House hunting is already tough. It’s about to get harder

[Cris_Ard]

House hunting is already tough. Guess what? It’s about to get harder​

By: Diana Olick - CNBC.com

Anyone out shopping for a home on the resale market knows the pickings are slim. They’re about to get slimmer.

The number of homes for sale this month was actually 7% higher than June of last year, according to Realtor.com. But, in just the last week, that comparison went negative, with the number of homes for sale falling below year-ago levels for the first time in 59 weeks.

New listings in the last week of June were down 29% from the same week a year ago. That’s a wider drop than previous weeks.

With mortgage rates surging ever higher, crossing over 7% again on the 30-year fixed Thursday, according to Mortgage News Daily, homeowners have very little incentive to sell their homes. The vast majority of homeowners with mortgages have rates below 4%, with some even below 3%.

An even tighter housing market ahead means home prices are unlikely to cool. Prices peaked last June, after rising over 45% from pre-pandemic levels. They began to fall because mortgage rates had doubled in a matter of months. But prices bottomed in January, according to the latest S&P Case-Shiller home price index, despite still higher interest rates and slower sales.

“The ongoing recovery in home prices is broadly based,” Craig Lazzara, managing director at S&P DJI, said in a release.

Pending sales, which measure signed contracts on existing homes, fell nearly 3% in May from April, according to a report Thursday from the National Association of Realtors.

“Despite sluggish pending contract signings, the housing market is resilient with approximately three offers for each listing,” NAR’s chief economist, Lawrence Yun, said in a release. “The lack of housing inventory continues to prevent housing demand from being fully realized.”

On the flip side, the nation’s homebuilders have been big beneficiaries of the tight market, seeing sales jump 12% in May from April, according to the U.S. Census. Higher mortgage rates have been less of a factor, as builders, some of whom have their own mortgage arms, have been buying down rates for buyers. In May, there were twice as many homes that were sold but hadn’t been started as there were a year ago.

While single-family housing starts are finally increasing, they are still well below historical levels. Builders have also been underbuilding since the great recession, meaning the market was undersupplied well before the recent, pandemic-induced run on housing.

“Bottom line, for all the excitement in the home builders because of the need for more supply, the existing home market is depressed and experiencing a serious case of stagflation with little transactions taking place but at still very high prices,” wrote Peter Boockvar, chief investment officer at Bleakley Financial Group.

 

[firegiver]

Its tough. I believe its not going to get better. Stock buy backs for corporations i would point to as a major problem. The shrinking of the middle class can be linked to such policies introduced in the 1980s. When companies are allowed to buy back their stocks, which used to be illegal, they dont invest in innovation or their employees. They can pump and dump their own stock which forther allows the employees less power in creating wealth and thus creating value.
Futhermore corporations are buying and hoarding land. The common consumer cant compete.

In the great depression the average pay, adjusted for inflation was 88k a year. Now its 30k. The average ceo pay is like 20 million.
Theres other factors of course like china slave wages effecting global supply and demand. Regardless, we do not have the opportunities our parents had.
Our work is valued far less as employees

 

[FranktheDank]

Need inventory to catch up. Obviously need to build more homes and faster. I’m not a politician but if I were I would also push for a policy that would allow for sellers to have any capital gains forgiven if they sell to an owner occupant instead of an investor

 

[SDTiger9]

Need inventory to catch up. Obviously need to build more homes and faster. I’m not a politician but if I were I would also push for a policy that would allow for sellers to have any capital gains forgiven if they sell to an owner occupant instead of an investor

Eliminate corporations buying single family homes. It’s criminal in any capacity.

 

[PAWrocka]

Eliminate corporations buying single family homes. It’s criminal in any capacity.

Ireland has done this, they have also additionally implemented an additional taxes on rental properties.

 

[FranktheDank]

Eliminate corporations buying single family homes. It’s criminal in any capacity.

I wouldn’t go that far. They fill a need. Not everyone wants to own a home or can afford/qualify to own one. There should be options available for those people to still be able to enjoy some of the comforts and benefits of living in a single family home instead of a 700sqft fart hole where they have to share all walls with neighbors.

However I think something could be done to help the average homebuyer have a better shot at winning a bidding war against them and I think what I proposed would help do that without going too far

 

[Cocks are Number 1]

Its tough. I believe its not going to get better. Stock buy backs for corporations i would point to as a major problem. The shrinking of the middle class can be linked to such policies introduced in the 1980s. When companies are allowed to buy back their stocks, which used to be illegal, they dont invest in innovation or their employees. They can pump and dump their own stock which forther allows the employees less power in creating wealth and thus creating value.
Futhermore corporations are buying and hoarding land. The common consumer cant compete.

In the great depression the average pay, adjusted for inflation was 88k a year. Now its 30k. The average ceo pay is like 20 million.
Theres other factors of course like china slave wages effecting global supply and demand. Regardless, we do not have the opportunities our parents had.
Our work is valued far less as employees

You seem to be working for the wrong guy(s) / company(s).

Go get what you believe you’re worth.

 

[FranktheDank]

@Cris_Ard thanks for sharing. Any chance we can get this thread moved to the west zone to get more exposure/activity? The housing situation effects all of us to some degree and it is a pretty slow sports week

 

[OleFastball]

Its tough. I believe its not going to get better. Stock buy backs for corporations i would point to as a major problem. The shrinking of the middle class can be linked to such policies introduced in the 1980s. When companies are allowed to buy back their stocks, which used to be illegal, they dont invest in innovation or their employees. They can pump and dump their own stock which forther allows the employees less power in creating wealth and thus creating value.
Futhermore corporations are buying and hoarding land. The common consumer cant compete.

In the great depression the average pay, adjusted for inflation was 88k a year. Now its 30k. The average ceo pay is like 20 million.
Theres other factors of course like china slave wages effecting global supply and demand. Regardless, we do not have the opportunities our parents had.
Our work is valued far less as employees

Im trying to hear you out but help me understand what you are trying to say.

When you say "They can pump and dump their own stock which further allows the employees less power in creating wealth and thus creating value." ...... how does a company buying their own stock give employees less power to create wealth? What do you mean by that?

Also in bringing up the great depression you must consider the amount of jobs available. What was the unemployment rate when 88k a year was the average? Unemployment is 3% now and I'm guessing its a lot lower. So there are more jobs available at a lower wage. Sounds like the labor market needed a correction. Just like it seemingly needed a correction the other way after Covid. You have really seen a spike in demand for labor the last 3 or 4 years and pay at the bottom end of the scale has been picking up.

I disagree that we don't have the opportunities that our parents had. Our lives are more comfortable for more people than at any time in history. There are stories upon stories of people coming from nothing to having all the riches they could want. Opportunities are abound.

 

[Willence]

Im trying to hear you out but help me understand what you are trying to say.

When you say "They can pump and dump their own stock which further allows the employees less power in creating wealth and thus creating value." ...... how does a company buying their own stock give employees less power to create wealth? What do you mean by that?

Also in bringing up the great depression you must consider the amount of jobs available. What was the unemployment rate when 88k a year was the average? Unemployment is 3% now and I'm guessing its a lot lower. So there are more jobs available at a lower wage. Sounds like the labor market needed a correction. Just like it seemingly needed a correction the other way after Covid. You have really seen a spike in demand for labor the last 3 or 4 years and pay at the bottom end of the scale has been picking up.

I disagree that we don't have the opportunities that our parents had. Our lives are more comfortable for more people than at any time in history. There are stories upon stories of people coming from nothing to having all the riches they could want. Opportunities are abound.

Our issues are many but the government controlling so much of our economy is a big part of the problem. Another is people deciding to be employees and not employers. My wife more than doubled her pay by having the courage to start her own business. Folks seem to want a treadmill to success. There is no such thing. The Fed should go away. Government "investment" should change dramatically. The idea a president can run our economy is absurd. Government can help facilitate a growth environment and that's about it.

Our housing problems are so deep it is going to take a long time to escape them. A big part of the problem is the urbanization of our country. That's been a very bad thing on so many levels.

 

[Clemson Goat]

I wonder what impact the 3 million migrants that has crossed the Southern border in the last couple years has on home or rental property shortage.