patrick.net

DemoralizerOfPanicans says

Not sure how many young couples without a Bank of Relatives have a $60k downpayment (plus closing costs) to avoid mortgage insurance, get the best rate, etc.

Yup. But hey! Ppl here actually believe the bullshit economic data claiming that incomes rose 20% these past few years. Mean income, sure. Median...my bullshit scent receptors go crazy.

Case/Shiller came out yesterday. It was down from the prior month, but such a small decline it barely registered. From peak it is down about 1%. I caution anyone reading this as any sort of trend. Lower interest rates over the upcoming months could tip prices up a little.

https://fred.stlouisfed.org/series/CSUSHPISA

The recent and previous Interest rate cut resulted in mortgage rates staying flat, in fact ticking up slightly.

It's possible there will be a brief uptick. But the cost of housing is too damn high.

Again, in the 80s, the average first homebuyer was 29 years old in a double digit rate environment.
Today he's in late 30s, in a normal to low rate environment.
https://money.com/first-time-homebuyer-age-record-high/

It not only happened before, it happened just 15 years ago. The fundamental cause was the same: Wimpy lending standards allowing home prices to skyrocket; just like no student loan caps allow tutions to skyrocket. NINJA was replaced with little down under Biden COVID rules.

It's not the rate. It's the price and the carrying costs.

Misc says

Lower interest rates over the upcoming months could tip prices up a little.

Every time the Fed cuts interest rates so far in an inflationary environment, mortgage rates have gone up. The markets see through the bullshit and thus respond.

DemoralizerOfPanicans says

It's not the rate. It's the price and the carrying costs.

Yup.

MolotovCocktail says

https://x.com/VladTheInflator/status/1973135828873613807

Still the VA and FHA rates are 6%, which mean buy down 4 discount points to get to 5% rate. I forecast the VA rate will be 5.5% by next March.

Slight uptick in sales if rates decline a bit, but the fundamental problem is that the price and carrying costs are too damn high, not the normative rates.

We're at a peak. There's only one way to go in the next few quarters as inventory piles on and buyers stay away in droves.


More and more data to support the onslaught of anecdotes from recent past low-rate homebuyers that they are selling out of their 3-5% era loans due to sky high carrying costs, preferring to get out while they can and avoid the enormous 20-30% leaps in insurance and property taxes and maintenance costs.

They are walking away from "Free Money" after inflation because the latter hit the carrying costs hard and made maintaining ownership unattractive or untenable in the long term.





https://wolfstreet.com/2025/09/29/the-lock-in-effect-and-mortgage-rates-update-on-unwinding-a-phenomenon-that-wrecked-the-housing-market/

The only way out of this trap is to lower the price of homes, which lowers the underlying price assessment for insurance and property taxes.

DemoralizerOfPanicans says

Slight uptick in sales if rates decline a bit, but the fundamental problem is that the price and carrying costs are too damn high, not the normative rates.

Our HOA paid $330,000 for HOA master insurance (covers townhome building structure for wind, fire, etc) this year for Citizen Insurance, now its paying around $250,000 to Princeton Insurance in 2026. $330,000 is what we've been paying since January 2022.

My HO3 insurance went down from $2300 to $1600 by switching from Olympus to Ovation Insurance. $1600 is what I was paying back in 2021.

Property tax rates are again the same this year for Panama City Beach, and HOA is discussing lowering the HOA assessment for 2026.

I've seen same for other HOAs in Panama City Beach as far as insurance and HOA fees.

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DemoralizerOfPanicans says

https://wolfstreet.com/2025/09/29/the-lock-in-effect-and-mortgage-rates-update-on-unwinding-a-phenomenon-that-wrecked-the-housing-market/

The only way out of this trap is to lower the price of homes, which lowers the underlying price assessment for insurance and property taxes.

Looks like about 70% of mortgages are no more than at an interest rate of 5%.

Prices now down around 15% from all time high price set in early 2022 in Panama City Beach.
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AD says

which mean buy down 4 discount points to get to 5% rate.

"Let them eat cake!" - attributed to Queen Antoinette.

Or how about: "You can pay less if you put more down", too.

Your typical first time buyer doesn't have the $$$ to barely put down 5%, let alone buy down points. Nor are most even eligible for VA loans.

DemoralizerOfPanicans says

More and more data to support the onslaught of anecdotes from recent past low-rate homebuyers that they are selling out of their 3-5% era loans due to sky high carrying costs, preferring to get out while they can and avoid the enormous 20-30% leaps in insurance and property taxes and maintenance costs.

AD says

DemoralizerOfPanicans says

https://wolfstreet.com/2025/09/29/the-lock-in-effect-and-mortgage-rates-update-on-unwinding-a-phenomenon-that-wrecked-the-housing-market/

The only way out of this trap is to lower the price of homes, which lowers the underlying price assessment for insurance and property taxes.

Looks like about 70% of mortgages are no more than at an interest rate of 5%.

Prices now down around 15% from all time high price set in early 2022 in Panama City Beach.
.

No longer will be the case going forward:

MolotovCocktail says

https://x.com/nickgerli1/status/1973064429706031342

MolotovCocktail says

AD says

which mean buy down 4 discount points to get to 5% rate.

"Let them eat cake!" - attributed to Queen Antoinette.

Or how about: "You can pay less if you put more down", too.

Your typical first time buyer doesn't have the $$$ to barely put down 5%, let alone buy down points. Nor are most even eligible for VA loans.

So the typical “first time buyer” is just a prospective that wants to buy but can’t. There are a lot of people who want to buy something but cannot afford to do so. I had to make sacrifices to save up for many years for a down payment and emergency fund so that I was being a responsible buyer. Why can’t others? They don’t want to take the time? I’m taking 12 years by the way, it is what it is. Financial prosperity takes discipline, and that is uncommon in our society today. It’s not let them eat cake, it’s respond to the situation you are in and make it work. Don’t just bitch about your situation and try to make other people feel bad for you.

It’s way past time to demand government action to stop foreign national purchases of property, ban property owners from leasing to illegal alIens, in general make the market work again for legal residents of our states…

ForcedTQ says

So the typical “first time buyer” is just a prospective that wants to buy but can’t.

No. I didn't say that at all.

MolotovCocktail says

ForcedTQ says

So the typical “first time buyer” is just a prospective that wants to buy but can’t.

No. I didn't say that at all.

I said it, I equated what you posted to that.

ForcedTQ says

I had to make sacrifices to save up for many years for a down payment and emergency fund so that I was being a responsible buyer. Why can’t others? They don’t want to take the time?

Why not expect voters passing a basic numeracy, literacy and geography multiple guesses test, too?

FYI: Personally I am with you...and for that poll test. Of course, house prices and voting numbers would have to fall like 80% in such a world, too.

ForcedTQ says

It’s not let them eat cake

Yes. It is 'Let them eat cake'. Your tirade just established that term applied.

"Let them eat cake" (which nobody is sure Antoinette actually said, to be clear) reflected her belief that she held that the proles actually had access to cake like she did in her 'world'. She liked to eat cake when she was upset. So she (supposedly) said that as being a serious statement when she heard of the proles not having enough bread.

It was reflective that she never even could consider a world otherwise that people could live in, because she didn't herself.

So yes, when you bring up what you did - which makes sense - it is still a 'let them eat cake' statement in such a world we live in, unfortunately. And things have gone so bad that only a huge correction in house prices as I mention above can restore that world.

MolotovCocktail says

AD says

which mean buy down 4 discount points to get to 5% rate.

"Let them eat cake!" - attributed to Queen Antoinette.

Or how about: "You can pay less if you put more down", too.

Your typical first time buyer doesn't have the $$$ to barely put down 5%, let alone buy down points. Nor are most even eligible for VA loans.

The seller should offer to buy down 4 discount points for the buyer's mortgage as well as discount the house at least 10% from the all time high price.

That is one way to incentivize buyers to make offers on the home, as likely they will negotiate down and want a 15% discount not the 10% discount.

.

AD says

The seller should offer to buy down 4 discount points for the buyer's mortgage as well as discount the house at least 10% from the all time high price.

That is one way to incentivize buyers to make offers on the home, as likely they will negotiate down and want a 15% discount not the 10% discount.

Yes. The seller CAN offer the buyer to run a train on both of the seller's daughters too.

But it doesn't change market mortgage rates.

You keep cherrypicking exceptions - increasingly imaginary - to avoid that.

MolotovCocktail says

AD says

The seller should offer to buy down 4 discount points for the buyer's mortgage as well as discount the house at least 10% from the all time high price.

That is one way to incentivize buyers to make offers on the home, as likely they will negotiate down and want a 15% discount not the 10% discount.

Yes. The seller CAN offer the buyer to run a train on both of the seller's daughters too.

But it doesn't change market mortgage rates.

You keep cherrypicking exceptions - increasingly imaginary - to avoid that.

No I am not cherry picking.

Buy 4 discounts points lower the FHA mortgage rate from 6% to 5%. That is like lowering the price 10% for the buyer. That is on top of lowering the price 15%.

So if the house is hypothetically $100,000 at all time high price, and is sold for $85,000 but it is like the buyer purchasing it at 90% of $85,000 (i.e., $76,500) by lowering their rate from 6% to 5%.

So its a 23.5% discount from all time high price.

From what I've read, a lot of economists say that housing should bottom around 25% below all time high price set in 2022.

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ForcedTQ says

Why can’t others?

Because typical homes are 4.3x incomes and up. This only happened twice in history, once in the early 50s and once again just before the GFC.

Worse than the 50s, because "income" back then meant in the majority of cases, one F/T employed adult, not two.

Buyers will buy at the price they feel comfortable with, not the peak COVID price the sellers think they are owed. This isn't aimed necessarily at Boomers, either - Social Media is flooded with homeloaners under 40 who think it's the buyers job to bail them out at the peak price they paid PLUS any repairs and improvements they made post-purchase. Many whinge that the price has indeed gone down a bit, and after repairs/upgrades they've actually lost equity despite only owning for several years - and witnessing skyrocketing carrying costs up 20-30%.

Another problem is the continued existence of Biden era COVID and DEI programs, and the generally loosening of mortgage rules. Should be 20% down with 15-20 year schedule. But sellers would hate that because prices would collapse in most areas.

Finally, a big reason Buyers are staying away, nobody thinks houses are going up 30-50% again over the next few years, and nobody wants to catch a falling knife, and many are perceiving the job market and economic forecast is weak as inventory piles up in most markets. And never mind a perception rates will be declining further over the next year or two.

Rents are dropping like a stone, so what's the rush to buy?

I certainly wouldn't pay anything near the median ask in this market:



And unstoppable, irreversable upcoming Demographics is going to do nothing but reduce demand.

The Fed will play tricks, REITS will beg for bailouts, but in the end, the population pyramid cannot be stopped.

Another great reason not to buy:



Hiring is at GFC levels.

DemoralizerOfPanicans says

nobody wants to catch a falling knife

I see where a couple or someone waits another year think prices will go down another 10%, or they may get enticed to buy based on them seeing very good deals on prices like a 20% discount from 2022 all time high price plus the seller offers to buy up to 4 discount points.

I agree as sellers need to be motivated enough to lower prices (and offer money for buyer to buy discount points) to account for a 6% rate for FHA and VA mortgages.

But its not a deflationary spiral matter where someone holds off on buying a computer at Best Buy since they think its going to drop in price in 30 days. There are a lot of factors as far as home buying versus continuing to rent.

Just around here in Florida panhandle it seems housing sales came to almost a halt since fall of 2022, naturally coinciding to the 30 yr mortgage rate reaching 7%.

Well even BLS complements ADP data on how job hiring slowed starting around February 2022.

Yet all the political chatter was about abortion going into the 2022 midterm election. They ran out of silver bullets for the 2024 election, and a lot seen through the Biden regime's bullshit economic stats.

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Yes, the recession really began earlier, long before the election, even. Doctored numbers, esp. job numbers, going into the election were extra buck wild.

Retail Homesellers will do anything BUT lower prices until urgency overpowers "Sticky Upwards". Retail homesellers are usually a year behind the so-called smart money, Realtors will often repeat NAR propaganda. Interestingly, Builders and big Investors are cutting prices and selling off. The fact that new is selling below used in many markets is a big tell.

Lots of stories in West and Central Florida that Realtors are actually telling sellers the bottom line, and they will NOT list their house unless they have a realistic price (ie big fat price cut from what they thought they'd get). There is a glut of houses now in Clearwater, St. Pete, etc. and starting in Orlando in earnest now too.

Tennessee and other COVID hot states are getting a punch of reality, also.

AD says

No I am not cherry picking.

Buy 4 discounts points lower the FHA mortgage rate from 6% to 5%. That is like lowering the price 10% for the buyer. That is on top of lowering the price 15%.

I know what discounting points is.

What person who needs to get a FHA loan has the $$$ to buy down points?

And your average seller won't do that either. They'll just reduce the price.

So you are cherry-picking scenarios..scenarios that won't happen on Planet Reality for most cases. Oh, I believe they happen with your crowd. But until I see a Zillow price listed like $750k (but seller will buy 4 points!) in the column where prices show up...cherry picking. A bit of "Let them eat cake" too.

AD says

From what I've read, a lot of economists say that housing should bottom around 25% below all time high price set in 2022.

Economists? Hahahaha.

MolotovCocktail says

What person who needs to get a FHA loan has the $$$ to buy down points?

I understand as I am addressing the $240,000 to $310,000 price range for a 3 bedroom, 2 car garage townhome within 2 miles of white sands beaches in Florida panhandle.

And as I said, this year marks a second year that property insurance prices are going down in Florida such as with Ovation Insurance.

And property taxes still are the same for las 4 years in Panama City Florida metro area, as well as my HOA charging the same HOA assessment in 2026 as they did in 2022.
.

The Panhandle seems 'invisible' from most of the Florida R/E Collapse Chatter, but from what I gather it was the least crazy of all Florida regions during the Pandemic, so therefore will have the weakest correction.

RENT GROWTH - and now I am speaking generally about everywhere but the Northeast and Midwest - has declined. Expected less than 1% next year, and in the hot Pandemic Markets - Austin, Nashville, Orlando - they've dropped. In Austin almost 20%, approaching pre-pandemic levels.

Not factored in that, and one of the tricks of property managers, is "comps". Because of the massive multifamily building binge starting Obama's awful 2nd term, there is a huge supply of apartments. To fill them, and keep the vacancy rate looking nice for investment pamphlets, managers are offering free months (plural) including now in Tennessee and long since the norm in parts of Texas and Florida, over a year now. This does not change the asking price, so it conceals what may be a rental drop in some areas as a mere weakening in growth. Even though of course it impacts the bottom line.

Other COVID era norms, like big fat one and a half months security, or first and last, has completely disappeared from Florida, at least from properties not for the ultrawealthy. Security deposits are now $300-500, sometimes waved for great credit applicants, and it's just the first month - with lots of comps offered.

(TL;DR: Instead of cutting rents, they offer free months, which amounts to de facto rental price cuts)

Rents are a major player when pricing houses. Strong rent price growth appeals to investors, big and small, and justifies paying high prices for investment properties, be they condos or SFH.

If rents fail to grow as predicted, investors don't want to pay the carrying costs and do the work, since the ROI is not what was expected.

According to some pundits I've heard (and I do so in the commute so I can't link, sadly), the Pro Investors are made at "Inadvertent Renters". These would be the Northern/Midwesterners who came down South to live and escape Lockdowns during the COVID era, but are now unable to get the price they want after paying a premium and making repairs/upgrades, so they are renting them, cutting into the Pro Investor's anticipated rental returns.

Finally AirBNB/VRBO are not doing great as municipalities continue to crack down on them, their value is now questioned vs. 3-stars especially for shorter trips, taxes and registration fees and regulations increase for them, etc. So we have former many former Short Term Rentals entering the market either as property to sell or as long term rentals.

AD says

MolotovCocktail says

What person who needs to get a FHA loan has the $$$ to buy down points?

I understand as I am addressing the $240,000 to $310,000 price range for a 3 bedroom, 2 car garage townhome within 2 miles of white sands beaches in Florida panhandle.

And as I said, this year marks a second year that property insurance prices are going down in Florida such as with Ovation Insurance.

And property taxes still are the same for las 4 years in Panama City Florida metro area, as well as my HOA charging the same HOA assessment in 2026 as they did in 2022.
.

That has nothing to do with buying points on a mortgage.

MolotovCocktail says

AD says

MolotovCocktail says

What person who needs to get a FHA loan has the $$$ to buy down points?

I understand as I am addressing the $240,000 to $310,000 price range for a 3 bedroom, 2 car garage townhome within 2 miles of white sands beaches in Florida panhandle.

And as I said, this year marks a second year that property insurance prices are going down in Florida such as with Ovation Insurance.

And property taxes still are the same for las 4 years in Panama City Florida metro area, as well as my HOA charging the same HOA assessment in 2026 as they did in 2022.
.

That has nothing to do with buying points on a mortgage.

Yes it does.

I see it firsthand in my townhome HOA as far as sellers offering to buy discount points (up to 4 points to lower the FHA rate from 6% to 5%), and it costs them around 4% of average mortgage balance of $270,000 or $10,800.

The sellers have the cash to offer this.

.

AD says

Yes it does.

I see it firsthand in my townhome HOA as far as sellers offering to buy discount points (up to 4 points to lower the FHA rate from 6% to 5%), and it costs them around 4% of average mortgage balance of $270,000 or $10,800.

The sellers have the cash to offer this.

.

You went on about property taxes, not this. Go re-read what you wrote. https://patrick.net/comment?comment_id=2212817

And even so, its anecdotal. And it doesn't show up in listings prices so most buyers wouldn't know about it. And many strapped sellers won't have the cash to do this.

AD says

I see it firsthand in my townhome HOA as far as sellers offering to buy discount points (up to 4 points to lower the FHA rate from 6% to 5%), and it costs them around 4% of average mortgage balance of $270,000 or $10,800.

I can see how paying points rather than dropping price would entice a buyer since lowing the rate from 6% to 5% on $270,000 would save about $170/mo for the buyer while lowering the price to $259,000 would only save about $66/mo. Also, the realtor is happy since the higher price is better for commission and comps.

MolotovCocktail says

AD says

Yes it does.

I see it firsthand in my townhome HOA as far as sellers offering to buy discount points (up to 4 points to lower the FHA rate from 6% to 5%), and it costs them around 4% of average mortgage balance of $270,000 or $10,800.

The sellers have the cash to offer this.

.

You went on about property taxes, not this. Go re-read what you wrote. https://patrick.net/comment?comment_id=2212817

And even so, its anecdotal. And it doesn't show up in listings prices so most buyers wouldn't know about it. And many strapped sellers won't have the cash to do this.

The carrying costs like property tax and property insurance were brought up, and I was stating for my research, Florida panhandle is faring well as far as property taxes remaining steady and property insurance dropping.

That is why I presented this info.

And there are many sellers in my townhome HOA and in Florida panhandle that can afford the cash for upfront for buying down up to 4 discount points.

The "cash strapped" sellers likely are underwater and desperate to sell, like they are offering a fire sale.

There are no fire sales that I see in my townhome HOA or in Panama City Beach.
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https://missionlocal.org/2025/09/sf-veritas-foreclosure-652-million-debt/

S.F. housing giant Veritas defaults on $652M debt. 66 buildings now face foreclosure.

1,566 units in five dozen buildings may represent entire San Francisco portfolio of city’s former No. 1 landlord ...

Veritas did not immediately respond to a request for comment. CEO Yat-Pang Au did not respond to a late Wednesday message.

If a sale were to proceed, a buyer would likely purchase the entire tranche of 66 buildings. Tenants would not face eviction, but their landlord would change.

The Veritas loan has an unpaid principal balance of $551 million that first came due in March 2024, according to the notice. Veritas also failed to pay $1.1 million in property taxes, according to the notice. ...

As a landlord, Veritas has long drawn the ire of tenant advocates. Many of its tenants have organized as the Veritas Tenants Association and withheld rent to improve housing conditions. Tenants have alleged harassment and neglect, and sued the company multiple times.

In 2022, its property management subsidiary warned residents in its San Francisco properties that they could be evicted for organizing by distributing “literature” and hanging signs on doors. Earlier this year, tenants who organized a rent strike at one of its buildings were reportedly threatened with eviction.

The Royal Bank of Canada has pursued San Francisco borrowers before. Its RBC Real Estate Capital arm in June 2024 took over 1,200 San Francisco housing units from owners Goldman Sachs and Ballast Investments after they defaulted on $687.5 million in loans.

One bell weather as Invitation Homes is the largest owners of single family rental homes in the USA.

prices down on average 15% for townhomes in Panama City Beach

HeadSet says

AD says

I see it firsthand in my townhome HOA as far as sellers offering to buy discount points (up to 4 points to lower the FHA rate from 6% to 5%), and it costs them around 4% of average mortgage balance of $270,000 or $10,800.

I can see how paying points rather than dropping price would entice a buyer since lowing the rate from 6% to 5% on $270,000 would save about $170/mo for the buyer while lowering the price to $259,000 would only save about $66/mo. Also, the realtor is happy since the higher price is better for commission and comps.

Yes. But HOW does that get communicated in listings to potential buyers and their agents?

You can't filter on price since that won't show 'seller will buy x points!'. In fact, no MLS has that data field, correct? At least not now. I suppose it can be mentioned in the description field.

Say Joe & Jill Sixpack would-be homebuyer get pre-approved for $XXX,XXX amount of a mortgage. Their realtard™ knows this. So any listing more gets filtered out. They never look at that $XXY,XXX house and thus never hear about the seller point discount for it.

Ergo, sellers will feel the need to compete with selling price since that is what is communicated at large to the buyer's market, instead.

It's been a while since I've been involved with an MLS (I used to work for one). So am I right or has things per the above changed?

AD says

One bell weather as Invitation Homes is the largest owners of single family rental homes in the USA.

Builders continue to build at a slower, but still steady pace, and selling BELOW used houses, yet able to perform to a degree that generates investor interest, is a testament somewhat to the health of the market...

... but also how inflated used house prices are. If builders can build new and sell with strong incentives, choice of flooring, all new brand-name appliances included, and teaser rates below what used house owners are asking...

Then price for used houses is set too damn high. Double digit percentages too high, not 5% too high.

Cutting rates 1-2% doesn't make $2200/month instead of $2600/month (plus 100% responsibility for all issues) on a 20-50 year old used house ...

...a better deal for financial health than $1400/month and NO responsibilities for maintenance.

One would be far better off investing the $800 difference - being generous and excluding HVAC repair, worn fixtures, etc. - a month in equities. Especially given that we are almost certainly at a peak. And remembering the same people who "Permanently Plateau'd" in the late 2000s are also claiming that for today with similar affordability and price runup issues.

It's a terrible time to buy!

"The Rise of Accidental Landlords"
https://www.sfgate.com/realestate/article/the-rise-of-the-accidental-landlords-and-what-20783304.php

How COVID-era home buyers, unable to find suckers buyers who will Entitle them to rescue from carrying cost explosions and their sunk upgrades and repair outlay expenses yet current rates but COVID peak prices buy at the price they want, are now folding their arms in fury and waiting... renting out these properties.

The explosion of these 'accidental landlords' plus the completion of millions of multifamily units coming to market, is also killing the ROI for investors, who purchased SFH at low rates, conditional on previous substantial growth estimates for rental prices.

It's now a game of chicken between investors, COVID era buyers, and current potential buyers on who can be the most stubborn and hold out the longest

My money is on the potential buyers. Eventually Bob the Boomer and Melinda the Milennial over-her-head will decide to simply settle for less due to urgency to retire/relocate/divorce/pay other debts.

Paul the Potential Buyer is only looking at declining or at least slowing rents as a renter who kinda wants a house sometime in the next few years.

Not only is Paul not under pressure, but outside the Northeast and pockets of the Midwest, it's flat or declining rents as far as the eye can see.