American Homeowners: Regional Markets Show Signs of Struggle
893 sats \ 12 comments \ @TomK 9 May econ
The impact of persistently high interest rates on American homeowners is becoming increasingly apparent, raising concerns about the vulnerability of heavily indebted households. Regional housing markets are exhibiting early signs of strain, with a notable uptick in the number of households facing significant debt burdens. This trend is particularly alarming as it has the potential to trigger severe economic downturns on a regional scale.
Recent data reveals a concerning statistic: approximately one in 37 homes in the United States is now classified as seriously underwater, with a considerably higher proportion observed across several southern states. According to the latest findings released on Thursday, 2.7% of homes nationwide carry loan balances exceeding their market value by at least 25% in the early months of 2024. This marks a slight increase from the previous quarter's figure of 2.6%, as reported by ATTOM, a leading real estate data firm, in their first-quarter 2024 US Home Equity & Underwater Report.
The growing disparity between loan balances and property values underscores the mounting pressure on homeowners, exacerbating financial strains and threatening the stability of the housing market. As interest rates continue to stay high, the risk of widespread economic repercussions looms large, necessitating proactive measures to mitigate potential crises. It's a question of when not 'if' - the pressure on the Fed is g
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42 sats \ 3 replies \ @Hamstr 9 May freebie
It's the homeowners that are going to be the ones hurt by this the most. As they are "gold-cuffed" and home prices exponential exploded. FACT: NO one wants to sell their house lower than what they bought it for. With higher interest rates it should have lowered the house prices but have been steady. You have to think who the F*k wants to buy a house with interest rates at 5-7% and 2x higher than what it 2/3 years ago? Something gotta give. Whenever this bubble busts, I wouldn't be surprised to see 30-40% off just to get rid of their property.
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42 sats \ 2 replies \ @entrope 9 May
I was under the impression the fed acts as a bubble burst protection team, and will lower rates when things start getting dicey.
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0 sats \ 1 reply \ @TomK OP 9 May
Don't overrate their power
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42 sats \ 0 replies \ @Hamstr 9 May
Let's be honest-When the government gets involved, it's always misery. Just like SW, 2020, 2008, all the way back to when the fed getting established in the 1800s. I'm not even including wars.
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52 sats \ 1 reply \ @SwapMarket 9 May
How did they become 25% underwater if the house market did no crash?
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0 sats \ 0 replies \ @TomK OP 9 May
Secular trend. Don't need crashes, only healthy supply demand adjustments
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42 sats \ 0 replies \ @Coinsreporter 10 May
This concludes that homeowners don't have allodial rights on their houses. Actually they don't have their houses as their houses. They are of the state and in no way they are going to own them completely.
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42 sats \ 1 reply \ @entrope 9 May
Will the fed allow a collapse in real estate?
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104 sats \ 0 replies \ @TomK OP 9 May
It will happen with or without their intervention
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42 sats \ 1 reply \ @Undisciplined 9 May freebie
Wow. It's taking a little longer than I expected, but it seems like the housing crash is about to hit.
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84 sats \ 0 replies \ @Hamstr 9 May
It should have happened like 2-3 years ago but the FED kept bailing out banks, remember? What should have been a recession has been the fed supporting behind the scenes. They don't want to lose the AAA+ rating that was threatening their credit score as well.
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0 sats \ 0 replies \ @Satosora 9 May
During the pandemic, people were FOMOing, and prices rose a lot. Now, they are underwater because the value of their house is way more than it should be.
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