US Home Prices Set Record New High

Yes, much better indicator than the PPI.

Labor shortage is part of the problem but that is mainly in new home construction. You also have many of the larger companies not stretching themselves in a market of high interest rates so that further constricts supply.

Existing homes are getting a premium because of availability and location.

 

That link did not say the housing shortage was from labor shortages. It also pointed out that some places do not have a housing shortage.

 

Wealth transferring from who to who?

 

My previous links show the labor shortage in construction. 500k workers needed according to the links. And not all areas are experiencing shortages, but as a whole, the country is down 3.2 million dwellings.

It's not all labor shortage fault. But it's VA big contributor. And one that could be fixed with immigration reform. Go the other way and deport many of these workers, and it only makes the labor shortage issue worse. And supply will be even tighter.

 

Id argue that it’s the greatest non-transfer of wealth in history as Boomers stay in their homes, lobby against the construction of any density near where they live and watch their 401k balances explode with the equities markets at or near all time highs. And are now happily earning 5.5% on their cash.

 

Wanna stabilize home prices? Build these 7 million homes so the residential market returns to some sort of equilibrium.

Otherwise land locked places like Dallas, Atlanta, Nashville, Charlotte, etc will continue to see gateway like price increases and young prospective homeowners stay locked out of the market. .

U.S. Housing Gap Hits 7.2 Million After More than a Decade of Underbuilding - BAM

 

Middle class to rich.

 

How so? Explain it to us.

 

Not to pick nits here, but it’s hard to transfer what you never had.

I think it’s more that younger people may not have the same initial opportunity to accumulate wealth as it is that they’ve transferred it.

And that’s wholly independent of having to choose either Biden or Trump as it’s been happening for almost 20 years.

 

Yeah it's a supply issue. The the active listing count is about half of what it was 8 years ago. There just aren't enough houses for sale, due to boomers staying in their houses and due to high interest rates. I actually want to sell my house, but to buy a new house and take on a new mortgage, my rate would go from 2.6% to about 7%.

Here's the housing inventory graph:
Housing Inventory: Active Listing Count in the United States

 

From who to whom.

Lol! I dun da river dance on river him own sef!

 

Basically, if a Democrat gets elected, you will complain about house prices increasing/decreasing/staying the same. If a Republican gets elected, you will talk about how great it is that house prices are increasing/decreasing/staying the same.

 

Interest rates will never return to 2-3% in your lifetime unless we have a global depression or WW3. The ideal rate would be 5-6%, but I dont see that happening until we inflate past our debt, which will likely be after 2/3 of Boomers take a dirt nap. Supply will naturally take care of itself as their homes will likely go to estate sales or passed down to their Millennial children.

 

The average rate on a 30 year mortgage in the US over the past 55 years is around 8% or about 100 basis points higher than it is today. Current rates are comparatively high to rates the past 5-10 years but are actually historically better than the long term average.

As I said upthread we have a supply problem due to under building that is compounded by Boomers’ unwillingness to sell for a plethora of reasons.

Mortgage Rates Chart | Historical and Current Rate Trends

 

The rates are not on average near 8%, since the data in the link you provided is based on Freddie Macs data from 1971-2024. The early 80s 18% rate skews the numbers somewhat, but if you go even further back, right after WW2, the rates were near 4% until the late 60s they were near 6%.

Regardless, the rate hikes have stopped because the fed cant increase them without significant issues with Capital, especially for the tech sector. They wont go any higher without significant pain. A healthy rate is 5-6% for the housing market. I dont think we will see that for awhile due to our debt.

I somewhat disagree with the supply issue, the problem is more complex. There are alot of folks locked into their 2-3% rate with a lower principle. If you were lucky to get that, great, if you want to live there until you die. Otherwise, at some point you will have to dip into the pool of pain like everyone else, because the prices and rates wont budge regardless of how many homes they build. Whatever supply pressure there is on the price will be negated by inflation.

 

Jimmy was a few years too early;

 

While accurate, that is a pretty skewed sample with ridiculous highs of the 80’s and ridiculous lows of the last 15 years. Neither of those periods were in any sort of market equilibrium state. Both were forced by Fed policies at the time. Open that aperture up to post WWII and you will get a better average.

 

I agree on the 5-6%.

I also understand in principle your comment about inflating past the debt but that won’t have anything to with dirt naps unless those naps are for the shithead politicians that have created this and worse still, the people that don’t vote them out.