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Housing market bubble?
I decided recently to hold off on buying a home and save up some more money before I did. After a few months researching prices, it is off the charts. A home where I am that was selling for $450K a year ago is now selling for $700k. At this rate I definitely won't be able to afford any home in my area 1 year from now. I don't see how prices can continue like this? Are we at the top of the housing market? Wondering what this group here thinks about this!
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B
The low mortgage rates sure does help and then you have people worried they are missing out by not buying! Thats what I think is going on. But there is a shorting of housing and the lumber prices going way up doesn't help, so supply is low and further driving up prices. I totally see what you are saying and it doesn't add up. Home prices where I am in S. CA are crazy although I see more inventory now than a year ago.
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@Beth890 Lol, it's fomo in full effect! Didn't know about lumber prices going up.
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T
I worry about the same. What goes up that high must come down a little bit, shouldn't it? I don't see people's salaries and wages going up that much year after year. So how are people able to afford these homes? It sure does feel high and I wouldn't buy if I were you. Some people say not to time buying a home but I disagree with that!
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@Theresa716 Yes, my salary hasn't gone up 100% in 1 yr that's for sure!
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V
People also seem to be getting approved for really large loan amounts and I'm not understanding it at a time when jobs security is not so secure! I'm worried about how extended people are with such large loans.
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R
@Vanessa514 I wonder about this too but I've got to think post sub-prime crash that the mortgage industry has figured out a better way of how to extend mortgages to people with low credit!
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@Reuben392 The mortgage industry really has and there are stats that show they are approving the right creditworthy borrower. The question though is whether borrowers are ready to take on all that debt and can manage it well.
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My take on this is that all the money being printed and in circulation is just pushing prices on everything up!
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I'm not so sure we're at the top and do real estate prices even ever go down over an extended # of yrs? Maybe move to a cheaper location? I live in Oregon the prices don't go down. At best price increases might slow down or stay flat but not reverse! :)
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T
Generally I would say yes we are. This is totally dependent on where you live because some places are well behind others in terms of growth of home prices over the last year, but generally home prices going up this much is not sustainable.
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G
@Tanya968 There's truth to this. Price are higher than ever, but buyer sentiment is at a low, and sales are slowing despite low mortgage rates right now: In April 2021, the median home listing price reached an all-time high of $375,000, up 17.2% compared to last year. But, 47% of respondents to Fannie Mae’s April National Housing Survey said it was a good time to buy a home, the lowest in the survey’s history. That supports the March 2021 stats that show existing-home sales fell 3.7% from the prior month to a seasonally-adjusted annual rate of 6.01 million. Freddie Mac is also projecting declining mortgage originations in 2021.
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