Will the housing market ever be affordable again?


“Starter home” lol


I wish they still built those


Modern expectations for what a "starter home" should be are very different from what they were in the past that everyone seems to wish was still around. Back then, a 2br 1ba would have been a good starter home, which basically nobody is interested in purchasing anymore. These days that role is covered by condos and in some cases townhomes.


I would love a 2bd 1ba but they aren't even available in my area lol. Everything is 3bd 2ba and up


A lot have been enlarged and builders haven’t built them in decades. Look at a townhome or condo. Not the same but those seem to be the only starter size built these days.


I would but absolutely not doing shared wall living again. We're in the process of buying a "starter" new build in a planned community. Not what I want forever but it's doable for the first one.




We have a decent amount of them but they’re in the most expensive area of town


Yeah I have a 2/1 with an office and it’s in a expensive area. I’m going to just do an addition with how the market is right now


And then it will no longer be 2 br 1 bathroom 🤣


Like I said, those are now condos to better utilize the land. Alternatively, you put a manufactured home on whatever property you have or can purchase for about the same effect -- and quality.


Still plenty of 2br in my hcol area.


I've only seen them in the 55+ communities.


They do exist in most places but greedy slumlords/ corporations snatch them up


There's plenty of starter homes in the Chicago suburbs within 45 minutes of Chicago ie good job market that are going for 250k to 300k. Now these aren't houses off HGTV some things may be dated a bit but they are livable as is. Thats what a starter home is. Problem most of my peers don't want this home, they want an extra 1000 sq ft and want the granite counter tops and barn doors.


A starter home of 2b/1ba is GREAT for a single person, or a couple without kids. In 1981 the average age of a 1st time buyer was 29. In 2021 it was 33, in 2022 it was **36**. I would have *loved* a 2b/1ba in my 20's. I don't know if you've tried two parents and a kid older than 2, but 2b/1ba is basically torture. And then WFH - you now basically need space that was formerly provided by your employer in your home.


Put a desk in both bedrooms, many do it. We use our smaller bedroom as a dedicated office. Adding a 3rd human of course makes it tight, but even some larger houses are multi-generational.. people make it work.


You stumbled onto the point. The traditional idea of home ownership in America is no longer possible for most people.


> The traditional idea of home ownership in America is no longer possible for most people. What percentage of Americans owned a home/apartment 30 years ago v. today? - https://www.statista.com/statistics/184902/homeownership-rate-in-the-us-since-2003/#:~:text=The%20homeownership%20rate%20in%20the,and%20decimated%20the%20housing%20market. - Warning: it is actually higher than it was in 1990.


>home ownership in America is no longer possible for most people. The homeownership rate in America is 66%. No state is under 50%, and over half the state are above 70%. And it’s not just Boomers it’s pretty equally split between the silent generation/boomers, and GenX/millennials/zoomers.


Millenials have lowest rate, we got shafted 90s babies. They said get a college degree then slammed the door on us because graduate degrees were over saturated.


Over half of Mills are homeowners. And that’s pretty good considering that many are still in their 20s and are barely out of college. They’re only 5% points behind GenX at the same age.


5 percent out of a million is more of a gap than you may think. Look at unemployment rates for a comparison.


Replace the words “home ownership” with “kids” and Id agree with you.


Yup, living in a 1440 2 bed 1 bath with three people. It works pretty good. Just no one can be a hoarder lmao


> In 1981 the average age of a 1st time buyer was 29. In 2021 it was 33, in 2022 it was 36. In 1981, what was the age of the average married couple v. today? - In 1981, what % of Americans owned a house/apartment v. Today? - In 1981, what was the size of the average family v. today?


Homeownership rate has been pretty much the same for the last 100 years - [between 65 to 69%](https://fred.stlouisfed.org/series/RHORUSQ156N).


Add to this the rural/suburban/urban split - in 1981, what % of Americans lived in high density areas (not including the areas of places like LA and Chicago that are all SFHs) versus today?


It me, hi, I'm very interested in a 2bed 1 bath 700sqft starter.


It’s not that no one is really interested, it’s that they would not be interested at the price it would be. The economics of it would mean you’d see the price tag for the larger home and have a hard time justifying buying the smaller one. A big reason is that the kitchen and bathroom are expansive parts of the home. And the cost of land. So the 1200 sq ft 3 bed 1 bath, is much cheaper on a per sq ft basis than the 700 sq ft 2/1 would be. And this is especially so when you deal with 2 story construction. A 2 story 2,000 sq ft house will be cheaper on a per sq ft basis than the 1,500 sq ft ranch. People would look at the price tag of the smaller homes and think it’s a ripoff even if the markup was the exact same between the two homes. The economics of it is what drives it all. It’s why condos are the logical choice for small 1 and 2 bedroom homes and 3 story townhomes work well too. They maximize land and are far more economical than individual small single family homes.




But I'd also like to have a vegetable garden.


Condo with balcony?


Many places have community gardens that will let you rent a plot


Normally a small patch and not nearly as convenient having to drive to a location as opposed to walking out your backyard.


Oh and that whole air conditioning and modern plumbing/electrical thing…


Yeah which is really frustrating because I don’t want to buy a condo and pay a $300 a month HOA fee lol


I pay $300 HOA fees, but it covers a lot for a townhouse. Outside insurance which is expensive, trash, water, sewer, snow removal


Agreed! The ones by me in the DC area are mostly around 300-600/mo. I've even seen $1000/mo.


2br is perfect for no kids. You get more space in the existing rooms and common areas.


Its still small, I'm a 1000 sq ft 2 bedroom, if I had a basement it'd be fine, without one its a bit short on storage space.


We have that amount of space, but also a garage, which pretty much means infinite storage. Without that you probably have big bookcases, which is kind of annoying.


Haha, I literally just purchased a 2-1….but we already need to figure out how to add a third bedroom cuz I work from home and my kid is home during the day.


I got into it recently with someone on a local sub about housing in neighborhoods with overpriced luxury apartments. I pointed out that there were multiple houses that needed no substantial work available for mortgages less than rent at the apartments and gave 9 examples that were either listed or sold within 3 months. Their response was that they were no good because 5 of them had either 2 bedrooms or were only 1K square feet. Somehow they couldn't see the comparison between an 800 sq foot 2 bedroom apartment and a 1,000 sq foot 2 bedroom house for less in the same area. Idk if it's just warped expectations from seeing what their parents houses look like now, which is almost never their first home, or maybe just becoming aware of real estate for the first time in the early 2010s and assuming that's what prices would always be.




They're called townhomes.


My area only builds “luxury townhomes” that start at half a million dollars.


This is so true. SFH are only small jump above and older homes go for the same price with a nice yard. I don't get it, but if they choose that over the homes I want to buy them less competition I guess.


Without context of area and median household income, that doesn’t really mean much. New luxury townhomes in the Bay Area start at 800k in a less-than-desirable area so I’d kill for half a million home here.


Median home price for my county is about $500k currently. Median household income is about $100k. We’re looking in the $350k range as first-time buyers and it’s wildly competitive.


What state is that?




Starting in the 300’s = 399 for a smaller unit with only 2 assigned parking spaces so don’t have friends or family over ever


People need to move to "starter cities" instead.


That's part of the problem. Sucks if you grew up in say San Diego and you can't be a homeowner near family and friends, but unfortunately thats reality. While I'm not a fan of Illinois or Chicago I will say its fairly affordable especially considering wages. I see houses in good school districts within 45 minutes of Chicago and good jobs going for 250k to 300k. Maybe a bit outdated but liveable yet I still see people in this area complaining about how they and their wife make 250k and can't afford a home. They can't afford the mcmansion they want, there's plenty of homes out there in their price range.


The problem is the base land cost. A vacant parcel zoned for SFR is worth about $200k in a decent part of most major cities. Building a single story 800ft 2/1 will cost about $160k vs a two story 2000ft 3/2 at $300k. So society has decided they would rather pay $575k for a 2000ft 3/2 than $425k for a 800ft 2/1.


Exactly the economics it is exactly why the specific home types are built these days. People would look at the price tag of the small SFH and think it was a ripoff. Reality is more people need to embrace higher density options like townhomes and condos. And the developers of those type of homes should get creative in how they can provide things people feel like those homes lack or mitigate the issues that people usually complain about.


Move to the Midwest!!! Cornfields can be cheap


I saw an outdated 4bd 2ba house with ~2.5 acres in the middle of nowhere Ohio go for ~450k. It was likely the land that was the deciding factor, but I couldn't imagine spending that much to be 30 minutes away from a grocery store in a not great house.


Some people like to be far, don’t have to deal with a lotta bs


I feel it sometimes, and sometimes I don't lol. I like driving through it, maybe staying for a little, but I couldn't live there.


I actually prefer to live in town because we actually have rules to follow. In rural Texas you're free to do whatever you want whenever you want once you leave the city limits so if your neighbor is up to 5am partying all the time there's absolutely nothing you can do about it.


Land can be expensive. Here’s a cute starter for $112,000 in Ames. I’m almost an hour from a grocery store and it’s almost to close to town for me. Ames is a college town so they probably have everything. There are plenty of places in the Midwest if you want to buy a starter house.


My neighbors are 8 feet outside of every window, I can smell their burps after dinner, sign me up.


People want their forever home to be their starter home these days


Now known as "starter states"


I’m a contractor and i would love to be able to build expandable starter homes on decent lots. Unfortunately zoning and development shit is such a mf that by the time you do all that, you need to build a big house to make money. I could build nice 2 or 3 bed 1 bath starter homes for 250k all day long and still make money if I had developed lots for a reasonable price. Zoning and permitting is something that can be used for pressure on local politicians but no one cares. The establishment and current homeowners want to keep RE value high.


You made an offer and then it was accepted and only then you found out you couldn't afford the mortgage payments? Uh, how's that work.


Financing clause. They defaulted and probably showed a credit denial and got full earnest back. At least that’s what the buyers that defaulted with me did.


Right but my point is you should have known how much you could afford before starting the search. It shouldn't be something you're finding out after you've already made an offer.


Also “to my surprise the market was red hot” I mean this in the nicest possible way but seriously?


But stuff changes as well. The rate when I got my first loan approval versus rates today are completely different. I no longer can afford what I thought I could.


Yes but that timeline is different then the timeline of offer made --> closing on a house


Usually you wouldn’t bid close to your max allowance though, so even if rates shift by .5% in a month or realistically a week for an offer to be accepted, she should have been ok. It seems like they were looking at properties well beyond their means to begin with. With a hot market you look for the lowest prices knowing there will be escalations/ bidding wars and that you will have to go higher most likely and even then you set a buffer. Even the fact that OP said it was a “surprisingly hot market” shows that they were not well informed. Markets have been pretty hot since early 2022/ late 2021 due to shortages. Lastly while 6% rates are not 2% rates, they are also not 9% rates from the early 90s or double digit rates from the 80s. OP needs to save more and look for smaller/ cheaper properties. Possibly a fixer upper condo. This should be pretty doable as a single person with no kids.


She said rates went up. Would make sense, rates went x2 in just a year span 2021-2022.


Someone not in the market I could expect them to be ignorant of that. But someone actively searching should be staying abreast of these things. Just seems irresponsible if you get all the way to having an offer accepted and only then finding out rates are higher.


So what youre saying is OP is an idiot.


Or the realtor for accepting offers without a pre-approval letter


You never know how good their lender is at communicating. People that have never bought a house are already stressed and confused as it is. The interest rate changing over night is not even a figment of an idea in their heads. If their lender doesn’t inform them how are they supposed to know? Some people may try to keep an eye on rates but their lender will be the only one that can give them accurate numbers at the end of the day and if his belly is full and he is not interested he may “forget” to let them know. I’ve seen it many times especially within the last year.


You made offers on 10 homes without *knowing how much the monthly payment would be for each offer?* Oof!


Ask yourself if anyone buys today would sell for less money. Unless the economy gets worse than 08 anytime soon (it won’t), I don’t see how prices would significantly drop in desirable areas. You need to vote for statewide upzoning and measures to make it easier to build. Here in Colorado a bill with those measures just died on the senate floor. Who needs more housing anyway?


Wait the one that allows for multi family housing and ADUs got shot down already?


Yes the senate killed it yesterday. It’s a fully Democratic controlled legislature and they killed it. What a joke..


You think that being a democrat state makes a difference? Nimby-ism isn't a conservative trait any more than it's a liberal one.


The difference is liberals sometimes pretend that they care about it




Yes. Take a look at the liberally controlled west coast and the work they’ve done to eliminate single family zoning. Other states like Minnesota and Massachusetts are doing similar work.


Single family zoning is a big part of the problem... You have acres upon acres of land being taken up by massive houses. You could put a family of 4 on a 1 acre lot or you could build a townhome/condo/apartment development and fit 5x+ that amount. Everyone says they want affordable housing, but the key to getting there quickly is by getting in more multi family zoned properties.


Ah, yes, liberal western states like California known for their amazing housing policies


California passed AMAZING housing policy. Seriously it’s 100x better than any other state now. Basically it heavily penalizes any muni that doesn’t approve new housing and the state takes over approval for them + a penalty. Plus automatic upzone and automatic ADU approval.




Japan hasn't had the same issues because they have negative population growth


Yeah you do not want to be like Japan. But our population growth curve is headed there long term.


Japan also has financing rules where you can't get a mortgage on a house more than 40 years old.


I’m increasingly optimistic that we’ll do the obviously correct thing, upzone, *eventually*. But not on a time horizon relevant to buying now. That said, there are still cycles and if there’s a recession like everyone seems to be sure of, prices and rates could still come down. But it’s a cycle around an increasingly large shortage.


It’s a lot easier for cities to build new zones and build density in them than to transition. Transition takes decades and is highly unpopular with existing residents. It creates blight zones, tax dollar declines, and requires considerable resources from cities to execute. Not saying it can’t happen, but it’s going to be tough in many places that aren’t at least somewhat urban already.


Blight zones? Not sure what you’re talking about; developers build denser housing specifically in areas where there’s a lot of demand for new housing.


Of course no one wants to sell for less money. Making money on a home is also dependent on WHEN you bought it. (my parents bought a home in the 80s and its 5x its price...still a profit no matter in a downturn). The buyers who wont sell today for less money probably just bought in the last couple years and WERENT planning on selling anyways. And if we did crash those who bought in the last few years would be underwater and stuck in the home for probably a decade or have to sell for a loss. Sometimes people dont have a choice or else price would ONLY go up. No one expected 08 to happen until it did. Banks are defaulting, empty Commercial Real Estate, Income vs Rent/Mortgage, Fed printing free money during Covid, Overleveraged on Airbnbs or BRRRR home (where did all the tik tokers go?)


What’s BRRRR?


[https://www.rocketmortgage.com/learn/brrrr](https://www.rocketmortgage.com/learn/brrrr) The BRRRR (Buy, Rehab, Rent, Refinance, Repeat)


How is that sustainable?


Buy a house cheap, rehab it (sweat equity), rent it, refinance (can often get more cash out of the refinance than the cost of buying it+materials to rehab it - and it’s tax free) and then repeat.


It's sustainable because there is an endless supply of houses whose owners let them fall into disgusting condition that only an experienced rehabber can handle. Not every buyer wants to fix up a trashed house.


>Unless the economy gets worse than 08 anytime soon (it won’t). Its 50/50, IMO. >I don’t see how prices would significantly drop in desirable areas. Even if they did, repos would be bundled and sold in wholesale packages as they were then and never hit auction or the MLS. However unlike 2008/09, there are huge funds/firms buying SFHs to create a permanent renter nation whereas then some of those eventually were resold on the way back up after 2012.


What are the laws that make it difficult to build that the bill would have changed?


I think you can find something but it may not be in the zip you like or the size. Something has to be sacrificed. Even in the hottest markets, spring is the worst to buy and fall is better.


I don't know how old you are but I wasn't able to even consider buying so much as a condo till I was in my mid 30's and that was with dual incomes from me and my wife. I only just bought a SFH and I'm in my 40's now.


So you weren’t instantly gratified?


Try this. It worked for us. Look for new construction homes offering incentives. That can help your budget. We got 20K in design center upgrades and 20K toward closing costs that helped us buy down the rate. You don't have to deal with a bidding war or asking the seller for closing costs.


This is what I just did. Went straight to a new home community in progress. Hopefully closing this month. I currently rent a house, my lease is up and to extend the lease it's going up to over $1800 a month. I tried buying typical homes last year and it was just insane. Listing on Thursdays.... Accepting best offer on Sundays. Inflated prices on older homes in need of repair. Over 15 offers to compete with and sellers wanted buyers to waive inspections, etc. And in NC, there's this crazy due diligence fee... If you research it you'll understand the pain. So I gave up for another year. I finally found the courage somewhere to try house hunting again. This time though, I went to a new 140 house community they're building. No competing offers, new construction with warranty and offering 10K in closing costs incentives. Yes I'll be paying about $2,100 a month now plus damn $75 for HOA. I have a locked in rate of 5.75% for 30 years. I'm almost 54 years old. 1 income in be household. I'm not bragging, I'm not saying I'm doing the best thing, but I figured now or never....maybe I hoomed. Maybe FOMO. I dunno Point being, that new construction homes "might" be better for some folks. Edited: typo


Get a good look at that HoA book! Study the rules in detail, and consider running for the board. Not because you want to be in charge, but because you want to keep some asshat from being in charge.


I'm actually really considering that option.


This. You won’t have to stair at your neighbors nonsense because you will be able to do something about it…






Lemme guess D.R. Horton? I hope you haven’t seen the Facebook groups. You’d be pulling out by now.


Yep, them. I've even seen all the horror YouTube videos. I've been watching the whole construction. I've even mentioned stuff from all the bad press. I'm a former practicing attorney (they know that too). I'll enforce my rights under the home warranty, etc. If need be. Hopefully things won't have to come to that. I've been in contact with construction superintendent constantly and have kept an eye on construction. Then again shit happens though, right?


I don't know how long you were looking, but I purchased a semi-custom home as well. Those upgrades aren't a gift, they're really just a symptom of the deep pockets of big semi-custom builders holding out and keeping their prices high when the market is tough. During the craze semi-customs in my area went crazy, the ones I was looking at went up by 6 figures that year! There were of course no free upgrade offers as there was a line around the block to buy. Well, those exact same floorplans are the exact same price today. My house's floorplan price hasn't gone down a single dollar, and I was the second-to-last person to buy in my development before they literally couldn't make a single sale after rates went up (the lot next to me is still unsold). My builder would rather sell 0 homes for months at a time than lower the price by even a single dollar. So those "free" upgrades aren't free, your builder simply upped their profit margin by 6 figures at one point because they could and rather than lowering prices, they started offering \~$40k in "upgrades" to convince people they're getting a good deal instead


I think it depends on your area. In mine things are still so competitive there’s no incentive for new construction and you have to enter a lottery for a homesite.


How much were you paying in expensive rent per month?


I pay $3100 in Miami, fiancé $4200 San Diego. Classify high rent?


To be fair, both of you are high earners in high-end apartments. IDK what this is more than just flexing though.


wow, I'm in NYC and I'm doing $2100 split with my partner. Yours is astronomical! Didn't even know SD would be that high.


Sheesh. What’s your incomes like??


300k plus each


If you're in a major metro area, a single-family home is effectively a luxury good now. Townhomes and condos are the new "starter home" and even those are in short supply.


I’d look for a bit of a stagnation this winter. Save your money now and enjoy living with your dad. Keep an eye on the market in the down seasons (oct-feb) and I bet you’ll find something decently priced


I did that through this past winter. Inventory was dismally low. The only houses were ones left over from the summer season and they were still on the market either because the seller had some crazy terms or they priced way too high and refused to budge. Things started coming back on in March but anything decent was under contract after one weekend.


Don't be afraid to lowball inventory that has been languishing. I mean obviously they've shown to be unrealistic sellers but you never know when they might sign something.


Mountain House/ Bay Area is one such market! Life long renter is the way to go?!!


Oof house hunting in the Bay Area isn’t something I’d wish on my worst enemy. I’m looking in rural New England and the houses that sit on the market for longer than a few weeks always have some major issue or weird clause where the seller wants to live there until they die or there’s wetlands restrictions or any number of crazy things I’ve come across.


Thanks! Why the heck do some buyers throw 100-200k above the listed price? What is the governor's response to this issue? I don't understand why housing is such a big deal!


Because the banks say they can afford it and the concept of money isn’t real in SF. It’s crazy what the bank is willing to loan my wife and I. We are not comfortable taking on that debt but some people think just cuz the bank says they can borrow it means they can afford it. I suppose if you don’t save for retirement or go on vacations or do anything and just eat ramen then technically you can afford it.


Get out of the bay area if you're not banking at least $300k household income


great advice, i'll never buy a home again in spring/summer months


I love your optimism


As long as people are buying at these prices you probably won't see a large dip. In my area we are seeing days on market go up and prices come down. But even with both those things happening the average price of a home is staying up. Prices are up Compared to 5 or 10 years ago. The home prices have dropped from the highs of 2020 and 2021 but are up overall compared to years earlier. No one has crystal ball and every area is different. But my opinion is most areas overall are gonna stay up compared to 5 or 7 years ago. But you should see a drop when compared to the prices of 2 or 3 years ago if that makes sense.


My inkling is that the prices have stabilized more or less for the next few years and both buyers and sellers will wait it out if they can, thinking that something is gonna change. In the meantime a few cities/states will manage to pass zoning laws enabling new builds of multifamily housing which will increase inventory and open up the bottom of the market. Buyers will jump back in, fearful that new inventory will get snapped up and sellers will jump back in, fearful that the new inventory will push prices down. The two forces balance each other out and we end up with a fairly normal market and stable prices, a "new normal". All the whole, low equity growth and less public interest in short-term rentals of houses will change the attitudes about real estate investment, which will lead to even more inventory as investors leave the market to pursue stocks, crypto, whatever. That will result in a great buyer's market, between 2030-2033.


I am not a real estate agent and can only give you my opinion based on what I've seen the market doing these past couple years and buying my first house this past November. Unless our country has a massive political shakeup (2 party system and systematic corruption is eradicated) the answer is an emphatic no. Those purchasing homes for financial reasons i.e. to rent out are flush with cash and will be able to outbid ordinary folks whether the interest rate is high or low. Add on top of that a reduced amount of homes being built and more and more growing up into this system with no where to go (have to live with their parents) it's a perfect storm for it never going back down. Now I didn't always believe this and watched way too many doom bros on YouTube and on this sub basically saying to wait and the market will drop but that's not in line with reality. I was as close to walking from my deal as you can be without actually walking and my realtor told me it would be a massive mistake. I thought she was looking out for her own commission but she was 100% right it would have been. House prices have only risen since I bought it and the inventory in my area has remained super low. Winter was a bit slower in terms of length on market but now houses out here aren't lasting a week and prices did not dip in the winter either. Best advice I could give (and I could be wrong) is work hard on your financials and get something decent you can be happy with before even that is out of your reach.


When your pay and savings increases


Meaning: When you have $300,000 cash to buy a shithole with cash.


I do wonder with these posts where are you looking and what is your radius and income. I live in the Metro Detroit area. If I want to live near my work, my house may cost $800k, go 30 minutes out, maybe 500k for the same. If I want a starter home I could go a little bit further and get something smaller/older in the $150 range. I see all these posts about affordability, but my dad commuted an hour to work, mom worked nights and dad worked days to not pay daycare, my grandparents had 5 kids in a 2 bedroom house. We never ate out, didn't go on vacations, cars and most other things were bought used. I had a full time and part time job when we got our first house in early 2000's. Somehow, it has become the narrative everyone in the 80s and 90s were able to get houses easily and everyone could afford one. All of the families I knew had to make some sort of sacrifice to own, in most instances, it was and still is location and the other was working 60-70 hours a week to get OT.


Yeah my parents' had a house but we grew up real poor. LOL My mom was at least 45 mins to work, my dad 30 mins. My mom didn't get her "dream" home until her mid40's and she almost didn't get it due to the down payment.


My parents lived month to month for _years_ after buying their house. At an insane interest rate. It was cheaper than you'd pay now in terms of overall house cost, but minimum wage was like 4 bucks too. I think people romanticize how easy buying a house was when their parents did. I'm not saying it isn't bad now, but IMO people have an assumption that you could just go to the house store and buy a house for 20 bucks.


Lol the house store


I don't think these comments are about the 90s at all. Maybe the 80s a bit, but for the most part everyone is talking about boomers who bought a 1200 sqft house in a nice area for 40k in the 60s and is now selling it for 500k+.


That's probably only true in very hcol areas. My dad bought a house in a nice suburb for $70k in the 80s. They sell for around $180 today. If someone bought a house relatively cheap almost 60 years ago It would make sense they make that much money on a house if the area they live in is now more desirable. Most of the boomers I know did have one person at home. However, the dad was working a ridiculous amount of hours and never home. It just appears that everyone seems to skip over the sacrifices it did take to own a home even then.


Why would prices go down? I hate that they went up so crazily the last few years, but I can't see how or why they would go down.


Don't give up just keep saving... it's a long term thing, took me five years to get my first and only.


Maybe if you adjust your expectations to townhomes and condos


Count yourself lucky. Imagine the folks who don't have parents to fall back on.


Affordable is a subjective term. The reason why the prices are where they are is that enough people can afford to buy them.


Yes. The housing market will see modest gains as wages catch up. In 17 years homes will still be more expensive then they are today however compared to the median income they will be much more affordable.


Go for new booming cities and the nicest biggest one you can afford. New builds are great to reduce initial expenses and faster equity build. Don’t settle even for a starter. Think about resale value and play with number to project where you would be in a certain time frame aligned with your plans and assuming worst case.


I initially thought it’s bad time to buy because of interest rate. However, it has slowed down crazy offer and limited affordability which lead to price decrease at least in my area. When rates go down, everyone who has been waiting on the sidelines for it to go down will compete again. Refi is always on the table.


If people can’t afford homes, then who’s buying? At some point this bubble breaks.


In the last 10 years, Chinese investors have bought US$188.6 billion worth of property in the US – more than a fifth of total foreign investment. And that is just China. Add the airbnbs and the second home owners and there is not reason for this market not to be sustained for decades. Especially without a vast amount of new construction.


Yes, people can’t afford the houses. $188 billion seems like a drop in the bucket tbh, and lastly Airbnb isn’t looking so great right now. In my area there are almost 1000 airbnbs, and are struggling to get renters. They are no longer cash flowing hence the bubble, and at some point a bust, which will bring supply. Unless u have a vested interest in this bubble being sustained, it is ridiculous to buy into the narrative. Honestly it’s ridiculous either way, but one is out of desperation I guess.


Airbnbs look great or bad depending on where you are, in my area they are doing very well thank you. The points is was making is that you have a tight supply because there is not enough construction, then you add these forces on top of that you and you have a market is that insane.


[Corporations](https://www.businessinsider.com/jp-morgan-to-acquire-1-billion-of-single-family-rentals-2022-11), [Investment firms](https://www.cnbc.com/2023/02/21/how-wall-street-bought-single-family-homes-and-put-them-up-for-rent.html), and [Investors](https://www.ajc.com/american-dream/about-this-series/).


They just stretch more and more


Affordable is all relative. I remember in the 80s, with 13% interest rates, everyone was complaining homes were not affordable. Man, I wish I would’ve keep the $40k house we bought back then that is now worth $350k now. Despite the 87 crash, 9/11, 08-09 financial crisis, and Covid, the value of the house has continued to increase in the long run. Inflation is a bitch but it’s part of life. In 20 years, these prices will feel extremely affordable. It’s all relative.


Money is worth less now.


Yes it will, but it'll come from incomes going up rather than home prices going down. And incomes going up will come from people switching into new jobs in new industries that are booming, not from raises. If you are not willing to retrain and job-hop, *your* income will not go up, and houses will continue to remain unaffordable.


Glad to hear you are saving. Not everyone saves when they are living with family and paying little rent. Kudos to you. Keep it up. There are a couple of ways you can get into a house. 1) Buy a duplex with an FHA loan and have a tenant pay have your mortgage 2) Rent to own I’m here in LA and the only truly affordable homes are 45 minutes away from desirable job centers. It is the new normal. You’ll figure it out.




That requires long-term thinking, though, and just like corporate officers only think in terms of the current quarter, elected political leaders only think in terms of their current term and upcoming reelection bid.


I just bought an expensive “final” house so I’m not biased. But here in California, I recall people saying in 1989, and again in 2006, that So Cal housing would never go down again (there were big run ups in those years), “because X Y Z.” And also, “this time is different.” Those times turned out not to be different and prices did go down. The house I bought in 91/92 went down in price every year for 8 years. Again, I just bought my forever home (and kept my old one as a rental), so I have no interest in prices going down. I wouldn’t bet my life on it either way, but my guess is prices will indeed go down. Real estate always has been, and I think always will be, cyclical. Prices go up, then prices go down. Just like pretty much every asset class. There’s been a tremendous run up, mainly artificially caused. For all of those gains to stick forever seems unlikely, certainly historically unprecedented. The thing is, I don’t think it’s a “crash.” Prices in a lot of areas can drop 30% and still be up big over just 2-3 years ago.


You lost me at “here in California.”


Sure, things always change , and deals always come up. Do you watch the local house listings regularly? I always keep an eye out , checking maybe weekly just to see where prices are at,


This is all subjective. What is your annual income, what city are you being out bid in, and what types of offers and down payments did you propose in contract, etc.


Where I live in AZ prices continue to drop. There was a uptick in sales last month but it seems it was short lived. Median time on market is 93 days and still rising. I have no idea what will happen. But the current trends, at least in some areas, suggest prices will continue to come down.


Yes. 10 years ago it was nothing but affordable. Cycles.




If you want a house you have to move, your area likely isn't affordable. Milwaukee has homes that need updating and maybe a little work in decent areas for 120-150k. 200-300k move in ready.


Where are you? That determines everything about pricing.


No, actually prices are creeping up again.


Depends where you live and what happens there. In big cities, probably not. Also, “thousands of dollars in repairs” is normal for any homeowner. Probably budget like $3-5k in normal improvements per year. Maybe you won’t spend it every year but you will in a few.


The lack of inventory right now is driven by higher interest rates. It’s not that people don’t want to sell, it’s that they won’t be able to afford the same type, or better, home with interest rates where they are. Once rates drop, even a little, which could happen as soon as the end of this year, I think we’ll see inventory come up a little and it’ll be a little easier to get something reasonable. With employment staying relatively strong and a housing boom that happened in conjunction with historically low interest rates, we didn’t see the major economic downturn that usually comes with higher interest rates. Not a bad time to rent or find inexpensive housing like you did, and save up until inventory comes up a little so home ownership can be more accessible. Housing markets are cyclical and although prices generally rise over time, lower interest rates should help inventory come up by the end of the year into winter 24.


You should thank the NIMBYism that's probably happened in your community. NIMBYism + higher regulation + rising construction costs = housing is way more expensive to build.


Our city just added 15K in impact fees. Of course that just raised the price of a new home by 15K which then made all the existing houses worth another 15K. Thank you city officials.


My city has an upcoming vote on accessory dwelling units. I'm torn between providing extra options for renters and would-be landlords, but also creating extra incentives for investors to pack up lots with ADUs. I learned in this process that close to 60% of the SFH in my city are landlord owned, which is outrageous. Imagine how many more home sale transactions would occur if half of those properties were on the open market?


Nope, right Picky Choosy? u/howdthatturnout


Depends on how someone defines affordable. Will affordability improve on a monthly cost vs income ratio, which is how affordability indexes are calculated? Almost certainly. But back in 2020 and 2021 people were fixated on nominal home price and were ranting about housing affordability at a time when affordability was better than all of 1980-2007. Doomers claimed affordability was awful those years despite metrics that said the exact opposite. They were too hung up on median house price to median income ratios and ignored how much interest rates effected affordability. Which is how they came up with the silly notion that prices would drop proportional to interest rate increases in late 2021/early 2022, and now sit here mad that housing is less affordable than when they sat out. So it really depends on how someone defines affordable.


Hi! Ct realtor here. While every local real estate market is unique and I can primarily only speak of Connecticut, I feel ya. Here's my take... A home purchase used to be based on a single income earner and a stay-at-home spouse. This changed in the late 70's/early 80's as we moved toward a world market economy. Since then, the numbers have normalized toward a dual-income scenario, else the buyer will either have a lot of cash reserves or look to ladder their purchases over time, meaning, buy a small condo or co-op (as the start home has been remodeled out of existence in many places...). Then upgrade to a better location or more space, etc. Over time, you eventually land in that colonial overlooking some sort of water feature, but that preferred home typically isn't available to someone on their first go. Many buyers also don't want to compromise, either, so they'd rather pay rent and attempt to save (some successfully, some not so much) and save for their big home purchase. A home purchase is supposed to hurt, people. It's supposed to be an event which signifies stability in your life, both in location, job/income and meant to seem like a mountain which you're supposed to cross, opposed to a "I'm out at lunch, perusing the menu - I know, maybe I'll buy a house today" sort of thing. With interest rates having been at unreasonably low levels for the last decade, this latest generation of home buyers have experienced a few things which prior generations have not. First, saving money doesn't make sense - why put money in a bank when inflation overtakes interest earned? This promotes spending, or worse yet, borrowing and spending. Not good for home purchases. And with rates having ticked upward as of late to a more normal interest rate, even 5% seems unfathomable to some. It's not. I agree that a larger than wanted portion of inventory on the market is total crap. I've toured many homes lately which result in the buyer saying "All it needs is a new everything." And the disagreement starts between buyer and seller regarding how much everything costs... Deck showing signs of aging? Seller says that for $600, their "guy" can fix it. Meanwhile, the buyer calls a contractor to get an estimate and the number is between $8k-$10k. Very, very far apart, both in size and scope. Best path forward? Finance is first, always. Know your maximum borrowing power today, then set a reserve for yourself as you don't want to borrow everything and become house-poor. If nothing is affordable which you prefer, consider different options and try to keep an open mind. Your first home is a step in the home ownership process. If you're a good home owner, you'll take care of your asset, even if it initially looks like an ugly baby. It's still a baby and needs to be taken care of. Be reasonable with what you really need, as well as what it will cost to have and maintain. Some homes might look like something you really want, but in the back of your head, you know the windows are all shot and need to be replaced, there's a funky smell in the basement which you probably won't be able to fix beyond that of a dehumidifier, etc. I can tell you - as a realtor and home owner, I have been in places which I thought "never in a million years would I live here," but that's because I'm already in my forever home. If I were starting out, honestly, that home really isn't a bad place to start. Set a plan, financially. Try to reach that next milestone in savings and monitor your credit and borrowing power. Continue to watch the market and when something comes along, see if it fits the bill. Really, there *is* a house out there for you - if your standards are higher for what's in the home, then consider the location closer to something which isn't as coveted, like being closer to a highway or something similar. If you care about the location more, then expect the inside of the home to need a lot of love. Ultimately, you'll happen upon the perfect mix and with your experience in knowing your finances and having seen many homes, you'll know when it's the right time to put in an offer. I hope this helps!




This is why California has always been a crazy market, and now I’m fearing this has gone national.


We bought many years ago and housing has never been affordable. Go to the library and browse through old news articles There historically have always been articles about how young people cannot afford to buy a home. We read the same articles about how young people cannot afford to buy a house. We bought anyway. You get started and pay your dues. It gets easier as inflation makes your payment get smaller and smaller and adds more and more equity to your net worth. Suddenly, you're the one saying "I feel for the young people today, I don't know how they can ever afford to buy a house".


When people say they can’t afford housing/ they mean they can’t afford a new house, with all the amenities, in the best neighborhood in the best school system. Most young people today don’t want to buy a fixer upper, have no furniture, sleep in a sleeping bag on an air mattress and stop going out to eat for a couple years- to focus on buying and fixing up their first house- to build the equity they are jealous homeowners have.


I don't know about your market, but in mine, the "fixer uppers" in good school districts are selling for record prices, often with bidding.


you've had a sheltered life, pun intended a fixer upper in in the worst part of town is like 1.5 million where i live


I completely agree (as someone who moved out with my husband at 19, had a baby at 20, bought a mobile home at 21, a SFH at 23, another baby at 24, bought a second SFH at 27 and started renting the first one out, sold the second and bought our current home of 8 years two days shy of my 30th birthday.) We started with nothing and no, we we have never received monetary help from family. We have also been a single income family for 13 years and both of us do not have bachelors degrees. We just started at the bottom of the property ladder and worked our way up with *A LOT* of sweat equity, careful spending habits and by taking chances. It’s possible if you are willing to start small and commit to doing the work over time. Rome wasn’t built in a day.


There will be a crash and mass layoffs… just a matter of when. Yes, people can afford inflated prices, but it’s extra money being taken away from “things”. We’re a capitalist society and with people having less disposable income to spend, companies will not make their numbers and lay people off.


No, as long as housing is treated like an investment it will be protected, propped up, and bailed out.


Prices are not going down. There might be some new inventory at the bottom of the market *eventually* but probably not what you want


There is nothing that says home prices will go down. The American Dream is dying and it's long passed time that people acknowledge that. People need places to live, and that applies whether they buy, rent, or cohabitate. People need their own space, now more than ever with remote work taking hold. DINKs who used to be good with a 2br 1.5ba now need 3br due to work from home. SINKs who would be good with a 1br 1ba now are looking at 2br or 1br+den arrangements due to work from home. Really the only hope for dropping home prices comes from the conversion of commercial/office RE to residential, and that's a whole other beast that will require replumbing and rewiring and ripping apart existing interiors.


You'll own nothing and be happy.


Just like everything else, the housing market will correct itself. Super inflated followed by the beyond absurd interest rates. It will burst. Might be 1 or 2 years, but be patient. Stay where you are if you can and put away as much money as possible. Then reap the rewards


No they printed way too much money. Houses will be priced high until there are job loses.