The affordable housing crisis

Xyls
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Re: The affordable housing crisis

Post by Xyls »

R8Z wrote: Mon Nov 15, 2021 1:53 pm I am not sure I agree with either articles above, but it's a starting point. It feels like (global) inflation is much stronger that it is currently implied.
Keep in mind this is America specific. The housing crisis is far worse in other countries. Canada probably has the world's most intense housing crisis at the moment, and there are rumblings that it could set off a financial crisis globally if it were to get out of control.

Canada's market never reset like the American one did after the Great Recession and housing in Canada is almost twice as expensive as homes in the United States.
Xyls
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Re: The affordable housing crisis

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Canada is the furthest along on interest rate rises. Everyone should be watching it to see how the housing crisis is going to go...

Canada's average home price slides to $746,000, sales plummet amid rising rates

https://financialpost.com/news/economy/ ... rate-hikes
Home prices across Canada appear to be slipping under the weight of rising interest rates, with the nationwide average home price falling to $746,000 in April, down 6.3 per cent from March’s average of $796,000, according to data from the Canadian Real Estate Association.
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raklian
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Re: The affordable housing crisis

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Xyls wrote: Tue May 17, 2022 2:22 pm Canada is the furthest along on interest rate rises. Everyone should be watching it to see how the housing crisis is going to go...

Canada's average home price slides to $746,000, sales plummet amid rising rates

https://financialpost.com/news/economy/ ... rate-hikes
Home prices across Canada appear to be slipping under the weight of rising interest rates, with the nationwide average home price falling to $746,000 in April, down 6.3 per cent from March’s average of $796,000, according to data from the Canadian Real Estate Association.
I think the housing market is going to keep heating up in Canada as more people migrating there due to the effects of climate change. The current slide in prices is probably a temporary reprieve, allowing those who missed the opportunity to buy in earlier to get on the bandwagon to even higher prices.
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Xyls
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Re: The affordable housing crisis

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raklian wrote: Tue May 17, 2022 2:30 pm
Xyls wrote: Tue May 17, 2022 2:22 pm Canada is the furthest along on interest rate rises. Everyone should be watching it to see how the housing crisis is going to go...

Canada's average home price slides to $746,000, sales plummet amid rising rates

https://financialpost.com/news/economy/ ... rate-hikes
Home prices across Canada appear to be slipping under the weight of rising interest rates, with the nationwide average home price falling to $746,000 in April, down 6.3 per cent from March’s average of $796,000, according to data from the Canadian Real Estate Association.
I think the housing market is going to keep heating up in Canada as more people migrating there due to the effects of climate change. The current slide in prices is probably a temporary reprieve, allowing those who missed the opportunity to buy in earlier to get on the bandwagon to even higher prices.
Yes, part of the problem is that Canada takes in too many immigrants. The Liberal government has set immigration targets with no consideration for whether there is housing for them. Then you get the government saying we are going to take in all these refugees to look good to the media with no plan and now this is part of the result.
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funkervogt
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Re: The affordable housing crisis

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Here's an article from nearly three months ago predicting that U.S. mortgage interest rates could hit 5% by later this year.
Hale thinks we’re close to hitting 5%: “Even if rates slow their recent pace of increase, they’re likely to hit 5% by mid-year unless something big changes in the outlook,” she says. And Jeff Ostrowski, analyst at Bankrate, thinks it could happen even sooner. He notes that rates have been climbing sharply and hit 4.59% in Bankrate’s latest weekly survey of lenders. “It’s quite possible that the upward trend will continue and that the rate will hit 5% sometime this spring,” he says.
https://www.marketwatch.com/picks/inevi ... 1648838969

The reality is worse than they predicted: today, a 30-year conventional mortgage has a rate of 6%.
https://www.bankrate.com/mortgages/toda ... e-21-2022/
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caltrek
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Re: The affordable housing crisis

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European Union Tracks Highest Spike in Housing Prices in Nearly Two Decades
by Amanda Pampuro
July 8, 2022

Introduction:
(Courthouse News) — For 29.8 million koruna ($1.2 million), you can purchase an 872-square-foot rowhouse a five-minute drive from Prague. While the ad for this four-floor dwelling boasts forest access and potential, the home now costs about 7.45 million koruna ($310,000) more than it would have if bought last year.

While the central European country reported the second highest increase in house prices last year, housing prices across the European Union jumped 10.5% since last year marking the most drastic year-over-year increase in 17 years, according to data released by Eurostat on Friday.

Seventeen of the EU’s 27 members tracked annual house price increases greater than 10%.

Residents in Hungary experienced the greatest increases in annual housing costs, 20%, followed by Czechia, 25%, and Estonia, 21%. With an increase of only 1%, Cyprus reported the smallest increase in house prices, followed by Finland and Italy, both 4%.

Between the last quarter of 2021 and the first quarter of 2022, housing prices jumped an additional 2%.
Read more here: https://www.courthousenews.com/eu-tra ... decades/
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caltrek
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Re: The affordable housing crisis

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The Great Housing Divide: How Wealth Inequality in Denmark Starts With Property
by Mie Olsen
July 8, 2022

Introduction:
COPENHAGEN, Denmark (Courthouse News) — In 2018, the World Bank published a report on housing, mobility and welfare in European Union member states. Denmark was found to have one of the highest housing cost overburden rates in cities.

The report also said that homeowners are more likely to benefit from overall economic growth because, in general, renters see their increased salaries tempered by increases in monthly housing costs.

Since then, Denmark has experienced a housing bubble, as prices went up 21% since the first Covid-19 lockdown in 2020. While inflation and high interest rates have experts forecasting a price decline by the end of this year, homeowners in Denmark´s largest cities – Copenhagen, Aarhus, Odense, and Aalborg – still benefit from the high demand in a market with limited supply.

That’s according to housing expert Jørgen Munksgaard Rasmussen from the Knowledge Center Bolius. He described the dynamic as a “spiral.”

“It is a self-reinforcing spiral objectively contributing to an increase in wealth inequality. If you bought a flat in central Copenhagen for the price of 1 million DKK [about $140,000] 10 years ago and sell it for 3 million today, you suddenly have equity of 2 million. Parents can use the leverage to buy flats for their kids in attractive areas. So the investments and accumulation of wealth accelerate,” he said in an interview.
Read more here: https://www.courthousenews.com/the-g ... property/
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caltrek
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Re: The affordable housing crisis

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Fed's Rate Hikes Hammer Housing Affordability
by Matt Phillips
August 17, 2022

Introduction:
(Axios) The Federal Reserve has hit the brakes on the economy, in an attempt to slow inflation. Housing is where the rubber meets the road,
Why it matters: Since the pandemic, the hot housing market — and associated boomlets in renovations and new construction — have been key contributors to the post-COVID economic recovery. That's changing.

Driving the news: The number of newly started homes plunged in July.

• Starts of single-family homes fell 10% from the prior month, hitting their lowest point since June 2020 near the depths of COVID-era uncertainty.

How it works: Fed rate hikes have helped push mortgage rates sharply higher, making purchasing a new home much more expensive.
Additional extract:
The big picture: This might be a bad thing for economic growth and employment, but by slowing housing demand, the Fed hopes that house prices eventually start to edge lower.
Read more here: https://www.axios.com/2022/08/17/feds- ... rdability
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caltrek
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Re: The affordable housing crisis

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Mortgage Rates Hit 6% for First Time Since 2008 Housing Crash
by Herb Scribner
September 15, 2022

Introduction:
(Axios) Mortgage rates have reached 6% for the first time since November 2008, according to new data Freddie Mac released Thursday.
Why it matters: Rising mortgage rates could dissuade prospective homebuyers, and particularly first-time buyers, from pursuing ownership. The climbing rates have sent demand for mortgages plummeting compared to last year.

By the numbers: The 30-year fixed-rate average rose to 6.02%, which is higher than the 5.89% rate last week. A year ago, the figure was 2.86%, per Freddie Mac.

• Freddie Mac said the uptick might put "downward pressure on home prices," but any decreases won't be large because there's still a shortage of homes for sale.
• New mortgage applications have dropped nearly 30% since the same period last year, according to data from the Mortgage Bankers Association, obtained by CNBC.
Read more here: https://www.axios.com/2022/09/15/mortg ... t-housing
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caltrek
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Re: The affordable housing crisis

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Mortgage Rates Hit 20-year High at Nearly 7%
by Matt Phillips
October 11, 2022

Introduction:
(Axios) Mortgage rates are at their highest point since April 2002.

Why it matters: The recent surge in rates has slammed the brakes on activity in the residential real estate sector.

• Plunging housing affordability could also become a contentious political issue.

The latest: The average rate on the 30-year fixed rate mortgage hit 6.92%, according to Freddie Mac. Just a year ago it hovered around 3%.
Read more here: https://www.axios.com/2022/10/14/mortg ... ng-market
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