Posted on 04/09/2023 12:18:26 PM PDT by millenial4freedom
Twenty-somethings who have been frozen out of buying a home are eagerly anticipating a potential housing crash in 2023 in the hopes that they’ll finally be able to afford a place of their own. A number of economists have noted that the combination of high inflation, rising interest rates to fight that inflation, the continued effects of Russia’s invasion of Ukraine and continuing pandemic-related supply chain bottlenecks are likely to bring about a recession sometime next year. If that happens, it could be enough to finally burst the decade-long housing bubble that sent home prices to record levels. And that’s exactly what Gen Zers are rooting for.
(Excerpt) Read more at finance.yahoo.com ...
As housing prices decline the cost of mortgages rises. The monthly cost of a mortgage doesn’t actually change so much. The rise in interest rate is a major part of the decline in price.
They are not wrong. Housing prices have far outpaced their value.
Cannot really blame them for that. But one might want to blame them for a good many of them having the math and economics (il)literacy of a Democrat.
And as mortgage interests goes up the housing prices must fall.
Be careful what you wish for. We are in the early stages of an economic bubble popping that will make 2008 look like a picnic. Those Millenials won’t have jobs or credit.
So if you're a home buyer, how do you play it? The best way is to buy when housing prices are down, even if it means a relatively high mortgage rate. Get a 30 year mortgage.
Then years later when rates go back down get a refinance. And you'll have the best of both worlds: both a low mortgage balance and a low rate. But you can't have both if you decide to buy while prices are high. You can't refinance away a high balance.
>Those Millenials won’t have jobs or credit.
Nope. Almost no one will except for the billionaires that will get taxpayer payoffs.
If I were looking for a house to buy, I’d hope for the same thing. Here in the PNW though, that’s not going to happen. There is a huge shortage of single family homes. Construction companies keep building apartments, but young, prosperous families want to live in and own single family homes. The shortage makes the value of existing homes only go up.
Why do they want homes? Having a home takes work, repairs, maintenance, money etc.
GenZ, who has caused all that..?
The lack of supply is definitely an issue. No one wants to sell because they’re in a good situation if they bought more than 3 years ago. Why would you trade prices and rates from five years ago or more for buying now and getting hosed. Those who wanted to make a move have done it already.
1) I hope for a future in which I own nothing, and I am happy.
2) These dang house prices are ridiculous! I can’t afford anything! I’m so unhappy!
3) Cognitive dissonance is the only way I know to view the world.
That’s how I did it. I also spent the first five years of my career in a field service engineering job starting up industrial and utility power plants. I was on an expense account with meals and hotel/motel paid for and and had a company car, so I could bank about 80% of my paycheck. I missed the stability of having an apartment and friends, but it was one hell of an adventure traveling all the western states for three years and nine foreign countries for two years.
My 26 year old son, a well compensated astronautical engineer was just talking about this a few minutes ago. There are no houses anywhere near him below $400k. He’s not interested in spending that much or more.
Great woke leading photo at the source.
Laughing twenty-somethings at a bistro paying for overpriced coffee. Cute white, blonde chick with a black boyfriend (of course) accompanied by friends, all wearing surgical masks.
That house in Arlington is “affordable” for DINKS each taking home low 6 six figures. There are lots of those in that area - say a couple of graduate level bio industry types.
Globalized safe havens like the US, for now adds to speculation. Canada housing is even worse in multiple areas because of the flight of wealth from China, etc to there.
>>they want a housing crash, but will they get one? Honestly, I’m doubtful at this point.<<
A “crash” will be a drop of a point or 2. And industrial investors will move in well ahead of individual home buyers.
Mostly because the places where the homes are needed the worst is where it is most expensive to build.
So supply stays limited which means no meaningful crash.
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