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re: Pending home sales fall to the lowest level in 26 years
Posted on 10/22/26 at 9:19 am to Henry Jones Jr
Posted on 10/22/26 at 9:19 am to Henry Jones Jr
quote:
Sounds like buyers will eventually have to realize they don’t control the price. The sellers do.
Posted on 10/22/26 at 9:20 am to baldona
quote:
Rates aren't that bad, I'm sorry. The essentially free money days of 2-4% interest were an exception not the norm.
Economists were saying for years that the 3% interest rates were going to bite us in the arse at some point.
I agree.
quote:
The hard truth is interest rates in the 5-8% range is healthy. That allows a healthy bond market and generally speaking helps with inflation.
I agree.
quote:
Here's the hard truth: If you can't afford to "upgrade", then the reality is you were just allowed to upgrade too early in the past and you are current in the right house most likely. Hard pill to swallow for most but its the truth.
I, and others, can afford it. But it's just dumb to give up such a "cheap" mortgage for something that's a want, not a need. Once you have something that's so cheap, it's hard to give up, even if you can afford something a lot more expensive.
For a lot, like me, it's not affordability, but financial responsibility of weighing needs v. wants. I am an example of a potential buyer removed from the market, not because of affordability of new home, but of the over-affordability of current home.
quote:
Economists were saying for years that the 3% interest rates were going to bite us in the arse at some point.
Back to this...
ETA:
I don't think rates will ever plummet again to 3% in our lifetimes and eventually people will HAVE to give up these homes as they age, move, etc. It will just take a while and won't happen at once.
This post was edited on 10/22/26 at 9:23 am
Posted on 10/22/26 at 9:21 am to stout
I’ll be curious to see what happens when the government starts garnishing wages again for student loan default. People coming off the SAVE plan are seeing their payments go up hundreds. And I know of at least two people who bought houses while their loans were in deferment.
Could throw a wrench in the numbers.
Could throw a wrench in the numbers.
Posted on 10/22/26 at 9:23 am to stout
I like zillow telling me if i offer 5-10K more the asking id have a very high chance of my bid being accepted.
frick that noise in this market
frick that noise in this market
Posted on 10/22/26 at 9:23 am to CatfishJohn
quote:
I, and others, can afford it. But it's just dumb to give up such a "cheap" mortgage for something that's a want, not a need. Once you have something that's so cheap, it's hard to give up, even if you can afford something a lot more expensive.
For a lot, like me, it's not affordability, but financial responsibility of weighing needs v. wants.
I agree completely. But I stand by my point, the cheap money days allowed people to over buy into a house. To a large extent, their current house would actually be their "dream house" they want to move into. But the low rates allowed them to jump sooner. Now people want to "upgrade" to logically something they likely never could afford.
If everyone was currently in 7% rates, almost no one would be looking to "upgrade". The only reason people are considering upgrading, is the lower rates.
Posted on 10/22/26 at 9:27 am to jmarto1
quote:
I've often said if we could get off of our asses and put high speed rail up it would change the real estate market in a good way. Imagine living outside of New Orleans and being able to work in Houston. No need to pay either city's high prices. It lets people spread out without it being a hassle
Yes, this wouldn't be expensive at all.
lulz
Posted on 10/22/26 at 9:27 am to baldona
quote:
If everyone was currently in 7% rates, almost no one would be looking to "upgrade". The only reason people are considering upgrading, is the lower rates.
This doesn't make sense.
People would be more willing to upgrade houses if they were moving from 7% to 7.5%
They don't want to move because they don't want to go from 3% to 7.5%
Posted on 10/22/26 at 9:28 am to baldona
I think prices are also supported a bit by replacement cost of construction. It isn't cheap to build, gone are the days when you could walk away with a bunch of equity by building vs buying.
Posted on 10/22/26 at 9:29 am to stout
I could easily buy a home right now, but I don't want to be stuck in BR for longer than I need to be. Renting has been fine for us, and my landlord has no plans on selling in the near future.
Posted on 10/22/26 at 9:33 am to Salmon
quote:
If everyone was currently in 7% rates, almost no one would be looking to "upgrade". The only reason people are considering upgrading, is the lower rates.
This doesn't make sense.
People would be more willing to upgrade houses if they were moving from 7% to 7.5%
They don't want to move because they don't want to go from 3% to 7.5%
The point is that they bought a bigger nicer house with their 2-4% interest rate, so there is less motivation to move. If you had a smaller house at 7% and you want to upgrade with a 7%, its not as hard of a pill to swallow. That's fairly basic economics.
If you already have a nice big house with 2-4%, the motivation to move into a bigger nicer house at 7% is low.
The main point is the market isn't moving because most people overbought in the past because interest rates allowed them.
How else is the market supposed to correct itself, than to have a downturn? At some point the market had to correct itself from the 2-4% interest rates. I'm not sure why this is shocking to anyone.
Posted on 10/22/26 at 9:34 am to baldona
quote:.
The point is that they bought a bigger nicer house with their 2-4% interest rate, so there is less motivation to move. If you had a smaller house at 7% and you want to upgrade with a 7%, its not as hard of a pill to swallow. That's fairly basic economics.
If you already have a nice big house with 2-4%, the motivation to move into a bigger nicer house at 7% is low
You are all over the fricking place dude
How you have zero understanding of very, very basic financial concepts is shocking
This post was edited on 10/22/26 at 9:36 am
Posted on 10/22/26 at 9:35 am to JeauxT
quote:
Renting
Probably the best thing to do at this moment especially if you have rental properties in your retirement portfolio and want to relocate somewhere and not buy a house.
Posted on 10/22/26 at 9:35 am to Mahootney
quote:
And "Boomers". Yes, your home "was worth" $600k a couple of years ago. But you built it for $60k in 1995.
Yeah, how Dare they for wanting a favorable ROI
Posted on 10/22/26 at 9:36 am to SlowFlowPro
quote:
The fact prices aren't falling more is insane
Not really. There's not much inventory. Because people aren't walking away from a 3 or 4% mortgage. They'll live in an imperfect house for that kind of incredible luck.
The other contributor to the inventory problem is that we haven't built a lot of inventory since the great recession on the affordable end of the spectrum. The exact type of homes that used to go to first time owners, teachers, nurses, and other people with modest income......are now owned by boomers and millenials and used as rentals.
Not an easy way to correct this unless we go back in time and build more 1200-1500 square foot houses in like 2012-2018
Posted on 10/22/26 at 9:41 am to Mingo Was His NameO
quote:
You are all over the fricking place dude
How you have zero understanding of very, very basic financial concepts is shocking
Am I the one that thinks he couldn't sell his house because of the interest rates?
You couldn't sell your house because your price was too high. Post the info I said Mingo, year you bought it and price you paid and the price you are asking.
Posted on 10/22/26 at 9:42 am to member12
quote:
1200-1500 square foot
Which is ideal for a family of three. So many families of three are in 2400 square foot homes and larger. It makes no sense.
Posted on 10/22/26 at 9:44 am to Mingo Was His NameO
quote:
How you have zero understanding of very, very basic financial concepts is shocking
Worth another post, I've asked what's a healthy real estate market? What should the goal be? Comparing sales to 2006 or 2020 is dumb, those are outliers.
What's a health interest rate?
What's a healthy days on market?
What are the healthy numbers? Because it just seems like someone is always complaining about real estate.
Posted on 10/22/26 at 9:46 am to baldona
quote:
You couldn't sell your house because your price was too high.
The price was “too high” because rents are not equitable with the price of ownership. I had 3 applications and a new renter within a week at 20% cash flow after taxes and insurance.
That’s my entire fricking point you don’t, could I have sold it for a lower price? Of course, but that made WAY less financial sense than keeping it and continuing to rent it.
So, many renters are not interested in buying, and many would be buyers are staying put due to their current cost of ownership. You continuing the very obvious statement of “wElL RaTeS aRe At HiStOrIcAl AvErAgEs” is a no fricking shite comment and brings absolutely zero value to the conversation.
Posted on 10/22/26 at 9:46 am to stout
quote:
Just no buyers
yep... i have a listing, right now, backyard overlooks a hole on the golf course, new generator, well taken care of, great price....
i've had 2 people in 3 weeks come through it... literally, there is NO ONE looking to buy right now, in this uncertain economy, with rates, prices, gas, inflation, etc so high...
Posted on 10/22/26 at 9:46 am to gaetti15
quote:
be a whole lot better if telework policies were re-instituted across the board
Yep, remote work would also lower gas prices as less people commuting lowers demand. Wear and tear on roads is less, so less money spent on upkeep.
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