Mortgage rates and the housing market

[NCMUFan]

Someone hasn't been to Wisconsin for awhile. Just drive across the Illinois border and you will see miles of businesses that have relocated there recently.

Hey, raised in Kenosha.  Congrats on becoming a suburb of Chicago.

[Scoop Snoop]

But isn't this all ignoring the problem that the US has with suburban sprawl?  If there is little to no density being added near to city centers then it stands to reason that housing needs to be added to the edge of town.  The consequences of building like this are everywhere.  More roads, more traffic, and more destruction of farmland/nature.

What is it that you think should be done about it, other than discouraging its spread? Your wording leads me to believe that you have a hatred for suburbs and want them punished somehow. I doubt that is what you are thinking, but it sure sounds like that.

[jesmu84]

Fair question. Can we agree that there is no easy solution? I bet we can.

I am familiar with only one metro area and its housing "solutions"- Richmond, VA., even though we have lived in a rural area of Virginia and have for years. So...my thoughts and opinions are no longer based upon being a resident here, but rather as a visitor who has seen the dramatic changes.

1) I have seen badly dilapidated homes that were beyond salvation razed and (I think via HUD) new homes built with "old timey" exteriors to blend in with the rest of the neighborhood. The neighborhood remained almost 100% African American, as the temporarily displaced residents wanted.

2) Long vacant, deteriorating industrial properties have either been repurposed as apartments, mini breweries, restaurants etc. I mention this because I think focusing solely on the residential aspect ignores the linkage between residential and commercial.

3) An area with once beautiful Victorian era townhouses had been very run down by the '70s. It is now restored to its former glory, but not everyone is happy. The charge? Gentrification.

4) Throughout the city, old homes have been rehabbed. People are doing this on their own. If there is lead paint or asbestos removal involved, the cost of properly correcting the problems can be overwhelming. This would be a great place for government to help out so that the homes are not abandoned because buyers are scared off.

5) The Chicago program I discussed in my earlier post regarding using rehabbing as apprentice training as well as restoring old homes needs some government involvement to entice contractors to buy in to the program. Although it was many years ago, I still remember talking to a contractor who was happy to be part of the program and he mentioned the job training benefit to workers who previously in low paying jobs.

My point is/was that shoehorning duplexes and small apartment buildings into single family neighborhoods impresses me as unfair and hardly making a dent in the housing shortage. Old homes often have lead pipes, asbestos, antiquated wiring, and other problems. They typically need new kitchens and baths, HVAC, etc. But there are SO many of them, and to ignore them, I think, is silly. Do homes need huge kitchens and sunrooms? Exercise rooms? A couple of rooms as offices? There is plenty of very good stock needing rehabbing, and residents in those neighborhoods in a apprentice program are able to earn more than they did. I have never been a fan of simply throwing government money at problems. But offering it to help with the costs of rehabbing old homes? Sure! Just put in a requirement that it be owner-occupied for a while. Meaning maybe 10 years.

Thanks for asking the question regarding the solutions. The ones I offer may not work out, but I think that-to use a very worn out cliche'-we need to think outside the box.   

None of this adds density or increases housing supply.

[Hards Alumni]

What is it that you think should be done about it, other than discouraging its spread? Your wording leads me to believe that you have a hatred for suburbs and want them punished somehow. I doubt that is what you are thinking, but it sure sounds like that.

No, I live in a suburb.  Personally, I would prefer to live in a more urban place, but I don't fancy living alone.  

I think properties that are within a certain distance of city centers should have less restrictive zoning to encourage development and density.  Additionally, I think we could certainly do some things to move away from home ownership being the primary storage of wealth.  Homes should be for living, not a foolproof investment opportunity.

[4everwarriors]

Yeah, let's tax unrealized capital gains. Hope Buffoon 2 keeps showin' her brilliance. She's lookin' more like a kamikaze
pilot every day, aina?

[jficke13]

Yeah, let's tax unrealized capital gains. Hope Buffoon 2 keeps showin' her brilliance. She's lookin' more like a kamikaze
pilot every day, aina?

Weird.

[Spaniel with a Short Tail]

Yeah, let's tax unrealized capital gains. Hope Buffoon 2 keeps showin' her brilliance. She's lookin' more like a kamikaze
pilot every day, aina?

Why would you add this stoopid blatantly political comment in a thread that has avoided any semblance of a political taint? Was it supposed to be funny for others of your ilk? This is the type of comment that I hope will lead to an immediate scoopcation. SMH

[Scoop Snoop]

No, I live in a suburb.  Personally, I would prefer to live in a more urban Centreville ha. place, but I don't fancy living alone.  

I think properties that are within a certain distance of city centers should have less restrictive zoning to encourage development and density.  Additionally, I think we could certainly do some things to move away from home ownership being the primary storage of wealth.  Homes should be for living, not a foolproof investment opportunity.

The newer suburban areas around DC area are definitely high density. Four story townhouses and multistory apartment buildings are plentiful. Exactly what are proposing to make homeownership "not a foolproof investment opportunity"? And why should the owners be restrained in this? I really think all this has about as much chance of flying as Muggsy's magnificent 5 point plan.

I'm not sure how housing costs becomes reasonable for the average person, but I DO get your oft repeated outrage at the burden on younger generations. We can agree on that, right? With the current near deadlock on housing-high prices, high mortgage rates- I realize that there may be no other way out other than with government getting involved somehow, but that basic principle is too often a slippery slope to me. The massive amount of very large apartment building I see tells me that investors are expecting this country to be increasingly rental based long term. As Lawdog has pointed out, it has been heavy on luxury apartment buildings.

I hope you get your wish to live in the city. Do me a favor....lighten up on demonizing old farts like me that were able to do well in real estate when conditions were much better. Success is not a crime, even if it was achieved under easier conditions. All you are doing is heading towards an ulcer. 

[Pakuni]

Yeah, let's tax unrealized capital gains. Hope Buffoon 2 keeps showin' her brilliance. She's lookin' more like a kamikaze
pilot every day, aina?

You'll never have to worry about paying that tax, my guy. Dentists ain't in that tax bracket, aina?

[The Sultan]

Why would you add this stoopid blatantly political comment in a thread that has avoided any semblance of a political taint? Was it supposed to be funny for others of your ilk? This is the type of comment that I hope will lead to an immediate scoopcation. SMH

Because vomiting political nonsense is the only things he manages to do lately.

[Hards Alumni]

The newer suburban areas around DC area are definitely high density. Four story townhouses and multistory apartment buildings are plentiful. Exactly what are proposing to make homeownership "not a foolproof investment opportunity"? And why should the owners be restrained in this? I really think all this has about as much chance of flying as Muggsy's magnificent 5 point plan.

I'm not sure how housing costs becomes reasonable for the average person, but I DO get your oft repeated outrage at the burden on younger generations. We can agree on that, right? With the current near deadlock on housing-high prices, high mortgage rates- I realize that there may be no other way out other than with government getting involved somehow, but that basic principle is too often a slippery slope to me. The massive amount of very large apartment building I see tells me that investors are expecting this country to be increasingly rental based long term. As Lawdog has pointed out, it has been heavy on luxury apartment buildings.

I hope you get your wish to live in the city. Do me a favor....lighten up on demonizing old farts like me that were able to do well in real estate when conditions were much better. Success is not a crime, even if it was achieved under easier conditions. All you are doing is heading towards an ulcer. 

I didn't know you were old and I feel like I've be honest about my questions here.  If you feel upset that I think a lot of people who are older (and especially on this board, wealthy) are out of touch I don't know what to tell you, they are.  On a daily basis, I work with old people who are not as fortunate.  A woman called my office yesterday and wanted a ride to her dentist on the other side of town.  She had recently lost her ability to drive and feels stranded at her retirement home.  Her apartment is brand new, but located on the edge of town, and as I mentioned, far from her dentist.  For her to take an Uber round trip would be around $50 (I looked for her on my app) and of course, that is too much for her so she will probably miss her appointment on Monday.  And since I know people will ask, the service our company provides was more than she required and would have been much more expensive.  Now, if her housing didn't cost more than 40% of her monthly income, she was more centrally located, or public transportation was readily available she would probably be able to make it to her appointment.  I field dozens of calls like this every week.  The point I'm trying to make here is that housing among all age groups is unaffordable.  The best way to solve this problem is adding supply, but where the supply is also matters.

You're bringing up the newer suburban areas around DC getting multistory apartments is exactly what I'm referring to.  It's poor planning.  My guess is those apartments are the typical 5-over-1 construction that goes in everywhere.  They're fine, but they need to be INSIDE the city to provide density for people who need access to services.  Stacking them in the suburbs isn't ideal... though DC is a distinct exception here since the Metro lines extend far enough away from the city center to be effective.  My cousin lives in Fairfax and can take the Metro into the downtown area, which is AMAZING.  Try doing that in Phoenix area.  Getting anywhere in that sprawling hell hole of a city takes 45 minutes by car, and if you don't have a car or a lot of money for rides you're basically screwed.

Saying you don't want rezoning of single family housing is peak, "I got mine, eff you" behavior.  I don't care who says it.  Whether they're old or young, it's misguided and short sighted.  Times change, and cities need to adapt to this change.  You got yours and your financial freedom what I assume is decades ago.  I'm on the same track, but I've been fortunate.  Good family, good friends, and financially literate parents that passed along vital information.  Not everyone has this luck or opportunity.

Your observation about more rental units is absolutely true.  But one of the things you're probably not seeing is SFH's being bought up and turned in rental units by investment firms.  Some from the US, but many are international corporations.  I'm sure you can see why this is not ideal.

I understand not wanting government to get involved from a political point of view, but a large part of what government functionally does is providing things that the market can't or won't provide to produce a functional society?  Without city planning and government intervention there would be no roads, water, sewer, EMS, education, etc.  Why not add basic housing to that responsibility?  Other countries do it with great success.  We don't do it here because it might upset people who have absolutely no skin in the game other than a slightly higher tax bill.  Personally, I already pay for a ton of government services that I don't use, BUT I do benefit from them.  These services are essential to maintaining a functional society.  I don't use EBT, I don't benefit from Ag subsidies, I don't have children in school.  BUT these things all benefit our society as a whole.  I find it very strange where we decide to draw lines in our society about what basic needs we are okay with providing or at least assisting with.  Food?  Yep, that's fine.  Water?  Yes, everything that is built has water access and is readily available.   But somehow we draw the line at shelter.  Don't you find that a bit repulsive?  American can have most of the things they need to survive (not thrive) as a human except a place to actually lay down.

Also, I'm not sure if your attempting to joke that you hope I get to live in a city by wishing I get divorced, but I don't think that's what you meant, since you're a level headed person.  I'll choose to not read it that way.   

I never once said success is a crime.  If it was, myself and most of my family and friends would be locked up.  Again, I'm doing great.  I have no problem with successful people.  What I have a problem with the absolute lack of empathy for people who are less fortunate and not successful.  Our society should be about lifting up people who are less fortunate and making the world a better place for everyone.  I hear a lot of people say they want to do the same, but they are uncomfortable with solutions that are observable and work under the guise of the solutions being 'too expensive' or 'unfair'.  Which is BS.  The US is the most wealthy country in the world.  The real problem is that we are also the most greedy, arrogant, and self absorbed nation.

And finally, ulcers are bacterial and can easily be treated with antibiotics.   

[lawdog77]

I didn't know you were old and I feel like I've be honest about my questions here.  If you feel upset that I think a lot of people who are older (and especially on this board, wealthy) are out of touch I don't know what to tell you, they are.  On a daily basis, I work with old people who are not as fortunate.  A woman called my office yesterday and wanted a ride to her dentist on the other side of town.  She had recently lost her ability to drive and feels stranded at her retirement home.  Her apartment is brand new, but located on the edge of town, and as I mentioned, far from her dentist.  For her to take an Uber round trip would be around $50 (I looked for her on my app) and of course, that is too much for her so she will probably miss her appointment on Monday.  And since I know people will ask, the service our company provides was more than she required and would have been much more expensive.  Now, if her housing didn't cost more than 40% of her monthly income, she was more centrally located, or public transportation was readily available she would probably be able to make it to her appointment.  I field dozens of calls like this every week.  The point I'm trying to make here is that housing among all age groups is unaffordable.  The best way to solve this problem is adding supply, but where the supply is also matters.

You're bringing up the newer suburban areas around DC getting multistory apartments is exactly what I'm referring to.  It's poor planning.  My guess is those apartments are the typical 5-over-1 construction that goes in everywhere.  They're fine, but they need to be INSIDE the city to provide density for people who need access to services.  Stacking them in the suburbs isn't ideal... though DC is a distinct exception here since the Metro lines extend far enough away from the city center to be effective.  My cousin lives in Fairfax and can take the Metro into the downtown area, which is AMAZING.  Try doing that in Phoenix area.  Getting anywhere in that sprawling hell hole of a city takes 45 minutes by car, and if you don't have a car or a lot of money for rides you're basically screwed.

Saying you don't want rezoning of single family housing is peak, "I got mine, eff you" behavior.  I don't care who says it.  Whether they're old or young, it's misguided and short sighted.  Times change, and cities need to adapt to this change.  You got yours and your financial freedom what I assume is decades ago.  I'm on the same track, but I've been fortunate.  Good family, good friends, and financially literate parents that passed along vital information.  Not everyone has this luck or opportunity.

Your observation about more rental units is absolutely true.  But one of the things you're probably not seeing is SFH's being bought up and turned in rental units by investment firms.  Some from the US, but many are international corporations.  I'm sure you can see why this is not ideal.

I understand not wanting government to get involved from a political point of view, but a large part of what government functionally does is providing things that the market can't or won't provide to produce a functional society?  Without city planning and government intervention there would be no roads, water, sewer, EMS, education, etc.  Why not add basic housing to that responsibility?  Other countries do it with great success.  We don't do it here because it might upset people who have absolutely no skin in the game other than a slightly higher tax bill.  Personally, I already pay for a ton of government services that I don't use, BUT I do benefit from them.  These services are essential to maintaining a functional society.  I don't use EBT, I don't benefit from Ag subsidies, I don't have children in school.  BUT these things all benefit our society as a whole.  I find it very strange where we decide to draw lines in our society about what basic needs we are okay with providing or at least assisting with.  Food?  Yep, that's fine.  Water?  Yes, everything that is built has water access and is readily available.   But somehow we draw the line at shelter.  Don't you find that a bit repulsive?  American can have most of the things they need to survive (not thrive) as a human except a place to actually lay down.

Also, I'm not sure if your attempting to joke that you hope I get to live in a city by wishing I get divorced, but I don't think that's what you meant, since you're a level headed person.  I'll choose to not read it that way.   

I never once said success is a crime.  If it was, myself and most of my family and friends would be locked up.  Again, I'm doing great.  I have no problem with successful people.  What I have a problem with the absolute lack of empathy for people who are less fortunate and not successful.  Our society should be about lifting up people who are less fortunate and making the world a better place for everyone.  I hear a lot of people say they want to do the same, but they are uncomfortable with solutions that are observable and work under the guise of the solutions being 'too expensive' or 'unfair'.  Which is BS.  The US is the most wealthy country in the world.  The real problem is that we are also the most greedy, arrogant, and self absorbed nation.

And finally, ulcers are bacterial and can easily be treated with antibiotics.   

Excellent post. I would add healthcare to the bolded as well.

[Hards Alumni]

Excellent post. I would add healthcare to the bolded as well.

You're exactly right!

[Herman Cain]

There is plenty of housing in this country. People have to be willing to live in the areas that are affordable and within their means.

All my kids were able to gain a stake in the real estate economy by their mid 20s. They worked hard , long hours saved and bought something within their means without parent subsidy. In excellent neighborhood's .

We employ thousands of folks at the lower end of economy and are very aware of what it takes for people to enjoy a life that is safe and having basic needs. We pay reasonable wages and provide excellent benefits.

People of all ages need to take personal responsibility for their own lives and living circumstances.

As to Older folks,Plenty of my friends changed their residences as they aged to accommodate  easier access to basic necessities like medical and grocery stores etc. Many moved well in advance of physical infirmities to be well positioned . Small town America offers a lot in this regard.

Government can and is absolutely there for disabled . However , I reject the notion that government needs to take care of everyone's responsibilities.

[Hards Alumni]

There is plenty of housing in this country. People have to be willing to live in the areas that are affordable and within their means.

All my kids were able to gain a stake in the real estate economy by their mid 20s. They worked hard , long hours saved and bought something within their means without parent subsidy. In excellent neighborhood's .

We employ thousands of folks at the lower end of economy and are very aware of what it takes for people to enjoy a life that is safe and having basic needs. We pay reasonable wages and provide excellent benefits.

People of all ages need to take personal responsibility for their own lives and living circumstances.

As to Older folks,Plenty of my friends changed their residences as they aged to accommodate  easier access to basic necessities like medical and grocery stores etc. Many moved well in advance of physical infirmities to be well positioned . Small town America offers a lot in this regard.

Government can and is absolutely there for disabled . However , I reject the notion that government needs to take care of everyone's responsibilities.

Thank you for so quickly proving my point.

[The Sultan]

Thank you for so quickly proving my point.

Well, he's not a real guy, so it was pretty easy for him to make up something quickly.

[TAMU, Knower of Ball]

There is plenty of housing in this country.

Theres an estimated shortage of 8 million single family homes in this country that is growing by the hundreds of thousands every year.

[The Sultan]

Theres an estimated shortage of 8 million single family homes in this country that is growing by the hundreds of thousands every year.

But his kids bought homes in excellent neighborhoods in their mid-20s. Therefore you're wrong.

[jesmu84]

But his kids bought homes in excellent neighborhoods in their mid-20s. Therefore you're wrong.

And I'm sure they had no financial advantages to make those purchases possible

[rocket surgeon]

Theres an estimated shortage of 8 million single family homes in this country that is growing by the hundreds of thousands every year.

well let's see...how many illegals have been allowed to essentially walk across our "border"?  I'll bet it's well north of 8 million, so you might have a point.  they all need a place to stay, eyn'a?

[The Sultan]

well let's see...how many illegals have been allowed to essentially walk across our "border"?  I'll bet it's well north of 8 million, so you might have a point.  they all need a place to stay, eyn'a?

So is your assertion that if they weren't here there would be adequate housing for everyone? Because there are studies that suggest the exact opposite. By free-market libertarians!

https://reason.com/volokh/2024/05/02/how-immigration-restrictions-reduce-housing-construction-and-exacerbate-shortages/

[wadesworld]

well let's see...how many illegals have been allowed to essentially walk across our "border"?  I'll bet it's well north of 8 million, so you might have a point.  they all need a place to stay, eyn'a?

Lolllllll

[forgetful]

Theres an estimated shortage of 8 million single family homes in this country that is growing by the hundreds of thousands every year.

I'll also add, that if you make the median household income in the US ($75k), and can put 20% down on a home, you cannot afford a mortgage on the median house price ($412k), because you do not make enough money to support the loan (28% of monthly gross income: $1750 per month).

Housing is not affordable, because people are not competing against other like-minded people for buying a home, they are competing against corporate entities, investment companies, and other high net-worth individuals, who recognize that housing is a need, and they can take advantage of that to profit, while excluding families from the housing market.

[Not all scoop users are created equal apparently]

well let's see...how many illegals have been allowed to essentially walk across our "border"?  I'll bet it's well north of 8 million, so you might have a point.  they all need a place to stay, eyn'a?

[jficke13]

well let's see...how many illegals have been allowed to essentially walk across our "border"?  I'll bet it's well north of 8 million, so you might have a point.  they all need a place to stay, eyn'a?

Such a weird little guy.