Average Homebuyer Payment based on median asking price. Getting expensive
And yet I keep seeing many folks out there saying "housing prices will remain strong and go up even more due to the lack of supply".
They may be right, but I wouldn't (and am not) betting on it. This chart is NOT their friend.
Price growth will slow but not reverse (at least nationally)
Compare the payment relative to median household income in the US vs in most other developed countries. Still dirt cheap relatively speaking in the US. If rent prices weren’t soaring, construction costs weren’t soaring and supply at record lows I would agree with you, but I think it’s as likely we go the route of Europe, Canada, Australia etc where only 40-50% can afford to own vs the 65% we have in the US today.
That payment is at 35% of median household income, prob 25% of median household buyers excluding renters. Still very affordable and 20% are all cash don’t forget. Price growth will slow but not reverse (at least nationally)
Do you believe this will be true in real terms (i.e. adjusted for inflation)?
Tough to say, but housing does really well in inflationary periods. I think it will outperform stocks as for rentals (and it has the last two years). Look how well housing did in the 70s and 80s even with rapidly rising rates, much higher than today. Add in strong (and rising) cash yields and paying down principal each month, and I'm yielding 30-35% annual returns even at 3% appreciation, to say nothing if it grows faster than 3% nominally.
Plex - the US has a ton of land but NOT in places where people want to live. Most of the larger metro cities (say top 30) are having to build way outside of the city. Here in Charlotte, they've already started to run out of land in Fort mill and Indian Land in SC after growing like crazy here the last 12 years just outside of Charlotte and are now going further out to Lancaster, etc. That's a good 30 miles+ from the city center and not even the same state. Same story in Raleigh and Atlanta etc. Australia technically has a ton of land available as well, but not many areas that are inhabitable and that folks want to live in. The same is largely true in the US, moreso on where folks want to live than uninhabitable. And worse - new build construction cost is way higher than existing stock even with these price increases so its not like we can easily build our way out of this.
On Friday I opened a "tracker" on $SRS, Pro-shares ultra-short real estate just as a way for it to be in my portfolio as a daily reminder. (A nice thing about commission free trading, buying one share just to watch is easy.) I am in no way recommending this as an investment play.
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Is this chart inflation adjusted?
This bond was discussed in this forum previously. Now down 90% from issueance.
This bond was discussed in this forum previously. Now down 90% from issueance.
So does this now have a 2% Yield to Maturity?
So does this now have a 2% Yield to Maturity?
Primary owner are passive bond funds. The issuance of 2.2 Billion was oversubscribed by 10 billion dollars in requests from "investors" Primarily passive bond funds, pension funds and hedge funds to be used as a hedge againt falling rates. Because they are govenment bonds, Austria has a total of about 10 billion in 100 year bonds, pension funds in Austria by law are required to hold them.Nice!
And this after only 2 years. Still has 98 more years to go.
PS. Did we find out who the bond holders are? Who in their right mind would lock up their money for 100 years in exchange of a guarantee of 0% interest for that long? They were expecting 100 years of deflation?
Primary owner are passive bond funds. The issuance of 2.2 Billion was oversubscribed by 10 billion dollars in requests from "investors" Primarily passive bond funds, pension funds and hedge funds to be used as a hedge againt falling rates. Because they are govenment bonds, Austria has a total of about 10 billion in 100 year bonds, pension funds in Austria by law are required to hold them.
I suspect they do what Ishares did which is to sell the shares buy another long term then buy them back at current market price to hide the loss. They are showing 1 million in 100 year Australian bonds - probably 10 million originally or about 1/2 percent of the total issuance and yet show only net loss of $7,000. Must account for bonds on FIFO method.Well, if they don't have to sell, then they don't lose. It's just that in 100 years, their bonds will be worth less than 1c.
I wonder if they have to do mark-to-market accounting. That hurts.