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Cheflife15

Housing market

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The wifey and I have a baby coming in the next few months so we've been browsing the housing market again. Seems like everything I read gives me a different opinion of what will be happening. Any educated guesses? I know rates won't drop back to 2 percent but will prices actually come down? I saw a 385k house today that is smaller than my 1 bedroom apartment. No idea what the right move Is.. 

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47 minutes ago, Displaced Texan said:

Interest rates will eat you alive…

Yup.  I have to be honest.  I don't know how the average person is buying right now. My wife and I are blessed to have jobs that pay wayyyy over any average income in this state and still can't stomach pain 2500/ monthly plus for a townhome with over 20% down. 

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My wife an I bought our first tiny Cape Cod house in 1979 and had the pleasure of 9.5% interest rates. Four days after we closed on the mortgage Carter gave his 'oil is war' speech, and there was no mortgage money to be had anywhere. At any rate. We were glad we got in the door.

Just a cautionary tale for those of you who think you've seen the worst.

You haven't.

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2 hours ago, Cheflife15 said:

The wifey and I have a baby coming in the next few months so we've been browsing the housing market again. Seems like everything I read gives me a different opinion of what will be happening. Any educated guesses? I know rates won't drop back to 2 percent but will prices actually come down? I saw a 385k house today that is smaller than my 1 bedroom apartment. No idea what the right move Is.. 

No info on the mortgage question, But congrats on the baby coming.

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2 hours ago, Cheflife15 said:

Yup.  I have to be honest.  I don't know how the average person is buying right now. My wife and I are blessed to have jobs that pay wayyyy over any average income in this state and still can't stomach pain 2500/ monthly plus for a townhome with over 20% down. 

I thank my lucky stars that we own our houses outright (except for the legalized theft, AKA property taxes). 
 

I don’t know how we would carry a mortgage these days. 

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IMHO I would say wait.  Prices aren't rising like they were.  But they haven't fallen as one would expect with the quick rise in mortgage rates over last six months or so.

This would lead me to think that home prices HAVE to come down soon.  Especially since the Fed will probably raise rates at least a few more times between now and the end of summer.

Once fall hits home sales should slow even further.  Families like to be moved in before the start of a new school year.

Congrats on the firthcoming baby!  The great thing about newborns is they don't take up a lot of space! 

Time is on your side here.  I would wait until prices come down somewhat.  You may pay a little more due to a higher rate now but you can always refinance in a few years once rates go down.  Once you buy there is no renegotiating the price you paid.

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I'm in Burlington county and prices are way overvalued my son and daughter-in-law can't find a shed for under 300K . Supply and demand issue . People who want to move up down or whatever don't want to sell their house and buy something else at a higher interest rate. Also young people don't  have any recollection of what a high rate really is they have been living in a phony economy and interest rates  for the last 10 + years. Look at what mortgage rates have been for the last 50 years 6% 7% isn’t an eaten alive rate. Go back to 1981. 16% 17% and get eaten alive. I'm not sticking up for the fed or bank or any other criminal cartel insurance companies included but I wish my son could buy something he could afford . 

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“Back in my day it was…” Blah blah blah. 
Yes, interest rates were higher 40 years ago.  But the cost of the house has skyrocketed too.  Paying 16% on a $250k SFH in 1985 is better than 6% on $650k for the same house today.  

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Just now, voyager9 said:

“Back in my day it was…” Blah blah blah. 
Yes, interest rates were higher 40 years ago.  But the cost of the house has skyrocketed too.  Paying 16% on a $250k SFH in 1985 is better than 6% on $650k for the same house today.  

This. I don't get how people are missing this lol. There's a reason my parents were able to buy a home while working 40 hour weeks and making far less than average. 

The main reason I started this thread was for educated insight about future predictions. 

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I am 26 years old and I still live in my parents house. I am focused on paying off my student loans which I paided over half of what I owe and only have two loans left. But once I pay off my loans and put more into savings, I don't know how I will find my own home in this state if things stay the same or get worse with the market. Realistically, I am going to live at home till I get married so at least it will be two incomes to contribute.

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14 minutes ago, always_an_eagle said:

I am 26 years old and I still live in my parents house. I am focused on paying off my student loans which I paided over half of what I owe and only have two loans left. But once I pay off my loans and put more into savings, I don't know how I will find my own home in this state if things stay the same or get worse with the market. Realistically, I am going to live at home till I get married so at least it will be two incomes to contribute.

That's the crazy thing. I'm blessed enough to be in good financial shape (i was a chef so i didnt have too many student loans) but the simple thought of even buying anything any time soon seems crazy. 2600/ month for a 350000 townhome with over 25 percent down just doesn't seem worth it. My wife's family is the only thing keeping me here.

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21 hours ago, 45Doll said:

My wife an I bought our first tiny Cape Cod house in 1979 and had the pleasure of 9.5% interest rates. Four days after we closed on the mortgage Carter gave his 'oil is war' speech, and there was no mortgage money to be had anywhere. At any rate. We were glad we got in the door.

Just a cautionary tale for those of you who think you've seen the worst.

You haven't.

No comparison between then and now.

Housing prices, property taxes are far more expensive today and If you couldn't afford to buy back then rents were reasonable.

Today residential real estate is a witches brew of high prices," high" interest rates, low inventory and massive legal/illegal immigration driving up demand for housing. Plus all the FED agencies distorting the market; HUD, Fannie/Freddie Mac, etc.

 

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On 4/18/2023 at 6:46 PM, Cheflife15 said:

 Any educated guesses? I know rates won't drop back to 2 percent but will prices actually come down? I saw a 385k house today that is smaller than my 1 bedroom apartment. No idea what the right move Is.. 

At this point might as well just wait and see what happens. 

The ultra low interest rate ship has sailed, prices are still at bubble valuations and inventory is low because people can't or won't sell and lose their 30 year 3% mortgages. 

https://www.oftwominds.com/blogapr23/housing-rates4-23.html

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49 minutes ago, Bomber said:

No comparison between then and now.

Of course not. The two main points of my post were:

  • Current mortgage interest rates around 6.5% today seem bad. They can (and probably will) get a lot worse.
  • A Black Swan event can change the entire housing (or banking!) outlook in just a few days.

As far as the prices of houses... our $55,000 Cape Cod starter house in 1979, being exactly the same house, would cost $228,663.64 in today's dollars due to the DEPRECIATION in the value of the U.S. dollar.

People are sleepwalking as the value of everything they own denominated in U.S. dollars goes into the tank.

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1 hour ago, silverado427 said:

$#!*%!!  FJB!!!

We plan to buy the retirement home later this year, and we’ve gotta directly subsidize the high-default borrowers?    

Sonofabitch

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9 hours ago, silverado427 said:

I'm glad I did the right thing in my 20s by paying things off on time so I can help pay for those that "live love laugh."

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