In 2021, a home was sold for $685,000, with the buyer’s monthly payment amounting to $3,526. Fast forward to today, and the same buyer is now facing a staggering monthly payment of $8,402.
Some might argue that wages have increased or that people have more cash on hand, but the reality is far from reassuring. This situation is nothing short of complete insanity, especially when we consider that monthly payment calculations assumed a 20% down payment and a 2.9% interest rate in 2021, compared to a 7.5% rate today. Property tax, HOA fees, and insurance estimates were also factored into these monthly payments, and property taxes are notably high.
To add to the frustration, any new buyer needs to brace themselves for the infamous “380 at rush hour,” highlighting the growing traffic congestion woes.
Breaking news from Fannie Mae, a government-sponsored mortgage company, paints a bleak picture for the US housing market. It predicts that total home sales this year will plummet to 4.8 million, the lowest level since 2011, and the outlook for 2024 remains grim, with an expected 4.9 million sales—another decade-low reading.
Even if the US avoids a recession, the housing market is expected to grapple with challenges for an extended period. The root issue lies in the desperate need for more housing supply. As a result, the market is experiencing softening rents, with “rent and waits” gaining traction over time. Over-leveraged investors are feeling the squeeze as time passes, and the supply shortage is likely to persist in the near-term future.
In summary, the housing market is in a precarious state, marked by soaring costs, dwindling sales, and a pressing need for solutions to address the supply-demand imbalance.
For you math geeks—
Monthly Payment Calculations assume 20% down on both and a 2.9% rate in 2021 vs. a 7.5% rate today
I also included property tax, HOA, and insurance estimates in the monthly payment numbers. Our property taxes are very high
— Amy Nixon (@texasrunnerDFW) September 20, 2023
Oh, but this home gets you access to a neighborhood “crystal lagoon” pool
Lemme translate: faux constructed poor man’s CA beach in the middle of farmland akin to the spawn you’d birth from mating a retention pond with an overcrowded middle class water park
— Amy Nixon (@texasrunnerDFW) September 20, 2023
BREAKING: Fannie Mae says US housing market is headed for the largest sales slowdown since 2011.
According to Fannie Mae, a government sponsored mortgage company, total home sales this year will fall to 4.8 million.
This is, by far, the lowest since 2011 and not expected to… pic.twitter.com/ggob3DF03d
— The Kobeissi Letter (@KobeissiLetter) September 20, 2023
BREAKING: U.S. home sales are heading for the largest slowdown since 2011
– Fannie Mae. t.co/ft7U8JsfYA— Financelot (@FinanceLancelot) September 20, 2023
In a stalemate, time chooses the winner
Rents are softening now—“rent and waits” are gaining strength with the passage of time
Over-leveraged investors are bleeding and weakening with the passage of time
Supply will be tight for the near term future though t.co/YIt374HUby
— Amy Nixon (@texasrunnerDFW) September 20, 2023