patrick.net

Case/Shiller reported a drop in housing prices today, but don't get too excited. It was a drop of about a quarter of one percent over the course of a month.

Still near the top of prices, but kinda heading lower real slow like.

Misc says

Case/Shiller reported a drop in housing prices today, but don't get too excited. It was a drop of about a quarter of one percent over the course of a month.

Still near the top of prices, but kinda heading lower real slow like.

Sideways. All the summer closing are done as well. After Labor Day everyone will dump their listings. Most have equity anyway and don't have to sell. Spring 2026 is the biggie at this point. Sales will go down this fall but so will inventory. So prices will stay the same and/or rise in a lot of places. No one wants to move or have showings during the holidays.

I know it's realtor talk, but everyone wants to move in the summer months if they have kids. So you have to get under contract in spring. If it's a bad 2026 spring for contracts then there might be problems. I'm not seeing it being bad, especially if there is 1-2 fed cuts. I don't see unemployment going anywhere outside of seasonal jobs in the winter which don't matter.

The expensive areas is what I'll call them now so I don't get trolled will take a hit. With the tariffs and if it really moves businesses back to the states that's another positive. The lower priced areas will rise, but national numbers will look poor 5%, not bad like 10-15% down. The transition from city to suburb or rural will look bad, but it's actually good. Except for those that live rural already. Don't bring your politics.

Misc says

Case/Shiller reported a drop in housing prices today, but don't get too excited. It was a drop of about a quarter of one percent over the course of a month.

Still near the top of prices, but kinda heading lower real slow like.

Very small change!
This doesn’t sound like a good news as the FED announced interest rate cuts after Trump threatening to lower the rates.
Prices may still go down at various places but will very likely push up overall prices to reflect the inflation from rate cuts.

I believe whoever "they" are, will do whatever is needed to support home prices. It really is different this time.

https://www.aol.com/more-homesellers-pulling-properties-off-215312299.html

AD says

https://www.aol.com/more-homesellers-pulling-properties-off-215312299.html

Bro, it's because they're going to lower rates.

What happened the last time rates went down?

The fundamental barrier is price, not rate.

And add on the skyrocketing costs of insurance, property taxes, and utilities all at the 2025 rate, not last assessed or sold at 2010 price.

6x Median Income is not a stretch, but suicide.

GNL says

AD says

https://www.aol.com/more-homesellers-pulling-properties-off-215312299.html

Bro, it's because they're going to lower rates.

Uhuh

DemoralizerOfPanicans says

What happened the last time rates went down?

The fundamental barrier is price, not rate.

And add on the skyrocketing costs of insurance, property taxes, and utilities all at the 2025 rate, not last assessed or sold at 2010 price.

6x Median Income is not a stretch, but suicide. I have no faith that TPTB will allow the market to work like it should.

All I can say it, let's see what happens. I have no faith that TPTB will allow the market to function like it should.

Since a lot of people have been relying on Mainstream economists, I will take a moment to de-bunk one of their main crap talking points.

Economists have been spewing that lowering short term interest rates increases the potential for inflation. While this was true back in the 80's and 90's, today the opposite is true. Lowering shirt term rates decreases inflation. Back in the 80's and 90's household balance sheets were big on debt and light on savings/money market accounts. Today there is about $1trillion in vehicle loans and about $1 trillion in credit card debt (A lot of that gets paid off at the end of the month and accrues no interest charges). Today's households own about $6-7 trillion in money market accounts alone. This does not include CDs or high yield savings accounts.

A decrease in short term rates reduces the cash flow going to households from their short term interest bearing accounts in an amount greater than the cost savings of the variable rate debt holdings they have.

Read that again. It is now plainly seen that reducing short term rates reduces inflation in the economy.

Interesting take. Lower rates = lower returns = less $$ to spend?

GNL says

I have no faith that TPTB will allow the market to function like it should.

There's a big issue.

GNL says

Interesting take. Lower rates = lower returns = less $$ to spend?

Only if savers were spenders. Reality is Lower Rates equals more borrowed money to spend. When borrowing is easier, stocks, cars, and houses inflate.

HeadSet says

GNL says

Interesting take. Lower rates = lower returns = less $$ to spend?

Only if savers were spenders. Reality is Lower Rates equals more borrowed money to spend. When borrowing is easier, stocks, cars, and houses inflate.

That's the way it used to be, but now households hold trillions and trillions of money markets and yes they are using it as income. The increase in borrowing from a lower short term rate is dwarfed by the loss of income from these extra trillions of assets.

Personally I think they held rates so low for so long over the first two decades of this century that we have an entire generation who has no idea what it's like for rates to be "normal" by historical standards.

In this cycle lower rates will help to a point but at some point if wages don't start to rise your middle class consumer will be tapped out. So I don't see lowering rates leading directly to inflation, in the short term (one to five years out)... If anything they raised rates TOO quickly coming out of Covid, compared to the more "step wise" approach coming out of the 2008 housing collapse.

Extend and pretend, again. Even with lower rates house prices don't have much more room to run on the coasts. To borrow a phrase, the rent is just too damn high!

I'm not an economist.. just a guy who likes numbers.

Full data set


2000 to present:


Source: Federal Reserve (https://fred.stlouisfed.org/series/fedfunds)

GreaterNYCDude says

Personally I think they held rates so low for so long over the first two decades of this century that we have an entire generation who has no idea what it's like for rates to be "normal" by historical standards.

Yes. "OMG rates are brutally high at 7%" LOL

It's a hit, it's outta here, I'm Phil Rizzuto with THE MONEY STORE... Rates as low as 14.5%!


https://www.youtube.com/watch?v=QI9q7nkIryA

Also stupid to drop rates to zero like they did and give away buckets of money. Nothing that could do but cause inflation…

Misc says

A decrease in short term rates reduces the cash flow going to households from their short term interest bearing accounts in an amount greater than the cost savings of the variable rate debt holdings they have.

Read that again. It is now plainly seen that reducing short term rates reduces inflation in the economy.

Nope. Because most ppl barely have $400 in their bank account. Meanwhile, Uncle Sam keeps injecting new money faster than supply of goods occurs.

Inflation is purely a too much money chasing too few goods situation. A monetary phenomenon.

And most incorrectly conflate rising prices with inflation, too. Tariffs do not cause inflation even if they do cause some prices to rise. It's a tax, is all.

Back to inflation..

Reducing rates leads to more lending. Since our banking system is soo fucked up, the Fed ends up loaning more money from printing than banks use deposits. Its supposed to work the other way around but the Fed became a lender of First Resort instead of Last Resort to banks ever since the GFC and never really stopped.

That leads to more consumption on the production side and consumer side via more money being created, causing inflation.. That means higher prices until supply catches up.

Since we are talking about housing here, supply is one big local/state/federal fuckup just like medical care and college costs are. We know what happens when even more money is thrown at it.

We are at peak everything. Peak debt. Households have record cash. Close enough to peak real estate prices. Peak stock market. Peak gold prices with households having record amounts of physical gold/silver. Record GDP Savings rate is good at 4.5% and looking for places to put this savings.

Mal-investment is everywhere.

Misc says

Mal-investment is everywhere.

There's only one way to cure Mal-investment.

And boy will many people hate it.

US household net wealth is over $170 trillion.

We have more liquid cash type assets than mortgages outstanding.

We are saving over $1 trillion per year.

If our net wealth simply keeps up with inflation, that's a nominal increase of $4-5 trillion per year.

If the Fed doesn't lower mortgage rates dramatically, Trump is going to send out tax rebate checks based on the amount of tariffs received.

Regardless of interest rates, one thing that is a big negative for the economy is people having to start (or re-start) paying back their student loans. I wonder how much of a drag that puts on local economies. I know one borrower who called the administrative department, couldn't get through, and so decided to not bother paying. Is that common? How long will that go on for? Is it one of those little secrets where people in the know there are no consequences for pretending ot be ignorant?

Misc says

We are at peak everything. Peak debt. Households have record cash. Close enough to peak real estate prices. Peak stock market. Peak gold prices with households having record amounts of physical gold/silver. Record GDP Savings rate is good at 4.5% and looking for places to put this savings.

Mal-investment is everywhere.

so what is the end state or outcome ?

some big reset like housing prices crashing to affordable levels in 2009-2012 ?

.

MolotovCocktail says

Uncle Sam keeps injecting new money faster than supply of goods occurs.

I recall Bob Brinker in his MoneyTalk radio show saying it was like helicopter money as far as dropping money from a helicopter onto a crowd.

Maybe a lot of vacation rentals will be converted to long term rentals to help with supply.

I just saw this on WMBB about my county: "Last school year, Bay District Schools had a total of 21,690 students enrolled. This year, that number went down to 21,219."

Meanwhile I've seen no ongoing construction such as townhomes and "luxury" apartment complexes over the last 12 months, and rent for a 3 bedroom, 2 car garage townhome on the beach is around $2,000 and same price as back in 2021.

............

Misc says

If the Fed doesn't lower mortgage rates dramatically, Trump is going to send out tax rebate checks based on the amount of tariffs received.

CBO forecasts the FY 2025 deficit essentially being the same as FY 2024 deficit, at least adjusted for inflation. And the FY 2025 deficit is slightly less as a percentage of GDP.

This will be first time since FY 2001 that the deficit has not increased.

....

DemoralizerOfPanicans says

Misc says

Mal-investment is everywhere.

There's only one way to cure Mal-investment.

And boy will many people hate it.

Government doesn’t let it happen anymore, they just print away inflation to bail it out.

Capitalism crashes periodically to fix that, we haven’t had a crash because of money printer bailing out bad investments. We kinda screwed now by our own government.

The problem is savers. Household net wealth is about $170 trillion. America's savings rate is about 4.5% so a bit over $1 trillion per year. That $170 trillion to keep up with inflation is about another $4-5 trillion in nominal bucks. If you want a real rate of return of 2% on your investments...well that's another $3.5 trillion, and Americans have been told to expect much more than that. So that totals up to $9 trillion in nominal dollars. The American GDP is about $28 trillion. If you think it's possible to find $9 trillion in new investments when the economy is $28 trillion...well a shit ton of that $9 trillion is bogus. So instead of spending the money, savers would rather have a massive build up of assets that are really worth just a few pennies on the dollar. Then they are shocked when price discovery takes place. Basically they would rather lose the money on investments rather than spend it.

Misc says

US household net wealth is over $170 trillion.

We have more liquid cash type assets than mortgages outstanding.

We are saving over $1 trillion per year.

If our net wealth simply keeps up with inflation, that's a nominal increase of $4-5 trillion per year.

If the Fed doesn't lower mortgage rates dramatically, Trump is going to send out tax rebate checks based on the amount of tariffs received.

Is this sarcasm?

Misc says

The problem is savers.

Why do you hate fiscal responsibility?

Misc says

The problem is savers. Household net wealth is about $170 trillion.

It appears that you are including home equity as part of "savings." One cannot spend equity, only borrow against it.

GNL says

If the Fed doesn't lower mortgage rates dramatically, Trump is going to send out tax rebate checks based on the amount of tariffs received.

Is this sarcasm?

Eh, probably not. We shut down the country for the common cold for almost 2 years and gave people money. If the Fed doesn't play nice in Trumps world I wouldn't be shocked by a move like this. If he can win the midterms he gets his agenda. He'll still get the rate cuts too, at least 1-2 before '26.

Anyone living in the doom and gloom world is not seeing the plan. Not saying the tariff checks would happen but I wouldn't at all be surprised. Dump the illegals give blacks money and guess what, you win House seats and maybe some Senate seats.

GNL says

Is this sarcasm?

If so, an awesome troll.

.

https://www.mortgagenewsdaily.com/markets/mortgage-rates-08282025

down to 6.5% for conventional mortgages (non FHA, non VA, non government backed)

once down to 6% then it would increase sales volume and sellers more incentives to buy down 4 discount points to lower the rate from 6% to 5%

considering that all time high price was set when the rate was 3%

Zillow now shows 6.25% for FHA mortgages in Panama City Beach

.

Pending sales in all regions near record lows. Pending sales fell sharply in the Midwest, but also declined in the South and Northeast. The West was the only region where pending sales rose. Pending sales remained near record lows in all four regions.

Pending sales of existing homes in the US, compared to the Julys in prior years:

2024: +0.7%
2023: -6.5%
2022: -21%
2021: -36%
2020: -41%
2019: -32%.
The Buyers’ Strike continues because prices are too high after shooting up by 50% or more within 2-3 years. Those prices no longer make economic sense.

While inventory surged. This plunge in demand coincides with surging inventories of existing homes for sale – despite large waves of delistings by frustrated sellers – leading to the most supply since July 2016 over the past three months, along with May 2020.

Split out by single-family homes and condos: Supply of single family homes rose to 4.5 months while supply of condos has been over 6 months since April, the highest since 2012 at the end of the Housing Bust. Here is the combined supply:

https://wolfstreet.com/2025/08/28/buyers-strike-pending-home-sales-drop-further-plunge-in-midwest-near-record-lows-in-all-regions-even-as-supply-balloons/

Winter is going to be interesting. Florida leapt 23% in listings over last year and is on the way to 200,000 listings, despite deluded homeloaners delisting hoping that relisting later will get them COVID pricing.

Stretching to the extreme for a modest suburban ranch at price that a McMansion cost just a few years ago... Yet taxed and insured at 30% higher rates than before COVID at the new higher price points.



I can rent a 90s 1400sq ft for $1800. Leaky Roof or Pipes? Not my problem. Why would I pay $2500 to own the same thing, except it's my problem when the roof goes or the Carrier needs replacement? If the rate goes down a full point I'm still paying over $400 more for more responsibility and little benefit.

And if I was willing to pay $2500, Why not pay $100-200 more/month and buy new, everything under warranty, all new appliances, modern non-Florida Tile wood look floors, grey not billard green or rose pink walls, USB in the walls, teaser rates, and 15% larger?

Rent for $1800 https://www.zillow.com/homedetails/949-Serenade-St-NW-Palm-Bay-FL-32907/80767434_zpid/

Or buy similar for... $295k

https://www.zillow.com/homedetails/1500-Gardenton-St-NW-Palm-Bay-FL-32907/43484232_zpid/

Above was 180k in 2017. Is this house really worth 400% more from it's 2001 price 25 years later? Hell no. Have wages gone up 400% since 2001? Hell no. That means somebody with a $30k job in 2001 would have to make $120k today. I don't think too many assistant managers of Ace Hardware or F/T Dentist Office Techs made as little as $30k in 2001, not even in low-wage Florida. Shit, probably most F/T Denny's waiters made $30k or more in 2001. They ain't making $120k today.

At best, this is a $210k house. $2600 @ 6.5% vs. $2400 @ 5.5% is a nothing against $1800 for the same shit, same age, same size,etc. And for $2800 you could have all new - probably less once you factor in reduced insurance costs and first decade of reduced maintenance costs.

Mama says knock these house prices out
https://www.youtube.com/watch?v=vimZj8HW0Kg

DemoralizerOfPanicans says

Pending sales in all regions near record lows.

No, no. One of our resident Housing Experts of PatNet insists this can only be happening in 'hipster' coastal states/cities, remember?

And Florida is no "Under $3000 insurance for SFH", not in this county or any Central Florida County. People who were paying $1200-1800 5 years ago are paying well over $3000 despite new roofs and raising their deductible substantially, regardless of age of distance from the ocean, in fact houses on the island are easily paying twice that. This is true from Hillsborough to Lake to Brevard.

This county hasn't had real hurricane damage or flooding in ages. it's in a "Nearly Dead Zone" stretching between Sebastian, FL and Brunswick, GA where hurricanes very seldom land due to vagarities of the Gulf Stream and Hydrography. When this region gets hit it's usually from a storm that entered the mainland from the Gulf, not the Atlantic, and lost most of it's strength over the land.

1990-2025 Storm Track: Yellow is Cat 1, Green is a Tropical Storm. Red, Orange, Purple Cat 2+

https://wolfstreet.com/2025/08/28/buyers-strike-pending-home-sales-drop-further-plunge-in-midwest-near-record-lows-in-all-regions-even-as-supply-balloons/

Buyers Strike: Pending Home Sales Drop Further, Plunge in Midwest, Near Record Lows in All Regions, as Supply Balloons
by Wolf Richter Aug 28, 2025

MolotovCocktail says

No, no. One of our resident Housing Experts of PatNet insists this can only be happening in 'hipster' coastal states/cities, remember?

No. Not where I live. Midwest is doing just fine. Not a boom, but not decreasing outside of cities. Provide evidence. You won't. Most are easily outpacing inflation.

Illinois:

https://www.zillow.com/home-values/55433/dekalb-il/

https://www.zillow.com/home-values/197/kane-county-il/

https://www.zillow.com/home-values/1835/kendall-county-il/

https://www.zillow.com/home-values/1922/mchenry-county-il/

https://www.zillow.com/home-values/2363/kankakee-county-il/

https://www.zillow.com/home-values/220/lake-county-il/

https://www.zillow.com/home-values/83/lee-county-il/

Wisconsin

https://www.zillow.com/home-values/146/dane-county-wi/ (Leftyville)

https://www.zillow.com/home-values/1837/kenosha-county-wi/

https://www.zillow.com/home-values/149/door-county-wi/

https://www.zillow.com/home-values/1813/jackson-county-wi/

Iowa

https://www.zillow.com/home-values/1624/clinton-county-ia/

https://www.zillow.com/home-values/235/linn-county-ia/

Any time you want to back up trash talking go ahead. The RE market is just fine here. Solid, not losing and mostly outpacing inflation.

California (coastal)

https://www.zillow.com/home-values/3229/santa-barbara-county-ca/

https://www.zillow.com/home-values/2841/san-diego-county-ca/

https://www.zillow.com/home-values/3101/los-angeles-county-ca/

https://www.zillow.com/home-values/255/napa-county-ca/

https://www.zillow.com/home-values/2444/monterey-county-ca/

https://www.zillow.com/home-values/3159/contra-costa-county-ca/

Florida (coastal)

https://www.zillow.com/home-values/3026/santa-rosa-county-fl/

https://www.zillow.com/home-values/67/bay-county-fl/ (sorry AD, making a point)

https://www.zillow.com/home-values/2993/palm-beach-county-fl/

I can do this all day.

Hipster

https://www.zillow.com/home-values/389/boise-county-id/

https://www.zillow.com/home-values/2243/davidson-county-tn/

https://www.zillow.com/home-values/2299/gallatin-county-mt/

There are waaaaaaaaay more examples. Rural housing is doing well. I know you won't click into a single link because you know you're wrong.