patrick.net

https://fortune.com/2025/07/31/warren-buffett-berkshire-hathaway-zillow-mortgage-rates/
Warren Buffett’s Berkshire Hathaway and Zillow say mortgage rates can’t fall enough for Americans to afford a home

On Tuesday, Zillow economic analyst Anushna Prakash reported mortgage rates would need to drop to 4.43% for a typical home to be affordable to an average buyer. But “that kind of a rate decline is currently unrealistic,” Prakash wrote. Meanwhile, not even a 0% interest rate would make a typical home affordable in New York, Los Angeles, Miami, San Francisco, San Diego, or San Jose, she added.

zzyzzx says

https://fortune.com/2025/07/31/warren-buffett-berkshire-hathaway-zillow-mortgage-rates/
Warren Buffett’s Berkshire Hathaway and Zillow say mortgage rates can’t fall enough for Americans to afford a home

On Tuesday, Zillow economic analyst Anushna Prakash reported mortgage rates would need to drop to 4.43% for a typical home to be affordable to an average buyer. But “that kind of a rate decline is currently unrealistic,” Prakash wrote. Meanwhile, not even a 0% interest rate would make a typical home affordable in New York, Los Angeles, Miami, San Francisco, San Diego, or San Jose, she added.

Someone should break the news to certain idiots then...https://patrick.net/post/1383080/2025-01-03-housing-prices-will-not-go-down

https://www.redfin.com/news/housing-market-update-home-prices-drop-14-metros/

Home Prices Drop in 14 Major U.S. Metros, Including Parts of Florida and Texas, As Buyers Gain Upper Hand

What would be considered a crash?

zzyzzx says

On Tuesday, Zillow economic analyst Anushna Prakash reported mortgage rates would need to drop to 4.43% for a typical home to be affordable to an average buyer. But “that kind of a rate decline is currently unrealistic,” Prakash wrote. Meanwhile, not even a 0% interest rate would make a typical home affordable in New York, Los Angeles, Miami, San Francisco, San Diego, or San Jose, she added.

Coastal as usual. Midwest is doing fine as usual. Fact is the Midwest is going to boom with tariffs. The Great Lakes and Mississippi river valley areas are going to do well. No one is building a factory on the west coast or east coast. WI, MI, IN, OH, PA, IL, IA, MO are going to be at the core of it.

Between refineries, rail, rivers, lakes, solid interstates and state highways, cheap labor, multiple large airports, minimal traffic, secure power supply, etc. Our only disasters are flooding and tornados. Which are minimal on the overall economy. Low cost of living nationally speaking.

If tariffs have the intended effect, I agree.

What’s the best way to track that going forward?

WookieMan says

Most non-coastal areas will be steady and increase.

Subtract out FL from the chart in 6733 and you’ve got mostly non-coastal areas. Just sayin'.

Al_Sharpton_for_President says

Subtract out FL from the chart in 6733 and you’ve got mostly non-coastal areas. Just sayin'.

I think people here conflate the difference of coastal areas. If you're within 3-4 hours of the coast you can wake up and be on the beach in no time and have a full day there or a weekend. That's coastal. Nashville, TN is not coastal. St. Louis, MO is not coastal. Iowa City, IA is not coastal. The Great Lakes are not coastal as it's seasonal for 3 months total during the year if that.

The big % drop is all happening in coastal areas. Prove me wrong.

WookieMan says

If you're within 3-4 hours of the coast you can wake up and be on the beach in no time and have a full day there or a weekend. That's coastal.

AGAIN. Stop with your coastal bullshit. Just STOP

WookieMan says

If you're within 3-4 hours of the coast you can wake up and be on the beach in no time

Noone in their right mind would consider Stockton, CA, to be in a coastal area, so your definition is whacked. Nonetheless, in that list, Idaho Falls, ID, Austin, TX, Pueblo, CO, Kileen, TX, Morganton, WV, Parkersburg, WV, Charleston, WV, Wichita, KS, Beckley, WV. So 18 non-FL’s, and even under your strained definition, 50% are in non-coastal regions.

Al_Sharpton_for_President says

Noone in their right mind would consider Stockton, CA, to be in a coastal area, so your definition is whacked.

He didn't say 'cities' this time, either. He had more credibility pull there.

Al_Sharpton_for_President says

Charleston, WV

It's a day drive to Virgina Beach for a weekend. Not a big deal. I drive to Duluth, MN and Door County, WI at least 2-5 times a year all 5-7 hour drives. Stockton, CA is under 2 hours to Half Moon Bay. Not sure if it's worth going to but that's nothing. It's coastal. Las Vegas to Los Angles is 4hour-30min. These are all weekend trips to coastal areas. People over pay to live there and when shit crashes in those markets, it makes the national look bad.

Austin, TX to Corpus Cristi. 3hours 30min. Another example. KS, ID and CO are non-starters on the national average. CO with Denver I suppose but Pueblo, CO? https://sty.ink/10km2 $200-500k? Even a 10% drop is nothing. Sure there are some expensive properties, but it's cheap relatively speaking for that part of CO.

You hear all these rumors about Hollywood and its stars bailing out. There are a lot of Beverly Hills seven figure mega mansions for sale.

Interest rates are historically normal, even on the low side. Higher interest rates mean that people who aren’t financially sophisticated - they don’t engage in stock and real estate speculation - can get a decent bank return. It makes their lives easier to plan, less stressful.

We are only pushing for lower rates because that is good for financial speculators who can borrow cheap and make huge bets through hedge funds or private equity gambles - and cut bait if it goes south. Low rates are not good for the average citizen. And the other reason is we have buried ourselves in so much government debt that we won’t be able to pay it if interest rates stay the same or increase because we have to roll over the debt all the time. That government debt is directly related to financial speculators who screwed us over in 2008 and later.

So we are demanding lower rates that won’t help the normal man - so that we can save the government’s balance sheet - and give financiers more opportunity to borrow money for nothing and continue to buy up all assets and make ownership harder for the people.

https://x.com/FischerKing64/status/1951409794927174043

Al_Sharpton_for_President says

Noone in their right mind would consider Stockton, CA, to be in a coastal area, so your definition is whacked

I visit Stockton frequently as I have family there. They frequently travel to the beaches in summer to escape the Central Valley Heat.

During non-commute hours it's about 75 minute drive from SJ.

For decades I worked alongside Stockton commuter residents in tech employment in Silicon Valley.

And the fact they have an inland deep water port qualifies for MolotovCocktail's definition of Coastal Region (like Duluth, Pittsburgh and all the rest of those ports along inland waterways).

B.A.C.A.H. says

And the fact they have an inland deep water port qualifies for MolotovCocktail's definition of Coastal Region (like Duluth, Pittsburgh and all the rest of those ports along inland waterways).

Those are lakes. No one says they live in coastal Minnesota, Illinois, Michigan, Pennsylvania, etc.

https://www.vocabulary.com/dictionary/coastal

Duluth, MN is 100% not a "coastal" area. You can say it's a coastline where land meets the water, but is not "coastal" at all. Ocean or sea. Great Lakes are not that. I live here and know what people call it. They just happen to be massive lakes. Shoreline is the common term around here and I live here.

Fact is the Great Lakes region is not losing value outside of a tiny stretch of MN that happens to be on a lake. MN is losing value as people leave Minneapolis. The same is true for the other inland states with larger cities. Sell your $500k property and move to a further out property for $350k. Prices look like they're going down, even though they're going up elsewhere. It drags down the median and average.

Fact is 40% of people live in coastal areas: https://coast.noaa.gov/states/fast-facts/economics-and-demographics.html#:~:text=Almost%2040%25%20Live%20on%20the,land%20mass%20(excluding%20Alaska).

A 5% drop in coastal areas will bring the national median price down a ton. It's not a judgement of those areas, it's just reality. You will lose more value in a coastal area, it's doesn't mean a crash for the other 60% when you use national numbers.

WookieMan says

Ocean or sea. Great Lakes are not that. I live here and know what people call it.

Doesn't matter wtf people 'call it'. What matters is what it actually is.

And the St. Lawrence Seaway defines it. Blame that.

WookieMan says

A 5% drop in coastal areas will bring the national median price down a ton. It's not a judgement of those areas, it's just reality.

READ A FUCKING MAP!



Arkansas is landlocked. So is Nevada. Oklahoma. Utah. Idaho. Kansas. Missouri. Goes on and on and on.

https://www.dailymail.co.uk/real-estate/article-14933071/housing-markets-falling-home-prices-skyrocket-america.html

Number of US cities with falling house prices hits alarming milestone as crash fears escalate

One third of the housing markets across the US are seeing prices fall.

Of the nation's 300 largest housing markets, 109 experienced home price declines between between June 2024 and June 2025.

That compares to just 31 of the 300 markets posting annual drops in January, according to analysis from ResiClub.

Experts say it show how quickly conditions have shifted as more homeowners rush to offload properties.

MolotovCocktail says

Arkansas is landlocked. So is Nevada. Oklahoma. Utah. Idaho. Kansas. Missouri. Goes on and on and on.

Nevada - Las Vegas
Oklahoma - Oklahoma City
Utah - Salt Lake City
Idaho - Bosie
Missouri - St. Louis
Minnesota - Minneapolis
Kansas - Kansas City

7 low priced cities does not drag down national numbers. Just state numbers. Millennials are moving to the suburbs bringing up those prices but lowering the national median as they move from higher priced city properties to suburban or rural at lower prices. It's minimal though.

It's not a bad thing unless you live in a city or coastal area. Those are the people that are going to get hurt the worst and it will look worse nationally than it really is.

WookieMan says

low priced cities does not drag down national numbers

Yes they do.

MolotovCocktail says

WookieMan says

low priced cities does not drag down national numbers

Yes they do.

No 7-8 figure coastal cities and areas do. You seriously think St. Louis even moves the median nationally? We're talking $1-3 on price with a city like St. Louis if even that. It is probably pocket change.

WookieMan says

No 7-8 figure coastal cities and areas do. You seriously think St. Louis even moves the median nationally? We're talking $1-3 on price with a city like St. Louis if even that. It is probably pocket change.

Here you contradict yourself yet again. You say cities don't matter in determining national numbers yet insist cities be omitted.

MolotovCocktail says

WookieMan says

No 7-8 figure coastal cities and areas do. You seriously think St. Louis even moves the median nationally? We're talking $1-3 on price with a city like St. Louis if even that. It is probably pocket change.

Here you contradict yourself yet again. You say cities don't matter in determining national numbers yet insist cities be omitted.

🙄

If the opportunity cost of borrowing versus saving was properly priced, we wouldn't have massive capital malinvestment and capital speculation at the expense of savings/capital appreciation for the LAST 25 YEARS. The younger generations have no clue about this.

It's all grasshopper and no ants.

The biggest problem in today's housing market is not mortgage rates.

Rather - it's homeowners clutching onto an unsustainable amount of homeowner equity.

Today, homeowners have over $34 trillion in equity on their houses - more than 2x higher than the 2006 bubble.

It's the biggest homeowner equity bubble ever. And it's keeping hard-working Americans locked out from buying a house (because prices are too high).

Sellers who come to market today are often refusing to cut the price to the market-clearing price, and even de-listing their homes. This is further perpetuating the worst housing affordability crisis we've seen in 40 years.

The solution: home prices need to correct, by around 15-20% on a national basis, to bring the market back into balance with homebuyer incomes and interest rates. This type of correction will not be that damaging to the economy, since most homeowners would still have plenty of equity. (in this scenario, homeowner equity would drop to around $25 trillion - still almost double 2006).

It's important that lenders, realtors, investors, and government officials understand that unsustainable prices and homeowner equity levels are what is creating the worst home sales transaction market in decades.

Not mortgage rates.



https://x.com/nickgerli1/status/1952032852419252609

MolotovCocktail says

since most homeowners would still have plenty of equity.

But recent buyers are screwed.

stereotomy says

If the opportunity cost of borrowing versus saving was properly priced, we wouldn't have massive capital malinvestment and capital speculation at the expense of savings/capital appreciation for the LAST 25 YEARS. The younger generations have no clue about this.

It's all grasshopper and no ants.

While it is possible for an individual to "Save" money, it is impossible for a society to do so. At the societal level all investment schemes are Ponzi.

The government has engineered an impossible rate of return on assets. If the real rate of return is zero, take a guess at what percent of earnings a person would need to make to support 30 years of retirement. That savings rate is impossible.

Al_Sharpton_for_President says

MolotovCocktail says

since most homeowners would still have plenty of equity.

But recent buyers are screwed.

They shouldn't be selling anyway.

MolotovCocktail says

They shouldn't be selling anyway.

They will have the dreaded negative equity and for how long? If they need to sell, they are screwed.

Misc says

While it is possible for an individual to "Save" money, it is impossible for a society to do so. At the societal level all investment schemes are Ponzi.

I disagree. I can imagine a whole society investing in the stocks of productive businesses and then saving some of the profits.

Al_Sharpton_for_President says

MolotovCocktail says

They shouldn't be selling anyway.

They will have the dreaded negative equity and for how long? If they need to sell, they are screwed.

Which was the case back pre-Boomer/pre-Post War years. Esp when we had gold backed money and thus limits on lending.

Homes were never, ever meant to be (near guaranteed) slot machines. Most people considered breaking even on a house was a pretty damn good deal. They were thus not mortgaged if at all possible. Gold backed money is inherently deflationary so one avoided long term debt.

The land homes were on was another matter.

Now the Demographic Fall Is A Fucking Bitch* Fate Aspect (to reference a popular RPG rules system) is doing what deflationary money used to do. The adjustment is going to be very painful to most...especially given how too many are in total denial. Not just peeps but FIRE^♤, the government, et al.

* Not to be confused with the Fate Aspect called Demographic Collapse Is The Mega Bitch of Mega Bitches. Similar, but unlike the other this is quite terminal. The US at least produced another population bulge called 'Millennials' whose peak savings/investment years will kick in between now and 2035. But after that, we're fucked with the fatal Aspect like Europe, Canada and most of Asia is now.

^♤ Finance, Insurance and R/E. Which we have too much of as a percentage of our economy.

Patrick says

I disagree. I can imagine a whole society investing in the stocks of productive businesses and then saving some of the profits.

Like all Ponzi schemes it works fine as long as new money is being added into the scheme. The United States has mostly always had a positive savings rate. However, if the savings rate goes negative...well if you have to sell and there are no buyers...the price rapidly drops to zero.

Patrick says

I disagree. I can imagine a whole society investing in the stocks of productive businesses and then saving some of the profits.

Imagine Glass-Steagal and an end to the Fed Window as a routine borrowing mechanism.

Banks might have to - GASP - offer modest but solid ROI for CDs in order to make loans.

Patrick says

Misc says
While it is possible for an individual to "Save" money, it is impossible for a society to do so. At the societal level all investment schemes are Ponzi.

I disagree. I can imagine a whole society investing in the stocks of productive businesses and then saving some of the profits.

Or, after WWII, most people (or rather men) who worked for businesses had pensions. These schemes were reasonable because of the financial repression (<2% Treasury rates, 5% mortgages) that persisted until the early 1960's. If you didn't have to worry about inflation, it was easy to set aside money that would pay out over a few decades.

Then came the late 1960's through the 1980's - massive inflation that destroyed pension plans, the savings and loan banks, and the plans of corporations. Boesky et al looted the old school industrial corporations with lots of cash on hand for a rainy day and sold off the carcasses.

It's a globohomo looting free for all. Anything that holds value is criminalized because they can't inflate it away. If you have too much physical cash or gold, you're a terrorist or a drug lord.

The biggest problem today is over-capitalization

If we weren't over-capitalized, the bullshit quant trading algos wouldn't be a thing. Nickel-and-diming from Las Vegas Casinos to Airlines would not be such a thing. It's only possible because there is too much capital chasing too few opportunities.

Hopefully, we have have a two-decade reindustrialization financing that will produce real returns on real investment and offset, if not cancel some, of the effects of the massive Boomer sell-off that will be coming to finance retirement and health problems.

Fears?

Hopes!

Patrick says

Fears?

Hopes!

I am pretty sure I know how Zoomers feel about it:

.

Something has to give.

Hopefully housing costs (rent or mortgage + tax + insurance + HOA fee) go down no more than 10% while household income goes up 4 to 5% a year from 2022 (when home prices generally peaked) to at least 2028.

I just hope housing prices don't crash but you have some correction and relief for the working class.

I do know I saved a lot of money in the Florida panhandle switching from Olympus Insurance to Ovations Insurance (from $2250 to $1650 annual premium) for HO-3 insurance starting this September for a replacement value of $270,000 and 5% deductible for hurricane damage.

I credit that to Ron DaSantis stating he was working over the last 4 years at trying to bring more competition to the property insurance market.

And I did notice on the east end of Panama City Beach that 3 bedroom, +1 car garage townhomes are renting for around $2000, which is same price in 2021.

And my friends in the hospitality and service sector are saying the starting wage is now $16 an hour for retail associate such as at a culinary and spice specialty store at the local strip mall.

.

PanicanDemoralizer says

The biggest problem today is over-capitalization

Still suffering from the big jump in M2 money supply since 2020 ?

Yes, lots of easy money through "finance engineering" and Biden style handouts, and not earned through innovation and productivity.

You mentioned Vegas getting away with nickel and diming, and I even see in Panama City Beach no more charging $400 a night for a 2.5 (out of 5 star) beach condo.

And even with prices coming down quite a bit, the local tourist development council has reported a drop in visitors (and consequently a drop in hotel , motel, and short term rental "bed taxes").

.