US Home Prices Set Record New High

No, but I'm talking about the trend here...

 

That is not a significant slide, nor is it regression to the mean.

 

Well, didn’t say it was a plunge, I said it’s been moving down and sideways for me since 2022… which is true and what that graph shows. It’s definitely been a two year stall in the wealth building. Looks like about a 10% slide over 2022 - 2023 which is the same as I’m seeing. I guess whether or not that is significant is a matter of opinion.

I bet if you were to plot a long term moving average through that chart you’d see what I mean by reversion to the mean.

 

Exactly how much wealth is one expected to gain on their house in that short of a time period? It’s already been too much. There simply isn’t any meat left on the bone. Housing should have gradual appreciation so that wages keep up with it. This isn’t the stock market.

 

They were within 2% of what we got when we sold last year. Off by about that much when we bought our new house as well.

 

Better than -10% would be nice …

 

Why does it matter? If you don’t sell it doesn’t matter. If you sell at higher likely you have to have somewhere to live and you will buy at higher. Unless you are getting a reverse mortgage or headed to the old folks home it doesn’t really matter.

 

I have a rental property, and like everyone, I like to see positive growth in my investment.

 

No relief or crash in sight:

The housing market is ‘stuck’ until at least 2026, Bank of America warns | CNN Business

New YorkCNN —
Help may not be on the way for first-time homebuyers frustrated by high mortgage rates and even higher home prices.

Economists at Bank of America warned this week that the US housing market is “stuck and we are not convinced it will become unstuck” until 2026 — or later.

The bank said home prices will stay high and go even higher. The housing shortage will persist. And mortgage rates may not fall much — even if the Federal Reserve finally delivers long-delayed interest rate cuts.

 

Supply and demand. Not enough homes for sale, the people who can afford to overpay get a home, everyone else has to rent. Exactly as envisioned by the private equity firms when they went all in on SFH rentals. They can sell for a quick 50% profit, or they can hold and make obscene rent hikes and get even more money. Either way, we lose.

 

When people have non-liquid “paper wealth” - they tend to be more confident in their overall financial position and spend more of their liquid cash (some even take out leverage against their assets in the form of HELOC’s). This additional spending is a boost to the overall economy. It’s not rational, and we know what happens when those bubbles burst, but there’s no denying the phenomenon.

 

We will have to see how long inflation can be maintained in the absence of $2.1T in excess wealth no longer available to be spent?




Pandemic Savings Are Gone: What’s Next for U.S. Consumers? - San Francisco Fed

 

Tap their home equity?

Borrowers Gained $1.5 Trillion in Home Equity in Q1 2024 (themortgagereports.com)

Americans are sitting on a record amount of home equity, at $11 trillion - MarketWatch

 

Can't tap that for ever either. It may not be tomorrow or the next day, but unlike the wealthy or the governments, the average person is going to have their bill come due and the spending sprees on things formerly considered "needs" will fall to unaffordable "wants" and come to an end. Inflation will then act accordingly.

 

Meh. Purchasing power is the same as it was in 2019. We spend everything we earn. I would expect us to get back on the slow growth of Trump 2% ish. Right?

 

It's why Carnival cruise lines and Walmart are up. People are already pinching pennies.

 

Do we get to do a money angel for each home we own? Looks like fun, and not as cold as snow angels. But seriously, I am glad that I made my investments before the pandemic. In fact, real estate has been part of my long term plan ever since I bought a 3/2 1800SF home on .6ac in downtown Brooksville in 1990 for $45,700. Had been renting for a few years until then (paying other folks mortgages and taxes for them). Shortly thereafter I lost more than I paid for that house in my 401K in the crash. That solidified my intent to keep RE in my portfolio.

 

True. And exacerbated by the fact that so many young folks have no patience for delayed gratification. I am having a tough time getting my boys to understand budgeting and planning for the future.

 

Agree. Plead nolo contendere.