Buyers would like to see one and some on Wall Street think they may get their wish
of ConsumerAffairsMany buyers who cant afford a house blame mortgage rates, but paying around 7% interest on a mortgage is not exceptionally high on a historical basis. The problem for many is that the median-priced home is now more than $400,000.
Prices surged during the pandemic when mortgage rates were exceptionally low and they havent retreated. In most areas of the country, theyre still going up, and some industry experts they could go even higher.
Brian Rudderow, a real estate investor at HBR Colorado, expects prices could rise another 2% to 2.5% in 2025.
Existing home sales are anticipated to increase slightly, reaching around 4.3 million, up from 4.1 million in 2023, he told ConsumerAffairs. However, affordability challenges may persist due to continued high mortgage rates.
But if home prices fell, that would improve affordability for buyers but leave many recent homebuyers underwater, as was the case during the housing market crash of 2009. As long as there continues to be robust demand for homes and smaller inventories, dramatic price declines are not likely.
What should a single-family house cost?
However, the Wall Street Journal reports Wall Street investors are beginning to think that the housing market is inflated. It cites data from real estate analytics firm Green Street, which has reported that the stock market is pricing stocks of large single-family landlords at discounts of up to 35%, compared to the market price of the property they own.
According to the analysis, the average house in metros where one landlord, Invitation Homes owns property, sells for around $415,000 but is actually worth only $310,000.
How would that home affordability if the $415,000 home was repriced at $310,000? At a 7.15% mortgage rate, the monthly payment would be $709 lower.
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Posted: 2025-01-16 18:07:04
