this post was submitted on 26 Nov 2024
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New home sales plummet 17% to 2-year low as rising mortgage rates sideline buyers (nypost.com)
submitted 1 month ago by [email protected] to c/[email protected]
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[–] [email protected] 9 points 1 month ago (2 children)

It's also pretty typical for house sales to drop in the winter because people tend to not want to move during the holiday season. The biggest time for house purchases seems to be in the summer, when kids are out of school and the weather is nicer.

New home sales plunged 17.3% to a seasonally adjusted annual rate of 610,000 units last month, the lowest level since December 2022, the Commerce Department’s Census Bureau said on Tuesday.

I think a more reasonable explanation is that the housing market was nuts from a little before Covid through probably around EOY 2022, so Dec. 2022 levels is still probably a little elevated vs "normal," whatever that means. This article seems a bit more alarmist than necessary...

This (at the end) is far more interesting to me than the rest of the article:

The median new house price increased 4.7% to $437,300 in October from a year earlier. The inventory of new homes increased to 481,000, the highest level since early 2008, from 471, 000 units in September.

That's quite a bit of inventory, so this should drive mortgage rates down over the next year, especially since the reduced fed funds rate gives a bit more room for rates to fall.

[–] [email protected] 5 points 1 month ago* (last edited 1 month ago) (2 children)

Until we stop allowing corporations to buy and control nee home sales homes will never become more affordable.

We've had years of propaganda saying that Blackrock and Zillow buying every home they can afford has no effect on the market, but it's obviously having an effect. As well as their price fixing algorithms like the one made by RealPage who is being sued by the FTC/DOJ

[–] [email protected] 1 points 1 month ago (1 children)

Nah, the main problem is still supply of new construction. We've been behind pretty much ever since Covid, and demand has only increased. That has much stronger explanatory power than whatever BlackRock is doing, especially since treasuries are interesting again.

[–] [email protected] 4 points 1 month ago* (last edited 1 month ago) (2 children)

There's like 17 empty homes for every homeless person

We've built thousands of new units in my city since covid and all of them are apartment complexities owned by megacorps or SFH bought instantly by private equity. The price just keeps going up.

The amount of homes we build has no effect on price if all the big players just get to buy them and increase their ability to price fix

[–] [email protected] 0 points 1 month ago (1 children)

Homeless people are pretty ill-equiped to buy houses.

[–] [email protected] 2 points 1 month ago* (last edited 1 month ago)

We have more homes than homeless.

We leave houses empty to rot because the money doesn't exist for people who need them to be able to buy them.

It's incredibly apathetic that we don't all consider that horrible and evil.

[–] [email protected] 0 points 1 month ago* (last edited 1 month ago) (1 children)

We're (likely) at record lows for housing vacancy rates (census.gov report from 2022), and the vacancy rate doesn't seem to have meaningfully increased with higher mortgage rates (updated data for 2024 seems to be about the same as that report).

And even if we did have a higher vacancy rate, that wouldn't have any correlation to the homeless population, since I imagine many if not most of these vacant properties are occasionally used for vacations and whatnot (could probably figure that out from the data linked above), meaning the owner wouldn't be interested in having it be set up for use by homeless people, and they're probably in areas with a lower homeless population anyway.

The problem of housing for homeless people is completely separate from housing vacancy rates. People aren't going homeless because there isn't enough housing available, they're going homeless because they can't afford the housing that's available. Making more housing available that homeless people can't afford won't solve anything, we need charities and government agencies to provide housing for free or very cheap.

[–] [email protected] 1 points 1 month ago (1 children)

17 homes for every homeless person in the country.

We let them sit empty instead of making the logical decision to use them and help fix our housing shortage.

This will never get better until it is illegal for corporations to own homes

[–] [email protected] 0 points 1 month ago (1 children)

We let them sit empty instead of making the logical decision to use them and help fix our housing shortage.

That's not up to "us," it's up to homeowners. We can't just snap our fingers and have all available housing available for use by homeless people, the owners wouldn't be okay with that.

The closest we can get is to increase property taxes, which would discourage people from having second (or more) properties.

But like the statistics show, that isn't the issue here. Housing vacancies are down, almost to record lows, which means there's a supply problem. We can discuss what kind of supply we need (SFH vs multi-family), but the vacancy rate isn't the problem here. We need more housing, and we need better social programs to help w/ homeless people, we don't need to hit a 0% vacancy rate though.

[–] [email protected] 1 points 1 month ago (1 children)

We value people's ability to make money off of human needs more than other people's ability to obtain human needs, it's as simple as that.

We perpetuate an immoral and unethical society so greedy people can indulge in greed. I'm sorry it doesn't sicken you like it should, we've been trained to accept this unethical system.

[–] [email protected] 1 points 1 month ago

Whether it sickens me is irrelevant. I'm talking about the facts of the situation, which don't support the implication that we could solve homelessness by using vacant properties.

We should work toward solving homelessness, but vacant properties aren't relevant to those solutions.

[–] [email protected] 1 points 1 month ago (1 children)

Didn't Zillow divest their real estate wing 2 years ago?

[–] [email protected] 1 points 1 month ago

Just until they got the money to keep buying.

At the time they bought way more than they had the money for and almost bought so many units they were going to have debt issues if they didn't stop for a bit

[–] [email protected] 1 points 1 month ago* (last edited 1 month ago) (1 children)

It should drive prices down too, but it's not doing that either. Markets are based on whimsy now.

[–] [email protected] 1 points 1 month ago

Eh, I don't think so. I don't think there's an oversupply, inventory seems to also be falling. High mortgage rates discourage both buyers and sellers.

[–] [email protected] 4 points 1 month ago (2 children)

Just recently started looking since we want to sell our current one and buy another. We purchased 10 years ago, and after looking up and down the state, the average price increase for all houses is about 200k... so whether it's a 300k house or a 600k house 5 years ago it is now 200k more for both right now. I honestly doubt there was a 17% drop in this state.

[–] [email protected] 2 points 1 month ago

This isn't a 17% drop in values, it's a 17% drop in sales, meaning 17% fewer homes are being sold as of last month. I think there's a good chance that's pretty consistent on both sides of the transaction, since sellers are less willing to trade their low rates for a higher rate, and buyers are less willing to have the down payment for higher rates.

We've been interested in moving to upgrade our house (want a guest bed and a bigger master bed) and to reset the capital gains exclusion (we're up around $350-400k, cap gains exclusion is $500k), but it's not worth giving up our lower rate. We'll be interested if rates drop below 5%, but with current rates around 6.5-7% (depending on term), we're not interested.

I imagine a lot of homeowners are like us. They don't need to move, so they'll put it off until mortgage rates are more attractive, or until they need to move.

[–] [email protected] 1 points 1 month ago (1 children)

At least you get to roll your equity over into the new market, rather than having to enter from scratch.

[–] [email protected] 1 points 1 month ago

Not really, 90% of the reason we're moving is because we can no longer handle the debt accumulated and plan to use whatever gains we make to bring ourselves out of it and hope to have enough to at least put down a down payment on something else.