patrick.net

Al_Sharpton_for_President says

housing, may already be in recession because of high interest rates

They spelled "prices" wrong.

https://www.fastcompany.com/91434330/housing-market-affordability-is-so-stretched-that-dr-horton-is-leaning-even-harder-on-mortgage-rate-buydowns

I wonder if the buydowns by DR Horton are just for a few years and then the mortgage rate is reset to the current rates.

I hope this is not a gimmick for unsuspecting buyers.

AD says

wonder if the buydowns by DR Horton are just for a few years and then the mortgage rate is reset to the current rates.

I'm sure that's how it works, but the victims are still underwritten based on the full interest rate at the time of reset. Who knows mayne interest rates really will go down or their salaries go waaaaaay up before reset.

Looks like they are pushing a 3, 2, 1 buydown product, but yeah quilified based on max reset amount.

https://www.cmgfi.com/calculator/buy-down

Be a damn shame if interest rates did drop quite a bit over the 3 years, but so did housing prices. That way the victim couldn't refinance unless they brought more coin to the table. -- Don't worry nobody is telling the victims about this possibility.

AD says

I wonder if the buydowns by DR Horton are just for a few years and then the mortgage rate is reset to the current rates.

I hope this is not a gimmick for unsuspecting buyers.

According to AI it is a gimmick for unsuspecting buyers:

DR Horton's rate buydowns are promotional incentives where the builder pays to lower your initial mortgage interest rate for a set period, often for the first year or two of the loan. This temporarily reduces your monthly payments, making the home more affordable, but the rate will increase later in the loan term. These offers are market-dependent and can include deals like a \(3.99\%\) rate for one to two years, followed by a higher rate for the remainder of the 30-year mortgage. 

https://www.reddit.com/r/RealEstate/comments/1ci6xk2/thoughts_on_using_dr_horton_as_a_lender_for_lower/
The lower interest rate is a buy down for only 2 years.

Not that there was really any doubt in your mind!!!

Shakedown nation.

AD says

https://www.fastcompany.com/91434330/housing-market-affordability-is-so-stretched-that-dr-horton-is-leaning-even-harder-on-mortgage-rate-buydowns

I wonder if the buydowns by DR Horton are just for a few years and then the mortgage rate is reset to the current rates.

I hope this is not a gimmick for unsuspecting buyers.

zzyzzx says

The lower interest rate is a buy down for only 2 years.

But it's their loan package. So in 2 yrs they will have bad loans on the books unless they hoist them off to Freddy & Fannie?

the cost of buying a home should include title insurance to protect from zombie mortgages or any zombie debt liens

https://www.the-sun.com/money/15435289/homeowner-foreclosure-zombie-second-mortgage-debt/

AD says

the cost of buying a home should include title insurance to protect from zombie mortgages or any zombie debt liens

https://www.the-sun.com/money/15435289/homeowner-foreclosure-zombie-second-mortgage-debt/

???? Why would title insurance cover this? Did you read the whole article? He failed to deal with this despite notices. This was debt he incurred. Title insurance would not cover this.

This also would have came up when he tried to sell this anyway.

MolotovCocktail says

50% of states so far.

The Hipster Coastal States.

Misc says

Be a damn shame if interest rates did drop quite a bit over the 3 years, but so did housing prices.

This happened in California 1990-1994

MolotovCocktail says

AD says

the cost of buying a home should include title insurance to protect from zombie mortgages or any zombie debt liens

https://www.the-sun.com/money/15435289/homeowner-foreclosure-zombie-second-mortgage-debt/

???? Why would title insurance cover this? Did you read the whole article? He failed to deal with this despite notices. This was debt he incurred. Title insurance would not cover this.

This also would have came up when he tried to sell this anyway.

I agree this is the exception as this article states he is to blame (i.e., “did nothing to tender or cure the arrearages” on his second mortgage) for that zombie mortgage which he likely took out during the Clinton House Bubble of 2003 to 2007, and he thought he was cleared when they sent him a notice on that 2nd mortgage or zombie mortgage back in 2009.

I have read that this was not uncommon for mortgagees to receive notices like this to find out later on some company bought that note and then pursued the note's debtor.

AD says

I have read that this was not uncommon for mortgagees to receive notices like this to find out later on some company bought that note and then pursued the note's debtor.

They do the same for credit card debt as well.

AD says

But...but...I thought the rates were going down!

So, what is the average age of a first time home buyer ????

Answer: 40

A new all time high. No need to make it look even more extreme than it is.

Misc says

So, what is the average age of a first time home buyer ????

Answer: 40

A new all time high. No need to make it look even more extreme than it is.

In fairness, everybody knows the price of housing is too damn high, and nobody wants to catch a falling knife. While memories are short, most people know or can easily see recent, past 7 year price history. Seeing ranches that went for $180k in 2019 go for $300k in 2022 and still too much today at $270k, esp. factoring in rates and double digit tax/ins increases.

So the people buying right now have money to burn and most are on the sidelines due to expectations both prices and rates will drop substantially over the next year or so.

AD says

Great Chart, thanks @Ad

Misc says

So, what is the average age of a first time home buyer ????

Answer: 40

A new all time high. No need to make it look even more extreme than it is.

Median seems more appropriate here tho.

MolotovCocktail says

Explain that. Why millennials?

MolotovCocktail says

Which will completely collapse when Millenials and some Older Xers inherit

DemoralizerOfPanicans says

Which will completely collapse when Millenials and some Older Xers inherit

Housing Experts of PatNet when told that:

DemoralizerOfPanicans says

Which will completely collapse when Millenials and some Older Xers inherit

Yep, and its all based on demographics and economics for each zip code.

Some of those baby boomer homes may get demolished because they are at least 80 years old and in terrible condition.

I know for my county (Bay County, Florida) and zip code that they follow trends and forecast, such as there is less and less migration of out of state baby boomers to my zip code.

AD says

Nationally... https://www.zillow.com/home-values/21/il/



Zestimates are trash anyway. They don't account for any improvement over the years or updates. Don't get caught up in national when 40-50% of the population lives on the coasts or near it.

https://www.zerohedge.com/markets/analyst-warns-2032-demographic-crossover-point-poised-reshape-housing-market

Quick Summary: The ZeroHedge article argues that a looming “demographic crossover point” in 2032—when the number of Americans aged 80+ will surpass those aged 30–39—could profoundly reshape the U.S. housing market. Analysts warn this shift will reduce demand for large family homes while increasing pressure on senior housing, assisted living, and downsizing options.

🔑 Key Points from the Article
• Demographic crossover in 2032: For the first time, the U.S. will have more people over 80 than in the 30–39 age bracket.
• Housing demand impact:
• Fewer young households entering prime home-buying years.
• More elderly homeowners looking to downsize, sell, or move into assisted living.
• Supply-demand imbalance: This shift could create excess inventory of larger suburban homes, especially in regions with aging populations.
• Economic consequences:
• Potential downward pressure on housing prices in certain markets.
• Rising demand for smaller, accessible homes and senior-focused housing developments.
• Policy implications: Analysts suggest the U.S. may need to rethink housing policy, zoning, and retirement planning to accommodate this demographic reality.
• Investor angle: Real estate investors are advised to anticipate structural changes—favoring senior housing, multi-family units, and adaptable living spaces over traditional single-family homes.

📉 Contextual Insight
• The article frames this as a structural demographic shock, not a cyclical housing downturn.
• Unlike past housing cycles driven by interest rates or credit availability, this shift is rooted in population aging and generational replacement.
• The “max pain” for housing could be concentrated in suburban markets where baby boomers currently dominate ownership.

✅ Takeaway
The 2032 demographic crossover is portrayed as a turning point for U.S. housing, with fewer young buyers and more elderly sellers reshaping demand. The article warns that investors, policymakers, and communities must prepare for a market increasingly driven by aging households rather than first-time buyers.

Really! I thought boomers are already living in small houses. There could be some demand for old age homes at best.
In either case I believe inflation will push all shacks up irrespective of their shape and size in most markets.

Downsizing is and will cause much problems.

Blue says

I thought boomers are already living in small houses. There could be some demand for old age homes at best.
In either case I believe inflation will push all shacks up irrespective of their shape and size in most markets.

The senior "apartments/condos" are becoming popular here in IL. In the last 5 years in a neighboring town of ~10k population they put up probably 300 units for senior living. My observation is that most living there are female and were blue collar. Likely getting their SS and their deceased husbands or they had pensions.

The one thing I've notice as a country club snob when I was a kid, all of my parents friends are staying put in their big houses. Most I knew had businesses or wealth of $5-10M by 55. You can live pretty healthy just putting that in a CD or a REIT for dividends or some other semi safe investment. Most as far as I know are paid off.

My mom actually upsized buying my house. Now she's traveling in Europe with my sister and my nieces. She doesn't know how to spend her money. Teacher, so pension and health are covered. Paid cash. $1M in the bank and $90k/yr for a widow. Then SS. With interest on the money in the bank probably looking at $120k/yr with maybe $15k of regular expenses. As a boomer she really can't run out of money.

TL:DR - The boomers that moved already have. Most stayed and will hand down the family house. The 70-80 year olds moved into studio or 1 bed condos already.

Glock-n-Load says

Downsizing is and will cause much problems.

I could be wrong but I think it’s a big myth.

I did search if that was true!
AI summary:
Downsizing is not causing a real estate market crash; in fact, the difficulty homeowners (particularly baby boomers/empty nesters) face when trying to downsize is contributing to the current low housing inventory and preventing a crash.

“Most stayed and will hand down the family house.”

I think a significant amount may use the home to finance their long-term care.

Al_Sharpton_for_President says

“Most stayed and will hand down the family house.”

I think a significant amount may use the home to finance their long-term care.

I think you’re correct there. A bunch don’t have much for retirement and the majority of their wealth is wrapped up in their house.

Blue says

Glock-n-Load says

Downsizing is and will cause much problems.

I could be wrong but I think it’s a big myth.

I did search if that was true!
AI summary:
Downsizing is not causing a real estate market crash; in fact, the difficulty homeowners (particularly baby boomers/empty nesters) face when trying to downsize is contributing to the current low housing inventory and preventing a crash.

Downsizing doesn't cause a crash. No, instead what it does is put older people with more $$ into direct competition with younger buyers with less $$. Who is going to be the winning buyer in that case? Lots of older people downsizing causes lower priced homes to rise. Often out of reach of those trying to get a start.

We need more housing. And lots of it.

DemoralizerOfPanicans says

Misc says

So, what is the average age of a first time home buyer ????

Answer: 40

A new all time high. No need to make it look even more extreme than it is.

In fairness, everybody knows the price of housing is too damn high, and nobody wants to catch a falling knife. While memories are short, most people know or can easily see recent, past 7 year price history. Seeing ranches that went for $180k in 2019 go for $300k in 2022 and still too much today at $270k, esp. factoring in rates and double digit tax/ins increases.

So the people buying right now have money to burn and most are on the sidelines due to expectations both prices and rates will drop substantially over the next year or so.

300 is in the past, went from 200 to 800

AD says

The ZeroHedge article argues that a looming “demographic crossover point” in 2032—when the number of Americans aged 80+ will surpass those aged 30–39—could profoundly reshape the U.S. housing market. Analysts warn this shift will reduce demand for large family homes while increasing pressure on senior housing, assisted living, and downsizing options.

Noooooo! REALLY???

Who has been posting about demographic effects on Housing for over two years now on PatNet?

GNL says

Downsizing doesn't cause a crash.

There won't be any meaningful downsizing. Just like there isn't any presently going on.

For reasons Patnetters have already beaten to death in detail.

Which means that article is rather academic. That's fine as long as you keep that in mind. But it also means it is rather real world adjacent, at best.

GNL says

We need more housing. And lots of it.

CBS News recently interviewed Biden's chief economic advisor who said the USA is now short about 3 million homes.