Mortgage rates and the housing market

[Hards Alumni]

Can't believe you took me so seriously. It was a very simple dig at Hards as he has a bad habit of attacking and blaming boomers for all of life's ills. It was meant to be as over the top as his post.

Not all of them, but the state of the nation aint exactly seashells and balloons.

[JakeBarnes]

People should try getting better paying jobs then

Hey, I was solidly middle class. Then I increased my salary by 60% in 3 years, and look at me now--my buying power is solidly low middle class!

[Jockey]

You got me!

Too many threads goin' on. 

[Jay Bee]

Pathetic display of humanity, guys. Get ya bread up.

[Jockey]

Not all of them, but the state of the nation aint exactly seashells and balloons.

Oh, don't worry. I can trash boomers all day. Just not for everything.

[MU82]

From Reuters:

Sales of previously owned U.S. homes ticked unexpectedly higher in July, but the pace of sales remains sluggish amid affordability issues for buyers thanks to high house prices and interest rates on mortgages.

Home sales rose 2.0% last month to a seasonally adjusted annual rate of 4.01 million units from 3.93 million in June, the National Association of Realtors said on Thursday. Economists polled by Reuters had forecast home resales would be essentially unchanged from June at 3.92 million units. Sales edged up 0.8% on a year-over-year basis.

NAR Chief Economist Lawrence Yun saw the data as suggesting that some relief in the factors that have weighed on home sales - high borrowing costs and prices and limited inventory - may be in the offing. The sales pace over the last two years has averaged right around 4 million units a month, a weaker rate than seen even during the 2007-2009 recession that was triggered by a collapse in the housing market.

The average rate on a 30-year-fixed rate mortgage recently fell to the lowest level since last fall at 6.58%, according to data from Freddie Mac, but rates remain appreciably higher than they were coming out of the COVID-19 pandemic.

With the Federal Reserve widely expected to resume interest rate reductions next month, Yun said mortgage rates may have room to fall further in the months ahead.

"The ever-so-slight improvement in housing affordability is inching up home sales," Yun said in a statement. "Wage growth is now comfortably outpacing home price growth, and buyers have more choices. Condominium sales increased in the South region, where prices had been falling for the past year."

Sales rose month-over-month in the Northeast, South and West but fell in the Midwest.

The median sales price rose 0.2% from a year earlier to $422,400 - the 25th straight year-over-year increase - but slipped from June's record-high level.

The year-over-year price increase was the smallest since June 2023, Yun said.

Total inventory also edged up to 1.55 million units. At the current sales pace, that inventory would last 4.6 months, down from 4.7 months in June.

The share of all-cash transactions was 31%, which Yun described as unusually high. Investors made up 20% of all transactions, up from 13% a year ago.

First-time buyers accounted for 28% of sales in July, down from 30% in June and 29% a year ago.

"Homebuyers are in the best position in more than five years to find the right home and negotiate for a better price. Current inventory is at its highest since May 2020, during the COVID lockdown," Yun said.


I guess this is mostly good news? But the stat that jumped out at me was how much investor activity had increased - with investors making up 20% of all transactions, considerably higher than a year ago. Investor activity, which had been high for several years, had finally been slowing down ... until now.

[Hards Alumni]

I guess this is mostly good news? But the stat that jumped out at me was how much investor activity had increased - with investors making up 20% of all transactions, considerably higher than a year ago. Investor activity, which had been high for several years, had finally been slowing down ... until now.

Yep, and that should worry everyone.  If people can't ever purchase housing they have trouble building wealth.  And investors can outspend private owners which only drives prices higher, which makes it harder to buy a home, which means the homes are only available to investors because they can outspend, which drives prices higher... well you get the idea.

[TSmith34, Inc.]

Because - as a collective group - an entire generation made a LOT of social and political decisions to only benefit themselves or remove policies/programs they benefitted from

This is 1000% true.

That said, the more I've thought about it, the more I believe my Gen X cohorts deserve a good kicking, too. For too many, "Greed is Good" became their mantra, and "whatever" might as well be our generational credo.

[tower912]

Fair.  I was kicked outside and told to come home when the lights came on.  I also got a paper route at 12 and started watching my younger siblings when both parents were gone when I was 13.  Pay?  I let you eat, right?  15 of my high school classmates are dead by suicide out of a class of 152.   So all of those gen X tropes hit close to home.
  At MU, 84-88, it was all about the apathy.   Not enough of us with the fire and ambition to go out and change the world for the better.  Guilty.   Too busy just trying to get through.  So, I will agree both with the boomer criticism and the GenX criticism.   Shame on us for not booting their asses sooner and leading with our innate pragmatism and skepticism instead of narcissism.   The skepticism and pragmatism was turned against us and we let it be.

[Hards Alumni]

Fair.  I was kicked outside and told to come home when the lights came on.  I also got a paper route at 12 and started watching my younger siblings when both parents were gone when I was 13.  Pay?  I let you eat, right?  15 of my high school classmates are dead by suicide out of a class of 152.   So all of those gen X tropes hit close to home.
  At MU, 84-88, it was all about the apathy.   Not enough of us with the fire and ambition to go out and change the world for the better.  Guilty.   Too busy just trying to get through.  So, I will agree both with the boomer criticism and the GenX criticism.   Shame on us for not booting their asses sooner and leading with our innate pragmatism and skepticism instead of narcissism.   The skepticism and pragmatism was turned against us and we let it be.

Don't worry, we're next.  The generation of cynics.

[tower912]

Don't worry, we're next.  The generation of cynics.

From a young age.  But it was weaponized against us.  Whereas in the 80's and 90's we inherently did not trust multi-national corporations, now a lot of us don't trust science and facts, while embracing the most insane f-ing BS off of facebook and calling it 'doing my own research'.   

[barfolomew]

From a young age.  But it was vaporized against us.  Whereas in the 80's and 90's we inherently did not trust multi-national corporations, now a lot of us don't trust science and facts, while embracing the most insane f-ing BS off of facebook and calling it 'doing my own research'.   

That's why I only do my own research on Scoop.

It's how I know that my dentist is plotting to kill all the manatees wearing ugg boots with a self-driving car.

[tower912]

Preach

[jesmu84]

https://youtu.be/l7DJ3ThSYWs?si=k039iFa2EfhYY1ag

[MU82]

Extreme weather is driving sky-high home insurance prices in some especially storm-prone parts of the country, Axios' Alex Fitzpatrick writes from a new analysis by Bankrate.

Climate change is supercharging extreme weather events like hurricanes, increasing the odds of losses and claims and driving up insurance premiums.

The national average for annual home insurance premiums is up 9% since 2023, hitting $2,470 as of July.

Nebraska ($6,425), Louisiana ($6,274) and Florida ($5,735) — all three vulnerable to extreme weather — are just some of the states with shockingly higher-than-average premiums.

[TSmith34, Inc.]

Wouldn't this chart be more informative if it was based on average house price in each state?

[CreightonWarrior]

Luckily my insurance premiums cut in half when I went from wood shake to asphalt roof but a couple tornados and straight line winds have wreak havoc on Omaha the last 16 months.

[Scoop Snoop]

We bundle our insurance so that we can get a reasonable rate on our home. It seems that most insurers have "a thing" about our being in a rural area without hydrants.  With heart pine floors that are loaded with resin, if we have a fire our house would be totally engulfed in flames in minutes. Even without the heart pine, being at least 20 minutes from the nearest fire department would result in a total loss.

Cedar shake roofs have long since been outlawed in many areas due to fire risk when many homes still had wood burning fireplaces, so I'm surprised they were still allowed in the Omaha area. The shingles tended to cup fairly quickly due to modern installation practices. My family's 1883 cottage originally had cedar shake as we could see from the attic. The roof was built with generous spacing between the planks before the shakes were installed. The original shake siding is still on the house. This gave the shakes an ability to shed wood moisture and lie flat. In modern installations of shakes, a solid plywood or OSB board base ensured that the shakes would quickly begin to cup. 

[MU82]

Wouldn't this chart be more informative if it was based on average house price in each state?

Sure. I presented what Axios provided.

[rocky_warrior]

My family's 1883 cottage originally had cedar shake as we could see from the attic. The roof was built with generous spacing between the planks before the shakes were installed. The original shake siding is still on the house. This gave the shakes an ability to shed wood moisture and lie flat.

So, a shake shack, eh?

(The shake dissertation really shook me)

[CreightonWarrior]

We bundle our insurance so that we can get a reasonable rate on our home. It seems that most insurers have "a thing" about our being in a rural area without hydrants.  With heart pine floors that are loaded with resin, if we have a fire our house would be totally engulfed in flames in minutes. Even without the heart pine, being at least 20 minutes from the nearest fire department would result in a total loss.

Cedar shake roofs have long since been outlawed in many areas due to fire risk when many homes still had wood burning fireplaces, so I'm surprised they were still allowed in the Omaha area. The shingles tended to cup fairly quickly due to modern installation practices. My family's 1883 cottage originally had cedar shake as we could see from the attic. The roof was built with generous spacing between the planks before the shakes were installed. The original shake siding is still on the house. This gave the shakes an ability to shed wood moisture and lie flat. In modern installations of shakes, a solid plywood or OSB board base ensured that the shakes would quickly begin to cup. 

Yeah I"m surprised they aren't either. Most that still have them are definitely aged. The vast majority that get replaced are getting replaced with asphalt but there are a very select few that are just replacing single planks around the roof. They don't age well at all. From what I've heard in the neighborhood it's virtually impossible now to get any new insurance on them.

[Scoop Snoop]

Yeah I"m surprised they aren't either. Most that still have them are definitely aged. The vast majority that get replaced are getting replaced with asphalt but there are a very select few that are just replacing single planks around the roof. They don't age well at all. From what I've heard in the neighborhood it's virtually impossible now to get any new insurance on them.

The high resin content in cedar shakes is a major factor in their rot resistance, so sparks from a chimney are extremely dangerous. Once the insurance companies figured that out...I don't blame them. The other problem with the shakes not aging well is the quality of the cedar is not at all what it was many years ago. High grade shakes are available from some small companies specializing in tight, straight grain cedar, but of course the cost is much higher.

[rocky_warrior]

Today I learned:  Mortgage fraud is cause for dismissal from public service.  Hmmmm...

[Scoop Snoop]

Today I learned:  Mortgage fraud is cause for dismissal from public service.  Hmmmm...

Nice knowin'you Rocky, but with this post, you're toast once the Justice Department goes after you. I mean...everybody reads scoop!

[MU82]

Today I learned:  Mortgage fraud is cause for dismissal from public service.  Hmmmm...

Unless you're the Texas attorney general.

Helps to be white, and helps to have friends in high places.