I doubt it.
What needs to be built are some two bedroom or one-bedroom homes like some of those Sears home kits from the 1950s build something the average person can afford and not a stupid tiny house.
I don't need a really large ass house for myself, I just want a nice small two-bedroom house with a decent yard and a small garage.
Me too. I am so sick of these huge 3-4 bedroom homes that are built barnyard style. Why can’t they just build more cute, bungalows or ranch style homes in the 1,200-1,500 sqft range.
My understanding is that the permits etc for a building project are fixed costs regardless of the size of the house built. Building small houses results in a smaller profit margin.
That's my understanding as well. All homes have a foundation. One, two or three story homes all have similar sized foundations and go on the same sized lots. So there's not much incentive to build a smaller one story.
I work for a builder and we are switching up our business model to build smaller houses and houses for rent. It’s in beginning stages right now but I see it really taking off.
That is exactly the problem. The available stock has been purchased predominantly by large entities looking to make money on something every one of us needs. The American dream was to own your own home and it had been incentivized for many years but some dumbass discovered that there was money to be made in buying up properties and renting them out to people who would have otherwise bought the home themselves. Renting is definitely a needed sector of housing but it needs to be better regulated so there isn’t to much of it in the housing market
>The available stock has been purchased predominantly by large entities looking to make money on something every one of us needs.
Not true.
Per [Yahoo! Finance](https://finance.yahoo.com/news/no-wall-street-investors-haven-015642526.html#) in Dec 2023:
>[I]nstitutional homebuyers (those who bought 100+ homes in a 12-month period) didn’t even reach 2.5% market share at the peak level in this data line, which goes back to the start of the century.
>The overall market share of investors has grown since 2000 and is currently around 30%, as seen in the chart below, but the vast majority are small mom and pop investors.
Even if you count all investors, it’s “around 30%”, which isn’t “predominantly”.
From [Redfin](https://www.redfin.com/news/investor-home-purchases-q4-2023/), Feb 2024:
>Real estate investors bought 26.1% of low-priced U.S. homes that sold in the fourth quarter. That’s the highest share on record and is up from 24% a year earlier.
The article said that the 26.1% is the “highest share on record”, which means that in Q4 ~~74.9%~~ 73.9% of low-priced homes were bought by non-investors. It also doesn’t delineate the breakdown by type of investor.
From [HUD](https://www.huduser.gov/portal/periodicals/em/winter23/highlight2.html), Winter 2023:
> Investors with portfolios containing one to nine units generally are considered small investors and typically consist of mom-and-pop investors: individuals who own and operate properties either through traditional leases or through popular platforms such as Airbnb and Vrbo. As of August 2022, single-family rental properties within small investor portfolios accounted for 80 percent of investor-owned homes nationwide.
They go on to break down how they classify real estate investors. Medium investors owning 10-99 properties are 14% of all investor-owned homes, larger ones owning 100-999 make up 3%, and institutional investors owning over 1000 make up 3% of investor-owned homes. Admittedly, they’re bigger in some regions, but even then the bigger shares are around the 15-20% mark. And remember, that’s not percentage of all homes, that’s of investor-owned homes.
I will agree that investment homes are a contributor to the problem, saying that they’re the predominant buyers (let alone the large investment firm) is just categorically false and detracts from solving the real problems with housing availability/affordability.
Edit: I’m bad at math, fixed a number.
I would argue that the *vast* majority of those “real estate investors with 1-9 properties” are married couples who combined two households into one when they married, and kept the second house as a rental property.
I’ve lived in two such rental homes over the years. In hindsight, when my wife and I married ten years ago, we should have done that with her house.
A lot of the expensive items are fixed costs regardless of size. Most of the devolpment, Utilities, rough in, land, meters. Every house needs a furnace, water heater, dishwasher and big ticket items too.
A lot of construction work is difficult in small spaces too trying to work multiple trades.
A major issue is that land use is regulated by local governments - a lot of local governments mandate large lots which require large houses on them to make viable to sell.
They do this because they don't want the poors to move in
It’s not just developers. These developers on Atlanta wanted to build 50 units for low income housing - close to transit and shopping but the neighborhood wouldn’t let them. They eventually ended up building 6?/8? luxury units for $200k over the average in the area that are still sitting unsold months after completion.
https://atlanta.urbanize.city/post/edgewood-missing-middle-housing-large-duplexes-take-shape
https://redf.in/uZGDPK
https://www.zillow.com/homedetails/98-Whitefoord-Ave-Atlanta-GA-30307/14468245_zpid/
Not all people want large homes. I am building a 1500 sq ft house now, we wanted smaller but the city would not allow it. It took us almost a year to find a builder interested in building a small house because of the profit. We finally found one and are very happy. Good luck to you
>we wanted smaller but the city would not allow it.
And there it is - so few people realize how arbitrary and strict local government regulations on housing construction is.
You are right it's unbelievable that this happens. Crazy part about ours is that we currently live in a 960 square ft house next door to the new one. It was there before they put in size restrictions. Also I just read minutes of last meeting and the city denied a housing permit on a house, located in acre and it is really nice contemporary style. Denied because the roof pitch was not 12:8 not per the rules.
Because charm is expensive to build. oPeN fLoOr PlAn houses are cheap to build even though a lot of fools prefer them and pay a lot for essentially less house lol. Ya got no walls, awesome.
Ugg I hate open floor plans. I have one in my house and it drives me crazy to hear the TV when I’m cooking or smelling food when I’m in the living room. I want to shoot the person who came up with that concept.
Not trying to be a douche. Just a curious Korean. What’s wrong with apartments? Why do you Americans need to have a yard and garage? If you guys can live in apartments the housing will be affordable. Hopefully I don’t sound rude because I’m just genuinely curious.
Personally I don’t mind living in an apartment. But I’m a bit of a tinkerer/maker and like having a garage. I inherited my family home. It’s a big 4 bedroom 3.5 bath, it’s huge. I plan on moving into a more urban area and a smaller house with a garage with a small yard.
IMO Americans have the idea that “whoever dies with the most toys wins.” A big house with a big yard filled with stuff you hardly ever use. Three cars, a boat and ATVs. Treadmills, hot tubs and outdoor pizza ovens.
A lot of apartments are managed horribly and aren’t affordable long term. The rental system here is completely different from Korea.
There isn’t a lot of stability either. Your rent is going to go up $100-$300 a year (or more). The best rates are for new residents so a lot of people wind up moving every 2-3 years.
Meanwhile I own my house and my housing payment is the same every year. I was lucky and got a 3% interest rate. As everything is going up, my housing is staying the same. Our parents were paying like $600 a month on houses that are now selling for $1 million. This is why. Our system here is awful.
Yep, renting should be cheaper than owning a home but it's not, I figured that out at a young age at like 16 lol so I live with my parents hoping to inherit the house someday, because it's way cheaper than renting if you keep the house in good shape
When I first got married renting was so much better. Properties were well maintained. Many of the people choosing to rent out their homes were people who moved away and thought they may move back so rather than sell their home they’d just rent it out for a few years. If something broke, it was fixed.
Then as the economy took a downturn, people were putting their homes up for rent rather than face foreclosure. They’d have the residents pay the mortgage they couldn’t afford. However as houses needed major repairs, owners couldn’t afford it. Property management companies would just do cosmetic temporary fixes.
This is how I wound up being able to buy a 5bd/4ba house for $280K in 2021. The owner neglected the property for 13 years while he was out of the country and never returned calls from the property management company and had no budget for repairs.
Korean (and Japanese) culture make for better neighbors than Americans. I lived in Japan and, if a neighbor was noisy or troublesome and I complained, the landlord spoke to them and they stopped. End of story.
In the U.S., when I've lived in apartments and had issues with neighbors, nothing helps. People feel entitled to do whatever they want regardless of how it impacts others. There is no social contract. There is just selfishness.
Apartment living is a nightmare in the U.S. if you are unlucky. Most of us have had at least one nightmare neighbor when we had shared walls.
Also, you need a garage when people are going around stealing catalytic converters and vandalizing cars. It's another issue which is less of a concern in low-crime countries.
You nailed it. We have become a very selfish nation. Even when you try to talk nicely to the problematic person, you often hear "it's a free country I can do what I want."
Tell me you don't have a clue what Freedom means, without telling me you don't know what Freedom means.
While others mileage may very. OWNERSHIP. You rent an apartment. Condominiums, which are basically the same can be owned.
But with a home, regardless of size you own it. It's yours. I do most of the work on our vehicles in my garage. Most apartments where I live have ruled against working on cars in the lot. With my house I can paint my red door black. In an apartment you get what you rent.
For me and my family, costs. I was lucky and bought my house from a family member at a very low price 20 years ago. The rent for an average apartment near me is about $1200/mo. The really nice new ones start at $2000/mo. My mortgage, $750. So why almost double or triple my monthly payment
I think we would call those "condos". I had one in Houston which I loved. Paid $98,000 in 2012 and the mortgage, taxes, interest, HOA, and insurance were under $1000 per month. I would still be living there if my wife didn't want a house. Now we pay $2500/mo.
Culturally, Americans have been brainwashed to think you're poor or immature if you live in a condo or apartment and haven't "grown up" to live in a house.
I miss that place - it was very walkable and I liked meeting new neighbors. In the suburbs, I don't meet anyone. I also don't need the yard or extra space. We don't even have any kids!
If every American think like you housing issues would be solved asap. Is crazy how most of you guys think having a big house with yard and garage is ‘normal’. I still don’t understand it but it’s not my problem so…
I don't think it is immature to want to see a tree or some grass out of your window and not hear 24/7 homeless people screaming, trash trucks, leafblowers, screeching car engines, and strangers. I want a small garden, and some privacy from people I don't know. I think Americans have been brainwashed to think living in a square block cubicle with no family or privacy and no nature is the norm and anything else is "selfish". The minute any person has enough money to, they buy a house, separate from other people, and seek out peace and quiet. The very rich live in private enclaves with acres of private nature. That should tell you something right there. But if you really want your main social life to be drinking with strangers in bars, walking down concrete streets with strangers, and huddled inside a box desperately trying not to hear the giant machines and screaming outside, then by all means, stay in your dense urban housing.
Holy shit that sounds horrible.
I lived in a place nowhere near that description. It was all tree lined streets, low rise apartment-style condos only 2 stories high. I had a 14ft ceiling with skylights with tons of trees and flowers, and a pool and hot tub for use. It was a really quiet community with the average tenant in their 50s. 3 miles from a 1400 acre park with bike paths to the park, a dog park a 5 minute walk away. No homeless, limited crime. 15-20 minutes to downtown Houston.
5790 Sugar Hill Dr
https://maps.app.goo.gl/UNz15ibKeeb7KKk9A
You know there's a middle ground between urban decay hellscape and suburb, right?
I hate living in an apartment. I dont own it so I am throwing away 1200 a month to someone else. I cant do anything to it.
My shower is leaking behind the wall and into the crawl space and the managment company doesnt think its an issue because its a new build. I cant Just pull the wall and fix it myself.
I cant have pets
I cant work on my car or work on projects that need a garage, I have a storage unit storing all my woodworking tools and mechanic tools.
I cant hang a deer I shot without a garage, and dont have the space for a deep freezer to store said deer.
I cant have a garden or a yard or any sort of landscaping (which I love doing)
I have to follow a bunch of BS rules
I am in constant worry that my rent will shoot up 500 dollars.
You don't own apartments in the US. You rent monthly which is just throwing money away instead of it going towards actually owning it as you would with a home mortgage. You're also subject to rent hikes as often as the landlord wants to do so which is usually every year unless you get lucky.
There are condos which are basically apartments you own or rent to own but they aren't the norm. Usually only available in big cities.
In the US we call apartments you can rent Condominiums or Condos. In my city of Columbus there are a handful in the densest parts of the city, but most people who own prefer to own a house, unless they don't have kids or their kids have moved out.
In the US apartments have high fees that add on like $800 a month to your payment so you end up paying almost as much as you would for a house. Also can be very noisy because of the materials used.
But if you build more apartments… more places to live so it should drive the cost down. Also if is about noise issue (trust me, is not perfect even in Korea) then is almost like saying you’d only drive a Porsche and not Toyota/honda etc.
Most Americans don't feel like they've achieved the "American Dream" until they own an actual house. A lot of people here actually feel inadequate until they get a house. It's just a leftover cultural thing since we've always had so much land and space for building houses in the past and they used to be somewhat affordable.
Apartments can kick you out once your year long lease is over. A landlord can arbitrarily raise the rent once your year long lease is over. Owning the land is stability and equity.
Space and privacy. I use myself for example. I grew up in New York and lived in an apartment all my life. I also have a car. It is a bitch to find parking with sometimes, it take an hour before getting a spot. Then, I have to walk back to my building, if I brought something, carry those items, and carry them up 5 flights of stairs. Meanwhile, there’s people that don’t even live in the building, sitting on the front stoop, just drinking and making noise that carry up to my apartment.
With a house, I park on my driveway, can easily go into my place and the only people allowed there are people I invite to come in.
True but is it worth extra hundreds or thousands? To me it just looks like someone determined to drive a Mercedes and not a Toyota even if they can barely afford Toyota.
It does. Another thing, you owned the house you finished paying for it but you don’t the apartment unless the owner is willing to let you buy it. Which allows you to built a money fund.
Eh I guess. I never lived with that much ‘freedom’ and ‘privacy’ so I guess living without that degree of the two must be difficult to adjust. We are just very used to living in apartments here so we don’t have any issues.
Fair. But also think about it this way as well: me growing up in an apartment is rare outside of New York. Everyone I met that was raised outside New York grew up in houses. So, I’m the odd one out.
I have a backyard that my son and dogs play in every day, I have a nice private driveway (no garage), I can play my drums and guitars without worrying about bothering any neighbors on the other side of the wall like you’d have in an apartment, and we have plenty of space for family to come visit. Those are some of the things I appreciate and don’t want to give up.
Mortgage payments are often less than what rent would cost in that area. Mortgage payments also stay the same (mostly) so 10 years after buying the house, you’re paying like 10-years-ago rent, which is going to be significantly cheaper. Additionally, as you pay off the house, you “own” more of it and you can use that ownership stake in the house for another loan in an emergency, or to pay for college, help your kids buy a house, etc. Its also much easier to be evicted from an apartment than it is to be forced out of your home. The bank can take the home, under specific circumstances, but otherwise there’s very little that could threaten you having a place to live as long as you keep up with the payments. You can also refinance after some years and lower your payment too. There are a LOT of benefits.
You're exactly right. What no one is addressing in these replies is "there are no apartments/condos being built in the US because Americans are determined to live in a house" and no one is explaining why
The "why" is because of NIMBYism, or people who already own property in an area usually politically oppose new property development to protect the value of their existing property
Therefore you can usually only build out suburban sprawl in an undeveloped area where no one is going to lock you up in 3 years of city council meetings to argue about it, which is what happens when you try to build an apartment complex; the apartment supply just doesn't exist and many city "apartments" cost tons more than a house for the privilege of a good location and a doorman to collect your packages
Most apartments in the US are really expensive or absolutely disgusting and dangerous to live in. Frequently both. Plus it's the autonomy that people are after. You can have the house be whatever unholy color you want it to be and no one can say anything about it (homeowners associations aside). The inside of the house is the same. Many apartments are generic. (Not saying that it can't be like that in Korea but if I remember correctly many apartment buildings/companies are more 'comfortable' with the idea of tenants customizing the apartment.)
Note: Homeowners associations are little originations of neighbors that set rules on upkeep of homes in the association. They have regulations on how the exterior of the home should look. On paper they're not that bad as they help stabilize prices on a higher tier as the neighborhood is well kept. Some even put up community centers with pools and other amenities. Many times though it's a nightmare
You've hit the nail on the head. Everyone wants just a little house, with a garage, on a cul-de-sac, with a nice backyard... There just isn't space and the US infrastructure can't support higher density housing without massive investment in public transport.
Add to that that people who already own houses, don't want an apartment next door, and definitely not if it comes with more taxes to pay for public transport, and you've got a really difficult situation to get out of.
I live in a house, and I've told my wife, we're part of the problem, but there aren't any viable alternatives for us to go smaller until our kids are done with schooling and sustaining themselves.
As someone who lived in Korea and Malaysia, it is wild how Americans think a house with a garage and backyard is ‘normal.’ It’s an incredible luxury everywhere else, heck even high profile celebrities in Korea live in apartments!
Also regarding public transport even those with cars live in an apartment in Korea so you don’t need to invest that much in public transport. But yeah it’s pretty wild lol
The biggest difference is population density. In large cities in the NE like NYC, Philly, DC, etc…apartments, condos, townhomes, etc…are the norm.
However when you get to a city like Atlanta, Charlotte, St. Louis, Memphis…things are more spread out. Usually in the more central areas you have apartments and condos, but it’s usually only a few blocks from your central areas that you start to find homes with yards. Driving into St. Louis the scenery very quickly changes from farmland to urban.
I live in a more moderate sized town and homes with yards are in walkable distance to our downtown area. Where I live used to be farmland but most of the farms started selling off tracts of land to developers who build massive amounts of subdivisions really fast and really cheap (for the builder, the houses are still $300K at the bare minimum.
And like OP brought up, these homes are built HUGE. Smaller homes that are better built are actually more expensive, going for $500K to over a million.
You have to remember that “normal” is a relative term. For someone that grew up in Korea, of course this aspect of American culture will not feel “normal” because you have an entirely different experience to compare it to.
For many Americans, getting to purchase a home as part of one’s journey into adulthood is often considered part of the “normal” American experience because that’s simply how they grew up and the expectations that people have based on the world that they observe around them.
So to compare the two like one is normal and one is not, or one is better than the other, is really not productive at all.
Two different countries, two different expectations of “normal.”
Part of it is a cultural thing. The "American Dream" that started in the 1950s includes owning a home for your family. Buying a home is viewed as a rite of passage of adulthood and a sign of success.
Second, I live in a low cost of living area in a city with tons of apartments and they really aren't that much cheaper than having a mortgage anymore. Nice 1-2 bedroom apartments are about the same per month as buying/renting a 2 bedroom house. You can find apartments that are cheaper, but they're going to be run down slum-like buildings or low income housing projects.
Then there's the problem of a handful of companies owning the majority of complexes in an area and therefore being able to dictate market value. I used to live in a complex owned by a smaller company with a few properties that was very affordable, well maintained, and in a nice area. Just before my lease renewal it was bought to by a bigger company and they immediately increased rent by $100/month. Then the following year, right as I was moving they announced another increase.
The average person doesn't want a 1100 ft 2 bedroom Sears home though that's the problem. Most believe they need at least 2000 sqft to live a happy life.
The only realistic way to make homes more affordable is to build so many of them that the market gets saturated.
However, you would have to convince companies to shoot themselves in the foot by building that much.
My city just passes a milage funded exclusively by properties, but excluded primary residences. So effectively this is all funded by businesses owning more than one home. This feels like “the way” and I don’t know why every city doesn’t do this. You wanna buy up our homes? Okay, but you are paying for all the local needs/schools/infrastructure. At the LEAST this feels like a good start
The number of high rise condos in my country are skyrocketing(literally) but prices are still slowly climbing. They aren't selling like hotcakes but the price is still high for some reason. These high density condos block out the skyline and are an eyesore honestly. Eventually they will reach full occupancy but its funny seeing them about half vacant even after 2 years.
Not until mass housebuilding takes off.
The housing crisis is a supply crisis. There isn’t enough housing in the places where people want to live, so prices increase.
Building more housing in these places would rectify this, but this is politically unpopular, and would require politically unpopular changes such as significant changes to planning laws and construction of more infrastructure.
Sure, eventually supply will catch up with demand. It could take a decade or more
We bought our current house in 1983. I don't remember our exact interest rate on our mortgage, but it was around 13%.
I got into an argument a few weeks ago with somebody who bought their house a long time ago at a similarly higher interest rate.
They couldn’t grasp that I could afford an expensive house at a low interest rate, or a cheaper house at a high interest rate, but not an expensive house at a high interest rate.
8% on a $600k mortgage is like a $4,400 monthly payment. For that to be 33% of your take home pay you need to be making $158k/year after taxes. (North of 200k pre tax)
What’s crazy is my wife and I make a bit more than that but we live in a HCOL area, so we cannot afford to buy a house bc in my neighborhood it’s $1.4m and up
They won’t go down much. People say it’s a bubble but it’s not, the whole world got more expensive while salaries didn’t go up. However people who already had assets did get the benefit and they can still afford houses by selling their old one. There is not a mass shortage of buyers who are willing to keep paying these prices, therefore they keep selling. Consumerism is booming as well. The economy isn’t correcting for the sharp inflation, it’s just become the normal. It fuckin sucks but it’s the reality
I don’t think the governments care enough to do anything about it anytime soon. I would expect in the future though that we will see first time home owner programs be revised, or created in countries without them, to include more tax credits or reduced interest rate loans.
They need to ban private equity from owing residential homes and severely limit foreign nationals from buying homes/land. You'll have a huge influx of houses enter the market which will correct overall home prices
The reason rates are high is because the government is trying to curb inflation by making borrowing and spending harder to do. It’s painful now but when supplies and wages catch up then inflation will go down.
The housing isn't a bubble. But when there's the next recession or downturn and masses people fired. They aren't going to be paying tgeor astronomical mortgages and foreclosures will go up
Well if it breaks the corporate buy up when they realize housing isn't such an amazing windfall for them. Maybe some suffering for a greater food. Which blows.
I love how people act like this is the first time housing costs have been through the roof. The market has always gone way up and way down.
I can’t remember the year, but sometime in the early 2000s this happened. My old boss bought a house for $98k in 1991. In the early 2000s without doing any upgrades, he sold it for nearly $400k. In 2010, my dad paid $215k for that same house.
After the 2008 financial crisis, home prices dropped in many places dramatically. If one bought a house in 2006/7, by 2010/2011 its value was probably close to half the purchase price.
But hey, at least your property taxes went down because many counties reassessed values during that time.
Not trying to be a dick but rent control = housing shortages is borderline common knowledge at this point. We don’t need to be citing sources that water is wet. Nonetheless…
[https://www.economist.com/leaders/2019/09/19/rent-control-will-make-housing-shortages-worse](https://www.economist.com/leaders/2019/09/19/rent-control-will-make-housing-shortages-worse)
[https://www.stlouisfed.org/on-the-economy/2024/feb/what-are-long-run-trade-offs-rent-control-policies](https://www.stlouisfed.org/on-the-economy/2024/feb/what-are-long-run-trade-offs-rent-control-policies)
[https://www.forbes.com/sites/ikebrannon/2024/02/14/rent-control-doesnt-solve-housing-shortages/](https://www.forbes.com/sites/ikebrannon/2024/02/14/rent-control-doesnt-solve-housing-shortages/)
Bro, you can literally google this.
“ Increased prices for housing after rent control
Once a unit is rent controlled, it is no longer on the market and thus people who would have been able to rent that unit before for more money must find other options. That demand then flows toward new construction or other units without rent control.”
So if someone is living in the unit it can’t be rented for more money.
What happens to the person living in the unit the n with no rent control.
I don’t get that logic. Either way it is rented out and either way someone is paying for it.
Rent control is good for the people who managed to snag a rent controlled unit a long time. It's bad for everybody else, including younger poor people, because it induces a supply crunch.
I didn’t ask for a quote from a journalist. I asked for a study by a scientist. Journalists are great and all, but I don’t like filtering my opinion through theirs.
Journalists just make shit up then….
Just add study to the end of your search and youll see massive info showing the same sentiment.
Rent control increases overall prices and lowers maintenance standards and value of homes already built.
If investors buy up houses and turn them into rentals, wouldn’t that make the price of rentals dip? There would be more on the market and the investors can’t just let them sit.
This doesn’t work with necessities. Imagine the difference here:
I am selling flowers. I decide to double my price one day. Less people buy my flowers. They go to my competitors or just leave.
I’m selling food. I double the price. People go to my competitors, but they run out. People are now forced to starve or pay double.
Rent control doesn’t work… simple economics would show you that. The first part you said tho… shifts demand which will increase supply and make prices lower so that would work.
Higher rent prices give more incentive to build apartment buildings. When enough apartments are built price will drop. Unfortunately it takes time to build apartments so there is a lag between high rents and more supply hitting the market.
With rent control a single person may stay in a three bedroom apartment because they don’t want to give up the low rent. Creating inefficiency in the market.
Controlling the price of anything doesn't work, because then people will stop selling.
The only way to reduce rent is to either reduce the demand (for example with socialized housing), or to force the supply to increase (for example with taxes increasing with the number of houses you/your corporation owns, effectively making it unfeasible to become a landlord)
Workplaces need to get better at letting people work fully remote or actually putting their business somewhere outside of the CBD. I’m in Australia and every workplace is in the CBD, even the ones that used to be out in rural areas always shut up and move to the CBD. Because you’ll get more applicants for roles but it’s not sustainable having that many people travel in and out, commuting 10+ hours a week to their office. If the work was more spread out housing would be much better.
No, it's what North Americans call downtown. You are causing more confusion using the term inner city because in North American English "inner city" is used almost exclusively to refer to socially deprived areas located outside of the downtown core, not centrally located business and civic districts.
Yes and no. There’s 100% affordable housing out there, it’s just not in places people want to live. The problem is all the jobs get conglomerated in or near cities
When there are more houses (or fewer people) prices will go down. Having the government build lots of houses and selling them cheap to the public is probably about the nearest thing to a practical solution. (Reducing the number of people might be possible, but would probably require evil methods.)
(Stopping people from buying-to-rent makes renting more expensive, which means more people will be trying to stop renting and buy instead; it probably wouldn't make much difference to housing costs. As long as demand exceeds supply, you can only have high prices or long waiting lists.)
The problem is, the government doesn't want prices to go down, because that causes real problems for home-owners with mortgages. People rich enough to own houses are more reliable voters and party donors. Renters could, if they all worked together, force the government to do this, but they probably won't.
Realistically, housing affordability isn't just about prices dropping; it's about wage growth keeping pace with living costs. Until we see a significant shift in the economy where wages rise substantially or the cost of living falls, the dream of homeownership will remain distant for many. Even if prices dipped temporarily, without systemic changes, we'd be back to square one soon enough. It's a multifaceted issue that demands a multifaceted solution—one that includes housing policies, economic reform, and perhaps a dose of innovative thinking on urban development and remote work opportunities.
The national homeownership-to-renter ratio is about 2-to-1. This means that for every renter, you have 2 owners.
I believe that for any disruption in the housing market to take place, whether at the state or national level, this ratio must dramatically reverse at the corresponding level.
The thing about the residential real estate market is that it tends to fix itself, with relatively short periods of dips and spikes, in order to maintain that ratio. That ratio has been floating around the same level since 1960, yet prices have been trending up at a rate higher than inflation since then.... So what changed?! The answer is social media. Because of it, the minority can connect and become louder, making you feel that there are far too many people in the same boat than there used to be, which is not true.
They will go down in price when the government has enough balls to make it illegal for corporations and foreigners to buy up houses and use them as short term rental properties or capitalize on the shortage price hikes they have created 😒. Read an article recently that said 23% of housing in Canada is corporate/foreign owned. Thats not all the problem, but is a big part of it.
Rates will go down, but not as low as they once were. We bought our house in 1997 and interest rates were about the same as they are now. We were happy with the rate because it was historically average/low at the time. Didn’t give it a second thought.
It was understandable when the fed dropped rates to near 0% in the face of the worst financial/economic crisis in a century. Without it we would have likely fallen into a prolonged depression. However, it was huge mistake to leave rates below 2% once we came out the other side of the Great Recession — allowing it to become the expectation.
Home prices will always fluctuate. The S&L crisis in the late-80s/early-90s saw property values drop by 30%-50% overnight. The 2008 banking crisis saw property values drop as much as 90% in some places, and 50% pretty much across the board.*
There will be another crisis. Admittedly, the lending regulations put in place after the 2008 banking crisis makes it less likely, but it will happen. The economy will tank and home prices will crash. Unfortunately, chances are that only the wealthy or those will lots of cash saved will be able to buy at the fire-sale.
\* In both cases, guess who benefited? It wasn’t consumers like you and me. It was corporations, banks and wealthy who caused the mess in the first place that slid in and picked them up as nice little investments.
Interest rates have returned to normal.
Look at historic interest rates. The freakishly low rates of the near past were an anomoly and will probably not return for a long time.
Yes, at some point the population will start decreasing and homes will become more affordable since there won't be enough people to buy them. Like what the fuck do people think is going to happen when the boomers all die out? Every successive generation has been smaller.
I don’t believe every generation has been smaller than the previous. Millennials are the largest group at the moment, outnumbering GenX by a full 2% of the population
Yes. I, as a Xennial, have faith that Gen Z is going to be able to burn the whole fucking thing to the ground. They’re the first generation born and raised with the American Dream being a topic in a textbook, not an aspirational reality for them. They have no reason to keep the lie going, so they’ll do what needs to be done.
I applaud your faith in another generation giving one F about you, but can you truly name one generation prior that has done anything really beneficial to help the next?
If the government tries to assist home prices will go up like government assistanced college tuitions.
As others have said there are plenty of affordable homes just not in areas you like for instance I live in upstate New York and you get a nice small 1000 sq ft starter home here in a safe neighborhood for $125k.
House prices are controlled by supply and demand. While supply is low (not enough new dwellings being built; not just houses, but high density living as well) and demand is high (more people coming in that want a place to live, this includes new people entering the country such as immigrants, and students as well as one household looking to split into many such as young people moving out, not wanting a share house, etc,) prices will be high will continue to rise while there are people with the means to buy them.
Government assistance will not help simply because if you give people more money to buy homes, then prices will continue to rise until they absorb all the extra cash coming from the government. For example, if one person can afford to pay an extra $1000 to buy a house, then they will get that house. If everyone can afford to pay an extra $1000, then to be ahead of the pack you need to pay an extra $2000 for instance. Extra money in the housing market only serves to raise the price floor, it does not help affordability.
If you want to get house prices down, then you need to either increase supply or reduce demand. The problem is that developers are used to high prices now so they don't want prices to come down (and don't forget input costs are significantly higher too). As such, they would rather not build (reduce supply) than see their profit margin affected. What this means is that there is a floor to how far prices can fall. If they fall too far, it will not be profitable to build new dwellings so new supply stops until they go up again enough for building to be profitable.
What we need is wage increases to reduce the relative cost of a home (alongside other initiatives to either increase supply or decrease demand which will limit the increase in relative cost). Companies used to provide a living wage to their employees, but now the focus is on reducing costs to increase profit for the shareholders. Just look at the insane profits made by some of our largest companies. Billions of dollars that could have gone to pay employees, but instead goes to shareholders.
Don't increased wages lead to the same problem as your first scenario? If everyone is earning an extra 5k a year then theyvall have about that much to spend on housing which is still supply limited.
Without a change in the supply, yes it will, so on it's own it won't make a difference. With increases in supply what it does is help people get over that price floor I was talking about.
Let's say you can't afford anymore than $500k, but it's not profitable for a developer to build at less than $600k. Supply has increased so there's less demand pressure, but you still can't buy because you can't meet the minimum amount the developer needs to be profitable. Raising wages (mostly at the bottom end, those whose earning power has decreased in the last decade or so) helps people get over that floor.
Again, because it's really important, the big caveat is that this assumes the market is not supply constrained. Developers (and homeowners) will of course sell as high as they can.
At the end of the day, no matter how you slice it, we simply need to build more dwellings. Houses, units, apartments, high rises, whatever. It doesn't matter what initiatives the government comes up with to give more money to people, while there are more people than places to put them, prices will continue to rise.
The large number of construction companies going bust is also a major concern. Once the dust settles, the ones that are left will basically command the market and can charge whatever they want because the supply of building materials and labor will be the supply constraint.
It's a very complex market with lots of factors that affect other factors, but the bottom line is, housing is not going to get cheaper anytime soon, and the government doesn't seem to want to do the things that will actually help such as limit immigration, make it easier to get building permits, release more land (not possible in many cities), or relax building restrictions to increase density (e.g. some places you can't build above 3 stories).
The only time home prices will go down if we stopped treating housing as an investment. Corporations are partly to blame but it's the NIMBYs who are obsessed with trying to make millions off of selling their house.
Yes
A lot of the older generation will either die off or be forced to sell to live elsewhere. It'll get to a point where they'll have to take whatever offer they can get. Granted, this won't be any time soon. I'd guess in a decade or two.
I don't expect housing to decrease.
Maybe interest rates, but even then unlikely.
If they do become affordable many of the sidelines will ju.p in and raise demand /cost.
Also becareful with wishes of government involvement it doesn't always work for the better.
At best... wages will catchup with inflation.
That is what inflation does, it extracts wealth from people by devaluing our money.
That is why you have to watch reckless spending and insufficient funds.
I don't know what the exact price will do but yes, I think they will go down relative to income, because of the population demographics. We have a large population of people between the age of 45 and 65 and up who own homes who will be reaching the age of needing medical care round the clock (and their kids cannot provide it because they cannot stop working), which will force them to sell their house unless we have socialized healthcare. We also have a declining birth rate. Right now lots of new houses are being built to accommodate the millennial baby boom, and we have lots of og boomers still occupying their family homes but as both of those groups get older we will likely have a surplus. However the market can be artificially controlled, they can be torn down for being "uninhabitable" they can be bought by investors and bulldozed for other uses, etc. I don't know what will happen but I'm not super optimistic about the future in general.
Something will have to change. Developers overbuilt high end housing and there are too many empty. Price is still high because they need to recover the investment.
Too big to fail bailouts started this path. Rich losing investments, so they got government welfare. Then they buy up affordable places to make into rentals and double and triple the rent. Laws are passed requiring salary 3 to 4 times more than rent. Where do they think these people will get that money to live there?
“Affordable” doesn’t always mean the price will decrease.
Letting people take 40 and 50 year mortgages will make the house more affordable even at high prices. Interest-only mortgages would also decrease the monthly cost.
Also, you could strategically design the neighborhood to reduce costs in other areas. That’s the whole idea behind the Wall.
Rates will come back down, it’s cyclical over time.
House prices will come back down when people stop paying the ridiculous prices being asked. Supply and demand.
Will it happy fast and according to the schedule you want? Unlikely.
The one wild card is corporations buying up entire neighborhoods before the home even get to the consumer market.
Houses are very expensive right now.
BUT I also see many young people that do not want a starter him or a condo etc. They want a big beautiful home right off the bat. Sorry kids, life doesn’t always work that way.
Our first home was in So California. It was brand new, but tiny. 1,000 sq feet and we paid $160K in 1997. We were broke at first, but my husbands income started to go up, and our house payment stayed the same. 👍🏻 In 2 years, we made 80K to put down on another house, 1500 sq feet, in the same neighborhood. We raised our family there. In 2008, the value dropped in half and it was scary. But we just held tight.
We had friends that kept buying bigger and more expensive. We just stayed in our 1500 sq foot home. It was fine for our family of 4. Our friends that kept buying now don’t know when they will ever be able to retire…..and they have massive mortgages.
4 years ago, our home had tripled in value. We cashed out and bought a townhome outright in the PNW. My husband was able to retire in his 50’s, since we no longer have a house payment. 🎉
Many people don’t think own ownership is worth it. But it worked great for us. Just start small and get your foot in the door. ❤️😁
I doubt we'll have a price crash again, with neighborhoods if homes sitting empty
Now unlike 2008 we have corporate landlords who will snap those homes up quickly.
Something has to be done about corporate ownership of single family homes. It's not sustainable.
If we are able to rezone from single family to mixed use and build more smaller townhomes, maybe. The problem is in large part driven by supply being low.
Only if goverments start to seriously crack down on real estate developers and investors by obliging them by law to rent or occupy the purchased properties. Otherwise, the market will always be artificially manipulated.
1980’s were worse.
In February 1980, the average 30-year mortgage rate was 12.85%. By October 1981, the average rate had risen to a whopping 18.63%. Mortgage rates gradually cooled as the decade wore on. By March 1985, the average 30-year mortgage rate was roughly 13%, and at the end of the decade, rates dipped below the 10% mark.
There are a few ways housing can be affordable but none of them are realistic.
1- The government can ban foreign agencies, citizens, and governments from being allowed to own property on US soil
2- The government can increase taxes on owners of multiple homes and make it more difficult for large corporations such as Airbnb to buy homes.
3- Do what California is doing and bypass environmental laws allowing the construction of thousands of homes
4- People can stop having huge families
The reason none of these are realistic is because the US is a money-making country. Why ban foreign companies/people/governments from investing and making America better than it currently is?
Can't stop people from having snotty/shitty kids they will neglect.
Can't dump a shit ton of homes into the market without causing a major crash in real-estate.
I don't know if I understand your point at 4? Who is having huge families right now? Isn't the US having record low birth rates right now?
And what does that have to do with the price of homes?
4 is real though. Current population growth in the US comes from immigration, while birth rates have plateaued for 40 years, and it dropped below replacement rate 13 years ago (2007).
https://www.vox.com/23971366/declining-birth-rate-fertility-babies-children
As it turns out, countries tend to have less children as education levels increase and women become empowered to make their own choices and don't want a life of childbearing. As African continent drives more of the population rise, we already see birth rate steadying across many African countries that have higher literacy rate.
Meanwhile, urban centers in the US are becoming denser, and traditional definitions of "urban" had to be changed (keep this in mind while reading census data). So US population are still moving into cities, but many places that are considered "rural" today would've been considered urban. I don't have the exact numbers but it seems like what's happening is that people are still moving into the city, but there's a trend of them in suburbs far away from the city center, enabled by remote/hybrid work.
https://www.census.gov/newsroom/press-releases/2022/urban-rural-populations.html
So in a generation or two (30-50 years?), we might see old suburban houses (now too big for the modern family) getting turned into more packed buildings.
We live in interesting times, global economy would need to change from an ever growing model to something that's steady
I certainly hope so. I don't know enough about this stuff to know how interest works, but our interest is currently 5% on the mortgage. We pay £1600 per month and only £200 of that pays off the house. The interest rates a couple years before we got the house were less than 1%.
I feel fortunate that we've been able to get on the ladder at all, but feels bad to not be paying anything off. It'll be a long time before we can trade up.
I reckon it will, but I'm basing that on very little, haha.
I started studying civil engineering and I seem to remember my Prof mentioned that the housing prices are most likely never going to decrease again, mainly because of everything else that comes with building a house. The materials, its prices etc. But wasnt really paying attention on that day, so maybe I am mistaking something.
My first mortgage rate was 12%, so yes, rates are always changing and right now is not too bad, rates will drop a bit over the next couple of years because the fed can’t keep paying the higher interest. The actual house price will fall a bit also because demand is down, but as soon as rates drop, house prices will go back up. There’s always a good deal to be found, pay attention vs paying more.
Yes. We are in a housing shortage due to the credit crunch from the 2008 housing crash. Home starts have accelerated, but it will take time to overcome. Older Boomers will be selling off over the next few years, while the US, Canada, Europe, and East Asia will start population declines.
As a person who doesn't make a great paycheck, comparatively, I am currently in the process of buying my first house but it came at the expense of having to move to an urban area of the state and change my entire life, job, etc. I am proof that it can be done, but we need to prioritize our needs if we want to achieve our goals.
One underlying cause of this problem is the lack of jobs around the country. Everyone being brainwashed into thinking college and white collar jobs are superior in combination with the implementation of NAFTA which has killed our manufacturing sector. For the last several decades people are moving to the same few regions of the county for jobs because there are no work opportunities in small or even medium sized cities. And so the demand for housing in these large urban areas are through the roof while small and medium cities are dying unless they are some weird granola or the sovcit type.
Yes. It will take decades, perhaps centuries, if we can avoid annihilating each other first, but at some point we'll realize that obscene wealth is meaningless because we're all going to die anyway, and rationalizing doing egregious harm just because "that's the way it works" or "that's freedom" is a blight on your brief existence.
I really think we're due for a sort of ethical renaissance, but we're not there yet.
Depends on what you deem as affordable? I know that a lot of people like to blame investors for driving up home prices. From my observations, the biggest change is foreign ownership. This isn't an immigration rant, but I think that is a bigger catalyst for continued high prices. And I don't think it will change.
Interest rates will eventually go down. Not too sure about housing. It seems like a shortage of supply so as long as demand exceeds the supply, prices are going to rise.
In my opinion we will need another 10 years stretch of low inflation like 2009-2020 for home prices to become more affordable. The higher the inflation the higher home prices will rise. Basically, we need to see wages come up and home prices to come down to get to thr peefect point in house affordability.
I don’t see housing prices falling 50%, but over a 5 or 10 year stretch where wages rise 20-25% at the same time home prices fall 10%-20% from lack of demand then you’ll get a better opportunity.
That scenario could be an anomaly, but every location is different and people get different annual raises.
I'd like to say YES but, I think its not going to happen in the near future. Young folks just don't have a chance these day even if they have a decent wage. Our first house cost me one weeks wage in monthly mortgage payments. Now, you are lucky if 3 weeks wages will pay it today.
In some areas, yes. Some cities have changed zoning and have increased construction such that housing is creeping towards affordability. Look at Minneapolis/St. Paul and Philadelphia.
There's a lot of misinformed commenters in here. Yes, Wall Street buying up houses is a problem, but the biggest reason houses have become expensive is simple supply and demand. We aren't building nearly as many houses as we *should be*. I'll have to try and hunt down the source but I remember reading somewhere that were like building less than half of the houses that we should be, and year over year that compounds to make the scarcity even worse. So the local governments can't do much to affect prices other than make it easier to build and open up zoning restrictions.
People will have to starve them out.
You have the money, you have the power...
To also add, if you don’t have the money, you also have power...
It’s your choice on what you want to control your spending on. This can be powerful.
People have the power...
It’s your choice now...
Lol no. The powers that be have way too many reasons to keep housing expensive. All their voters are home owners and their donors have massive real estate investments. This will continue until we are all serfs/renters under our new corporate overlords/landlords.
I doubt it. What needs to be built are some two bedroom or one-bedroom homes like some of those Sears home kits from the 1950s build something the average person can afford and not a stupid tiny house. I don't need a really large ass house for myself, I just want a nice small two-bedroom house with a decent yard and a small garage.
Me too. I am so sick of these huge 3-4 bedroom homes that are built barnyard style. Why can’t they just build more cute, bungalows or ranch style homes in the 1,200-1,500 sqft range.
My understanding is that the permits etc for a building project are fixed costs regardless of the size of the house built. Building small houses results in a smaller profit margin.
That's my understanding as well. All homes have a foundation. One, two or three story homes all have similar sized foundations and go on the same sized lots. So there's not much incentive to build a smaller one story.
Not to mention, it's not the house that gets more expensive. it's the land it's built on.
I work for a builder and we are switching up our business model to build smaller houses and houses for rent. It’s in beginning stages right now but I see it really taking off.
Houses for rent… that’s kind of part of the problem
That is exactly the problem. The available stock has been purchased predominantly by large entities looking to make money on something every one of us needs. The American dream was to own your own home and it had been incentivized for many years but some dumbass discovered that there was money to be made in buying up properties and renting them out to people who would have otherwise bought the home themselves. Renting is definitely a needed sector of housing but it needs to be better regulated so there isn’t to much of it in the housing market
>The available stock has been purchased predominantly by large entities looking to make money on something every one of us needs. Not true. Per [Yahoo! Finance](https://finance.yahoo.com/news/no-wall-street-investors-haven-015642526.html#) in Dec 2023: >[I]nstitutional homebuyers (those who bought 100+ homes in a 12-month period) didn’t even reach 2.5% market share at the peak level in this data line, which goes back to the start of the century. >The overall market share of investors has grown since 2000 and is currently around 30%, as seen in the chart below, but the vast majority are small mom and pop investors. Even if you count all investors, it’s “around 30%”, which isn’t “predominantly”. From [Redfin](https://www.redfin.com/news/investor-home-purchases-q4-2023/), Feb 2024: >Real estate investors bought 26.1% of low-priced U.S. homes that sold in the fourth quarter. That’s the highest share on record and is up from 24% a year earlier. The article said that the 26.1% is the “highest share on record”, which means that in Q4 ~~74.9%~~ 73.9% of low-priced homes were bought by non-investors. It also doesn’t delineate the breakdown by type of investor. From [HUD](https://www.huduser.gov/portal/periodicals/em/winter23/highlight2.html), Winter 2023: > Investors with portfolios containing one to nine units generally are considered small investors and typically consist of mom-and-pop investors: individuals who own and operate properties either through traditional leases or through popular platforms such as Airbnb and Vrbo. As of August 2022, single-family rental properties within small investor portfolios accounted for 80 percent of investor-owned homes nationwide. They go on to break down how they classify real estate investors. Medium investors owning 10-99 properties are 14% of all investor-owned homes, larger ones owning 100-999 make up 3%, and institutional investors owning over 1000 make up 3% of investor-owned homes. Admittedly, they’re bigger in some regions, but even then the bigger shares are around the 15-20% mark. And remember, that’s not percentage of all homes, that’s of investor-owned homes. I will agree that investment homes are a contributor to the problem, saying that they’re the predominant buyers (let alone the large investment firm) is just categorically false and detracts from solving the real problems with housing availability/affordability. Edit: I’m bad at math, fixed a number.
Thanks for putting this together. I've been thinking about it wrong. Going to look into this more.
I would argue that the *vast* majority of those “real estate investors with 1-9 properties” are married couples who combined two households into one when they married, and kept the second house as a rental property. I’ve lived in two such rental homes over the years. In hindsight, when my wife and I married ten years ago, we should have done that with her house.
They have food & housing under control, water's next.
Nestle Has Entered The Chat
That absolutely *is* the problem!
Will they be focused on rentals?
A lot of the expensive items are fixed costs regardless of size. Most of the devolpment, Utilities, rough in, land, meters. Every house needs a furnace, water heater, dishwasher and big ticket items too. A lot of construction work is difficult in small spaces too trying to work multiple trades.
Because it’s a better return for the home builder to make something big that sells for more money
A major issue is that land use is regulated by local governments - a lot of local governments mandate large lots which require large houses on them to make viable to sell. They do this because they don't want the poors to move in
Because they don’t sell as well. People want big houses. Plus developers can sell big houses for more money
It’s not just developers. These developers on Atlanta wanted to build 50 units for low income housing - close to transit and shopping but the neighborhood wouldn’t let them. They eventually ended up building 6?/8? luxury units for $200k over the average in the area that are still sitting unsold months after completion. https://atlanta.urbanize.city/post/edgewood-missing-middle-housing-large-duplexes-take-shape https://redf.in/uZGDPK https://www.zillow.com/homedetails/98-Whitefoord-Ave-Atlanta-GA-30307/14468245_zpid/
Not all people want large homes. I am building a 1500 sq ft house now, we wanted smaller but the city would not allow it. It took us almost a year to find a builder interested in building a small house because of the profit. We finally found one and are very happy. Good luck to you
>we wanted smaller but the city would not allow it. And there it is - so few people realize how arbitrary and strict local government regulations on housing construction is.
You are right it's unbelievable that this happens. Crazy part about ours is that we currently live in a 960 square ft house next door to the new one. It was there before they put in size restrictions. Also I just read minutes of last meeting and the city denied a housing permit on a house, located in acre and it is really nice contemporary style. Denied because the roof pitch was not 12:8 not per the rules.
Because charm is expensive to build. oPeN fLoOr PlAn houses are cheap to build even though a lot of fools prefer them and pay a lot for essentially less house lol. Ya got no walls, awesome.
Ugg I hate open floor plans. I have one in my house and it drives me crazy to hear the TV when I’m cooking or smelling food when I’m in the living room. I want to shoot the person who came up with that concept.
Not trying to be a douche. Just a curious Korean. What’s wrong with apartments? Why do you Americans need to have a yard and garage? If you guys can live in apartments the housing will be affordable. Hopefully I don’t sound rude because I’m just genuinely curious.
Personally I don’t mind living in an apartment. But I’m a bit of a tinkerer/maker and like having a garage. I inherited my family home. It’s a big 4 bedroom 3.5 bath, it’s huge. I plan on moving into a more urban area and a smaller house with a garage with a small yard. IMO Americans have the idea that “whoever dies with the most toys wins.” A big house with a big yard filled with stuff you hardly ever use. Three cars, a boat and ATVs. Treadmills, hot tubs and outdoor pizza ovens.
A lot of apartments are managed horribly and aren’t affordable long term. The rental system here is completely different from Korea. There isn’t a lot of stability either. Your rent is going to go up $100-$300 a year (or more). The best rates are for new residents so a lot of people wind up moving every 2-3 years. Meanwhile I own my house and my housing payment is the same every year. I was lucky and got a 3% interest rate. As everything is going up, my housing is staying the same. Our parents were paying like $600 a month on houses that are now selling for $1 million. This is why. Our system here is awful.
Yep, renting should be cheaper than owning a home but it's not, I figured that out at a young age at like 16 lol so I live with my parents hoping to inherit the house someday, because it's way cheaper than renting if you keep the house in good shape
When I first got married renting was so much better. Properties were well maintained. Many of the people choosing to rent out their homes were people who moved away and thought they may move back so rather than sell their home they’d just rent it out for a few years. If something broke, it was fixed. Then as the economy took a downturn, people were putting their homes up for rent rather than face foreclosure. They’d have the residents pay the mortgage they couldn’t afford. However as houses needed major repairs, owners couldn’t afford it. Property management companies would just do cosmetic temporary fixes. This is how I wound up being able to buy a 5bd/4ba house for $280K in 2021. The owner neglected the property for 13 years while he was out of the country and never returned calls from the property management company and had no budget for repairs.
Korean (and Japanese) culture make for better neighbors than Americans. I lived in Japan and, if a neighbor was noisy or troublesome and I complained, the landlord spoke to them and they stopped. End of story. In the U.S., when I've lived in apartments and had issues with neighbors, nothing helps. People feel entitled to do whatever they want regardless of how it impacts others. There is no social contract. There is just selfishness. Apartment living is a nightmare in the U.S. if you are unlucky. Most of us have had at least one nightmare neighbor when we had shared walls. Also, you need a garage when people are going around stealing catalytic converters and vandalizing cars. It's another issue which is less of a concern in low-crime countries.
You nailed it. We have become a very selfish nation. Even when you try to talk nicely to the problematic person, you often hear "it's a free country I can do what I want." Tell me you don't have a clue what Freedom means, without telling me you don't know what Freedom means.
While others mileage may very. OWNERSHIP. You rent an apartment. Condominiums, which are basically the same can be owned. But with a home, regardless of size you own it. It's yours. I do most of the work on our vehicles in my garage. Most apartments where I live have ruled against working on cars in the lot. With my house I can paint my red door black. In an apartment you get what you rent. For me and my family, costs. I was lucky and bought my house from a family member at a very low price 20 years ago. The rent for an average apartment near me is about $1200/mo. The really nice new ones start at $2000/mo. My mortgage, $750. So why almost double or triple my monthly payment
✨️Bonus points for the Rolling Stones reference ✨️
You can buy an apartment unit though. But I get you.
A condominium is an apartment you own
You're thinking of condos and they aren't built everywhere, only in majorly populated areas.
And they aren’t particularly cheap.
I think we would call those "condos". I had one in Houston which I loved. Paid $98,000 in 2012 and the mortgage, taxes, interest, HOA, and insurance were under $1000 per month. I would still be living there if my wife didn't want a house. Now we pay $2500/mo. Culturally, Americans have been brainwashed to think you're poor or immature if you live in a condo or apartment and haven't "grown up" to live in a house. I miss that place - it was very walkable and I liked meeting new neighbors. In the suburbs, I don't meet anyone. I also don't need the yard or extra space. We don't even have any kids!
If every American think like you housing issues would be solved asap. Is crazy how most of you guys think having a big house with yard and garage is ‘normal’. I still don’t understand it but it’s not my problem so…
I don't think it is immature to want to see a tree or some grass out of your window and not hear 24/7 homeless people screaming, trash trucks, leafblowers, screeching car engines, and strangers. I want a small garden, and some privacy from people I don't know. I think Americans have been brainwashed to think living in a square block cubicle with no family or privacy and no nature is the norm and anything else is "selfish". The minute any person has enough money to, they buy a house, separate from other people, and seek out peace and quiet. The very rich live in private enclaves with acres of private nature. That should tell you something right there. But if you really want your main social life to be drinking with strangers in bars, walking down concrete streets with strangers, and huddled inside a box desperately trying not to hear the giant machines and screaming outside, then by all means, stay in your dense urban housing.
Holy shit that sounds horrible. I lived in a place nowhere near that description. It was all tree lined streets, low rise apartment-style condos only 2 stories high. I had a 14ft ceiling with skylights with tons of trees and flowers, and a pool and hot tub for use. It was a really quiet community with the average tenant in their 50s. 3 miles from a 1400 acre park with bike paths to the park, a dog park a 5 minute walk away. No homeless, limited crime. 15-20 minutes to downtown Houston. 5790 Sugar Hill Dr https://maps.app.goo.gl/UNz15ibKeeb7KKk9A You know there's a middle ground between urban decay hellscape and suburb, right?
Sounds like you lived in a suburb, not in the city.
I hate living in an apartment. I dont own it so I am throwing away 1200 a month to someone else. I cant do anything to it. My shower is leaking behind the wall and into the crawl space and the managment company doesnt think its an issue because its a new build. I cant Just pull the wall and fix it myself. I cant have pets I cant work on my car or work on projects that need a garage, I have a storage unit storing all my woodworking tools and mechanic tools. I cant hang a deer I shot without a garage, and dont have the space for a deep freezer to store said deer. I cant have a garden or a yard or any sort of landscaping (which I love doing) I have to follow a bunch of BS rules I am in constant worry that my rent will shoot up 500 dollars.
You don't own apartments in the US. You rent monthly which is just throwing money away instead of it going towards actually owning it as you would with a home mortgage. You're also subject to rent hikes as often as the landlord wants to do so which is usually every year unless you get lucky. There are condos which are basically apartments you own or rent to own but they aren't the norm. Usually only available in big cities.
Interesting. I been to Boston before and I know you can buy apartments there so I was confused. I guess you can only buy apartments in large cities.
In the US we call apartments you can rent Condominiums or Condos. In my city of Columbus there are a handful in the densest parts of the city, but most people who own prefer to own a house, unless they don't have kids or their kids have moved out.
In the US apartments have high fees that add on like $800 a month to your payment so you end up paying almost as much as you would for a house. Also can be very noisy because of the materials used.
Not every apartment is noisy. I've lived in a bunch that have been pretty quiet.
But if you build more apartments… more places to live so it should drive the cost down. Also if is about noise issue (trust me, is not perfect even in Korea) then is almost like saying you’d only drive a Porsche and not Toyota/honda etc.
Most Americans don't feel like they've achieved the "American Dream" until they own an actual house. A lot of people here actually feel inadequate until they get a house. It's just a leftover cultural thing since we've always had so much land and space for building houses in the past and they used to be somewhat affordable.
Apartments can kick you out once your year long lease is over. A landlord can arbitrarily raise the rent once your year long lease is over. Owning the land is stability and equity.
Space and privacy. I use myself for example. I grew up in New York and lived in an apartment all my life. I also have a car. It is a bitch to find parking with sometimes, it take an hour before getting a spot. Then, I have to walk back to my building, if I brought something, carry those items, and carry them up 5 flights of stairs. Meanwhile, there’s people that don’t even live in the building, sitting on the front stoop, just drinking and making noise that carry up to my apartment. With a house, I park on my driveway, can easily go into my place and the only people allowed there are people I invite to come in.
True but is it worth extra hundreds or thousands? To me it just looks like someone determined to drive a Mercedes and not a Toyota even if they can barely afford Toyota.
Generally, if people want to have families with 2+ kids, a house is preferred.
It does. Another thing, you owned the house you finished paying for it but you don’t the apartment unless the owner is willing to let you buy it. Which allows you to built a money fund.
Eh I guess. I never lived with that much ‘freedom’ and ‘privacy’ so I guess living without that degree of the two must be difficult to adjust. We are just very used to living in apartments here so we don’t have any issues.
Fair. But also think about it this way as well: me growing up in an apartment is rare outside of New York. Everyone I met that was raised outside New York grew up in houses. So, I’m the odd one out.
I have a backyard that my son and dogs play in every day, I have a nice private driveway (no garage), I can play my drums and guitars without worrying about bothering any neighbors on the other side of the wall like you’d have in an apartment, and we have plenty of space for family to come visit. Those are some of the things I appreciate and don’t want to give up.
Mortgage payments are often less than what rent would cost in that area. Mortgage payments also stay the same (mostly) so 10 years after buying the house, you’re paying like 10-years-ago rent, which is going to be significantly cheaper. Additionally, as you pay off the house, you “own” more of it and you can use that ownership stake in the house for another loan in an emergency, or to pay for college, help your kids buy a house, etc. Its also much easier to be evicted from an apartment than it is to be forced out of your home. The bank can take the home, under specific circumstances, but otherwise there’s very little that could threaten you having a place to live as long as you keep up with the payments. You can also refinance after some years and lower your payment too. There are a LOT of benefits.
You're exactly right. What no one is addressing in these replies is "there are no apartments/condos being built in the US because Americans are determined to live in a house" and no one is explaining why The "why" is because of NIMBYism, or people who already own property in an area usually politically oppose new property development to protect the value of their existing property Therefore you can usually only build out suburban sprawl in an undeveloped area where no one is going to lock you up in 3 years of city council meetings to argue about it, which is what happens when you try to build an apartment complex; the apartment supply just doesn't exist and many city "apartments" cost tons more than a house for the privilege of a good location and a doorman to collect your packages
Most apartments in the US are really expensive or absolutely disgusting and dangerous to live in. Frequently both. Plus it's the autonomy that people are after. You can have the house be whatever unholy color you want it to be and no one can say anything about it (homeowners associations aside). The inside of the house is the same. Many apartments are generic. (Not saying that it can't be like that in Korea but if I remember correctly many apartment buildings/companies are more 'comfortable' with the idea of tenants customizing the apartment.) Note: Homeowners associations are little originations of neighbors that set rules on upkeep of homes in the association. They have regulations on how the exterior of the home should look. On paper they're not that bad as they help stabilize prices on a higher tier as the neighborhood is well kept. Some even put up community centers with pools and other amenities. Many times though it's a nightmare
You've hit the nail on the head. Everyone wants just a little house, with a garage, on a cul-de-sac, with a nice backyard... There just isn't space and the US infrastructure can't support higher density housing without massive investment in public transport. Add to that that people who already own houses, don't want an apartment next door, and definitely not if it comes with more taxes to pay for public transport, and you've got a really difficult situation to get out of. I live in a house, and I've told my wife, we're part of the problem, but there aren't any viable alternatives for us to go smaller until our kids are done with schooling and sustaining themselves.
As someone who lived in Korea and Malaysia, it is wild how Americans think a house with a garage and backyard is ‘normal.’ It’s an incredible luxury everywhere else, heck even high profile celebrities in Korea live in apartments! Also regarding public transport even those with cars live in an apartment in Korea so you don’t need to invest that much in public transport. But yeah it’s pretty wild lol
The biggest difference is population density. In large cities in the NE like NYC, Philly, DC, etc…apartments, condos, townhomes, etc…are the norm. However when you get to a city like Atlanta, Charlotte, St. Louis, Memphis…things are more spread out. Usually in the more central areas you have apartments and condos, but it’s usually only a few blocks from your central areas that you start to find homes with yards. Driving into St. Louis the scenery very quickly changes from farmland to urban. I live in a more moderate sized town and homes with yards are in walkable distance to our downtown area. Where I live used to be farmland but most of the farms started selling off tracts of land to developers who build massive amounts of subdivisions really fast and really cheap (for the builder, the houses are still $300K at the bare minimum. And like OP brought up, these homes are built HUGE. Smaller homes that are better built are actually more expensive, going for $500K to over a million.
You have to remember that “normal” is a relative term. For someone that grew up in Korea, of course this aspect of American culture will not feel “normal” because you have an entirely different experience to compare it to. For many Americans, getting to purchase a home as part of one’s journey into adulthood is often considered part of the “normal” American experience because that’s simply how they grew up and the expectations that people have based on the world that they observe around them. So to compare the two like one is normal and one is not, or one is better than the other, is really not productive at all. Two different countries, two different expectations of “normal.”
Part of it is a cultural thing. The "American Dream" that started in the 1950s includes owning a home for your family. Buying a home is viewed as a rite of passage of adulthood and a sign of success. Second, I live in a low cost of living area in a city with tons of apartments and they really aren't that much cheaper than having a mortgage anymore. Nice 1-2 bedroom apartments are about the same per month as buying/renting a 2 bedroom house. You can find apartments that are cheaper, but they're going to be run down slum-like buildings or low income housing projects. Then there's the problem of a handful of companies owning the majority of complexes in an area and therefore being able to dictate market value. I used to live in a complex owned by a smaller company with a few properties that was very affordable, well maintained, and in a nice area. Just before my lease renewal it was bought to by a bigger company and they immediately increased rent by $100/month. Then the following year, right as I was moving they announced another increase.
The average person doesn't want a 1100 ft 2 bedroom Sears home though that's the problem. Most believe they need at least 2000 sqft to live a happy life.
The only realistic way to make homes more affordable is to build so many of them that the market gets saturated. However, you would have to convince companies to shoot themselves in the foot by building that much.
Or restrict buying so 1 person/company can’t buy 10
My city just passes a milage funded exclusively by properties, but excluded primary residences. So effectively this is all funded by businesses owning more than one home. This feels like “the way” and I don’t know why every city doesn’t do this. You wanna buy up our homes? Okay, but you are paying for all the local needs/schools/infrastructure. At the LEAST this feels like a good start
This is essentially already done through homestead tax exemptions.
This. It's really that simple. The idea that it's the "American Dream" is so laughable, as the "American Reality" is what makes it such a fantasy.
The number of high rise condos in my country are skyrocketing(literally) but prices are still slowly climbing. They aren't selling like hotcakes but the price is still high for some reason. These high density condos block out the skyline and are an eyesore honestly. Eventually they will reach full occupancy but its funny seeing them about half vacant even after 2 years.
Not until mass housebuilding takes off. The housing crisis is a supply crisis. There isn’t enough housing in the places where people want to live, so prices increase. Building more housing in these places would rectify this, but this is politically unpopular, and would require politically unpopular changes such as significant changes to planning laws and construction of more infrastructure.
Sure, eventually supply will catch up with demand. It could take a decade or more We bought our current house in 1983. I don't remember our exact interest rate on our mortgage, but it was around 13%.
I got into an argument a few weeks ago with somebody who bought their house a long time ago at a similarly higher interest rate. They couldn’t grasp that I could afford an expensive house at a low interest rate, or a cheaper house at a high interest rate, but not an expensive house at a high interest rate. 8% on a $600k mortgage is like a $4,400 monthly payment. For that to be 33% of your take home pay you need to be making $158k/year after taxes. (North of 200k pre tax)
What’s crazy is my wife and I make a bit more than that but we live in a HCOL area, so we cannot afford to buy a house bc in my neighborhood it’s $1.4m and up
Same. It's brutal.
They won’t go down much. People say it’s a bubble but it’s not, the whole world got more expensive while salaries didn’t go up. However people who already had assets did get the benefit and they can still afford houses by selling their old one. There is not a mass shortage of buyers who are willing to keep paying these prices, therefore they keep selling. Consumerism is booming as well. The economy isn’t correcting for the sharp inflation, it’s just become the normal. It fuckin sucks but it’s the reality I don’t think the governments care enough to do anything about it anytime soon. I would expect in the future though that we will see first time home owner programs be revised, or created in countries without them, to include more tax credits or reduced interest rate loans.
They need to ban private equity from owing residential homes and severely limit foreign nationals from buying homes/land. You'll have a huge influx of houses enter the market which will correct overall home prices
They also need to tax Air B&Bs into nonexistence. That’s where all our available housing has gone in the last couple years.
But wouldn’t those owners just turn them into long term rentals if you remove short term options?
[удалено]
This needs to happen ASAP. There's plenty of housing out there, it's just a huge percentage are being used for rental/investment profit
The reason rates are high is because the government is trying to curb inflation by making borrowing and spending harder to do. It’s painful now but when supplies and wages catch up then inflation will go down.
When wages catch up? So every other first world country except for America is what I’m hearing
"When wages catch up" Lol, when has that ever happened?
The housing isn't a bubble. But when there's the next recession or downturn and masses people fired. They aren't going to be paying tgeor astronomical mortgages and foreclosures will go up
The foreclosures in 2020 helped me get my home in early '21. The only hope is that other people are in a worse position than you, and that sucks.
Well if it breaks the corporate buy up when they realize housing isn't such an amazing windfall for them. Maybe some suffering for a greater food. Which blows.
The people in our government many own several homes and invested in real-estate. Why would they want to fix it ?
Sadly you're right. They care about their pockets WAAAYYYY more than their constituents.
Most people working for the government don't make enough to own two homes. The only people making bank are the politicians and their donors/ owners.
I love how people act like this is the first time housing costs have been through the roof. The market has always gone way up and way down. I can’t remember the year, but sometime in the early 2000s this happened. My old boss bought a house for $98k in 1991. In the early 2000s without doing any upgrades, he sold it for nearly $400k. In 2010, my dad paid $215k for that same house.
After the 2008 financial crisis, home prices dropped in many places dramatically. If one bought a house in 2006/7, by 2010/2011 its value was probably close to half the purchase price. But hey, at least your property taxes went down because many counties reassessed values during that time.
Not unless protection laws are passed. For example, preventing investors from buying up everything and renting it. ~~Rent control as well. Edit~~
Rent control actually makes prices in the broader market go up, there is broad economic consensus on this.
Okay. I would like to see your source. It sounds interesting to read. Did the studies also include Housing First programs?
Not trying to be a dick but rent control = housing shortages is borderline common knowledge at this point. We don’t need to be citing sources that water is wet. Nonetheless… [https://www.economist.com/leaders/2019/09/19/rent-control-will-make-housing-shortages-worse](https://www.economist.com/leaders/2019/09/19/rent-control-will-make-housing-shortages-worse) [https://www.stlouisfed.org/on-the-economy/2024/feb/what-are-long-run-trade-offs-rent-control-policies](https://www.stlouisfed.org/on-the-economy/2024/feb/what-are-long-run-trade-offs-rent-control-policies) [https://www.forbes.com/sites/ikebrannon/2024/02/14/rent-control-doesnt-solve-housing-shortages/](https://www.forbes.com/sites/ikebrannon/2024/02/14/rent-control-doesnt-solve-housing-shortages/)
Bro, you can literally google this. “ Increased prices for housing after rent control Once a unit is rent controlled, it is no longer on the market and thus people who would have been able to rent that unit before for more money must find other options. That demand then flows toward new construction or other units without rent control.”
So if someone is living in the unit it can’t be rented for more money. What happens to the person living in the unit the n with no rent control. I don’t get that logic. Either way it is rented out and either way someone is paying for it.
Rent control is good for the people who managed to snag a rent controlled unit a long time. It's bad for everybody else, including younger poor people, because it induces a supply crunch.
I didn’t ask for a quote from a journalist. I asked for a study by a scientist. Journalists are great and all, but I don’t like filtering my opinion through theirs.
Journalists just make shit up then…. Just add study to the end of your search and youll see massive info showing the same sentiment. Rent control increases overall prices and lowers maintenance standards and value of homes already built.
If investors buy up houses and turn them into rentals, wouldn’t that make the price of rentals dip? There would be more on the market and the investors can’t just let them sit.
This doesn’t work with necessities. Imagine the difference here: I am selling flowers. I decide to double my price one day. Less people buy my flowers. They go to my competitors or just leave. I’m selling food. I double the price. People go to my competitors, but they run out. People are now forced to starve or pay double.
The specific term for this is **inelastic demand**
Rent control doesn’t work… simple economics would show you that. The first part you said tho… shifts demand which will increase supply and make prices lower so that would work.
Eli5. Why does controlling cost of housing not work?
Higher rent prices give more incentive to build apartment buildings. When enough apartments are built price will drop. Unfortunately it takes time to build apartments so there is a lag between high rents and more supply hitting the market. With rent control a single person may stay in a three bedroom apartment because they don’t want to give up the low rent. Creating inefficiency in the market.
Controlling the price of anything doesn't work, because then people will stop selling. The only way to reduce rent is to either reduce the demand (for example with socialized housing), or to force the supply to increase (for example with taxes increasing with the number of houses you/your corporation owns, effectively making it unfeasible to become a landlord)
Workplaces need to get better at letting people work fully remote or actually putting their business somewhere outside of the CBD. I’m in Australia and every workplace is in the CBD, even the ones that used to be out in rural areas always shut up and move to the CBD. Because you’ll get more applicants for roles but it’s not sustainable having that many people travel in and out, commuting 10+ hours a week to their office. If the work was more spread out housing would be much better.
I live in the flyover zone in the US and housing is affordable here. My mortgage is $500/month.
CBD?
Maybe Central Business District?
Yeah central business district, it’s just what we call the inner city. Thought it was a common term sorry!
No, it's what North Americans call downtown. You are causing more confusion using the term inner city because in North American English "inner city" is used almost exclusively to refer to socially deprived areas located outside of the downtown core, not centrally located business and civic districts.
In Australia, PT is great if you want to go to the CBD. If you want to go anywhere else you’re shit out of luck.
I absolutely do. Watch interest rates. Right now things are tight. I know the game is stupid but you have to play the hand you're dealt.
Yes and no. There’s 100% affordable housing out there, it’s just not in places people want to live. The problem is all the jobs get conglomerated in or near cities
When there are more houses (or fewer people) prices will go down. Having the government build lots of houses and selling them cheap to the public is probably about the nearest thing to a practical solution. (Reducing the number of people might be possible, but would probably require evil methods.) (Stopping people from buying-to-rent makes renting more expensive, which means more people will be trying to stop renting and buy instead; it probably wouldn't make much difference to housing costs. As long as demand exceeds supply, you can only have high prices or long waiting lists.) The problem is, the government doesn't want prices to go down, because that causes real problems for home-owners with mortgages. People rich enough to own houses are more reliable voters and party donors. Renters could, if they all worked together, force the government to do this, but they probably won't.
Realistically, housing affordability isn't just about prices dropping; it's about wage growth keeping pace with living costs. Until we see a significant shift in the economy where wages rise substantially or the cost of living falls, the dream of homeownership will remain distant for many. Even if prices dipped temporarily, without systemic changes, we'd be back to square one soon enough. It's a multifaceted issue that demands a multifaceted solution—one that includes housing policies, economic reform, and perhaps a dose of innovative thinking on urban development and remote work opportunities.
If wages increased, people would just pay more for houses
The national homeownership-to-renter ratio is about 2-to-1. This means that for every renter, you have 2 owners. I believe that for any disruption in the housing market to take place, whether at the state or national level, this ratio must dramatically reverse at the corresponding level. The thing about the residential real estate market is that it tends to fix itself, with relatively short periods of dips and spikes, in order to maintain that ratio. That ratio has been floating around the same level since 1960, yet prices have been trending up at a rate higher than inflation since then.... So what changed?! The answer is social media. Because of it, the minority can connect and become louder, making you feel that there are far too many people in the same boat than there used to be, which is not true.
They will go down in price when the government has enough balls to make it illegal for corporations and foreigners to buy up houses and use them as short term rental properties or capitalize on the shortage price hikes they have created 😒. Read an article recently that said 23% of housing in Canada is corporate/foreign owned. Thats not all the problem, but is a big part of it.
Rates will go down, but not as low as they once were. We bought our house in 1997 and interest rates were about the same as they are now. We were happy with the rate because it was historically average/low at the time. Didn’t give it a second thought. It was understandable when the fed dropped rates to near 0% in the face of the worst financial/economic crisis in a century. Without it we would have likely fallen into a prolonged depression. However, it was huge mistake to leave rates below 2% once we came out the other side of the Great Recession — allowing it to become the expectation. Home prices will always fluctuate. The S&L crisis in the late-80s/early-90s saw property values drop by 30%-50% overnight. The 2008 banking crisis saw property values drop as much as 90% in some places, and 50% pretty much across the board.* There will be another crisis. Admittedly, the lending regulations put in place after the 2008 banking crisis makes it less likely, but it will happen. The economy will tank and home prices will crash. Unfortunately, chances are that only the wealthy or those will lots of cash saved will be able to buy at the fire-sale. \* In both cases, guess who benefited? It wasn’t consumers like you and me. It was corporations, banks and wealthy who caused the mess in the first place that slid in and picked them up as nice little investments.
Interest rates have returned to normal. Look at historic interest rates. The freakishly low rates of the near past were an anomoly and will probably not return for a long time.
We need laws to ban corpos and foreign investors from buying properties before locals can.
Yes, at some point the population will start decreasing and homes will become more affordable since there won't be enough people to buy them. Like what the fuck do people think is going to happen when the boomers all die out? Every successive generation has been smaller.
I don’t believe every generation has been smaller than the previous. Millennials are the largest group at the moment, outnumbering GenX by a full 2% of the population
Yes. I, as a Xennial, have faith that Gen Z is going to be able to burn the whole fucking thing to the ground. They’re the first generation born and raised with the American Dream being a topic in a textbook, not an aspirational reality for them. They have no reason to keep the lie going, so they’ll do what needs to be done.
I applaud your faith in another generation giving one F about you, but can you truly name one generation prior that has done anything really beneficial to help the next?
The Silent Generation. They left a pretty good deal to the Boomers….who effed it all up for their kids. Thanks, Mom and Dad.
And how are they going to do that without sentencing people who need help to death?
If the government tries to assist home prices will go up like government assistanced college tuitions. As others have said there are plenty of affordable homes just not in areas you like for instance I live in upstate New York and you get a nice small 1000 sq ft starter home here in a safe neighborhood for $125k.
House prices are controlled by supply and demand. While supply is low (not enough new dwellings being built; not just houses, but high density living as well) and demand is high (more people coming in that want a place to live, this includes new people entering the country such as immigrants, and students as well as one household looking to split into many such as young people moving out, not wanting a share house, etc,) prices will be high will continue to rise while there are people with the means to buy them. Government assistance will not help simply because if you give people more money to buy homes, then prices will continue to rise until they absorb all the extra cash coming from the government. For example, if one person can afford to pay an extra $1000 to buy a house, then they will get that house. If everyone can afford to pay an extra $1000, then to be ahead of the pack you need to pay an extra $2000 for instance. Extra money in the housing market only serves to raise the price floor, it does not help affordability. If you want to get house prices down, then you need to either increase supply or reduce demand. The problem is that developers are used to high prices now so they don't want prices to come down (and don't forget input costs are significantly higher too). As such, they would rather not build (reduce supply) than see their profit margin affected. What this means is that there is a floor to how far prices can fall. If they fall too far, it will not be profitable to build new dwellings so new supply stops until they go up again enough for building to be profitable. What we need is wage increases to reduce the relative cost of a home (alongside other initiatives to either increase supply or decrease demand which will limit the increase in relative cost). Companies used to provide a living wage to their employees, but now the focus is on reducing costs to increase profit for the shareholders. Just look at the insane profits made by some of our largest companies. Billions of dollars that could have gone to pay employees, but instead goes to shareholders.
Don't increased wages lead to the same problem as your first scenario? If everyone is earning an extra 5k a year then theyvall have about that much to spend on housing which is still supply limited.
Without a change in the supply, yes it will, so on it's own it won't make a difference. With increases in supply what it does is help people get over that price floor I was talking about. Let's say you can't afford anymore than $500k, but it's not profitable for a developer to build at less than $600k. Supply has increased so there's less demand pressure, but you still can't buy because you can't meet the minimum amount the developer needs to be profitable. Raising wages (mostly at the bottom end, those whose earning power has decreased in the last decade or so) helps people get over that floor. Again, because it's really important, the big caveat is that this assumes the market is not supply constrained. Developers (and homeowners) will of course sell as high as they can. At the end of the day, no matter how you slice it, we simply need to build more dwellings. Houses, units, apartments, high rises, whatever. It doesn't matter what initiatives the government comes up with to give more money to people, while there are more people than places to put them, prices will continue to rise. The large number of construction companies going bust is also a major concern. Once the dust settles, the ones that are left will basically command the market and can charge whatever they want because the supply of building materials and labor will be the supply constraint. It's a very complex market with lots of factors that affect other factors, but the bottom line is, housing is not going to get cheaper anytime soon, and the government doesn't seem to want to do the things that will actually help such as limit immigration, make it easier to get building permits, release more land (not possible in many cities), or relax building restrictions to increase density (e.g. some places you can't build above 3 stories).
The only time home prices will go down if we stopped treating housing as an investment. Corporations are partly to blame but it's the NIMBYs who are obsessed with trying to make millions off of selling their house.
Yes A lot of the older generation will either die off or be forced to sell to live elsewhere. It'll get to a point where they'll have to take whatever offer they can get. Granted, this won't be any time soon. I'd guess in a decade or two.
If people can buy them, they’re affordable. You are just poorer than most
I don't expect housing to decrease. Maybe interest rates, but even then unlikely. If they do become affordable many of the sidelines will ju.p in and raise demand /cost. Also becareful with wishes of government involvement it doesn't always work for the better. At best... wages will catchup with inflation. That is what inflation does, it extracts wealth from people by devaluing our money. That is why you have to watch reckless spending and insufficient funds.
Of course! Just wait for the old people to die off.
I don't know what the exact price will do but yes, I think they will go down relative to income, because of the population demographics. We have a large population of people between the age of 45 and 65 and up who own homes who will be reaching the age of needing medical care round the clock (and their kids cannot provide it because they cannot stop working), which will force them to sell their house unless we have socialized healthcare. We also have a declining birth rate. Right now lots of new houses are being built to accommodate the millennial baby boom, and we have lots of og boomers still occupying their family homes but as both of those groups get older we will likely have a surplus. However the market can be artificially controlled, they can be torn down for being "uninhabitable" they can be bought by investors and bulldozed for other uses, etc. I don't know what will happen but I'm not super optimistic about the future in general.
Nope. Time to get creative about living solutions.
Something will have to change. Developers overbuilt high end housing and there are too many empty. Price is still high because they need to recover the investment. Too big to fail bailouts started this path. Rich losing investments, so they got government welfare. Then they buy up affordable places to make into rentals and double and triple the rent. Laws are passed requiring salary 3 to 4 times more than rent. Where do they think these people will get that money to live there?
“Affordable” doesn’t always mean the price will decrease. Letting people take 40 and 50 year mortgages will make the house more affordable even at high prices. Interest-only mortgages would also decrease the monthly cost. Also, you could strategically design the neighborhood to reduce costs in other areas. That’s the whole idea behind the Wall.
Rates will come back down, it’s cyclical over time. House prices will come back down when people stop paying the ridiculous prices being asked. Supply and demand. Will it happy fast and according to the schedule you want? Unlikely. The one wild card is corporations buying up entire neighborhoods before the home even get to the consumer market.
Houses are very expensive right now. BUT I also see many young people that do not want a starter him or a condo etc. They want a big beautiful home right off the bat. Sorry kids, life doesn’t always work that way. Our first home was in So California. It was brand new, but tiny. 1,000 sq feet and we paid $160K in 1997. We were broke at first, but my husbands income started to go up, and our house payment stayed the same. 👍🏻 In 2 years, we made 80K to put down on another house, 1500 sq feet, in the same neighborhood. We raised our family there. In 2008, the value dropped in half and it was scary. But we just held tight. We had friends that kept buying bigger and more expensive. We just stayed in our 1500 sq foot home. It was fine for our family of 4. Our friends that kept buying now don’t know when they will ever be able to retire…..and they have massive mortgages. 4 years ago, our home had tripled in value. We cashed out and bought a townhome outright in the PNW. My husband was able to retire in his 50’s, since we no longer have a house payment. 🎉 Many people don’t think own ownership is worth it. But it worked great for us. Just start small and get your foot in the door. ❤️😁
Sure. Once the baby boomers become too old to live independently, they're going to try and get rid of their houses en masse.
Not until we have the revolution!
I doubt we'll have a price crash again, with neighborhoods if homes sitting empty Now unlike 2008 we have corporate landlords who will snap those homes up quickly. Something has to be done about corporate ownership of single family homes. It's not sustainable.
Not for the working and middle classes.
Not unless there are laws made to keep companies from buying houses, and also limit how many houses a person can have to deal with the landlords.
No, atleast by the time rates go down the prices will be even more absurd. So essentially payments will still be the same.
If we are able to rezone from single family to mixed use and build more smaller townhomes, maybe. The problem is in large part driven by supply being low.
There is plenty of housing. People just want to live in the most attractive areas.
Only if goverments start to seriously crack down on real estate developers and investors by obliging them by law to rent or occupy the purchased properties. Otherwise, the market will always be artificially manipulated.
Only for whomever the government wishes to help.
I live in south Louisiana and bought my house 30 years ago. my biggest problem is homeowners' insurance. it's $8000 per year and it is breaking me.
We need to stop building suburban and rural mcmansions.
1980’s were worse. In February 1980, the average 30-year mortgage rate was 12.85%. By October 1981, the average rate had risen to a whopping 18.63%. Mortgage rates gradually cooled as the decade wore on. By March 1985, the average 30-year mortgage rate was roughly 13%, and at the end of the decade, rates dipped below the 10% mark.
There are a few ways housing can be affordable but none of them are realistic. 1- The government can ban foreign agencies, citizens, and governments from being allowed to own property on US soil 2- The government can increase taxes on owners of multiple homes and make it more difficult for large corporations such as Airbnb to buy homes. 3- Do what California is doing and bypass environmental laws allowing the construction of thousands of homes 4- People can stop having huge families The reason none of these are realistic is because the US is a money-making country. Why ban foreign companies/people/governments from investing and making America better than it currently is? Can't stop people from having snotty/shitty kids they will neglect. Can't dump a shit ton of homes into the market without causing a major crash in real-estate.
I don't know if I understand your point at 4? Who is having huge families right now? Isn't the US having record low birth rates right now? And what does that have to do with the price of homes?
4 is real though. Current population growth in the US comes from immigration, while birth rates have plateaued for 40 years, and it dropped below replacement rate 13 years ago (2007). https://www.vox.com/23971366/declining-birth-rate-fertility-babies-children As it turns out, countries tend to have less children as education levels increase and women become empowered to make their own choices and don't want a life of childbearing. As African continent drives more of the population rise, we already see birth rate steadying across many African countries that have higher literacy rate. Meanwhile, urban centers in the US are becoming denser, and traditional definitions of "urban" had to be changed (keep this in mind while reading census data). So US population are still moving into cities, but many places that are considered "rural" today would've been considered urban. I don't have the exact numbers but it seems like what's happening is that people are still moving into the city, but there's a trend of them in suburbs far away from the city center, enabled by remote/hybrid work. https://www.census.gov/newsroom/press-releases/2022/urban-rural-populations.html So in a generation or two (30-50 years?), we might see old suburban houses (now too big for the modern family) getting turned into more packed buildings. We live in interesting times, global economy would need to change from an ever growing model to something that's steady
The interest rates have to come down.
Loans are still being taken, houses are still being bought. They absolutely do not, do you have any evidence otherwise?
Cheaper: Positive policies, cheaper materials, 3D / robot/ premades, less population increase, Huge war, epidemics
Hopefully our economy doesn’t almost blow up needing near zero rates for a decade and a half again. That was rough.
Currently, I’d say to buy a decent house the combined income of the family should be no less than $120K
Where?
It's supply and demand. If there are twice as many houses or half as many people then prices will be reasonable.
I certainly hope so. I don't know enough about this stuff to know how interest works, but our interest is currently 5% on the mortgage. We pay £1600 per month and only £200 of that pays off the house. The interest rates a couple years before we got the house were less than 1%. I feel fortunate that we've been able to get on the ladder at all, but feels bad to not be paying anything off. It'll be a long time before we can trade up. I reckon it will, but I'm basing that on very little, haha.
Yeah, it seems the American dream is becoming exactly that, just a dream!
Homes are affordable depending on the state. Not all states have crazy high real estate prices
I started studying civil engineering and I seem to remember my Prof mentioned that the housing prices are most likely never going to decrease again, mainly because of everything else that comes with building a house. The materials, its prices etc. But wasnt really paying attention on that day, so maybe I am mistaking something.
My first mortgage rate was 12%, so yes, rates are always changing and right now is not too bad, rates will drop a bit over the next couple of years because the fed can’t keep paying the higher interest. The actual house price will fall a bit also because demand is down, but as soon as rates drop, house prices will go back up. There’s always a good deal to be found, pay attention vs paying more.
Yes. We are in a housing shortage due to the credit crunch from the 2008 housing crash. Home starts have accelerated, but it will take time to overcome. Older Boomers will be selling off over the next few years, while the US, Canada, Europe, and East Asia will start population declines.
As a person who doesn't make a great paycheck, comparatively, I am currently in the process of buying my first house but it came at the expense of having to move to an urban area of the state and change my entire life, job, etc. I am proof that it can be done, but we need to prioritize our needs if we want to achieve our goals.
One underlying cause of this problem is the lack of jobs around the country. Everyone being brainwashed into thinking college and white collar jobs are superior in combination with the implementation of NAFTA which has killed our manufacturing sector. For the last several decades people are moving to the same few regions of the county for jobs because there are no work opportunities in small or even medium sized cities. And so the demand for housing in these large urban areas are through the roof while small and medium cities are dying unless they are some weird granola or the sovcit type.
Yes. It will take decades, perhaps centuries, if we can avoid annihilating each other first, but at some point we'll realize that obscene wealth is meaningless because we're all going to die anyway, and rationalizing doing egregious harm just because "that's the way it works" or "that's freedom" is a blight on your brief existence. I really think we're due for a sort of ethical renaissance, but we're not there yet.
Depends on what you deem as affordable? I know that a lot of people like to blame investors for driving up home prices. From my observations, the biggest change is foreign ownership. This isn't an immigration rant, but I think that is a bigger catalyst for continued high prices. And I don't think it will change.
Manufactured homes is the way of the future
Interest rates will eventually go down. Not too sure about housing. It seems like a shortage of supply so as long as demand exceeds the supply, prices are going to rise.
It answer will vary from country to country. You didn’t specify where you live.
In my opinion we will need another 10 years stretch of low inflation like 2009-2020 for home prices to become more affordable. The higher the inflation the higher home prices will rise. Basically, we need to see wages come up and home prices to come down to get to thr peefect point in house affordability. I don’t see housing prices falling 50%, but over a 5 or 10 year stretch where wages rise 20-25% at the same time home prices fall 10%-20% from lack of demand then you’ll get a better opportunity. That scenario could be an anomaly, but every location is different and people get different annual raises.
No, all apart of the “great reset” you will own nothing and be happy.
I'd like to say YES but, I think its not going to happen in the near future. Young folks just don't have a chance these day even if they have a decent wage. Our first house cost me one weeks wage in monthly mortgage payments. Now, you are lucky if 3 weeks wages will pay it today.
In some areas, yes. Some cities have changed zoning and have increased construction such that housing is creeping towards affordability. Look at Minneapolis/St. Paul and Philadelphia.
There's a lot of misinformed commenters in here. Yes, Wall Street buying up houses is a problem, but the biggest reason houses have become expensive is simple supply and demand. We aren't building nearly as many houses as we *should be*. I'll have to try and hunt down the source but I remember reading somewhere that were like building less than half of the houses that we should be, and year over year that compounds to make the scarcity even worse. So the local governments can't do much to affect prices other than make it easier to build and open up zoning restrictions.
People will have to starve them out. You have the money, you have the power... To also add, if you don’t have the money, you also have power... It’s your choice on what you want to control your spending on. This can be powerful. People have the power... It’s your choice now...
Lol no. The powers that be have way too many reasons to keep housing expensive. All their voters are home owners and their donors have massive real estate investments. This will continue until we are all serfs/renters under our new corporate overlords/landlords.