNet that mortgage levels would go down!

Quote. I don't recall seeing that at all. I frankly don't want lower rates.

I made mention back in late 2023 that I thought there was a good chance the 30 year mortgage rate would drop to 5.5% by the end of 2024.

.

AD says

I made mention back in late 2023 that I thought there was a good chance the 30 year mortgage rate would drop to 5.5% by the end of 2024.

It won't. We're at normal rates. We got spoiled for over a decade. I'm fine with it building a house. Is what it is. If they go down I refi. If it doesn't I may have locked in "new" low rates. It's all relative to the time.

WookieMan says

I don't recall seeing that at all

Yes. In your world that is probably true.

Ahhhj...here we go:

May need another 12 months until it reaches steady state, so the Fed Funds rate can be lowered from currently 4.5% to 3.5%.

The 30 Yr mortgage rate should be around 6% based on it historically being around 1.5% greater than the 10 Year Treasury rate (~4.5%).

In reality:

On Wednesday, February 26, 2025, the national average 30-year fixed mortgage APR is 6.93%. The average 30-year fixed refinance APR is 6.96%, according to Bankrate's latest survey of the nation's largest mortgage lenders.

And as you mentioned, Wookie...probably they ain't going down.

But there are others here on PatNet if you search for them. Going back two years. Pushing basically the pure Hopium like our fav Home Depot CEO is (at least he's more likely correct about high rates are staying with us).

Number one reason: Massive numbers of Boomers retiring...and pulling out their equally massive savings/investments from capital markets. This was destined to happen for decades and won't reverse until Millennials start pumping up their retirement savings starting in about the 2030s.

Inflation is just the cherry on top of that.

WookieMan says

It won't. We're at normal rates. We got spoiled for over a decade

This time I am not giving Wookie shit. In fact, I 100% support the quoted statement.

Reason:

OkDOGEisAmountingToSomething says

Number one reason: Massive numbers of Boomers retiring...and pulling out their equally massive savings/investments from capital markets. This was destined to happen for decades and won't reverse until Millennials start pumping up their retirement savings starting in about the 2030s.

Inflation is just the cherry on top of that.

I'm gonna have to disagree. You see over the last few months the Biden administration has been throwing gold bricks off the Titanic. In the case of the Treasury Department this has meant issuing longer dated Bonds. The big banks have been scoffing them up, but the amount issued drove up the yields. The new Treasury secretary under Trump ain't gonna play that game and has stated that he issuing shorter term securities.

Also, the Fed is gonna stop its QT operations. This will free up some cash flow.

I'd say that over the next few months mortgage rates are gonna go down as the market manipulations end.

10-year Treasury buyers are simply not going to put up with lower rates from the Fed.

Not with inflation at 0.5% for January (6% annualized)

No matter how badly the Rate Day Dream Believers want so they can cash out...
https://www.youtube.com/watch?v=xvqeSJlgaNk

Man, I looked for Day Dream Believer and a Iraqi Dinar Believers "prophecy" appeared, LOL:
https://www.youtube.com/watch?v=LmgQOi8uHTY

3.5 Ratey Comeback
You can blame it all on meeeeeee
I should have sold, I was wrong...
And I just can't cash out without 'cha
https://www.youtube.com/watch?v=NmEyGiaqm7k

OkDOGEisAmountingToSomething says

Number one reason: Massive numbers of Boomers retiring...and pulling out their equally massive savings/investments from capital markets. This was destined to happen for decades and won't reverse until Millennials start pumping up their retirement savings starting in about the 2030s.

"Who could have seen Boomers selling off?! I have an MBA and all of our colleagues found this to be an unpredictable event! A Black Swan!"

I care about rates, but I don't. I know doesn't make sense. Until they hit double digits it's really a nothing burger. The new biggest generation is in buying mode. We stopped building in many places, not all places. I'm on many pages with people around my age begging to find a house in my region.

If you recently bought in Denver or Austin, you might have some issues. Florida has too many metros with a lot being tourist spots to really gauge, but certain parts are going to get MC Hammered. Probably mid major suburbs where they continued to build. Kind of all suburbs.

A nationwide crash is decades away unless monetary policy influences it. I don't think we'll see 2006-2008 loses again in our lifetimes. It was just shit lending and over building.

Idaho is probably fucked because many overpaid during the "everybody is moving to Idaho" fad. These lemming marches rarely end well.

RWSGFY says

Idaho is probably fucked because many overpaid during the "everybody is moving to Idaho" fad. These lemming marches rarely end well.

We almost closed on a home in the Avimor community, but finally bought a place in Greenville, SC. Downtown Boise did seem to have quite a bit of hipster types, but I never got to know any, so can only judge by appearance.

Al_Sharpton_for_President says

RWSGFY says

Idaho is probably fucked because many overpaid during the "everybody is moving to Idaho" fad. These lemming marches rarely end well.

We almost closed on a home in the Avimor community, but finally bought a place in Greenville, SC. Downtown Boise did seem to have quite a bit of hipster types, but I never got to know any, so can only judge by appearance.

I like the area, but Bozeman, MT is similar. The houses are massively overpriced. My buddies say look how much I'm making on the house.... I then ask did you sell? You didn't make anything. That area is due for a hipster crash.

$500k for a shitty built subdivision house in MT where there's millions of acres to build? Great friends out there, but that's an area due for a crash of 30-40%. Not housing related, but they have bad food there surprisingly. Real bad. You have to drive an hour to get good stuff.

Well, you are paying for the location. That adds a premium to the price.

The Avimor community north of Downtown Boise is very nice. Foothills hiking trails right out the door. But as my wife complained, where are the trees? It’s high desert, which is fine by me. Very cold winters and very hot summers. But mostly white people.

We bought a place very walkable from downtown Greenville and the very beautiful Falls Park on the Reedy and Swamp Rabbit Trail. Less black people in SC than Maryland, surprisingly, and while hot and humid summers, Maryland’s are actually worse. The current Maryland home goes live this week, and if we net 93% of the sales price, we’d only have paid $140k for our Greenville home.

Al_Sharpton_for_President says

Less black people in SC than Maryland, surprisingly, and while hot and humid summers, Maryland’s are actually worse.

I can confirm that Maryland summers are hot and humid! As in I could probably move to Florida and not notice the difference. Almost definitely not retiring here, but not because of the weather.

Misc says

I'm gonna have to disagree. You see over the last few months the Biden administration has been throwing gold bricks off the Titanic. In the case of the Treasury Department this has meant issuing longer dated Bonds. The big banks have been scoffing them up, but the amount issued drove up the yields. The new Treasury secretary under Trump ain't gonna play that game and has stated that he issuing shorter term securities.

Also, the Fed is gonna stop its QT operations. This will free up some cash flow.

I'd say that over the next few months mortgage rates are gonna go down as the market manipulations end.

Doesn't change the demographic effect nor the fiscal dominance effect, tho.

The median home price is the second worst measure for home prices, after “average home prices” (sum of all home prices divided by number of homes). Today, there are far better methods available, based on huge amounts of data from all sources, including public records, with sales-pairs relationships.

https://wolfstreet.com/2025/02/21/buyers-strike-crushes-green-shoots-of-demand-for-existing-homes-amid-surging-supply-active-listings-days-on-market/

zzyzzx says

I can confirm that Maryland summers are hot and humid! As in I could probably move to Florida and not notice the difference.

Never got the negativity towards humidity. I wear pants and long sleeves in IL and we get just as much humidity as FL or other east coast states for parts of the year. We get IWOG wet bulbed.

AmericanKulak says

This is the only stat that should be focused on if you're looking at value. Literally the only one. There's so many layers to it. Inventory can go up for probably 50 reasons. You need to figure those out.

For FL I'm guessing boomers and the older generations are starting to die and the family doesn't want the home. That's where the boomer crash would come from. Not from when they likely already sold their lifetime home, that's already done.

It's retirement areas that will take a beating. Hell some neighborhoods you couldn't even live there so you're forced to sell it because you're too young by the HOA rules.

https://wolfstreet.com/2025/02/26/inventory-of-new-houses-for-sale-highest-since-2007-builders-push-mortgage-rate-buydowns-price-cuts-and-incentives/

Where though? I'm guessing hipster places that over built in the last 5 years when interest rates were low. That's not a bust, that's just bad planning. Austin, Denver, Nashville, etc. Not happening in fly over country for the most part. A couple big cities can shift the national narrative which is kind of bull shit. I give no shits if Denver overbuilt. I don't live in Denver.

Nobody's buying.



There's only one way out, and prices will remain sticky upwards, until they aren't.

Selling is not always a choice, sometimes it's mandatory from life changes. Eventually those changes will pile up.

AmericanKulak says

Nobody's buying.



There's only one way out, and prices will remain sticky upwards, until they aren't.

Selling is not always a choice, sometimes it's mandatory from life changes. Eventually those changes will pile up.

If those are the only types of listings that come onto the market, they will sell fast and for full price. We need builders building.

Glock-n-Load says

We need builders building.

That's the only way prices go down. Happening in some regions due to demand and then people not buying. Short inventory here and little to no building. Our prices just go up (shrug).

OkDOGEisAmountingToSomething says

Buyers are acting like they are in a deflationary environment, which means they sit on sidelines thinking prices will continue to drop.

For us, we bought our new 3 bedrm, 2.5 bath, 2 car garage townhome about 2 miles from the white sand beach of the Florida panhandle in 2016 for $187,000.

Everything returns to the mean which I figure 4% annual appreciation over a +7 year timeline, so our townhome should be around $260,000 , whereas it could sell for $335,000 in early 2022.

A couple each earning $30K a year could afford a $260K townhome if the 30 year mortgage rate is 5.5% or less.

.

https://rubino.substack.com/p/the-weirdest-housing-bubble-ever

So How Does This Resolve?
A normal housing boom ends with a bust in which prices are cut and mortgage interest rates fall sufficiently to make houses affordable again. But this is not a regular market, because young families don’t earn enough to get anywhere near today’s real estate. So something more extreme has to happen.

Not only do home prices and/or interest rates have to fall hard, but incomes on the lower rungs of the economic ladder have to rise dramatically. And it’s not clear how those two things can happen simultaneously. Like I said, very weird.

Looks like there was some slight overbuilding in Texas. About 60k families net move into Texas per year from other states. Over the last few years there has also been about 100k families moving into Texas internationally. Looks like the numbers moving in from overseas has dropped. Even so, it only looks like about a 6 month period before the excess inventory is absorbed by migration. There may be a little price decline, but probably not substantial.

Yes Patrick as Austin was one of the first metro areas to show a large increase in housing costs starting around late 2020, so its no surprise rents are dropping this much there

Texas real estate market is as much boom-bust as Florida

Even the proverbial cheerleader for real estate industry shows its a cooling rental market: https://www.zillow.com/rental-manager/market-trends/austin-tx/
.

https://www.fhfa.gov/reports/foreclosure-prevention-refinance-and-fpm/2024/Q2

We shouldn't bail out homeloaners or banks.

We should have incentives for builders to keep building, so people aren't paying top dollar for 60-70 year old tick tack shacks.

If the rafters are toe nailed, cut the price 20% right off the bat.

Pound those prices to the ground; if you were depending on house appreciation to retire, you were double dumb. Dumb for missing out on 30-40 amazing years of stock market run up, dumb for thinking to think you're getting 6x median income for your ancient housing.

Just sold our house. Five offers. Escalation clauses kicked in getting us 6% over list. Great realtor. Advised correctly on setting price below what we expected to accept to encourage a bidding war which it did. Her service included an interior decorator who advised us on getting the home model ready, and a professional photographer. We accepted the second highest offer as it was an all cash offer with a quick close date and no charge rent back for 1.5 months. Boomer couple. The highest was a realtor which saved us 2.5% commission, but she hadn’t secured financing and put very little earnest money down. Too risky, but it did boost the escalation prices in the other offers. The third best offer was a 30’s something couple who seemed to be at the limit of their financing capability and just missed out. We did set a new comp for the hood, 5% higher than a similar model sold for a few months ago.

OkDOGEisAmountingToSomething says

https://www.fhfa.gov/reports/foreclosure-prevention-refinance-and-fpm/2024/Q2

What have I told you DOGE? They're not going to foreclose this round. Not happening. It's way cheaper with forbearance, banks learned bigly around 2008. Most loans are performing as well. The bad ones you toss them under the bed for 2-4 months until the homeowner gets back on their feet.

That's how they handled it in the 70-90's because the loans were legit and my dick couldn't just go out and buy a house. I lived this for 15 years. Meet 1k people and ask them WFT were you thinking? That was my life. The Big Short is one of the few Hollywood movies that is accurate.

There's a little problem in Florida on the Gulf side; people don't like the hurricanes, increased insurance, HOA fees, and property taxes.

My friend is having difficulty selling her little condo near Sarasota.

Elevator: "Going down...."

clambo says

There's a little problem in Florida on the Gulf side;

No hurricanes on the Atlantic side or just much less frequent and/or powerful? I realize they can travel from West to East overland but that's not what I'm talking about.

Al_Sharpton_for_President says

Just sold our house. Five offers. Escalation clauses kicked in getting us 6% over list. Great realtor. Advised correctly on setting price below what we expected to accept to encourage a bidding war which it did. Her service included an interior decorator who advised us on getting the home model ready, and a professional photographer. We accepted the second highest offer as it was an all cash offer with a quick close date and no charge rent back for 1.5 months. Boomer couple. The highest was a realtor which saved us 2.5% commission, but she hadn’t secured financing and put very little earnest money down. Too risky, but it did boost the escalation prices in the other offers. The third best offer was a 30’s something couple who seemed to be at the limit of their financing capability and just missed out. We did set a new comp for the hood, 5% higher than a similar model sold for a few months ago.

Location?