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High Rates and Prices Leave Many Stuck in a Starter Home
(www.nytimes.com)
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this post was submitted on 03 Jun 2024
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More specially, investment groups.
When a monthly mortgage and monthly rent are about the same in a market, then your average Joe Schmoe, will only make money if they’re speculating on a neighborhood. Buy low, let the renter cover the mortgage, sell when the neighborhood comes up.
Wall Street doesn’t need to speculate. Investment groups can buy with cash and the rent coming in is all additive.
I specifically included individual home owners who sit on their properties to rent instead.
If we're talking about retired couples downsizing into starters and established families not up-sizing as a part of the larger market dynamics, then homeowners hording their starter home are just as much of a problem.
Investment groups are a much larger problem for sure, but even the smaller players contribute to the larger market trends.
Depends on the market / part of the country through. Hoarding a starter home can be hard to pull off in a lot of markets. Many people usually need to sell the first house in order to cobble fun the 20% down on a larger, more expensive, home.
But young professionals who have stayed in their starter for more than 6 or 7 years typically have far more expendable income than when they first signed their mortgage, and can afford to save enough to put down 10 or 20 percent on a newer house (typically further out where the cost/sf is lower) without having to use the proceeds of a sale