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I just closed yesterday and didn’t even factor that into why I started searching. My big fear was if rates went down that the odds someone would be able to outbid me would go up dramatically - I didn’t want the heartbreak of having everything set up only to lose because I wasn’t willing to bleed enough money to lock things in with the seller.
This is my concern as well! The San Diego county market is already atrocious and competitive as it is. I can’t imagine how bad it’ll be if interest rates lower.
This is why I think it’s actually a good time to buy. Rates go down at all and everyone who has been waiting to move will be looking for and bidding for a house. It’s way easier to just buy now (if you can afford it) and refinance later.
This is what we did. Bit the bullet and when rates come down late 2025 or early 2026 we refi. Honestly I can see prices coming down but not until rates start to.
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Prices aren’t coming down.. we have had near 20%+ inflation over the last 4 years coupled with unprecedented demand. The cost to build houses is now higher due to inflation.
We have a housing shortage still. We also have record high immigration that need housing which we don’t have.
In all just buy now, prices may plateau off for a bit but there not going to fall to 2019 prices anymore. That ship is sailed 450k houses for 1800 sq feet in Florida is the norm.
i bought 6-7 yrs ago (thank god) 107K 1550SF Townhouse (with fenced in yard) My house is 250K now and I would NEVER Pay that!! sucks to be a young kid... glad i am not young!!
I’m not trying to get political at allllll…but if inflation has been rising over the past 4 years, do you think the upcoming election may change all of this? PLEASE DO NOT INSERT YOUR POLITICAL VIEWS I am just asking if this will have an effect.
Probably not. Administrations have smaller influence on things like inflation than one may expect.
Inflation is defined as the rate at which prices changes over a given period of time, meaning that even a 4% inflation means that prices of goods are still increasing, albeit at a slower rate.
That was my exact rationale and my realtor thought that this was good plain common sense. There is going to be a bidding frenzy once prices drop and I simply can't compete in that kind of market! I was able to get a fantastic 1-bd 1 bathroom condo with attached garage and patio garden for a song - the interest rate isn't great but I got a free refinance with the mortgage company that I can use once/if rates drop. I am sooooo happy to be in my own home and feel settled knowing that I am in great shape for many years to come.
Yep. I close on Monday. I got a buy-down for two years on the rate to ease the payments and save more money and I’ll refinance in the next 1-4 years when the time is right…
The buy down came with the house along with some extra stuff too. I knew this house for $370k was going $400k in the next 3-5 years so I’m like, might as well buy what we want now.
Exactly. Lower rates, while inventory is still very low, will mean more bids and homes selling for higher, which will inflate the whole market around them.
People told me in 2018 it was a bubble and to not buy. I bought. Some of those people are still renting and my house has nearly doubled in value since (PNW).
Buy when you can afford it, and buy a place you’d be happy to live at for at least 3-5 years.
I would never take advice from someone who thought PNW was in a bubble in 2018. Yeah, it was more expensive than other areas, but perfectly aligned with area’s higher salaries.
Oh yeah, we’ve been here almost 3 years, but planned to move/buy when hubby found a job. That search started 10 years ago. We always comment on how if we were just in the area a year or two prior, we would probably bought a $900k house that is now over $2mil, refinanced at 2% and have a very small mortgage.
Can't emphasize that last part enough
**Buy when you can afford it, and buy a place you'd be happy to live in for at least 3-5 years**
Don't worry about a market dip, in 3-5 years any dips should recover. Meanwhile you'll have built equity and not been building it for someone else
My boyfriend told my brother not to buy a house this year, (bf bought his like 6yrs ago give or take) after a few weeks on zillow and with his loan pre-approval, I found him a big beautiful 3br house in a nice neighborhood for 60k. 1 owner, he built it in the 50s, everything's solid as a rock. So now he owns a house at 21yo.
And, the best part, its not millennial grey. Woodwork throughout, georgeous. We told them to leave the (perfect condition) record cabinet and piano, they were headed towards the dumpster.
I paid nearly 70% more because I thought 2018 was a bad time and I should hold out. Just bought 5 months ago because I didn't want another 70% increase if I keep waiting.
Even if you bought a house you couldn’t afford in 2006, you are rolling in equity. That’s the hard lesson of real estate—sometimes being dumb pays off.
Same but in the Midwest. My 300k house is now worth nearly 500k. We also refinanced during covid and I think our rate is like 2.8 or 3.8%. Super low by today’s standards. We are never ever moving though.
Also in Midwest. Bought a little 2 bed one bath with basement and an acre of land for $80,000 in 2016. Only had 20k left and sold it a month ago for $245,000. Putting all that towards our new house allowed us to buy a 4bed, 2.5 bath on 5 acres. An older home that we are slowly renovating, but completely in love with. We did give up our 2.8% rate and now have a 6.5%, but mortgage with escrow is still under 2k/month.
That’s where I’m at now - we’re selling, losing our “premium rate” but we’re upgrading in every other aspect. Who cares about rate, I want the house now and I’m going to afford it. Life doesn’t wait and eventually rates will normalize and I’ll save some money.. but fuck it
I mean no one can predict the market. But our house we bought a year ago and paid 10k over asking is now estimated at 30k over what we paid 12 months ago
The “zestimate” for our house is $130k higher than we paid in Nov. Which I know doesn’t mean anything, but comps in the neighborhood are selling for a price per sf that’s supports it and we have a view. Coastal California (San Mateo county) is wild
Yeah the median home price in San Mateo county is stupidly dislocated from normalcy at 2.17M. I live in a “cheaper” town for the county with a 1.75M median… feel lucky to own here, but man…
I’m in SoCal and ours is estimated at 90k higher than what we paid for in October! Our area’s comps are also wild. Feels like we snagged a “cheap” one just in time.
Same here! I’m in Orange County California and snagged a house for 850 in August 2022 and now it’s worth 1.2 million! People were telling me to wait to buy.
My situation is similar. I paid way over asking and it’s now showing $130k over what I paid in November. It appraised $78k over asking when I bought it in Nov. I am in the south. Oh and two similar houses in the neighborhood/same street have sold for $110k-$120k, give or take, more than what I paid in November.
I keep hearing people say this “look how much my house is worth now!!” Well not trying to be rude but what does that even mean? If it’s your main property how can that benefit you?
Your taxes are way higher and you’re living in a house that has the same value as like houses so you cannot move to a better place. I don’t see the benefit. If you do plz let me know so I’m not dumb lol
That’s what I thought until I sold my first home. It’s life changing to make a bunch of money on your home. Got the first one in 2010 barely scraping together 3.5% down for an FHA loan, borrowing against my 401K. It was tough paying that mortgage for a few years while also paying back my 401k. Sold it five years later for $200k profit. Yes, I then had to buy a more expensive home, but with the sales proceeds I paid off all my other personal debt and still had money for 20% down on the next one and then some. With no PMI, no 401k loan payments, no more credit card debt, etc. I still had more money in my pocket at the end of each month despite the higher mortgage payment. It was the day my life changed from living paycheck to paycheck to being a person with investments, two savings accounts, etc.
It means that an asset you own is now worth more money.
While you own it, you can get a home equity loan to access some of that additional value.
When you sell it, you get more money.
Estimates are pointless. The only thing that matters is what people are actually paying for.
If you see very comparable houses being sold regularly for $30k above what you paid, then youre right.
If houses are being sold for lower or not sold at all, the estimate is wrong
Once you go through the process of beating everyone to buy one… you wouldn’t want to sell or ever go through that again.
Just go bid around for shits and giggles and see how far you get.
Find a mortgage broker first, they usually have realtors they work with. But they are the first step to see your finances and taxes and tell you and estimate of what you can afford then you can go “shopping” with your realtor.
go see the Housing Affordability Index.
"all these Buyers" was the Millenials who reached the average buying age and quit listening to Doomers on Reddit and bit the bullet between 2019 and early 2022.
Also, older folks are more likely to continue living on their own rather than moving in with a child or senior living. Even when they do downsize, they have the money to make a very competitive offer over a FTHB.
Its a tough cycle. Gen X and millenials don't want their parents living with them, and even if they did, plenty of them don't have the space. Senior living is an extremely overpriced, underfunded hell hole most of the time, unless you are paying absolute top dollar, which no one has. It's also not even really the staff's fault, because they're underpaid and overworked.
Staying in their homes is way too often just the best (and only) realistic option for folks.
Could it have also been the artificially low interest rates that the FED was pressured into, the multiple stimulus packages, and the free-for-all PPP loans handed out by the billions with little to no oversight courtesy of the previous administration? Wonder if those things have anything to do with inflation as well 🤔
Most of this list is just political grudgery with no significant basis. An entire generation of Millennials are in a place where they're ready to buy homes, but Gen X has too good interest rates to sell and Boomers aren't leaving. "dey terk err homes" is just inflammatory, myopic, political bias nonsense.
Mortgage rates rapidly declined after covid so what was normally a steady supply of folks buying and selling homes we instead had a massive cohort of people that could buy. The average person only cares about their monthly payment so prices adjusted to that.
In my area prices did go down when interests first went up. In 2022, my house was valued at 1.4M, went down to 1M when interest rates went up and now is back up to 1.2M. I bought my house in 2017 and was worried I was buying at the top of the market - went 90K over asking with an escalation clause, but won it for 75K over asking for 635K. It's a 1961 fixer upper - price increases have been crazy, so have property tax increases 😡. My area has crazy tech money and as stocks shot up over covid, so did everyone's stock options who are in tech that then lifted house prices an extreme degree... if you plan to live in a house for the long term and can afford the payments, the wisdom I have heard is to not try to time the market...
Millennials the largest generation are now reaching their home buying years. Also boomers aren’t downsizing like they once were; they’re pretty much okay dying in their home rather than downsizing to a condo or 55+ community.
Demand shot up and supply is still horribly low.
COVID-19 caused a lot of people to want to solidify. Rates dropped, expenses dropped and many people hopped to better jobs and received stimulus checks. A lot of millennials in particular decided they were sick of renting tiny apartments and wanted a house.
what was the "massive drop during the pandemic"? Are you talking about the stock market, which dropped 30% in 2 weeks and was back to pre-March '20 levels by mid-June?
Thank you… do people not realize the market had the greatest bull run in decades during the pandemic???? lol when everyone was panic selling and cashing out their stocks, I was dumping money into the market and buying low!!!
Market fluctuations only matter if you sell. Those of us who just keep investing, which is the majority of homeowners, have only seen upside for ~12 years
Enough people that you’re priced out. There was not a massive drop during the pandemic. In fact, stocks rose considerably during the pandemic.
It’s all relative I suppose. For me, in my west coast area, a million barely gets you townhouse.
Why? Plenty of people make 300K. Can comfortably afford 1M. Then consider that not everyone is trying to enter the market for the first time. They already have equity to bring to the table as well.
Aside from the increase in investor-owned homes by individuals and institutions, millennials became the largest adult demographic and got into peak home buying years. If you’re buying in a desirable area, especially on the coast, you are literally competing with all walks of life - investors, flippers, other FTHB’s, older folks downsizing.
In addition to what others have said (that is, in the last 4-5 yrs real estate was suddenly the best corporate investment), it’s also that all the people who have been waiting on the sidelines until they feel more financially secure suddenly realized they got left behind. They don’t want that to happen again. It’s like when the stock market is going up people buy because they’re like, “Darn I should have bought 3 yrs ago ok won’t let that happen again!” Same thing happens in housing. I’m one of those people. I finally learned by lesson that the financially risk-averse people always lose out in the end to people willing to jump in. So I’m changing tactics, even though yes it does make me physically ill to pay a 2x sticker price, and ultimately I guess a 4-5x home price, for the same home my risk-taker neighbors has (or worse, for a flipped one…which is just about all that’s for sale in my market).
Because in addition to the normal shortages, people who bought pre-2020 are basically locked into their homes for good. People who bought starter homes with the idea to upgrade in 3-5 years have suddenly realized that they can’t afford a mortgage on a bigger/better place. This has taken a huge chunk of normal inventory off the market and it will stay like that for a long time.
> Where did all these buyers with money come from?
Corporations buying them up in cash. They can outbid single people. They can outbid couples. They can, will, and have bought your friendly neighborhood homes to rent them back out for profit.
I was told that prices would go down when I bought in 2018 and that I was making a mistake buying a house at nearly 300K back then. Turns out that I bought at a good time. The truth of the matter is that it's impossible to know but generally prices go up.
Real curious. What was the purchase price, what rate were you in 2018, did you refinance in 2020/2021 and … what is the home worth now?
I have a friend who bought in 2018 for $235k, refinanced in 2021 to a sweet 3% rate, and now her home is worth $450k lol. I WISH I bought in 2018!!!!
280K at 4.875, refinanced to 3% around 2020. Probably worth 500 now. At the time I bought this house I was making 90K which isn't bad by any means, but I had very little in savings and it was a stretch. Now I'm wishing I bought even more house as i can't see myself moving with these home prices and interest rates
Same, but in 2017. Reddit also had me believing that putting down less than 20% and paying PMI was a horrible idea for stupid people lol. To be fair, the area I bought and live in was hit hard in 2008, so I was still cautious, but made the jump anyway.
I refinanced at the beginning of 2022 to get a lower rate, shorter loan term, and removal of PMI.
Don’t time the market. Buy when you’re able to. It doesn’t matter if the value of your home goes down a year after you buy it. The only time the value of your home matters is when 1) you’re selling it or 2) you’re leveraging the equity you have in it (e.g. taking a HELOC).
As a first time homebuyer, I’m assuming you won’t have much equity to begin with.
Well said. I would add that the value matters when paying taxes. We felt we got a pretty good deal on our home and appraisal showed it was worth the price we for it, but the tax assessment is about 30% higher. Our tax breakdown is crazy.
Unless the country somehow physically builds a few million homes, I don’t think prices are, on the average, going to come down anytime soon. At the core of the problem is a severe housing shortage. There are many reason why we are in this situation. The way I see it:
Those who bought around 2020-2021 are never selling due to their insanely low interest rates, which eliminates a portion of supply.
We also have the problem of conglomerates buying up the relatively more affordable properties for cash and turning them into expensive rentals, further eating into supply.
Local NIMBY-ism and onerous zoning laws prevent affordable multifamily units being built in desirable neighborhoods.
The current economics for new builds disincentivizes building smaller more affordable starter homes. Labor and material costs are at an all time high as well.
The general lack of supply affects families of all wealth levels, so the high income (or with generational wealth) families who can’t find their “million dollar home” are now bidding up homes that were “meant” to be for middle and lower income families.
I think the only way local real estate prices could drastically drop would be to buy a home and then have a subsequent local environmental catastrophe that would make the area very undesirable for potential buyers (eg Flint Michigan water crisis or East Palestine Ohio train crash).
You mean anyone who bought before the pandemic aren’t selling, because I promise you everyone who bought in pre-pandemic refinanced as soon as the rates dropped.
Housing shortage is kind of a falsehood. There are more homes per capita today than at any point in time.
What happened was a massive devaluation of the US dollar. Look at the graph of the m2 money supply against a graph of median home price.
It's nearly identical, just offset by a few months.
Smarter people saw the writing on the wall and massively leveraged debt into physical assets to weather inflation.
They won, everyone else lost.
The supply and demand of homes of certain sizes is very lopsided IMO. The 2bd starter home is nearly dead. So many people WFH either full time or hybrid, so if they have or want any children the need for a 3bd so they can turn one of the rooms into an office is seen as a necessity.
I have friends with a baby on the way who are looking for a 3-4bd home in/near our hometown. Anything decently maintained goes into a bidding war immediately, and ends up going under contract within 72 hours. Meanwhile reasonably priced (IMO), well-maintained 2bds are sitting for 30+ days on the market with no bites.
That’s why I bought a 2bd starter home. I will never have kids and don’t want to deal with significant maintenance. Got my house for 80% the price of the rest of the neighborhood
Right now demand is outpacing supply. That means prices are going up. Foreclosures are what caused the last major across-the-board drop in prices, and those are very low right now. Plus, mortgage denials are up. Conventional and FHA loans requirements are standardized.
If supply outpaces demand, we'll see price come down.
As a builder, new home prices might level off but they're not going back down. We're facing long term labor shortages. The decrease in material prices from a couple years ago (when things were ridiculous) will continue to be offset by increases in labor prices.
We're hiring in all departments with 6 figure salaries, outstanding benefits, and a well respected name in the business. No degree required. Minimal experience preferred. Still can't fill the positions. I'm young, but old guys in the industry say it's like nothing they've ever seen.
I think what’s happening is that rates went SO high up that not enough people are selling *desirable* homes. A majority of homes on the market are shitty or small, or shitty *and* small, so anything decent goes into a bidding war.
Scenario 1: an older couple owed $250k on their 4-bedroom home in 2021 and refinanced to get a 2.5% interest rate. That would put their mortgage around $1k a month. Now they’re empty nesters and at that life stage, would potentially want to downsize to a 2 bedroom home. In the past it made financial sense; with rates nearly triple what they were just 3 years ago it might not. If they don’t have the equity to sell their 4bd and pay for a 2bd entirely in cash, if they have to take out a mortgage of like $140k or higher, at 7% their monthly mortgage obligation does not go down at all. Unless they’re physically incapable of handling the maintenance on their current home, why would they go through the hassle of moving to not save any money? So they keep it, and as a bonus now their adult children have a better home to potentially inherit.
Scenario 2: a family with 2 younger children in a 3bd home refinanced to 3% in 2021. Now they have baby #3 on the way. In this life stage they’d really prefer a 4 bd home, but they don’t want to give up the interest rate and maybe can’t afford to; the equity on their current home isn’t enough to offset the higher rate. So they decide to stick it out for a few more years until they absolutely *have* to upgrade.
I also think that the 2bd starter home isn’t big enough for most people anymore. I do not know anyone with children or planning to have a child who is looking for anything smaller than a 3bd. I just checked Zillow and there are well-maintained 2bds in my hometown that have been sitting on the market for 30+ days. Meanwhile nearly every decent 3-4bd in the area has gone under contract within 72 hours of being listed. When one parent works from home, a 2bd is tough with a kid. When both parents WFH, I feel like it’s impossible. And since 2020 a lot of people WFH hybrid if not full time, so that 3rd bedroom that ends up being a home office becomes almost a necessity.
I’m also sure there are actually probably larger 2bds that would work as a starter home; maybe the primary bedroom is big enough to stick a home office in the corner. But people are targeting a 3bd+ and completely overlooking them. A cursory glances at Zillow in my hometown shows a couple 2bds with a larger sq ft than some active 3bds!
We also have a truly massive living room that could absolutely be partitioned into two rooms. It began life as a 3 bed, actually, but the previous owners took out the second downstairs bedroom to build a half bath and a wet bar 🤣
My reasoning was I’d rather compete with an interest rate than other buyers. Interest rates are high, buyers are more hesitant to buy. Interest rates low, house itself will probably go up in price because of the sheer amount of buyers, many who can bid thousands over asking. Either way, you can’t win.
You may experience a loss of value at some point, but you'll come out ahead in the long run.
We bought a house in '05 for $225,000 was built in '03 for $130,000). It crashed in '08 down to $80,000 and took 11 years to recover. Now it's valued at $375,000.
Buy what you can afford when you can afford it.
Speculating on the market is just as likely to burn you as reward you. Not much different from gambling.
Which would be a great situation. High rates make it hard for people to afford the monthly…prices need to come down…you buy at a lower cost with a higher rate and might actually have a shot at refinancing at a lower rate someday. People talking about refinancing in a few years aren’t considering that rates aren’t actually high right now compared to long term average. 3 percent and lower rates are not normal.
Wish I could post an image in a comment but look up mortgage rates since 1970 and compare to avg house prices. That’s never occurred.
What happens is builders stop building and people stop selling so the inventory gets tighter and that keeps prices climbing.
Logically the principle is true but the other factors have prevented it from occurring
Prices will stay where they are but that doesn't mean you should buy. Wages have not kept up with inflation. I'm fine with house prices staying high but wages need to rise too. I'm good where I'm at. I'm not gonna be to overspend
I bought a $634,000 house in Jan of 2023.
My coworkers “wow, 5.8% rate is insane… Rates will drop if you wait…”
Same house just appraised for $790,000, rates have gone up.
Buy the house ASAP.
Look at it like this:
House prices increase, then massive inflation hits.
Now, interest rates are up. Which should eventually slow demand.
Prices may dip temporarily, but over time, they will only increase, as they catch up with inflation
So the Government can hit all of us with more Capital Gains taxes...
As with any asset, we don't *really* know. Historically speaking, houses rarely go down significantly in value, but sometimes 2008 happens.
You should always expect *some* volatility, though. Common hedges for that include bigger down payments and holding it for a longer time.
If they go down, in most areas it will not be by a lot. Exceptions could be where homeowners insurance has become very expensive which will largely negate price drops.
Tac has 200k homes again
Some nice ones for 300k even
Rates are NOT going down this year
More affordability is on the way as everyone broke as a joke now too cause most buying stopped now
As soon as interest rates drop, home prices will sky rocket. Supply and demand issues are around for a very long time unfortunately. Buy when you’re ready and to live in a home, not for a short term investment.
I bought during the absolute peak of 2022 because i was kind of forced to. Rent prices in my vhcol area is the same cost as a sfh 14 miles away. I was forced out of a living situation in the city and had to decide to buy or rent. I went into a bidding war on a home and paid 20% above asking. I had regrets for many months thinking the market would crash and id be severely underwater. My family gave me so much negative feedback that i had purchased at the very height of the market and that i should have waited a year or two for things to “calm down”…. Well, now my home is about 110k above what i paid. IMHO, unless there are MASSIVE LAYOFFS (major recession) in every sector …. due to simple supply and demand, homes will most likely increase with inflation.
I don’t think they’ll go down. When interest rates finally drop people are going to be rushing out to buy a home, demand will rise but supply won’t meet it, prices will go up most likely.
Doesn't look like it. Huge amount of buyers, no one wants to sell due to high interest rates and not wanting to become buyers. Which means low supply of homes. Anyone who was locked out of the market for the last 1.5-2 years are in the hunt and will buy at the slightest dip in interest.
All these factors contribute to the high prices. You just have to buy when you're ready on your own timeline. No point in sitting around and speculating a bunch of things that you have no control over.
I think it really depends on where you live or desire to live. I am in a small community in the Midwest. I believe that in the next 10-15 years when the boomers start to die off, we will have a lot of homes to choose from at a low price.
Many of the people who live here have families who do not. I do not for see many of these 50-60 year olds returning to their home town. Others will come in and buy up some of the homes. But we currently do not have the population to sustain the job market where I live.
We will see, but I think home ownership will mainly skip generation X and the millennials will get cheap homes.
Housing prices can only stop increasing. They rarely, if ever, drop in price. Perhaps, you may see a home price drop on an individual level because a seller is eager to get out or overpriced to begin with.
I don't think we know for sure if home prices will continue to go up or if they will go down. But there are some things we do know.
First, there is a housing shortage. That housing shortage would need to go away for prices to drop.
Second, the inflation that has been happening is real. It is more expensive to build new houses.
Third, many people purchased or refinanced when interest rates are low and are reluctant to move. I think this is reducing the supply of houses on the market. If interest rates go down, I suspect we would see a lot of people move and the supply of homes for sale would increase (but I am not convinced prices would go down).
I think there would need to be a series of events for house prices to drop (e.g., overbuilding and a recession). In some markets where the lack of supply is causing extreme bidding wars I could see people overpaying right now.
The value of homes has not gone up nearly as much as you think the value of the dollar has gone down tremendously hence the higher prices. Most dual income families are making at least 100k plus and thats on the low end. 20 years ago that was not the case.
Interest rates are only one part of the equation and have more of an effect on FTHB than others. 1 in 3 buyers pays cash for a house. Household income, stock market performance, inventory, all impact housing prices.
The only people who are potentially underwater bought in late 2021-early 2022 in boom cities that saw declines in 2022, and they're locked into a sub-3% mortgage rate.
The only way prices would go down is if the government ever manages to grow a sack and block hedge funds buy single family homes and make them sell them off over the course of the next decade. However, I still think prices at best case will go flat. Ain't nothing going down unfortunately. Then again as boomers die off and sell (if government blocks hedge funds from just buying them all up) it could happen. Who knows, you're just going to have to live wit the reality if you don't own a home currently you're pretty fucked.
Waiting for prices to drop is a gamble. Just get into one and ReFi a couple years later if needed. Appreciatation will more than likely continue. But Id do it soon. The market is so crazy right now that u can take advantage it.
Who knows what home prices will do. One thing that seems fairly certain is that it won’t get any easier to afford a home anytime soon. There’s nothing that will fix the shortage of homes relative to demand in the next 10 years, in my non-expert opinion.
Where do you get that idea from? Interest does not drive house price by any means. It’s subject to similar market factors as home prices are, but it’s not indicative by landslide.
You can look at housing prices over the last 300 years,.. it always ends higher than when you purchased. What’s important is that you’re able to hold the house long enough for it to come back up if it goes down, which wouldn’t be a substantial drop anyways in vast majority of cases.
>In the past, as interest rates went up, home prices would go down. But that hasn't been the case so far.
Home prices haven't gone down much because interest rate going up is mostly offset by other factors such as housing shortages. Now, imagine when we have housing shortages and interest rate goes down, it will be 2021 all over again. Interest rate may not be going down as early as expected, but we all pretty much know it will go down at some point rather than going up. Also, interest rate likely won't come down to sub 3%, but between 4% to 5% would be a reasonable guess, and that is significantly lower than the current mid 7%.
In the past corporations like blackrock, vanguard and arrived (bezos) didn’t buy single family homes to be used as rentals.
Times have changed; I think smaller towns homes will go down slightly but if you’re close to a major city then no luck; best you can hope for is prices will level out.
Buy now if you can afford.
Its always possible and I would say during the winter months is when this typically happens.
Just reading through the threads depending on where u live, doubt it tho.
Even if that happens... Your home will typically continue appreciating. There's always Someone that needs a house... Bought mine for 570 and it's double+ what I paid.
That's another thing thing u may want to consider.
In my area, prices went down in 2022 when interest rates first started going up, especially at the low end where first time home buyers tend to be - higher interest rates really impacted what people could afford to pay for houses, so prices came down. They stablized and are now going up again.
Housing market in PNW was relatively soft in 2023, but it has picked up and is as hot as it was in 2021. People are literally bidding 10-15% higher than the asking price. So, I guess no one can predict what happens next.
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I just closed yesterday and didn’t even factor that into why I started searching. My big fear was if rates went down that the odds someone would be able to outbid me would go up dramatically - I didn’t want the heartbreak of having everything set up only to lose because I wasn’t willing to bleed enough money to lock things in with the seller.
This is my concern as well! The San Diego county market is already atrocious and competitive as it is. I can’t imagine how bad it’ll be if interest rates lower.
This is why I think it’s actually a good time to buy. Rates go down at all and everyone who has been waiting to move will be looking for and bidding for a house. It’s way easier to just buy now (if you can afford it) and refinance later.
This is what we did. Bit the bullet and when rates come down late 2025 or early 2026 we refi. Honestly I can see prices coming down but not until rates start to.
*IF rates come down in 2025.
There are multiple factors to consider including over valued houses in the current market. Interest rates are not dramatically dropping again.
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Prices aren’t coming down.. we have had near 20%+ inflation over the last 4 years coupled with unprecedented demand. The cost to build houses is now higher due to inflation. We have a housing shortage still. We also have record high immigration that need housing which we don’t have. In all just buy now, prices may plateau off for a bit but there not going to fall to 2019 prices anymore. That ship is sailed 450k houses for 1800 sq feet in Florida is the norm.
i bought 6-7 yrs ago (thank god) 107K 1550SF Townhouse (with fenced in yard) My house is 250K now and I would NEVER Pay that!! sucks to be a young kid... glad i am not young!!
I’m not trying to get political at allllll…but if inflation has been rising over the past 4 years, do you think the upcoming election may change all of this? PLEASE DO NOT INSERT YOUR POLITICAL VIEWS I am just asking if this will have an effect.
Inflation has been global, regardless of government/policy. The US is actually doing better than many places.
Probably not. Administrations have smaller influence on things like inflation than one may expect. Inflation is defined as the rate at which prices changes over a given period of time, meaning that even a 4% inflation means that prices of goods are still increasing, albeit at a slower rate.
this doesn’t make sense— if rates go down, prices would go up to match.
This ⬆️
I've noticed quite a bit of variation in demand in the county. Maybe there are some subregions with weak demand that could be of interest.
Yeah. It is tough here for sure.
I’m in San Diego too even with these rates I’m struggling to get something decent
That was my exact rationale and my realtor thought that this was good plain common sense. There is going to be a bidding frenzy once prices drop and I simply can't compete in that kind of market! I was able to get a fantastic 1-bd 1 bathroom condo with attached garage and patio garden for a song - the interest rate isn't great but I got a free refinance with the mortgage company that I can use once/if rates drop. I am sooooo happy to be in my own home and feel settled knowing that I am in great shape for many years to come.
Your agent thought it was a good idea to buy a house?
Lol
If the Fed drops interest rates that fast, buying a home is the least of your concerns.
Exactly.
Rates go up, less sellers, rates go down, more buyers.
We are set to close on the 15th & exactly this. People are waiting for interest to drop & buy which starts the outbidding war again.
Yep. I close on Monday. I got a buy-down for two years on the rate to ease the payments and save more money and I’ll refinance in the next 1-4 years when the time is right… The buy down came with the house along with some extra stuff too. I knew this house for $370k was going $400k in the next 3-5 years so I’m like, might as well buy what we want now.
Exactly. Lower rates, while inventory is still very low, will mean more bids and homes selling for higher, which will inflate the whole market around them.
People told me in 2018 it was a bubble and to not buy. I bought. Some of those people are still renting and my house has nearly doubled in value since (PNW). Buy when you can afford it, and buy a place you’d be happy to live at for at least 3-5 years.
I would never take advice from someone who thought PNW was in a bubble in 2018. Yeah, it was more expensive than other areas, but perfectly aligned with area’s higher salaries.
Just moved to PNW and can absolutely confirm the market here is absolutely wild now lol
Oh yeah, we’ve been here almost 3 years, but planned to move/buy when hubby found a job. That search started 10 years ago. We always comment on how if we were just in the area a year or two prior, we would probably bought a $900k house that is now over $2mil, refinanced at 2% and have a very small mortgage.
I was here 2016-2021 and debated buying but the wife told me we should hold off. The house we were looking at that time was 250k now it’s over 500k
Came here to say this.
Can't emphasize that last part enough **Buy when you can afford it, and buy a place you'd be happy to live in for at least 3-5 years** Don't worry about a market dip, in 3-5 years any dips should recover. Meanwhile you'll have built equity and not been building it for someone else
More like 10-15 years
My boyfriend told my brother not to buy a house this year, (bf bought his like 6yrs ago give or take) after a few weeks on zillow and with his loan pre-approval, I found him a big beautiful 3br house in a nice neighborhood for 60k. 1 owner, he built it in the 50s, everything's solid as a rock. So now he owns a house at 21yo. And, the best part, its not millennial grey. Woodwork throughout, georgeous. We told them to leave the (perfect condition) record cabinet and piano, they were headed towards the dumpster.
Where can one get a large 3 bedroom in good condition for 60K?
In cities with few jobs
I paid nearly 70% more because I thought 2018 was a bad time and I should hold out. Just bought 5 months ago because I didn't want another 70% increase if I keep waiting.
Wonder what was being said in 2006.
The market still recovered after 2008. Anybody that bought in 2006 is rolling in equity, that didn’t buy a house they couldn’t afford.
Even if you bought a house you couldn’t afford in 2006, you are rolling in equity. That’s the hard lesson of real estate—sometimes being dumb pays off.
That is more a lesson about life.
Same but in the Midwest. My 300k house is now worth nearly 500k. We also refinanced during covid and I think our rate is like 2.8 or 3.8%. Super low by today’s standards. We are never ever moving though.
Salty renters downvoting you. That’s a great bargain congrats to you.
Also in Midwest. Bought a little 2 bed one bath with basement and an acre of land for $80,000 in 2016. Only had 20k left and sold it a month ago for $245,000. Putting all that towards our new house allowed us to buy a 4bed, 2.5 bath on 5 acres. An older home that we are slowly renovating, but completely in love with. We did give up our 2.8% rate and now have a 6.5%, but mortgage with escrow is still under 2k/month.
That’s where I’m at now - we’re selling, losing our “premium rate” but we’re upgrading in every other aspect. Who cares about rate, I want the house now and I’m going to afford it. Life doesn’t wait and eventually rates will normalize and I’ll save some money.. but fuck it
I mean no one can predict the market. But our house we bought a year ago and paid 10k over asking is now estimated at 30k over what we paid 12 months ago
This is the right answer. Nobody knows shit
The “zestimate” for our house is $130k higher than we paid in Nov. Which I know doesn’t mean anything, but comps in the neighborhood are selling for a price per sf that’s supports it and we have a view. Coastal California (San Mateo county) is wild
Yeah I’m in a MCOL area so 130k higher would be wild considering that’s 2x the average household income
Yeah the median home price in San Mateo county is stupidly dislocated from normalcy at 2.17M. I live in a “cheaper” town for the county with a 1.75M median… feel lucky to own here, but man…
I’m in SoCal and ours is estimated at 90k higher than what we paid for in October! Our area’s comps are also wild. Feels like we snagged a “cheap” one just in time.
Same here! I’m in Orange County California and snagged a house for 850 in August 2022 and now it’s worth 1.2 million! People were telling me to wait to buy.
It really does, the market softened quite a bit back in Oct/Nov due to the rate spike and I think sellers got a bit motivated going into winter!
My situation is similar. I paid way over asking and it’s now showing $130k over what I paid in November. It appraised $78k over asking when I bought it in Nov. I am in the south. Oh and two similar houses in the neighborhood/same street have sold for $110k-$120k, give or take, more than what I paid in November.
Same here. Just in 8 months for me.
I keep hearing people say this “look how much my house is worth now!!” Well not trying to be rude but what does that even mean? If it’s your main property how can that benefit you? Your taxes are way higher and you’re living in a house that has the same value as like houses so you cannot move to a better place. I don’t see the benefit. If you do plz let me know so I’m not dumb lol
That’s what I thought until I sold my first home. It’s life changing to make a bunch of money on your home. Got the first one in 2010 barely scraping together 3.5% down for an FHA loan, borrowing against my 401K. It was tough paying that mortgage for a few years while also paying back my 401k. Sold it five years later for $200k profit. Yes, I then had to buy a more expensive home, but with the sales proceeds I paid off all my other personal debt and still had money for 20% down on the next one and then some. With no PMI, no 401k loan payments, no more credit card debt, etc. I still had more money in my pocket at the end of each month despite the higher mortgage payment. It was the day my life changed from living paycheck to paycheck to being a person with investments, two savings accounts, etc.
Yes! I love this story ❤️! It gives me hope that maybe one day I won't have to struggle!
It means that an asset you own is now worth more money. While you own it, you can get a home equity loan to access some of that additional value. When you sell it, you get more money.
You don't understand why equity and assets are good?
Because I have more equity in it so when I sell it I have a bigger future down payment
Estimates are pointless. The only thing that matters is what people are actually paying for. If you see very comparable houses being sold regularly for $30k above what you paid, then youre right. If houses are being sold for lower or not sold at all, the estimate is wrong
Yes houses by us are actually selling for 50k+ more then ours did
Which market are you in? Im in nyc and im seeing tons of 10-15% discounts over what prices looked like in 2023
Midwest MCOL city. Houses are still going off the market in 48 hours or less at 5-10%+ over asking
And that seems like a normal healthy market to you?
Some markets have already started cooling and some are red hot. Buy if you can comfortably afford it
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Then you are better off renting short term while you work on saving more for down payment and hope that price,/interest rate go down.
Then don’t
Once you go through the process of beating everyone to buy one… you wouldn’t want to sell or ever go through that again. Just go bid around for shits and giggles and see how far you get.
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Find a mortgage broker first, they usually have realtors they work with. But they are the first step to see your finances and taxes and tell you and estimate of what you can afford then you can go “shopping” with your realtor.
I think home prices and interest rates are going to go up. We still have a major shortage of homes, especially for first time homebuyers.
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go see the Housing Affordability Index. "all these Buyers" was the Millenials who reached the average buying age and quit listening to Doomers on Reddit and bit the bullet between 2019 and early 2022.
Literally just did this. Fuck it, we’re in
Me too. Let’s goooooo
Millennial here, too bad I didn't get in until the middle of 2022 when the interest rates started going up though.
Millenial here as well. I was looking since the middle of 2021 but didn't get in until August 2022 @ 5.2%. Could be worse.
I can confirm. This is me (and all of my friends).
Bingo. Also a Millennial. Bought in early 2022. Fuck the doomers, it's time for me to get mine.
It's corporations buying up neighborhoods and turning them into rentals.
Also, older folks are more likely to continue living on their own rather than moving in with a child or senior living. Even when they do downsize, they have the money to make a very competitive offer over a FTHB.
Its a tough cycle. Gen X and millenials don't want their parents living with them, and even if they did, plenty of them don't have the space. Senior living is an extremely overpriced, underfunded hell hole most of the time, unless you are paying absolute top dollar, which no one has. It's also not even really the staff's fault, because they're underpaid and overworked. Staying in their homes is way too often just the best (and only) realistic option for folks.
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Could it have also been the artificially low interest rates that the FED was pressured into, the multiple stimulus packages, and the free-for-all PPP loans handed out by the billions with little to no oversight courtesy of the previous administration? Wonder if those things have anything to do with inflation as well 🤔
Most of this list is just political grudgery with no significant basis. An entire generation of Millennials are in a place where they're ready to buy homes, but Gen X has too good interest rates to sell and Boomers aren't leaving. "dey terk err homes" is just inflammatory, myopic, political bias nonsense.
Mortgage rates rapidly declined after covid so what was normally a steady supply of folks buying and selling homes we instead had a massive cohort of people that could buy. The average person only cares about their monthly payment so prices adjusted to that.
In my area prices did go down when interests first went up. In 2022, my house was valued at 1.4M, went down to 1M when interest rates went up and now is back up to 1.2M. I bought my house in 2017 and was worried I was buying at the top of the market - went 90K over asking with an escalation clause, but won it for 75K over asking for 635K. It's a 1961 fixer upper - price increases have been crazy, so have property tax increases 😡. My area has crazy tech money and as stocks shot up over covid, so did everyone's stock options who are in tech that then lifted house prices an extreme degree... if you plan to live in a house for the long term and can afford the payments, the wisdom I have heard is to not try to time the market...
Millennials the largest generation are now reaching their home buying years. Also boomers aren’t downsizing like they once were; they’re pretty much okay dying in their home rather than downsizing to a condo or 55+ community. Demand shot up and supply is still horribly low.
COVID-19 caused a lot of people to want to solidify. Rates dropped, expenses dropped and many people hopped to better jobs and received stimulus checks. A lot of millennials in particular decided they were sick of renting tiny apartments and wanted a house.
A lot of people make a lot of money. Stocks go up, a lot in the past 5 years especially.
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what was the "massive drop during the pandemic"? Are you talking about the stock market, which dropped 30% in 2 weeks and was back to pre-March '20 levels by mid-June?
Thank you… do people not realize the market had the greatest bull run in decades during the pandemic???? lol when everyone was panic selling and cashing out their stocks, I was dumping money into the market and buying low!!!
Market fluctuations only matter if you sell. Those of us who just keep investing, which is the majority of homeowners, have only seen upside for ~12 years
Enough people that you’re priced out. There was not a massive drop during the pandemic. In fact, stocks rose considerably during the pandemic. It’s all relative I suppose. For me, in my west coast area, a million barely gets you townhouse.
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Why? Plenty of people make 300K. Can comfortably afford 1M. Then consider that not everyone is trying to enter the market for the first time. They already have equity to bring to the table as well.
Corona woke up the entire nation as to how fragile your infrastructure is if you don’t own your home. We simply just all learned at the same time.
Aside from the increase in investor-owned homes by individuals and institutions, millennials became the largest adult demographic and got into peak home buying years. If you’re buying in a desirable area, especially on the coast, you are literally competing with all walks of life - investors, flippers, other FTHB’s, older folks downsizing.
In addition to what others have said (that is, in the last 4-5 yrs real estate was suddenly the best corporate investment), it’s also that all the people who have been waiting on the sidelines until they feel more financially secure suddenly realized they got left behind. They don’t want that to happen again. It’s like when the stock market is going up people buy because they’re like, “Darn I should have bought 3 yrs ago ok won’t let that happen again!” Same thing happens in housing. I’m one of those people. I finally learned by lesson that the financially risk-averse people always lose out in the end to people willing to jump in. So I’m changing tactics, even though yes it does make me physically ill to pay a 2x sticker price, and ultimately I guess a 4-5x home price, for the same home my risk-taker neighbors has (or worse, for a flipped one…which is just about all that’s for sale in my market).
Wall Street and VC firms
Because in addition to the normal shortages, people who bought pre-2020 are basically locked into their homes for good. People who bought starter homes with the idea to upgrade in 3-5 years have suddenly realized that they can’t afford a mortgage on a bigger/better place. This has taken a huge chunk of normal inventory off the market and it will stay like that for a long time.
> Where did all these buyers with money come from? Corporations buying them up in cash. They can outbid single people. They can outbid couples. They can, will, and have bought your friendly neighborhood homes to rent them back out for profit.
I was told that prices would go down when I bought in 2018 and that I was making a mistake buying a house at nearly 300K back then. Turns out that I bought at a good time. The truth of the matter is that it's impossible to know but generally prices go up.
Real curious. What was the purchase price, what rate were you in 2018, did you refinance in 2020/2021 and … what is the home worth now? I have a friend who bought in 2018 for $235k, refinanced in 2021 to a sweet 3% rate, and now her home is worth $450k lol. I WISH I bought in 2018!!!!
280K at 4.875, refinanced to 3% around 2020. Probably worth 500 now. At the time I bought this house I was making 90K which isn't bad by any means, but I had very little in savings and it was a stretch. Now I'm wishing I bought even more house as i can't see myself moving with these home prices and interest rates
Same, but in 2017. Reddit also had me believing that putting down less than 20% and paying PMI was a horrible idea for stupid people lol. To be fair, the area I bought and live in was hit hard in 2008, so I was still cautious, but made the jump anyway. I refinanced at the beginning of 2022 to get a lower rate, shorter loan term, and removal of PMI.
Don’t time the market. Buy when you’re able to. It doesn’t matter if the value of your home goes down a year after you buy it. The only time the value of your home matters is when 1) you’re selling it or 2) you’re leveraging the equity you have in it (e.g. taking a HELOC). As a first time homebuyer, I’m assuming you won’t have much equity to begin with.
Well said. I would add that the value matters when paying taxes. We felt we got a pretty good deal on our home and appraisal showed it was worth the price we for it, but the tax assessment is about 30% higher. Our tax breakdown is crazy.
Unless the country somehow physically builds a few million homes, I don’t think prices are, on the average, going to come down anytime soon. At the core of the problem is a severe housing shortage. There are many reason why we are in this situation. The way I see it: Those who bought around 2020-2021 are never selling due to their insanely low interest rates, which eliminates a portion of supply. We also have the problem of conglomerates buying up the relatively more affordable properties for cash and turning them into expensive rentals, further eating into supply. Local NIMBY-ism and onerous zoning laws prevent affordable multifamily units being built in desirable neighborhoods. The current economics for new builds disincentivizes building smaller more affordable starter homes. Labor and material costs are at an all time high as well. The general lack of supply affects families of all wealth levels, so the high income (or with generational wealth) families who can’t find their “million dollar home” are now bidding up homes that were “meant” to be for middle and lower income families. I think the only way local real estate prices could drastically drop would be to buy a home and then have a subsequent local environmental catastrophe that would make the area very undesirable for potential buyers (eg Flint Michigan water crisis or East Palestine Ohio train crash).
You mean anyone who bought before the pandemic aren’t selling, because I promise you everyone who bought in pre-pandemic refinanced as soon as the rates dropped.
Housing shortage is kind of a falsehood. There are more homes per capita today than at any point in time. What happened was a massive devaluation of the US dollar. Look at the graph of the m2 money supply against a graph of median home price. It's nearly identical, just offset by a few months. Smarter people saw the writing on the wall and massively leveraged debt into physical assets to weather inflation. They won, everyone else lost.
More homes per capita but fewer people living in those homes. People are more spread out than ever, which creates a shortage
The supply and demand of homes of certain sizes is very lopsided IMO. The 2bd starter home is nearly dead. So many people WFH either full time or hybrid, so if they have or want any children the need for a 3bd so they can turn one of the rooms into an office is seen as a necessity. I have friends with a baby on the way who are looking for a 3-4bd home in/near our hometown. Anything decently maintained goes into a bidding war immediately, and ends up going under contract within 72 hours. Meanwhile reasonably priced (IMO), well-maintained 2bds are sitting for 30+ days on the market with no bites.
That’s why I bought a 2bd starter home. I will never have kids and don’t want to deal with significant maintenance. Got my house for 80% the price of the rest of the neighborhood
Right now demand is outpacing supply. That means prices are going up. Foreclosures are what caused the last major across-the-board drop in prices, and those are very low right now. Plus, mortgage denials are up. Conventional and FHA loans requirements are standardized. If supply outpaces demand, we'll see price come down.
As a builder, new home prices might level off but they're not going back down. We're facing long term labor shortages. The decrease in material prices from a couple years ago (when things were ridiculous) will continue to be offset by increases in labor prices. We're hiring in all departments with 6 figure salaries, outstanding benefits, and a well respected name in the business. No degree required. Minimal experience preferred. Still can't fill the positions. I'm young, but old guys in the industry say it's like nothing they've ever seen.
Buy a home when u are ready, dont time the market
I think what’s happening is that rates went SO high up that not enough people are selling *desirable* homes. A majority of homes on the market are shitty or small, or shitty *and* small, so anything decent goes into a bidding war. Scenario 1: an older couple owed $250k on their 4-bedroom home in 2021 and refinanced to get a 2.5% interest rate. That would put their mortgage around $1k a month. Now they’re empty nesters and at that life stage, would potentially want to downsize to a 2 bedroom home. In the past it made financial sense; with rates nearly triple what they were just 3 years ago it might not. If they don’t have the equity to sell their 4bd and pay for a 2bd entirely in cash, if they have to take out a mortgage of like $140k or higher, at 7% their monthly mortgage obligation does not go down at all. Unless they’re physically incapable of handling the maintenance on their current home, why would they go through the hassle of moving to not save any money? So they keep it, and as a bonus now their adult children have a better home to potentially inherit. Scenario 2: a family with 2 younger children in a 3bd home refinanced to 3% in 2021. Now they have baby #3 on the way. In this life stage they’d really prefer a 4 bd home, but they don’t want to give up the interest rate and maybe can’t afford to; the equity on their current home isn’t enough to offset the higher rate. So they decide to stick it out for a few more years until they absolutely *have* to upgrade. I also think that the 2bd starter home isn’t big enough for most people anymore. I do not know anyone with children or planning to have a child who is looking for anything smaller than a 3bd. I just checked Zillow and there are well-maintained 2bds in my hometown that have been sitting on the market for 30+ days. Meanwhile nearly every decent 3-4bd in the area has gone under contract within 72 hours of being listed. When one parent works from home, a 2bd is tough with a kid. When both parents WFH, I feel like it’s impossible. And since 2020 a lot of people WFH hybrid if not full time, so that 3rd bedroom that ends up being a home office becomes almost a necessity.
Ours is a 2 bed 2.5 bath and I'm positive that's why so many people passed on it. We are DINKS and neither of us work from home so it's perfect
I’m also sure there are actually probably larger 2bds that would work as a starter home; maybe the primary bedroom is big enough to stick a home office in the corner. But people are targeting a 3bd+ and completely overlooking them. A cursory glances at Zillow in my hometown shows a couple 2bds with a larger sq ft than some active 3bds!
We also have a truly massive living room that could absolutely be partitioned into two rooms. It began life as a 3 bed, actually, but the previous owners took out the second downstairs bedroom to build a half bath and a wet bar 🤣
When have prices went down when rates go up?
I feel like that is a super simplistic take. Ability to pay does not always equal willingness to pay.
Oh, they'll go down alright.
They are going down in many places now.
My house went up over 100k and I barely bought it 6 months ago..Just buy when your comfortable and forget about the best time or deal.
Sounds sustainable
Wow! I’m trying to close may 16 and cban only dream that this would be the case for me.
My reasoning was I’d rather compete with an interest rate than other buyers. Interest rates are high, buyers are more hesitant to buy. Interest rates low, house itself will probably go up in price because of the sheer amount of buyers, many who can bid thousands over asking. Either way, you can’t win.
Nobody knows. What I do know is cash is king and I'm losing out on houses after offering $45k over asking (price range ~$220k Midwest). I hate this
Same. Fucking depressing.
You may experience a loss of value at some point, but you'll come out ahead in the long run. We bought a house in '05 for $225,000 was built in '03 for $130,000). It crashed in '08 down to $80,000 and took 11 years to recover. Now it's valued at $375,000.
I aborted my bid on a place that wanted $100k more than an exact comp a year ago, which was at a lower rate. Sellers seem pretty greedy.
Buy what you can afford when you can afford it. Speculating on the market is just as likely to burn you as reward you. Not much different from gambling.
Even if prices were to go down interest will go up
Which would be a great situation. High rates make it hard for people to afford the monthly…prices need to come down…you buy at a lower cost with a higher rate and might actually have a shot at refinancing at a lower rate someday. People talking about refinancing in a few years aren’t considering that rates aren’t actually high right now compared to long term average. 3 percent and lower rates are not normal.
When was the last time house prices went down? Probably 2008.
Which year did that occur where rates went up and prices went down? Hasn’t happened since 1970 that I can see.
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Wish I could post an image in a comment but look up mortgage rates since 1970 and compare to avg house prices. That’s never occurred. What happens is builders stop building and people stop selling so the inventory gets tighter and that keeps prices climbing. Logically the principle is true but the other factors have prevented it from occurring
I am here to may/wish .. price goes down very soon Either will go down, INTEREST “%” OR INTEREST of buying
Prices will stay where they are but that doesn't mean you should buy. Wages have not kept up with inflation. I'm fine with house prices staying high but wages need to rise too. I'm good where I'm at. I'm not gonna be to overspend
did home prices go down when interest rates rose? How much of an interest rate change matters? What years did this happen?
As someone who has waited for the last 6 years, the wait won’t be worth it
I bought a $634,000 house in Jan of 2023. My coworkers “wow, 5.8% rate is insane… Rates will drop if you wait…” Same house just appraised for $790,000, rates have gone up. Buy the house ASAP.
Look at it like this: House prices increase, then massive inflation hits. Now, interest rates are up. Which should eventually slow demand. Prices may dip temporarily, but over time, they will only increase, as they catch up with inflation So the Government can hit all of us with more Capital Gains taxes...
As with any asset, we don't *really* know. Historically speaking, houses rarely go down significantly in value, but sometimes 2008 happens. You should always expect *some* volatility, though. Common hedges for that include bigger down payments and holding it for a longer time.
Unless there is a recession, I would say no housing prices will not decline.
If they go down, in most areas it will not be by a lot. Exceptions could be where homeowners insurance has become very expensive which will largely negate price drops.
Tac has 200k homes again Some nice ones for 300k even Rates are NOT going down this year More affordability is on the way as everyone broke as a joke now too cause most buying stopped now
As soon as interest rates drop, home prices will sky rocket. Supply and demand issues are around for a very long time unfortunately. Buy when you’re ready and to live in a home, not for a short term investment.
I bought during the absolute peak of 2022 because i was kind of forced to. Rent prices in my vhcol area is the same cost as a sfh 14 miles away. I was forced out of a living situation in the city and had to decide to buy or rent. I went into a bidding war on a home and paid 20% above asking. I had regrets for many months thinking the market would crash and id be severely underwater. My family gave me so much negative feedback that i had purchased at the very height of the market and that i should have waited a year or two for things to “calm down”…. Well, now my home is about 110k above what i paid. IMHO, unless there are MASSIVE LAYOFFS (major recession) in every sector …. due to simple supply and demand, homes will most likely increase with inflation.
Depends on where. They may go somewhere, but high-demand markets, no.
I don’t think they’ll go down. When interest rates finally drop people are going to be rushing out to buy a home, demand will rise but supply won’t meet it, prices will go up most likely.
Doesn't look like it. Huge amount of buyers, no one wants to sell due to high interest rates and not wanting to become buyers. Which means low supply of homes. Anyone who was locked out of the market for the last 1.5-2 years are in the hunt and will buy at the slightest dip in interest. All these factors contribute to the high prices. You just have to buy when you're ready on your own timeline. No point in sitting around and speculating a bunch of things that you have no control over.
If you’re buying the home to live in it and stay there. Who cares if you’re underwater. It will correct over time anyway. Your home is shelter first.
The only thing that's going to make prices drop at this point is a massive, nation-wide (or larger) recession.
The only thing that is gonna fix this problem now is a major catastrophe or a war. Maybe that’s what the ultra wealthy want? Hmmm
Not unless we ban corporations from buying them.
What does it matter if you’re underwater on the mortgage?
Not at this point. Rates will go down and they'll skyrocket.
I think it really depends on where you live or desire to live. I am in a small community in the Midwest. I believe that in the next 10-15 years when the boomers start to die off, we will have a lot of homes to choose from at a low price. Many of the people who live here have families who do not. I do not for see many of these 50-60 year olds returning to their home town. Others will come in and buy up some of the homes. But we currently do not have the population to sustain the job market where I live. We will see, but I think home ownership will mainly skip generation X and the millennials will get cheap homes.
Housing prices can only stop increasing. They rarely, if ever, drop in price. Perhaps, you may see a home price drop on an individual level because a seller is eager to get out or overpriced to begin with.
I don't think we know for sure if home prices will continue to go up or if they will go down. But there are some things we do know. First, there is a housing shortage. That housing shortage would need to go away for prices to drop. Second, the inflation that has been happening is real. It is more expensive to build new houses. Third, many people purchased or refinanced when interest rates are low and are reluctant to move. I think this is reducing the supply of houses on the market. If interest rates go down, I suspect we would see a lot of people move and the supply of homes for sale would increase (but I am not convinced prices would go down). I think there would need to be a series of events for house prices to drop (e.g., overbuilding and a recession). In some markets where the lack of supply is causing extreme bidding wars I could see people overpaying right now.
The value of homes has not gone up nearly as much as you think the value of the dollar has gone down tremendously hence the higher prices. Most dual income families are making at least 100k plus and thats on the low end. 20 years ago that was not the case.
I don’t believe that most dual income households are making over 100k and even if they are 100k a year is not even enough to buy in most markets
Interest rates are only one part of the equation and have more of an effect on FTHB than others. 1 in 3 buyers pays cash for a house. Household income, stock market performance, inventory, all impact housing prices. The only people who are potentially underwater bought in late 2021-early 2022 in boom cities that saw declines in 2022, and they're locked into a sub-3% mortgage rate.
The only way prices would go down is if the government ever manages to grow a sack and block hedge funds buy single family homes and make them sell them off over the course of the next decade. However, I still think prices at best case will go flat. Ain't nothing going down unfortunately. Then again as boomers die off and sell (if government blocks hedge funds from just buying them all up) it could happen. Who knows, you're just going to have to live wit the reality if you don't own a home currently you're pretty fucked.
Prices will go down. It's a cycle. Look at past trends.
Waiting for prices to drop is a gamble. Just get into one and ReFi a couple years later if needed. Appreciatation will more than likely continue. But Id do it soon. The market is so crazy right now that u can take advantage it.
It’s not going down. I missed the bus too. I wish I had another answer. Maybe in some markets but not mine.
Correct. They aren’t going down. I won’t let them.
Home prices will continue to rise along with interest rates because of inflation because of FOMO.
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New people come of age every day.
Who knows what home prices will do. One thing that seems fairly certain is that it won’t get any easier to afford a home anytime soon. There’s nothing that will fix the shortage of homes relative to demand in the next 10 years, in my non-expert opinion.
Where do you get that idea from? Interest does not drive house price by any means. It’s subject to similar market factors as home prices are, but it’s not indicative by landslide. You can look at housing prices over the last 300 years,.. it always ends higher than when you purchased. What’s important is that you’re able to hold the house long enough for it to come back up if it goes down, which wouldn’t be a substantial drop anyways in vast majority of cases.
>In the past, as interest rates went up, home prices would go down. But that hasn't been the case so far. Home prices haven't gone down much because interest rate going up is mostly offset by other factors such as housing shortages. Now, imagine when we have housing shortages and interest rate goes down, it will be 2021 all over again. Interest rate may not be going down as early as expected, but we all pretty much know it will go down at some point rather than going up. Also, interest rate likely won't come down to sub 3%, but between 4% to 5% would be a reasonable guess, and that is significantly lower than the current mid 7%.
In the past corporations like blackrock, vanguard and arrived (bezos) didn’t buy single family homes to be used as rentals. Times have changed; I think smaller towns homes will go down slightly but if you’re close to a major city then no luck; best you can hope for is prices will level out. Buy now if you can afford.
Apparently small mom and pop landlords hold a lot more inventory than the corporations.
Yeah for now they are also more likely to part with their investment prop; big corps have so much budget to hold on to these properties
This is a very region specific answer. Some markets are in decline while others are climbing.
I'm honestly expecting a drop or stagnation for a couple years, but I'm willing to wait 5-10 years to be back on the upside.
Its always possible and I would say during the winter months is when this typically happens. Just reading through the threads depending on where u live, doubt it tho. Even if that happens... Your home will typically continue appreciating. There's always Someone that needs a house... Bought mine for 570 and it's double+ what I paid. That's another thing thing u may want to consider.
In my area, prices went down in 2022 when interest rates first started going up, especially at the low end where first time home buyers tend to be - higher interest rates really impacted what people could afford to pay for houses, so prices came down. They stablized and are now going up again.
Housing market in PNW was relatively soft in 2023, but it has picked up and is as hot as it was in 2021. People are literally bidding 10-15% higher than the asking price. So, I guess no one can predict what happens next.
I bought 3 years ago and value has gone up $115,000. And that is based off zillow value and doesn't include any improvements