Homebuyers need to make about $50k more than they did pre-pandemic | Hacker News Reader

Homebuyers need to make about $50k more than they did pre-pandemic

fortune.com

13 pointsbelter12 comments

I'm as capitalist as they come, but I don't see how it's tenable that we created a system in which if you were in a good position to buy in 2020, then you got a huge windfall, but if you weren't, then you're probably locked out of the housing market for at least a decade -- especially since this outcome is largely the result of government intervention.

I guess the obvious counter is that sticker prices would be even higher today, anyway, if not for higher interest rates, so it all comes out in the wash.

How would an ideal housing market function, in your view?

I'd dramatically increase by-right permitting while at the same time assuring people that whatever gets created will be market-rate. The government shouldn't be in the social engineering business, one way or the other. In my perfect world there'd be a Supreme Court case overturning Euclid such that it's impossible for government to block most new housing, but also impossible for them to demand affordable housing subsidies, etc.

We've been under-building for decades. Let's give not doing that a shot and then we can talk about other approaches if that fails.

Could this all be summarized as a typical Yes-In-My-Backyard (YIMBY) philosophy?

- Remove (or greatly reduce) zoning restrictions to permit things like ADUs or re-development of single-family plats

- Enforce rent-control via legal means (which is what your guaranteed market-rate solution sounds like - although I don't understand how this solution would work with your stipulation that it be "impossible for the [government] to demand affordable housing subsidies")

Or is there something different/more that you're envisioning?

It’s a pretty typical YIMBY prescription. I’m just careful to emphasize the market-rate nature of it, since some YIMBYs are sensitive to attacks from the left and quick to assure people that they also support public housing, etc.

My view is that it’s pretty silly to talk about other solutions so long as it’s literally illegal to build housing. We should just try making it legal for a couple decades and then see where we are. This is not a problem that demands creative approaches.

https://archive.is/j4AZG

https://web.archive.org/web/20240302235627/https://fortune.c...

The current spike is mostly because of the interest rates. They will either come down or the house prices will eventually start going down. For now everyone just expects rates to go down soon, so nobody sells or buys houses.

There is a double whammy. Typically, someone sells their home to buy a different home that is better suited for them. Right now, there is a massive disincentive tp sell (as the seller would lose their sweet low rate 30 year). This depresses supply even more. In Canada, this isn't even a big factor (we don't have 30 year fixed rates) but shelter inflation is one of the biggest elements of inflation. I am surprised this is not causing inflationary pressure in the US.

In canada we have this crazy situation where there are homeowners that have the strata fees (homeowner association) that are e higher or close to their mortgage, that's because they bought 10 years ago, the home prices quadrupled, so their mortgage is extremely low, let's say for 200k instead of 800. So 1000$ payment for the home and 700$ for the strata fee. The strata fee for me it's negligible compared to the mortgage.

Construction has also been down, immigration has been up. Who would have thought these things have consequences.

historical context:

https://www.longtermtrends.net/home-price-median-annual-inco...

Also insightful: https://ipropertymanagement.com/research/housing-starts

Has the Biden administration made any progress at all into fixing this? Seems like there was plenty of advance warning so I would hope so, but maybe they have other priorities.

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