And yes, some more inventory would help. That said, as the population ages, who is going to buy all the McMansions? Price not only need to adjust to interest rate but demographics.
What life event would cause someone who currently owns a home at a <3% rate to sell?
It’s a once in a generation type of rate. You’d have to be a complete fool or have some kind of crazy life circumstance to sell.
Over 30% of employers in the US exclusively hire remote employees. Post-pandemic it’s hard for me to imagine someone in the home ownership socioeconomic class giving up that kind of leverage advantage to move for a job.
[X] Doubt
Yeah, you’re going to pay some more interest if you get a new mortgage, but don’t you just adjust your monthly finances and eat it? As long as you can hit your long-term financial goals, the “once in a generation” rate doesn’t seem so important.
Hopefully only sane mortgage products continue to be used so it doesn’t end up like automobile loans. Aren’t most car loans 72 months now? That’s what is required to get the monthly note affordable for most buyers.
Every homeowner knows this and if they’ve ever had the incling to move int rh last year theyve done the math and realize it simply doesn’t make sense. People won’t move right now unless life forces them to.
> they’ll just pay whatever they can maximally afford per month for a house that most closely matches what they need for their present life
Right, and if you ditch a 3% mortgage in favor of a 6% mortgage your monthly spend goes way less far. You're looking at a loan payment that increases by about 40%.
The McMansions will be unlivable by that point. They weren't built to last.
What are you talking about?
All buildings are depreciating assets. This was true before the idea of the McMansion existed.
It’s the land that is scarce and is the appreciating asset.
The truth of the matter is that any house that is around long enough gets repaired over time.
May be appreciating. Depends on where it is. A lot of land in metro Detroit hasn't appreciated in certain timeframes. Nor on some barrier islands.
In the bathrooms they also picked the cheapest bathroom fixtures imaginable. They looked decent at first, but it was also quickly corroded and the lights literally fell apart. We have one of those fancy three head shower setups and we discovered that the main shower head corroded and broke off inside the wall when our youngest innocently asked us why it was raining in the dining room. We also have water hammering issues when running the washing machine because they didn’t bother to put in a flow arrester.
On the exterior, our driveway and sidewalks were all laid with insufficiently packed base material. These gaps and buckles are reaching the point where we have to fix them or risk liability when the mailman trips over them. Our gutters were incorrectly installed and they have been slowly leaking down one corner of our house and we’ve found water damage in the basement due to this. The foundation in the garage also has done some settling because the stone work at the base has large cracks developed in it. In addition, our windows and doors are really just polite suggestions for the wind to stay outside because they picked such cheap options. You can literally feel a breeze through most of our windows.
I’m sure there were other minor things which I’m not thinking of, but the quality between our first house which cost 1/3rd of this house is night and day. The only thing the inspector found was the the cracks in the garage brick walls but those are a facade and the inspector told us it was cosmetic damage and the sidewalk was easily fixable via mud jacking. Those were issues we were willing to take on. There’s no way we would have bought the house if we’d known that there were so many issues. As we’ve been trying to address the issues we’ve been finding, we always seem to uncover another problem that needs to be fixed. Feels like a race we are losing.
I think a major issue is just water being the root of all evil for house problems and the bigger your house is, the more recent it was built, the more corners were cut. It's all compounded by contractors wanting to overcharge you if you're in an expensive neighborhood and not give you the time of day otherwise.
It's like you could just say, "let's just get rid of all this extra furniture and stuff and live within our means. The kids don't need that many toys." But then the argument falls on deaf ears and you wind up with the neverending complexities of redecorating, contractors, insurance claims and stress.
Given how sloppy new home construction has become, perhaps buyers would trade less home for say 10 years of peace of mind? I realize long term guarantees are tough. Obviously. Nonetheless, the current shit-show seems to be begging for alternatives.
The lower the price the better. Regardless how it'll cost you later, affect long term value, etc.
If anything it makes the argument to not buy new. Instead go for something in the 10 to 15 yr range that's had the structural bugs worked out but might need updated appliances.
Also, Levittown construction and materials are not comparable in any meaningful way to McMansions.
Sure. No one wants to live in those areas where the houses are being abandoned, or government regulation makes bringing them up to code financially non-viable.
The US population is projected to continue growing throughout most of the 21st century.
If you're waiting for people to die so you can afford real estate, you'll be waiting a long time.