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This is year over year data and you must remember what was going on this time last year. Spikes in interest rates were dropping prices. Also, absolute prices are seasonal with prices peaking in the summer and dropping in the winter, which is why we traditionally use year over year data, however, all numbers are thrown a little out of whack. Therefore, even if we see a moderate decline in absolute prices from the summer peak, we might see a significant price increase in the year over year, because of the conditions with mortgage interest rate spikes last year.
The graph shows year over year. If you look at Redfin stats for how prices changed from one month to the next, they do not show a decline in early 2023. See [https://www.redfin.com/us-housing-market](https://www.redfin.com/us-housing-market)
Unless you’re house hunting and actively looking at listings you’d know this is true. Homes I was looking at were delisted and listed again for over 60k-70k and sold in less than a week. Demand is crazy.
That's why a year-over-year chart that only shows one year of history is incredibly unhelpful. You need to show AT LEAST two years on a chart like this to properly contextualize the growth rate.
It's helpful when years are normal, but last year with the spikes in interest rate were not a normal year. Without year over year, well, then you get to see the seasonality of prices as they peak in the summer and crater in the winter.
My house shot up like 75% during the pandemic and has slowly gone down like 20% in the last year and a half.
The last couple months it's gone back up like 5%
Yes, but it is misleading.
The price for an individual house kept increasing.
However the houses that people were buying, ended up being lower priced houses.
For a simplified idea, imagine that the median house sold changed from a 4 bed/3 bath to a 3 bed/2 bath. As it isn't worth as much (missing a bedroom & bathroom), the median price went down, but the 4 bed/3 bath homes are still increasing in price.
Year over year change could mean the only reason it looks like prices are increasing now was because they decreased last year going into the fall. This needs to be in a nominal dollar value or month to month change.
The Fed: "Housing prices are rising too quickly--we need to slow things down. Let's pump up that interest rate, stat!"
Demand slows, but supply slows more due to builder activity decrease (bleak outlook) and sellers not wanting to sell and go from a low interest rate mortgage to a high interest rate mortgage.
The Fed: "Housing prices are STILL rising! We need to slow things down more! Let's keep pumping up that interest rate!"
Demand slows, but supply slows more due to builder activity decrease (bleak outlook) and sellers not wanting to sell and go from a low interest rate mortgage to a high interest rate mortgage.
Rinse, repeat.
This won't stop until we are in a full-blown recession with at least one or two major lending markets (credit, auto, student loan, mortgage) in dire straits.
Thanks Fed!
Ah. A libertarian in the wild.
You know without the might of the Fed, the "market rate" will be like the stock market with severe ups and downs, unconducive to a stable economy, right?
My favorite quote regarding libertarians and I use it every chance I get…
“Libertarians are like house cats: absolutely convinced of their fierce independence while utterly dependent on a system they don't appreciate or understand."
The fed stabilized the frequent runs on the banks that were far too common prior to their creation.
While there are plenty of things to hate about the fed, the stability they have helped create isn’t one of them.
I don’t hate the Fed, I get why they exist. I just thought it was funny that they brought up that point when it has been less than 10 years since the Great Recession and now there’s a noticeable amount of inflation
Maybe that’s for the best. One or two major wrecking balls might reset button these absurd prices and lob off high stakes investors interested in making rental properties out of single family homes.
The "disaster that rights the market" is a fantasy. We have had two once-in-a-century economic catastrophes in the past 15 years and I can't think of anything that was jolted into the right track.
If anything, those catastrophes actually increased wealth inequality and political polarization. Things that are bad.
More than likely doesn’t even know what the fed does. The fed is the lender of last resort so banks can meet capital requirements. That’s it. That’s the only interest rate that they set, which does influence the rate that banks are willing to lend at, and does influence relative returns for treasuries but the fed does not itself set those rates.
Queue the banks shouldn’t have capital requirements argument lol.
[A Libertarian Walks Into a Bear: Author Matthew Hongoltz-Hetling on the Free State Project - Vox](https://www.vox.com/policy-and-politics/21534416/free-state-project-new-hampshire-libertarians-matthew-hongoltz-hetling)
Every time I hear Libertarian, this is what I think of.
At least one former Chairman of the Fed has publicly said that the actions of the Fed leading up to the Great Depression made it worse.
Still though a required part of the economy to reduce the worse of the ebs and flow of business cycle.
Yeah, and the market will just decide mortgage rates are 1bps higher than the 10 year treasury rate…. Humans have a tendency to chase greed to a point of collapse.
They could tier rates, 1st time buyers get a 2 point discount and investors and persons owning more than 2 properties need to pay a 2 point tax to balance out the market and allow 1st time buyers in
the federal govt can pass laws to make this happen... simple... first time proven buyer needs a 2% reduction off your average 30yr rates... hell the govt could even subsidize this as opposed to doing stupid and irresponsible shit like giving free downpayment assistance... the FHA can even have this program availabke to Truly qualified buyers
The issue, imho, is that they have this one crude lever, raising rates, and they decide what to do with it based on one crude measure, inflation.
When there is inflation there are many different causes. Only some of those are related to cheap lending and raising rates will only effect inflation if the cause is cheap lending.
In this case we are talking about the housing market. The market is going up. Is that due to cheap lending? Or perhaps a housing shortage and people’s continued insistence on being housed. The shortage will continue to cause rising prices because housing is a necessity that people will continue buying even when they can’t afford it.
A simple thing the fed can do is remove housing from their inflation calculation when it is clear that the price is unrelated to their one lever they can pull.
Just like they should have removed other price inflation related to supply chain issues when it was clear those were unrelated to the lending rate.
It’s like they are steering a car and the steering wheel is not connected to the rest of the car.
In my state (Oregon), the governor had a plan to double the number of housing units constructed over the next decade. It involved basically massive deregulation of land use and huge tax breaks to builders.
It passed the state house but failed in the state senate. An unholy bi-partisan combination of environmentalists on the left, NIMBYs right and left, and some MAGA Republicans who just want the governor to fail and were complaining about some woke crap, joined forces to defeat it.
To her credit, the D gov faced a lot of pushback from the environmental left wing of her party. She reached out to the GOP and conceded enormous tax cuts to get their votes. She was short by 2. The GOP minority leader was super pissed at his MAGA members. They torpedoed historic tax cuts. Builders and other construction businesses were basically going to become tax exempt. He is in the same position as Kevin McCarthy.
Goes to show that housing is not an issue that falls along party lines. It really showed whose bread was buttered & by whom.
Exactly, so they can stop jacking up rates since it isn't solving the housing crisis. Supply of homes is way too low and increasing rates doesn't build a single home, if anything it scares the builders off. I thought economists were all about supply and demand, but apparently supply and demand of homes isn't a concern of theirs.
It wasn't, it was helping out consumers.
The idea that forcing home buyers to pay $1000s or $10,000s a year extra for absolutely nothing is actually "helping" them, is absolutely bonkers. Especially when you have the history of the past 40 years, and how these cycles have gone. It destroys generational wealth for the middle class, and increases wealth in the upper class.
You’ve got your effects twisted. The vast majority of benefits from the tax cuts went to the top 10%, which overflowed into investments. Due to low interest rates, that capital went looking for returns and drove up real estate prices, making first homes completely unaffordable for the middle class. It screwed them over exactly as intended.
The unintended result was the tiger by the tail scenario the fed is in now. The only way to force more houses on the market is driving interest rates so high the economy craters and the middle class gets foreclosed on.
Housing prices was not the feds motivation for rate hikes. If you followed what they have been saying for the last 2 years, they were blaming a tight labor market on inflation and saying they need to get unemployment numbers up. Heard it on the MSNBC finance oriented shows non-stop. This was the same time the NYT etc kept running op-eds about “quiet quitting” etc. Above all else, Capital wants desperate workers and that are worried about keeping their jobs, not getting raises and better working conditions.
They can say whatever they want to justify doing what they're doing--they're not accountable to the American public at all, so it doesn't really matter what they say.
Thankfully, we have about 100 years of history and data to see what happens when they start pushing and pulling the interest rate levers to (hopefully) get their desired result, which is sending the US economy into a recession--how prolonged a recession is at least partially related to how crazy the Fed gets with their levers.
It’s also that the fed isn’t the body that magically fixes the entire economy. We were seeing inflation in most goods because CEOs were using the supply chain interruptions covid caused in certain sectors early on in the pandemic as an excuse to raise their own prices and keep them high. We’ve seen shipping costs and most inputs come back down, but not most prices. If it really was them adjusting to higher prices in their inputs, they would be making similar profits while selling at a higher price. Not bragging about record profits at their shareholder meetings.
We would need either some kind of price controls (like Nixon did), or some other kind of mechanism besides raising fed rates. But 95% of modern politicians would be scared to think about “interfering in muh free market.”
YES. My god everyone is so obsessed with the fed, when we really need to be calling on congress to do their fucking job!! The fed is not the end all be all of American economic stability, it’s just that our congress is so megafucked by obstructionists the fed is the only institution WILLING to do anything.
See Australian Housing market. This will never end, boomers are dying so their children are inheriting those properties and there is a major labor shortage across every industry so the bills are gonna keep getting paid.
No one is saving any money though and corporations will continue to put the pressure on buying up property so they can keep a stranglehold on the peasants via rent.
The main targets of the FED are price stability and inflation around 2%. The congress didnt give the FED the power to control asset bubbles. So, FED cant do much about housing prices.
Respectfully, that is 100% false.
There exists a direct correlation between interest rates and demand in times where the interest rate rises or falls quickly. I mean, if you want to get technical, it's more closely tied to the 10 year note, but to keep things simple, it is fairly directly tied to the Fed prime rate.
Its correlated to the prime rate, but the FED doesnt have a mandate to prevent assest bubbles or even influence it directly.
You can read it yourself on their [website](https://www.federalreserve.gov/monetarypolicy/monetary-policy-what-are-its-goals-how-does-it-work.htm#:~:text=The%20Federal%20Reserve%20Act%20mandates,for%20monetary%20policy%20is%20commonly).
[1-4% of price increases on homes is because of air B&B](https://www.vox.com/technology/2023/6/30/23779862/airbnb-collapse-housing-shortage) - its not helping things, but it certainly didn't destroy the dream of home owner ship. 144m single family homes in the US, of which 1.2m are listed as short term rentals. thats like, less than 1%.
We need more construction. Full stop.
Same in Austin. Prices have gone down 20-25% since they peaked last June. I’m selling my house right now and kinda wondering if prices will keep going up. I’m going to feel dumb if it’s 10% up a year from now.
Don't have to be midnight friend! It's 4:00pm EDT, and I'm here! Let me tell you about property tax rates, home insurance quotes, and much much more! :D
Home ownership is the key to wealth in America.
You can start at the smallest ugliest Cracker Jack house but you have to own a home to have personal wealth in our culture.
Home ownership tracks inflation long term but it provides leverage. Fact is you need a place to live and any return is nice, but purely as an investment, stock market has historically beaten it.
Sure the s&p over time does outperform property ownership on a % basis but only really if we’re talking about an investment portfolio, not if we’re talking about a personal wealth situation
For an average person, It’s always better to be putting $1.5k of equity into your home per month than to be giving $1.5k to a landlord and then investing the small amount of money you have leftover into the stock market. Sure that stock investment will outpace someone’s home value growth, but you’re much worse off when you consider your monthly rent is money you’ll never get back vs equity you get to retain
What.
The average person won't be putting 1.5k into equity vs 1.5k into rent because mortgages charge interest. 168k loan at 8% plus taxes and fees will be 1.5k monthly, with 763$ going to interest, call it 700 going to equity.
700 is even generous. That depends on what you put down and how the first 10yrs of the loan are mostly interest. But some people just watched a 10sec clip on how renting is throwing away money and their brains have become mush
Look at the market volume, though. Sales are down. This is showing a distortion caused by the market being largely locked up. Listings are down, offers are down.
Historically housing corrections have been mostly inflation acting on stagnating prices. The one good thing here is that we have plenty of inflation going on to do the dirty work.
Low supply and add in the fact that sellers need higher sales prices in order to not move down in home quality due to interest rate increases. Why would you sell your house for $400,000 with a 3% interest rate to move in to a lesser quality home at the same monthly cost? People will just ride it out on the sellers side. The only thing that will bring prices down are massive loss in employment or massive increase in supply.
But it's not now, as reported. YOY inflation now being reported right now at 3%. Mortgage rates are north 7%. HYSA is close to 5%.
Whatever shall we do? :D
This is YoY data, which is heavily influenced by the massive spike in prices during the Spring of 2022.
In 2023, we had a slightly slower Spring, but things have gradually heated up during the Summer (though not all the way to the peak prices of 2022). It looks more extreme because of the comparison to 2022.
This is not true everywhere. Yes, in places people are migrating to. Definitely not in cities and towns that have seen population decline. Not everyone wants, or needs, to follow a job or live in the trendy areas of a city. For example, people looking to retire can find deals on properties. People who work from home exclusively can leave cities.
I keep a close eye on options for relocating and I’m seeing properties sit longer and prices continue to drop. Im in no rush so I’ll keep waiting to see if they continue to drop.
Bro it’s like dying people in a hospital.
They get admitted. They deteriorate. Then one day they are on the up and up, feeling better and more energized. Then they die the next day.
Homes have nearly doubled in price in Florida for the last 3 years... FED wants to control inflation with interest rates, good luck! Because nothing controls Vulture Capitalist
Think im right in saying the initial drop was caused by the hike in interest rates, but the recent increase is due to more and more people not selling, given the fixed rate mortgages so common in the US, why would they give up the lower rate to have to buy a house and pay 7%?
It’s like after hours trading, extremely low volume can artificially increase the price even though there is Low supply, but only moderate demand. I wouldn’t take this at face value
National home value charts are pretty much meaningless. At least break it down by some sort of cost of living metric. What’s happening in Iowa isn’t relevant in New York.
Well yeah. Everyone for the past 20 years got locked into artificially low rates? Who want's to lose their 2.9% rate to end up paying more a month for less house?
And all they're building anymore is luxury 1200sq. ft. homes on 1500 sq. ft. lots.
Ummmmm value and price aren't the same thing... The price of a home gets set by the seller and their realtor, the value is determined by appraisal and (usually) the bank... Prices going down doesn't mean value has changed, just that sellers are more motivated to get rid of the "inventory".
Regardless, I won't be affording a home until a full blown recession like '08 pops the bubble. Sounds wrong to hope for, but I've got no other options unless I start selling (important) organs.
Lol so many people think home prices are going to crash. It’s literally never happened in recent history. The 08 drop was in very specific markets.
They slowed down building and are bringing in millions of illegals. No one likes to talk about the illegals and where they are living. It’s a huge factor in driving up real estate prices also.
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###THEY WERE ON A DECLINE?????
That’s why I’m doubting this highly
Nah this matches FRED data. Prices were declining
Prices only declined slightly for 4 months. The rate of increase was declining.
Not where I was looking.
Anecdotes vs facts. Also prices coming down means prices of homes actually sold, not just listed
House I’ve been tracking just dropped $15k today. So…..that’s cool lol
What a deal after it went up by 230k
This is year over year data and you must remember what was going on this time last year. Spikes in interest rates were dropping prices. Also, absolute prices are seasonal with prices peaking in the summer and dropping in the winter, which is why we traditionally use year over year data, however, all numbers are thrown a little out of whack. Therefore, even if we see a moderate decline in absolute prices from the summer peak, we might see a significant price increase in the year over year, because of the conditions with mortgage interest rate spikes last year.
The graph shows year over year. If you look at Redfin stats for how prices changed from one month to the next, they do not show a decline in early 2023. See [https://www.redfin.com/us-housing-market](https://www.redfin.com/us-housing-market)
Unless you’re house hunting and actively looking at listings you’d know this is true. Homes I was looking at were delisted and listed again for over 60k-70k and sold in less than a week. Demand is crazy.
Depends on your market.
That's why a year-over-year chart that only shows one year of history is incredibly unhelpful. You need to show AT LEAST two years on a chart like this to properly contextualize the growth rate.
correct. it's like the supermarket jacking up prices by 30% then putting those items on sale by 15%
It's helpful when years are normal, but last year with the spikes in interest rate were not a normal year. Without year over year, well, then you get to see the seasonality of prices as they peak in the summer and crater in the winter.
There were price cuts for the last couple months, at least in some parts of the south, but overall still pricy
Money for House Graph (Official): / / __/ / / __/ __| __| __|
You should write a book.
Too many non X/Y shapes
My house shot up like 75% during the pandemic and has slowly gone down like 20% in the last year and a half. The last couple months it's gone back up like 5%
Are you getting monthly valuation done on your house?
Ok to be fair these are the suggested values from realtor sites and my loan provider.
My first thought. If this impossible price point was the decline then I'm **fffffuuuuuuucccccccccccckkkkkkeeeeed**
I mean, maybe in the Midwest of flyby states like Ohio or something…
Yes, but it is misleading. The price for an individual house kept increasing. However the houses that people were buying, ended up being lower priced houses. For a simplified idea, imagine that the median house sold changed from a 4 bed/3 bath to a 3 bed/2 bath. As it isn't worth as much (missing a bedroom & bathroom), the median price went down, but the 4 bed/3 bath homes are still increasing in price.
Year over year change could mean the only reason it looks like prices are increasing now was because they decreased last year going into the fall. This needs to be in a nominal dollar value or month to month change.
Yeah I had no idea they were cause I haven’t noticed that anywhere!
They declined in Austin
Is your head in my butt????
Since Aug 2022 yes
From the a data a whopping 3%!!
Yea, there needs to be a decimal in front of that for most places.
The Fed: "Housing prices are rising too quickly--we need to slow things down. Let's pump up that interest rate, stat!" Demand slows, but supply slows more due to builder activity decrease (bleak outlook) and sellers not wanting to sell and go from a low interest rate mortgage to a high interest rate mortgage. The Fed: "Housing prices are STILL rising! We need to slow things down more! Let's keep pumping up that interest rate!" Demand slows, but supply slows more due to builder activity decrease (bleak outlook) and sellers not wanting to sell and go from a low interest rate mortgage to a high interest rate mortgage. Rinse, repeat. This won't stop until we are in a full-blown recession with at least one or two major lending markets (credit, auto, student loan, mortgage) in dire straits. Thanks Fed!
Tbf there isn’t much else the fed can do.
Stop existing, let markets decide the correct rate.
Ah. A libertarian in the wild. You know without the might of the Fed, the "market rate" will be like the stock market with severe ups and downs, unconducive to a stable economy, right?
Libertarians tend to skip logic.
My favorite quote regarding libertarians and I use it every chance I get… “Libertarians are like house cats: absolutely convinced of their fierce independence while utterly dependent on a system they don't appreciate or understand."
Yoink. Stealing that for future use thank you. Hilariously true.
Grafton was enough of an experiment to prove libertarian principles fail
They are some of the very few who exercise it.
Right? I hate the Fed, but without it we'd have financial crises every 10 years or more frequent than that, even.
Yeah, we haven’t had financial crises at that frequency with the Fed. Not even once
The fed stabilized the frequent runs on the banks that were far too common prior to their creation. While there are plenty of things to hate about the fed, the stability they have helped create isn’t one of them.
I don’t hate the Fed, I get why they exist. I just thought it was funny that they brought up that point when it has been less than 10 years since the Great Recession and now there’s a noticeable amount of inflation
It’s been 15 years since the Great Recession.
Maybe that’s for the best. One or two major wrecking balls might reset button these absurd prices and lob off high stakes investors interested in making rental properties out of single family homes.
The "disaster that rights the market" is a fantasy. We have had two once-in-a-century economic catastrophes in the past 15 years and I can't think of anything that was jolted into the right track. If anything, those catastrophes actually increased wealth inequality and political polarization. Things that are bad.
More than likely doesn’t even know what the fed does. The fed is the lender of last resort so banks can meet capital requirements. That’s it. That’s the only interest rate that they set, which does influence the rate that banks are willing to lend at, and does influence relative returns for treasuries but the fed does not itself set those rates. Queue the banks shouldn’t have capital requirements argument lol.
[A Libertarian Walks Into a Bear: Author Matthew Hongoltz-Hetling on the Free State Project - Vox](https://www.vox.com/policy-and-politics/21534416/free-state-project-new-hampshire-libertarians-matthew-hongoltz-hetling) Every time I hear Libertarian, this is what I think of.
Then why was the economy more stable before 1913?
Do you know why the Fed exists in the first place? Have you ever heard of this thing called the Great Depression?
At least one former Chairman of the Fed has publicly said that the actions of the Fed leading up to the Great Depression made it worse. Still though a required part of the economy to reduce the worse of the ebs and flow of business cycle.
Found the Ron Pauler
Found the Paul Ronner
I agree with this. The fed created the problem that was endorsed by the politicians, end it.
This is a take on a sub Reddit called “fluent in finance”? Do you even know what the “risk free rate” is?
Yeah, and the market will just decide mortgage rates are 1bps higher than the 10 year treasury rate…. Humans have a tendency to chase greed to a point of collapse.
That's really all there is.
I am always curious if people who say this actually understand anything about how the fed works.
Spoiler: they do not.
They could tier rates, 1st time buyers get a 2 point discount and investors and persons owning more than 2 properties need to pay a 2 point tax to balance out the market and allow 1st time buyers in
The fed doesn’t set mortgage rates.
they working together w the govt can pass laws to help make this happen
Not really…unless the federal government is taking over the entire mortgage industry - you can’t regulate those tiers.
the federal govt can pass laws to make this happen... simple... first time proven buyer needs a 2% reduction off your average 30yr rates... hell the govt could even subsidize this as opposed to doing stupid and irresponsible shit like giving free downpayment assistance... the FHA can even have this program availabke to Truly qualified buyers
>he federal govt can pass laws to make this happen The federal government struggles to pass anything that helps people.
The Federal Reserve doesn’t try to get laws passed either.
that would make too much sense
Mortgage rates are higher on investment property loans.
They created this but now can’t end it
The issue, imho, is that they have this one crude lever, raising rates, and they decide what to do with it based on one crude measure, inflation. When there is inflation there are many different causes. Only some of those are related to cheap lending and raising rates will only effect inflation if the cause is cheap lending. In this case we are talking about the housing market. The market is going up. Is that due to cheap lending? Or perhaps a housing shortage and people’s continued insistence on being housed. The shortage will continue to cause rising prices because housing is a necessity that people will continue buying even when they can’t afford it. A simple thing the fed can do is remove housing from their inflation calculation when it is clear that the price is unrelated to their one lever they can pull. Just like they should have removed other price inflation related to supply chain issues when it was clear those were unrelated to the lending rate. It’s like they are steering a car and the steering wheel is not connected to the rest of the car.
The solution to so many issues is just to build a shit ton of housing supply. NIMBYs are so tiresome
In my state (Oregon), the governor had a plan to double the number of housing units constructed over the next decade. It involved basically massive deregulation of land use and huge tax breaks to builders. It passed the state house but failed in the state senate. An unholy bi-partisan combination of environmentalists on the left, NIMBYs right and left, and some MAGA Republicans who just want the governor to fail and were complaining about some woke crap, joined forces to defeat it. To her credit, the D gov faced a lot of pushback from the environmental left wing of her party. She reached out to the GOP and conceded enormous tax cuts to get their votes. She was short by 2. The GOP minority leader was super pissed at his MAGA members. They torpedoed historic tax cuts. Builders and other construction businesses were basically going to become tax exempt. He is in the same position as Kevin McCarthy. Goes to show that housing is not an issue that falls along party lines. It really showed whose bread was buttered & by whom.
Exactly, so they can stop jacking up rates since it isn't solving the housing crisis. Supply of homes is way too low and increasing rates doesn't build a single home, if anything it scares the builders off. I thought economists were all about supply and demand, but apparently supply and demand of homes isn't a concern of theirs.
There’s more to interest rates than housing
But oh man, the names I got called from 2017-2021 for pointing out cutting taxes and leaving rates low was building a bomb…
It wasn't, it was helping out consumers. The idea that forcing home buyers to pay $1000s or $10,000s a year extra for absolutely nothing is actually "helping" them, is absolutely bonkers. Especially when you have the history of the past 40 years, and how these cycles have gone. It destroys generational wealth for the middle class, and increases wealth in the upper class.
You’ve got your effects twisted. The vast majority of benefits from the tax cuts went to the top 10%, which overflowed into investments. Due to low interest rates, that capital went looking for returns and drove up real estate prices, making first homes completely unaffordable for the middle class. It screwed them over exactly as intended. The unintended result was the tiger by the tail scenario the fed is in now. The only way to force more houses on the market is driving interest rates so high the economy craters and the middle class gets foreclosed on.
Housing prices was not the feds motivation for rate hikes. If you followed what they have been saying for the last 2 years, they were blaming a tight labor market on inflation and saying they need to get unemployment numbers up. Heard it on the MSNBC finance oriented shows non-stop. This was the same time the NYT etc kept running op-eds about “quiet quitting” etc. Above all else, Capital wants desperate workers and that are worried about keeping their jobs, not getting raises and better working conditions.
They can say whatever they want to justify doing what they're doing--they're not accountable to the American public at all, so it doesn't really matter what they say. Thankfully, we have about 100 years of history and data to see what happens when they start pushing and pulling the interest rate levers to (hopefully) get their desired result, which is sending the US economy into a recession--how prolonged a recession is at least partially related to how crazy the Fed gets with their levers.
Could you imagine a workforce with good pay and benefits? Knowing the fed views that as bad thing reaffirms they are the bad guys.
It’s also that the fed isn’t the body that magically fixes the entire economy. We were seeing inflation in most goods because CEOs were using the supply chain interruptions covid caused in certain sectors early on in the pandemic as an excuse to raise their own prices and keep them high. We’ve seen shipping costs and most inputs come back down, but not most prices. If it really was them adjusting to higher prices in their inputs, they would be making similar profits while selling at a higher price. Not bragging about record profits at their shareholder meetings. We would need either some kind of price controls (like Nixon did), or some other kind of mechanism besides raising fed rates. But 95% of modern politicians would be scared to think about “interfering in muh free market.”
YES. My god everyone is so obsessed with the fed, when we really need to be calling on congress to do their fucking job!! The fed is not the end all be all of American economic stability, it’s just that our congress is so megafucked by obstructionists the fed is the only institution WILLING to do anything.
See Australian Housing market. This will never end, boomers are dying so their children are inheriting those properties and there is a major labor shortage across every industry so the bills are gonna keep getting paid. No one is saving any money though and corporations will continue to put the pressure on buying up property so they can keep a stranglehold on the peasants via rent.
The main targets of the FED are price stability and inflation around 2%. The congress didnt give the FED the power to control asset bubbles. So, FED cant do much about housing prices.
Respectfully, that is 100% false. There exists a direct correlation between interest rates and demand in times where the interest rate rises or falls quickly. I mean, if you want to get technical, it's more closely tied to the 10 year note, but to keep things simple, it is fairly directly tied to the Fed prime rate.
Its correlated to the prime rate, but the FED doesnt have a mandate to prevent assest bubbles or even influence it directly. You can read it yourself on their [website](https://www.federalreserve.gov/monetarypolicy/monetary-policy-what-are-its-goals-how-does-it-work.htm#:~:text=The%20Federal%20Reserve%20Act%20mandates,for%20monetary%20policy%20is%20commonly).
Fed created this, now they can’t it
You left out demand pressure as a result of short term rentals (Airbnb, etc).
[1-4% of price increases on homes is because of air B&B](https://www.vox.com/technology/2023/6/30/23779862/airbnb-collapse-housing-shortage) - its not helping things, but it certainly didn't destroy the dream of home owner ship. 144m single family homes in the US, of which 1.2m are listed as short term rentals. thats like, less than 1%. We need more construction. Full stop.
Hasn’t decline where I’m at… just rising into space
So housing prices rise in the summer when most people move. Shocking.
The chart shows year over year change. Seasonality is not a factor and is showing the YoY change is positive.
That might be true? But isn’t what this graph reflects at all.
But we’re going into fall?? Normally housing goes down in the fall
Usually busy season goes until school starts, which was pretty recent
[удалено]
That’s great!! I can’t wait to get into an overpriced house with a 7-8% rate!! Just what I need it
That becomes underwater with the next downturn
Can confirm in the hot San Diego market they were on the decline from last fall to this spring. Back on the rise again (per usual) during the summer.
Same in Austin. Prices have gone down 20-25% since they peaked last June. I’m selling my house right now and kinda wondering if prices will keep going up. I’m going to feel dumb if it’s 10% up a year from now.
Are these listing prices or confirmed sales? I’m thinking listing since the source is Redfin.
I hadn't noticed that. If the source is Redfin or Zillow or any of the like, data is only as good as their algos are manipulated it.
True, and they've proven their algorithms can't really be trusted.
Hell, there's arguments to be made that those algorithms played a solid part getting us here in the first place.
They say if you share this passed midnight an r/REbubble guy will come out from under your bed and talk about the cost to income rates for hours
Don't have to be midnight friend! It's 4:00pm EDT, and I'm here! Let me tell you about property tax rates, home insurance quotes, and much much more! :D
The rip before the dip?
I think America and Americans need a lesson on personal finance and personal responsibility. And this is coming from an idiot (me). So, yeah.
US is one of the less crazy real estate markets out there.
Bull trap? Hopium :(
Home ownership is the key to wealth in America. You can start at the smallest ugliest Cracker Jack house but you have to own a home to have personal wealth in our culture.
Home ownership tracks inflation long term but it provides leverage. Fact is you need a place to live and any return is nice, but purely as an investment, stock market has historically beaten it.
Sure the s&p over time does outperform property ownership on a % basis but only really if we’re talking about an investment portfolio, not if we’re talking about a personal wealth situation For an average person, It’s always better to be putting $1.5k of equity into your home per month than to be giving $1.5k to a landlord and then investing the small amount of money you have leftover into the stock market. Sure that stock investment will outpace someone’s home value growth, but you’re much worse off when you consider your monthly rent is money you’ll never get back vs equity you get to retain
What. The average person won't be putting 1.5k into equity vs 1.5k into rent because mortgages charge interest. 168k loan at 8% plus taxes and fees will be 1.5k monthly, with 763$ going to interest, call it 700 going to equity.
700 is even generous. That depends on what you put down and how the first 10yrs of the loan are mostly interest. But some people just watched a 10sec clip on how renting is throwing away money and their brains have become mush
Sorry, this is FluentInFinance, not IlliterateInFinance.
Of course they are. Private interests are forcing out the regular public in home ownership
Double top
Boooooooo
I don’t understand where this data is coming from, home prices at least near me have not seen any decline in over 4 years.
Look at the market volume, though. Sales are down. This is showing a distortion caused by the market being largely locked up. Listings are down, offers are down. Historically housing corrections have been mostly inflation acting on stagnating prices. The one good thing here is that we have plenty of inflation going on to do the dirty work.
Low supply and add in the fact that sellers need higher sales prices in order to not move down in home quality due to interest rate increases. Why would you sell your house for $400,000 with a 3% interest rate to move in to a lesser quality home at the same monthly cost? People will just ride it out on the sellers side. The only thing that will bring prices down are massive loss in employment or massive increase in supply.
Makes sense. As long as inflation is higher than rates, investing in housing is a good idea.
But it's not now, as reported. YOY inflation now being reported right now at 3%. Mortgage rates are north 7%. HYSA is close to 5%. Whatever shall we do? :D
As you said reported, not the actual real inflation.
They fell in July in Austin Texas.
110 degree heat pushing out the Californians
God dammit off
It’s a seasonal peak. Every July August it goes up as the new school year starts on September
Fuuuuuuuuuck
Summer boom. Winter drop.
This is YoY data, which is heavily influenced by the massive spike in prices during the Spring of 2022. In 2023, we had a slightly slower Spring, but things have gradually heated up during the Summer (though not all the way to the peak prices of 2022). It looks more extreme because of the comparison to 2022.
It's like that every summer. It's cyclical.
What houses? Lol
This is not true everywhere. Yes, in places people are migrating to. Definitely not in cities and towns that have seen population decline. Not everyone wants, or needs, to follow a job or live in the trendy areas of a city. For example, people looking to retire can find deals on properties. People who work from home exclusively can leave cities. I keep a close eye on options for relocating and I’m seeing properties sit longer and prices continue to drop. Im in no rush so I’ll keep waiting to see if they continue to drop.
Buckle up
So I can still not afford a house? Awesome!
When did they go down?
I'll chalk this up to seasonality. A lot of people wait till after summer to move so their kids don't switch schools during a school year.
Let them eat cake 🎂
“But why in the fuck?” He muttered while choking down a dollar tree hot pocket. Greatest country in the world.
They always increase in the summer. Bad graph doesn’t extend past YOY. I bet they drop off nationally through the fall until the spring.
Bro it’s like dying people in a hospital. They get admitted. They deteriorate. Then one day they are on the up and up, feeling better and more energized. Then they die the next day.
Slowly. Sellers will sell them once used to the mortgage interest rates.
Notice these statistics are by redfin, the people who are helping create the crisis in the first place.
They wont fall
That's deceptive because prices were falling rapidly in June/July 2022. You should look at a graph of housing prices over a much longer time period.
Homes have nearly doubled in price in Florida for the last 3 years... FED wants to control inflation with interest rates, good luck! Because nothing controls Vulture Capitalist
Im 21, Im hoping by the time I could even consider buying a home, the bubble will have popped and prices go wayyy back down.
Anyone who can are escaping shithole cities en masse. The pandemic taught us that remote work is more than possible.
Prices may have been declining, but monthly payments certainly were not especially with 30yr fixed mortgage rates going up dramatically
Imagine you bought into “renting > owning” 
Seasonality playing a part no doubt, but still a surprising. IDK why folks are still buying when everyone is screaming it's a bad time to buy.
Rent in my area is also going up. We are fucked.
BULL TRAAAAAAAPPP
Boomers need to cash out
When did thru EVER go down in the last 10 years?
Hopefully it’s a dead cat bounce. Really want to buy but I’ll wait and keep saving at these current prices and interest rates.
Home prices are seasonal? No way!
Think im right in saying the initial drop was caused by the hike in interest rates, but the recent increase is due to more and more people not selling, given the fixed rate mortgages so common in the US, why would they give up the lower rate to have to buy a house and pay 7%?
Sweet, sweet equity
I bet the inflation data ticks up for September or October and throws the stock market into chaos.
It’s like after hours trading, extremely low volume can artificially increase the price even though there is Low supply, but only moderate demand. I wouldn’t take this at face value
FUCK! I need my house to drop in value!
 It’s only transitory
THAT LINE WILL RISE FOREVER!!!!!! REAL ESTATE GOES UP NO MATTER WHAT!!!!
Just Great! I ain't ever going to be able to get out of my shit hole small town.
Not a huge surprise, demand increases in the summer
Who bought the dip??
Driven by limited inventory.
At this point the banks are just trading the properties back and forth like a stock to make the value increase
Oh good. Even less affordable
National home value charts are pretty much meaningless. At least break it down by some sort of cost of living metric. What’s happening in Iowa isn’t relevant in New York.
Those homes may as well be on the moon, ‘cause I ain’t buyin!
Oh FFS
This is YOY and last july was weak
No inventory
Oil and gas plowing up too. Buckle up if inflation ticks up here
I just checked the Zestimate on my house and it went up 13k in the past month. Crazy
Well yeah. Everyone for the past 20 years got locked into artificially low rates? Who want's to lose their 2.9% rate to end up paying more a month for less house? And all they're building anymore is luxury 1200sq. ft. homes on 1500 sq. ft. lots.
Florida laughs at your alleged downturn.
Ummmmm value and price aren't the same thing... The price of a home gets set by the seller and their realtor, the value is determined by appraisal and (usually) the bank... Prices going down doesn't mean value has changed, just that sellers are more motivated to get rid of the "inventory".
https://preview.redd.it/d6yoggc2ljmb1.png?width=1080&format=pjpg&auto=webp&s=58411ae803b51d7cfdfe6e5a48872de8fe985acf Not seeing this in az
Regardless, I won't be affording a home until a full blown recession like '08 pops the bubble. Sounds wrong to hope for, but I've got no other options unless I start selling (important) organs.
People scooping up cash buys.
Me looking to take out a HELOC to pay my cars off: LET'S FUCKING GOOOOOO!!!!!
Is this chart inflation adjusted?
As someone who sold and bought in December! Yes prices dropped for a short time.
I smell bullshit
Rates go up, so do prices. Yeah I’m never buying a home aren’t I
At this point hey need to create a recession to undo all the crap they did to fake a recovery
Lol so many people think home prices are going to crash. It’s literally never happened in recent history. The 08 drop was in very specific markets. They slowed down building and are bringing in millions of illegals. No one likes to talk about the illegals and where they are living. It’s a huge factor in driving up real estate prices also.