Been trying to buy a house because my rent is going up(and it will continue to do so) and a mortgage would be around the same as what my rent will become in a few years anyway so I figure I might as well build equity and have a house for my family.
Thing is the current housing market is nuts. Houses are put on sale with strict deadlines of "accepting all offers due 12pm 5 days from now" creating a false sense of urgency and to top is off the process is super opaque. You dont know what other people are offering so unlike an actual auction you cant start low and hopefully get a good value. Nope it's a black box and the asking price isnt of any help because that was just an advertising tactic to get more people to look at the house.
So you have to do research based on past history of other homes sold in the area of the same type recently and then place a competitive bid based on that. Of course everyone else is also doing that so you have to make your bid "competitive" and give a little more. How much more is hard to say and you only really get the one bid. So 12 pm comes along and the anticipation in your stomach is insane because this could be it you could be a homeowner and you did put in a competitive bid, and then sometime between immediately and just before bed you get a message saying they went with another offer.
ITS SO DAMN FRUSTRATING! Houses that I bid $30,000 over asking price and someone still swooped in and bid even more. And of course since the process is a black box you dont get told what bid beat you out or what the other bids were(dont want the 2nd place bid to decrease their bid in the event the 1st place falls through). You'll find out eventual final sale price a few months from now when everything finishes closing. I imagine the issue is other people got frustrated with the game over the last few months and now if they see a house thats ok they go all in with their max offer instead of a smart offer.
Oh and the market is limited, but somehow out of sheer coincidence after one round of sales is done the realtors manage to find another round of homes to put on the market. I'm convinced the realtors are limiting the supply on purpose and letting homes trickle in because the ACT NOW PUT IN THE BEST OFFER OVER ASKING tactic probably doesnt work as well if there are more than a handful of homes for sale at a time.
Its so frustrating I just want a house to live in and raise my soon to be born child, and Im willing to pay you what you're asking for it! The worst part is the housing market in my area shot up a lot over the years. So these people playing bid wars are making 100k profit AT LEAST for a house they bought just 5 years ago! And then theres the old people who bought the house for pretty much nothing 30+ years ago
Sorry for my long wall of text rant
Until the US passes laws designed to make the main purpose of homes to be housing, and not just profit for the already rich, millennials, Gen Z, and anyone else not already house-rich, will forever be locked out and forced to pay their hard earned wages to the rich just for the luxury of not being homeless.
Eh, it's not about people trying to get rich...
There just literally, is a huge shortage of housing right now. Pre-covid, I could easily find 100-200 houses for sale, near my small town.
Now? There are hardly 20 houses for sale at a given time.
Everyone is looking to rent/buy, but, there is hardly anything for sale/rent.
When COVID hit, builders basically stopped building houses. But- people didn't stop reproducing.
That's basically a drop in the bucket, as they started building up again pretty quickly.
The real problem goes back further than that. Builders really slowed down in 2008 and never really picked it back up. Meanwhile, construction costs have soared (both labor and materials), so a lot of construction starts have gotten delayed as the lag between housing starts versus housing completions started to stretch much longer than the historical average. We've got basically 14 years of backlog against the expected household formation (kids becoming adults and moving out), while also shifting economic activity even more urban, with regional migration trends towards the Sun Belt. That has led to some areas deepening their economic malaise (certain rural and small town areas, especially in the Midwest and Appalachia), while white-hot housing markets elsewhere completely wreck prices for new buyers.
Meanwhile, policy has a huge role to play, too. The difficulty building in some cities/states prevents some homes from ever coming on the market, while a growing population competes for a fixed number of homes. Other more subtle policy decisions around property tax rates (especially those favoring incumbent homeowners getting grandfathered into old rates) prevent those homes from going on the market even when the home no longer fits that homeowner's needs (empty nesters, etc.).
Plus macroeconomic policy of trying to juice the economy since the 2008 recession led to a sustained period of low interest rates, and now incumbent homeowners have locked in interest rates that make it irrational to sell, so those homes stay off the market, too.
We're in a weird place right now, where there are a lot of homes in existence, but not a lot that are actually being listed for sale.
That is the exact reason I want to move, and build... but, am not doing so. My current interest rate is under 2%. If I were to get a new mortgage, it would cost me a LOT of money due to the current interest rates.... Especially when I want to buy a house worth quite a bit more than my current home.
Interest rates probably plays a role with people having locked up mortgages at 2-3% and then seeing that if they sell and looked for a new home it'd be at like 6%.