3.6 Crunch Time

[Mile High Trout]

Look up the history of mortgage lending. Pre F/F, it was difficult to get any kind of mortgage let alone a a 30 year mortgage. A 5 or 10 year mortgage at most, with a balloon payment at the end if it was just interest only. IF you could get a mortgage. The GSEs allowed the lenders to sell the mortgages thereby freeing up their $$ to lend to someone else. You want the residential RE market to crash? Get rid of F/F.

Too funny use loans from CUs. Who do you think they sell their loans to? yes they tend to keep more in house than a bank, but they do sell many of their mortgages to free up capital.

Yeah back in the day people could afford homes in a much briefer payout period. You got that part right. There was far less housing turnover, far more generational wealth, and people did odd things like built their own homes if necessary.

I wonder what structural change possibly occurred to land the entire country where we are today....

Geesh, I'm just not sure. But we know one thing, it was not the central planners or governments fault.

What a premise, if we get rid of the corruption the central planners and bureaucrats imposed on the entire country through neverending corruption, we'd magically transport back a century in time and none of the technology or advancements in, well, just about everything would matter.

We can't do that. No sir. We need to troll around and always shut people down whom talk about real reform, and propose radical ideas like decentralization and less government control. That's what we need to be doing.

Central planning never works.

 

[Joe Flacco]

The.matket would be perfectly fine without Fannie or Freddie. Housing markets in the rest of the world works perfectly fine without a 30 year mortgage.

 

[Sadie]

Yeah back in the day people could afford homes in a much briefer payout period. You got that part right. There was far less housing turnover, far more generational wealth, and people did odd things like built their own homes if necessary.

I wonder what structural change possibly occurred to land the entire country where we are today....

Geesh, I'm just not sure. But we know one thing, it was not the central planners or governments fault.

What a premise, if we get rid of the corruption the central planners and bureaucrats imposed on the entire country through neverending corruption, we'd magically transport back a century in time and none of the technology or advancements in, well, just about everything would matter.

We can't do that. No sir. We need to troll around and always shut people down whom talk about real reform, and propose radical ideas like decentralization and less government control. That's what we need to be doing.

Central planning never works.

View attachment 111458

Hard to make sense of what you wrote, Are you advocating for the repeal of building codes?

Before WWII: From 1890 to 1940, fewer than half of all U.S. households owned their homes. The national homeownership rate sat around 44% to 48%, meaning over 52% to 56% of people rented or lived with family.

Following World War II—driven by government-backed mortgages (like the GI Bill and FHA loans) and later the secondary mortgage market support of Fannie and Freddie—homeownership surged. By 1960, ownership crossed 60%, making renting the minority status for the first time. Today, the U.S. homeownership rate hovers around 65%.

And the immigrants are not buying up all the houses, you are so gullible. If they were, there would be a huge glut of REOs on the market. And that is not happening. I thin JD Vance tried to push that theory.

No, immigrants are not buying all the homes or driving the majority of home purchases in the United States.

Who Is Buying Homes?

• • U.S. buyers: The vast majority of home sales involve people born in the U.S. or long-term citizens.

 

[NC Appraising]

Hard to make sense of what you wrote, Are you advocating for the repeal of building codes?

Before WWII: From 1890 to 1940, fewer than half of all U.S. households owned their homes. The national homeownership rate sat around 44% to 48%, meaning over 52% to 56% of people rented or lived with family.

Following World War II—driven by government-backed mortgages (like the GI Bill and FHA loans) and later the secondary mortgage market support of Fannie and Freddie—homeownership surged. By 1960, ownership crossed 60%, making renting the minority status for the first time. Today, the U.S. homeownership rate hovers around 65%.

And the immigrants are not buying up all the houses, you are so gullible. If they were, there would be a huge glut of REOs on the market. And that is not happening. I thin JD Vance tried to push that theory.

No, immigrants are not buying all the homes or driving the majority of home purchases in the United States.

Who Is Buying Homes?

• • U.S. buyers: The vast majority of home sales involve people born in the U.S. or long-term citizens.

You asked AI a loaded question...immigrants buying ALL...MAJORITY

simple supply and demand...10-20 million people need a place to live. Now, in my area, we had alot of h-1b holders buying multiple homes as rentals. Many people were buying rentals as investment properties. All caused increase in prices. Deportations are causing rent prices to decrease.
Major financial and real estate institutions estimate the cumulative backlog differently:

• Realtor.com: Estimates the housing supply gap at 4.03 million homes.
• Zillow: Places the shortage at approximately 4.7 million homes.
• Goldman Sachs Research: Calculates that the U.S. needs 3 million to 4 million additional homes beyond normal construction rates to alleviate the crisis and restore broad market affordability.

Here is my AI answer

Immigrants and H-1B visa holders have had a measurably positive impact on home values over the past five years, driving up home prices and rents through increased local demand, though the exact impact varies wildly by region and visa type. [1, 2]
Between 2021 and 2026, the intersection of record-high immigration surges, a hyper-concentrated tech-worker boom, and shifting federal policies created a complex housing market dynamic. Economists point out that while immigration increases housing demand, it acts alongside broader factors like high interest rates, inflation, and a chronic undersupply of new homes. [1, 2, 3, 4, 5, 6]

Impact by Group: High-Skilled vs. Broad Immigration
The housing market experiences two very distinct types of upward price pressure depending on the demographic:

• H-1B Visa Holders & High-Skilled Immigrants: These individuals typically work in high-paying tech, medical, and engineering sectors. Because of their high purchasing power, they directly bid up home sale prices in specific suburban and metropolitan areas. Builders in major hubs have explicitly identified high-skilled South Asian immigrants as one of the most critical forces driving first-time home purchases. [1, 2, 3, 4]
• Broad & Unauthorized Immigration: Studies by economists at the Federal Reserve indicate that broader immigration flows between 2021 and 2024 accounted for roughly 30% of home-price growth and 20% of rent growth in the average metropolitan area. However, because unauthorized immigrants are statistically far more likely to rent and often live in multi-family or multi-generational households, their direct upward pressure is felt most heavily in the rental market, which indirectly pulls home values up over time

 

[Sadie]

You asked AI a loaded question...immigrants buying ALL...MAJORITY

simple supply and demand...10-20 million people need a place to live. Now, in my area, we had alot of h-1b holders buying multiple homes as rentals. Many people were buying rentals as investment properties. All caused increase in prices. Deportations are causing rent prices to decrease.

Here is my AI answer

Immigrants and H-1B visa holders have had a measurably positive impact on home values over the past five years, driving up home prices and rents through increased local demand, though the exact impact varies wildly by region and visa type. [1, 2]
Between 2021 and 2026, the intersection of record-high immigration surges, a hyper-concentrated tech-worker boom, and shifting federal policies created a complex housing market dynamic. Economists point out that while immigration increases housing demand, it acts alongside broader factors like high interest rates, inflation, and a chronic undersupply of new homes. [1, 2, 3, 4, 5, 6]

Impact by Group: High-Skilled vs. Broad Immigration
The housing market experiences two very distinct types of upward price pressure depending on the demographic:

• H-1B Visa Holders & High-Skilled Immigrants: These individuals typically work in high-paying tech, medical, and engineering sectors. Because of their high purchasing power, they directly bid up home sale prices in specific suburban and metropolitan areas. Builders in major hubs have explicitly identified high-skilled South Asian immigrants as one of the most critical forces driving first-time home purchases. [1, 2, 3, 4]
• Broad & Unauthorized Immigration: Studies by economists at the Federal Reserve indicate that broader immigration flows between 2021 and 2024 accounted for roughly 30% of home-price growth and 20% of rent growth in the average metropolitan area. However, because unauthorized immigrants are statistically far more likely to rent and often live in multi-family or multi-generational households, their direct upward pressure is felt most heavily in the rental market, which indirectly pulls home values up over time

The stats quoted by Trout were the "stats" the Vance was pushing. But still the majority of all home purchases are citizens purchasing. The point is that immigrants, legal or otherwise are not driving up home prices. Perhaps in a few select areas, but that is not most of the US.. Recent changes to work visa rules and tech sector layoffs have slowed this specific buying trend. Many, many of those H-1B visa holders are being sent home and many have already gone home, so that shoots a hole in the theory. In years previous, there has not been this problem, but the housing supply has not kept up with the ongoing demand. As in the builders have not been keeping up with demand. for a variety of valid reasons, but now here we are. Its no one's fault, so we can't blame a segment of homeowners.

 

[Airstream]

Reason for inflated home prices. Not one single factor, but a congruence of many.
1) Illegal immigration. With 12 million plus coming into country that is a pressure on just about everything, including home values, food, etc.
2) Cheap money. We had incredibly cheap money for a long time. This resulted in people being able to afford more expensive homes. It also locked up the market for people reselling their homes or downsizing due to higher mortgages, the capital gains taxes, and cost of construction. It was just cheaper to stay put.
3) Zoning laws and fewer builders. Many builders got out of the market due to the Great Recession. They have never come back. And zoning regulations and the entire regulatory framework has added lots of money to the cost of building.
4) Cost of construction. Labor costs, materials, regulations, etc have gone up considerably.
We have to remember that today's mortgage rates are not historically excessive, but are the historical norm.

I just want to add something regarding affordability. There has been a lot of nonsense in the blogosphere about how unaffordable things are. It is a lot of nonsense, and it is propagated by an incredibly naive generation. Yes things are expensive, but that is more because wants have increased immensely. I grew up in a 920sf house with 2 bedrooms and 1.5 baths and a one car garage. I slept in the basement which was a room with a closet, but not a legal bedroom. We had only one car without AC by the way. We didn't eat out. We didn't go on expensive vacations. We didn't go on vacations!! I can remember maybe 4 or 5 my entire childhood. Both of my parents worked for most of my childhood. And that was true for just about every one on my street. I worked from the time I was 10 years old mowing lawns, etc. Got my first job at 14 and worked during school, etc while playing 3 sports. If I wanted something I had to pay for it. No freebies.

 

[Sadie]

Reason for inflated home prices. Not one single factor, but a congruence of many.
1) Illegal immigration. With 12 million plus coming into country that is a pressure on just about everything, including home values, food, etc.
2) Cheap money. We had incredibly cheap money for a long time. This resulted in people being able to afford more expensive homes. It also locked up the market for people reselling their homes or downsizing due to higher mortgages, the capital gains taxes, and cost of construction. It was just cheaper to stay put.
3) Zoning laws and fewer builders. Many builders got out of the market due to the Great Recession. They have never come back. And zoning regulations and the entire regulatory framework has added lots of money to the cost of building.
4) Cost of construction. Labor costs, materials, regulations, etc have gone up considerably.
We have to remember that today's mortgage rates are not historically excessive, but are the historical norm.

I just want to add something regarding affordability. There has been a lot of nonsense in the blogosphere about how unaffordable things are. It is a lot of nonsense, and it is propagated by an incredibly naive generation. Yes things are expensive, but that is more because wants have increased immensely. I grew up in a 920sf house with 2 bedrooms and 1.5 baths and a one car garage. I slept in the basement which was a room with a closet, but not a legal bedroom. We had only one car without AC by the way. We didn't eat out. We didn't go on expensive vacations. Both of my parents worked for most of my childhood. And that was true for just about every one on my street. I worked from the time I was 10 years old mowing lawns, etc. Got my first job at 14 and worked during school, etc while playing 3 sports. If I wanted something I had to pay for it. No freebies.

Did you also walk 5 miles in the snow, uphill both ways, to go to school?

I also see part of the problem in that not too many true starter homes being built. HBU says build what ever gives the most return. But smaller/less expensive homes are probably the ones that are needed the most. The immigrant impact is more strongly felt in the rental market, not the purchase market. Ironically, many of the immigrants who are higher earners and buying homes are the ones that are being sent home at a pretty good rate, or net getting their visas renewed.

 

[Airstream]

Did you also walk 5 miles in the snow uphill both ways to go to and from school?

Give it up. That's such a warn out cliche.

 

[Sandra Koutsopoulos]

Did you also walk 5 miles in the snow uphill both ways to go to and from school?

Having spent quite a few school years in the frozen tundra of Wisconsin's blustery blizzardy winters, it sure SEEMED like I walked 5 miles in the snow uphill both ways to/from school! I prayed for a watch communicator to 'beam me up, Scotty'!

 

[Airstream]

Having spent quite a few school years in the frozen tundra of Wisconsin's blustery blizzardy winters, it sure SEEMED like I walked 5 miles in the snow uphill both ways to/from school! I prayed for a watch communicator to 'beam me up, Scotty'!

I actually grew up in South Dakota. And yes, I had to walk home from school. No buses. It was a mile walk from Jr. High. And in the winter it was miserably cold with the wind blowing 20 mph. I can't remember one day where we called off school because of the cold. And we had some brutally cold days.

But that's far afield from the point of this thread. The 3.6 crunch is coming. Talked to a lender they other day and they are losing appraisers left and right.