U.S. homebuyers are backing out of their real estate deals at a record rate.
According to Redfin, nearly 60,000 purchase agreements were canceled in July - the highest percentage of any July on record - and sales of existing homes fell at an annual rate of 2%.
“Many house hunters are getting cold feet because housing costs remain high. Economic uncertainty is also high, with recession fears on the rise,” Redfin data journalist Lily Katz wrote.
People who have never owned a home usually have no idea the costs involved... Start with a 30 mortgage that at payoff
ReplyDeletewill cost you twice the value of your home, add in a new roof or 2 depending, atleast a couple water heaters and HVAC systems, routine maintenance and upkeep plus property taxes and home owners and flood insurance costs...
JD
More or less right but so what? If you stay in the same place 30 years, you wind up with a paid off home worth probably 3x the purchase price (ie, about what you paid all up with a 7% loan) if not better. Take a conservative loan, no more than 3x your gross income, expect some maintenance big and small, know what else you'll pay in running expenses. Or live in an apartment or rent house and build equity for somebody else. Ya pays yer nickle and makes yer choice.
DeleteSay someone buys a house for $100k. For the next 30 yrs, maintains the house as is. No new additions, add-ons, etc. Then at the end of 30 yrs you sell it for $200k. The value of your home did not change, the value of your money dropped.
DeleteSo what ???
DeleteWell the average American family will move 2x in those 30 years so you're not going to make anything on that house.... You'll have to move and hope the damn thing sells, even if you don't move most neighborhoods get worse over the 30 year payment plan not better meaning your house is no way going to be worth 3x what you paid for it..
Home ownership once made since but then overly greedy bankers and politicians stuck their greedy fingers into the system..
JD
Your math reminds me of a guy who once lived near me.... He loved to play Bingo and would go 2-3x a week..... His average amount he spent per visit was something like $100 so 200 to 300 a week to play... He would occasionally win a couple hundred and to him it was all profit because he wouldn't deduct cost before payout... Nothing could convince him he was maybe breaking even... Even when you did the math for him.
DeleteJD
Getting the manufactured evolution playing field set up for: "You will own nothing, a house for instance, and you will like it". BTW, , a lot of younger college graduates are looking forward to it.
ReplyDelete"Economic uncertainty is also high, with recession fears on the rise" Gee whiz Wally, do you think it's the polls claiming Harris is beating Trump and they look at the last 3 1/2 years and think if she does win things will get worse and we're fucked or wait and if Trump wins things will change for the better so we should wait. It's not a coincidence that Fed Chair Powell said the day after the DNC convention ended that rates would drop in Sept.
ReplyDeleteEach year you own the house the town will decide it's worth more and will raise your property tax accordingly. My property tax now exceeds what my original mortgage was.
ReplyDeleteThen if you retire and want to sell, the government will decide that greatly inflated value is all capital gains and tax the hell out of you.
For those that are still under the illusion that you get a one-time exemption from the capital gains when selling the family house know that the powers that be got that changed. Now it's a 250k exemption per person, that doesn't go far with average house prices in the NE.
Explain why you must pay sale taxes on a house that you have been getting skinned over for forty years?