So that housing data almost entirely bad news right? Market showing extreme tightening even without the impact of the latest 1.5% move higher in 30yr fixed but price inflation continuing to run high. We need to see home prices start to stagnate to show rates are actually impacting the market but seems like instead we are just getting a mega squeeze on consumers.
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Sanrith Descartes
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"Draconian rate hikes". Apparently Kathie is incapable of running a fund outside of a zero interest rate environment.
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Sanrith Descartes
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I think as in years previous, you will see the housing prices begin to moderate in sporadic places (with the extreme prices) before spreading to the rest of the country.
I think the tightening to the point of seizing up is a really interesting aspect. Assuming everyone with a fixed mortgage dated 12/31/2021 and prior has a 3.5% or less rate that puts a huge premium on moving. I think that will force people to stay in their current location in All but extreme circumstances so housing stock will continue to dry up as we are currently seeing causing upward price pressure counteracting the intended effect of the rate increases. Really a bad outcome for labor mobility too.
all of it adds up to a huge squeeze on disposable income though.
Sanrith Descartes
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Mist
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The fed is literally explicitly trying to cause a recession, why does the messaging even matter?
The WH should get out ahead of it and state "the fed is trying to cause a shallow recession to bring down inflation."
I hate politics.
Sanrith Descartes
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This is why I dont equate the current housing issue to 07/08. Its not the same. The majority of people who bought in the last 3 years got rates that were insanely low. Unless unemployment skyrockets, I dont see a huge wave of defaults. I do see higher rates slowing down further purchases and eventually a drop in housing prices as new inventory continues to get completed and buyers are being priced out.
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Falstaff
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Sanrith Descartes
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Mist
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There will never be enough new inventory. We've got a shortage of like 20 million houses.
Sanrith Descartes
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As rates stay high and the lenders continue to actually write conforming/high quality loans, the plebes will stay in apartments with their 500 credit scores where they below. Unless government once again steps in and forces banks to write loans to the dregs this will cut into that shortage naturally.
OU Ariakas
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There is an extreme shortage of "starter homes" because a few decade of low interest rates trained people that they could afford a ton of house for the same payment. A young professional or newly married couple in their 20s have been trained to start at 2000+ square ft in a master planned community and those are going at 350k+ even in smaller markets. There is real need for 3 bed 1- 1 1/2 bath houses at 1000-1200 sq ft that are new and good for the new expectation.
Sanrith Descartes
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I expect a shift back to upscale townhouses as well in the 2/2 and 3/2 variety sub 2k sq feet.
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Gravel
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This is true. Since it's just my wife and I we wanted something sub-1500 sqft (our last house was 2100, and we just left rooms closed all the time), and it was damn near impossible to find stuff that small.
And sadly, we basically ended up breaking even (minus equity). Sold our CA house for $315k and bought one in FL that was 650 sqft smaller for $292k.
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Sanrith Descartes
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Added a little bit of META at $156.25. I am not filling this position out in 0.25 tranches but in very small bites. I have about 3/4 of a full position at this point.
Rod-138
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The endless production of shitty DR Horton hoods will never be able to keep up with The demand of poor white folks and immigrant Latinos buying their first home.
The homes have shit resale value and are the equivalent to projects/public housing in relation to the next tier of homeowners wanting them in the same area code.
No offense if you own one, it was my first house too!
The good thing about these national building chains is they source their work locally, making many glass cutters, granite slinging, cement laying mother fuckers rich. The bad thing is all that shit costs so much bc those guys are getting that contract money and been rolling with the 3% mortgages.
if 6% slows that down, then maybe you see more reasonable prices in the Home Depot sector, but you gotta remember for every family that has less kids, the migrants keep coming and they like to live in houses too!
every race (except one) will do whatever they can not to live / raise their kids around the hood. The cycle of life.
The homes have shit resale value and are the equivalent to projects/public housing in relation to the next tier of homeowners wanting them in the same area code.
No offense if you own one, it was my first house too!
The good thing about these national building chains is they source their work locally, making many glass cutters, granite slinging, cement laying mother fuckers rich. The bad thing is all that shit costs so much bc those guys are getting that contract money and been rolling with the 3% mortgages.
if 6% slows that down, then maybe you see more reasonable prices in the Home Depot sector, but you gotta remember for every family that has less kids, the migrants keep coming and they like to live in houses too!
every race (except one) will do whatever they can not to live / raise their kids around the hood. The cycle of life.
Tmac
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But, wasn't there a report just last week saying that auto loans were starting to see more defaults?
Sanrith Descartes
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Yes. That being said I dont consider conforming mortgages and car loans to be in the same boat. Anyone can get a car loan. A conforming mortgage is another animal.
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