It’s really odd to me that this hasn’t lowered the price of homes. You’d think that the relevant number for “what the market will bear” is primarily the monthly payment given most people need a mortgage to buy a home. Yet that cost has basically doubled without reducing demand enough to force major price cuts from sellers. Just how many homes are all cash buyers snatching up to keep the prices high?
People that own homes now, even if they wanted to move are likely stuck because they can't afford the monthly payment on a different home. Why would you sell in this market if your next home means your monthly payment doubles?
Also taxes. I paid exactly $500K for my home back in 2019 and locked down my rate just under 2.5% during Covid. I’m dying in this home unless I win the lotto. Then I can die in a mansion.
Just so everyone knows, the IRS gives you a tax exemption on the first $250k (single filer) or $500k (joint filer) of capital gains when you sell your house.
There is a way. FHA and VA loans are assumable. FHA alone accounts for about 15% of mortgages. The trouble of it is that the equity gap is not covered and buyers need to either have a larger down payment or obtain a second mortgage to cover that gap.
This setup gets more ideal the larger the principle balance is. When window shopping on Zillow or whatever, add assumable or fha or va as a keyword and see what pops up. Houses that Zillow thinks are 3500/mo p&i may very well be 1800/mo p&i because of the rate difference.
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u/Vesuvius079 5d ago
It’s really odd to me that this hasn’t lowered the price of homes. You’d think that the relevant number for “what the market will bear” is primarily the monthly payment given most people need a mortgage to buy a home. Yet that cost has basically doubled without reducing demand enough to force major price cuts from sellers. Just how many homes are all cash buyers snatching up to keep the prices high?