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Good thread talking about why houses are WAY too expensive right now. I& #39;ll do a quick explanation thread in case anyone& #39;s curious why this is happening. https://twitter.com/EricaHayes87/status/1381462324842692609">https://twitter.com/EricaHaye...
Many stars aligning for this:
1. The 2008 recession destroyed a lot of home builders. New constructions never recovered and there is over a decade of new construction deficit.
1st chart - You want the green line above the blue line.
2nd chart - Single Family homes WAY too low.
1. The 2008 recession destroyed a lot of home builders. New constructions never recovered and there is over a decade of new construction deficit.
1st chart - You want the green line above the blue line.
2nd chart - Single Family homes WAY too low.
2. Key home-buying demographics are growing over the next decade. There& #39;s a surge of first time home buyers in that 30-40 year old bucket and then aging baby boomers that want to down size to homes with easier maintenance.
3. Remember Trump& #39;s trade war? Elections have consequences.
"The U.S. tariffs and other trade measures currently restrict the supply of almost everything you need to build a house, from the foundation to the roof and in between." https://www.cato.org/blog/how-us-trade-policy-contributes-our-insane-construction-materials-costs">https://www.cato.org/blog/how-...
"The U.S. tariffs and other trade measures currently restrict the supply of almost everything you need to build a house, from the foundation to the roof and in between." https://www.cato.org/blog/how-us-trade-policy-contributes-our-insane-construction-materials-costs">https://www.cato.org/blog/how-...
4. Covid. Normally, some foreclosures would be re-entering into the market as available housing. FHFA extended eviction Moratoriums until June 30th. Good for fighting the pandemic, bad for buying a new house.
https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Extends-COVID-19-Forbearance-Period-and-Foreclosure-and-REO-Eviction-Moratoriums.aspx#:~:text=FHFA%20announced%20that%20Fannie%20Mae,%2C%20single%2Dfamily%20mortgages%20only.">https://www.fhfa.gov/Media/Pub...
https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Extends-COVID-19-Forbearance-Period-and-Foreclosure-and-REO-Eviction-Moratoriums.aspx#:~:text=FHFA%20announced%20that%20Fannie%20Mae,%2C%20single%2Dfamily%20mortgages%20only.">https://www.fhfa.gov/Media/Pub...
5. More Covid. Potential home sellers are hesitant to have a bunch of strangers walk through their homes during the height of a deadly respiratory pandemic. Less selling going on despite innovation with things like virtual walk throughs and drive by appraisals.
6. Antiquated building industry. The same techniques for building a house from almost a century ago are widely used today. Lots of wasteful spending caught in these methods. Room for new tech to come in and shake things up.
There& #39;s more, but those are the BIG drivers. Lots of demand, not a lot of supply, and everything costs more. Should get a little better after we get Covid under control, but there are still many factors driving housing prices up. At least mortgage rates are low!
