Denton, Collin County See Declining Home Affordability

Denton and Collin County continue to suffer from declining home affordability. A recent Q1 2018 report from Attom Data Solutions shows that several North Texas housing markets saw worsening affordability rankings compared to last year. Grayson and Ellis Counties were near the top of the list of the most unaffordable counties in the U.S. to buy a home based local home prices and weekly average wages. Grayson and Ellis rank high on the list due to the relatively low average wages and the recent bout of home price inflation that has far exceeded wage gains. [...]

DFW Home Prices Pushing Limits Of Affordability

DFW home prices have been on a tear during the last 5 years. That begs the question of whether the recent price gains are sustainable. The answer to that inquiry generally boils down to who is selling what. In our hyper-financialized housing market it is not surprising when real estate practitioners or lenders suggest that we are not in a housing bubble. Whether you call it a housing bubble or not, there is no denying that the past decade has seen some dramatic shifts in the real estate market. Dallas/Fort Worth is certainly part of [...]

Texas Realtors Unwittingly Paying For Bad TAMU Economic Research

Texas Realtors are paying for some bad economic research. That's the only conclusion I can come to after looking at the current situation where highly educated economists are giving short shrift to the underlying causes of Texas home price inflation and market distortions. While the Fed has abdicated its responsibility to the American public, TAMU economists seem to be cooperating with the Fed in offering "alternative facts" surrounding the declining affordability of housing and real estate market imbalances. In a previous post I posited a guess as to why this is happening. After looking at [...]

By | 2017-12-23T11:26:51+00:00 February 8th, 2017|Education, Housing Policy, Politics, Real Estate, Spin Cycle, Video|0 Comments

Texas Housing Market Meets The Fed’s ‘Game of Thrones’ Economy

The latest issue of Tierra Grande is out, and it contains more examples of the Federal Reserve's fingerprints on the Texas housing market. This new batch of evidence is contained in an article titled 'Game of Homes - The Supply-Demand Struggle'. What is thoroughly entertaining is that the two Dallas Fed employees (both recent college graduates apparently) working on this latest missive appear to completely ignore their employer's responsibility for the distortions in the Texas housing market while making a complete mockery of the economics profession. Collaborating with a PhD from TAMU, they lay out [...]

By | 2016-11-20T13:26:48+00:00 October 23rd, 2016|Economy, In the Press, Politics, Real Estate, Spin Cycle|0 Comments

NAR: Existing Home Sales Fizzle In February As Affordability Evaporates

The National Association of Realtors reported that existing home sales fizzled in Februrary, falling to a seasonally adjusted annual rate of 5.08 million. This was a sharp decline from January numbers but 2 percent higher than a year ago. NAR's chief economist, Lawrence Yun, mentioned the stock market, poor weather on the East coast, as well as supply and affordability issues. At least he got one of the four correct! The real problem surrounding the U.S. real estate market is a lack of affordability. Home prices have been levitated back to the previous bubble levels [...]

Million Dollar Homes Sit Rotting In Vancouver As Authorities Ignore Illicit Money Flows

Earlier this year the government suggested it would start looking into the mystery buyers of luxury homes in certain U.S. real estate markets. Miami-Dade County and Manhattan were two of the high priced American markets where the Treasury Dept said it would start tracking all-cash purchases by shell corporations. Apparently U.S. authorities think now is as good a time as any (better late than never right?) to provide at least the appearance of concern about money laundering in U.S. real estate. It's not exactly a secret that the United States has been a very friendly [...]

Affordability Crisis: Rising Apartment Rents Amid Stagnant Incomes

I ran into a Realtor colleague earlier this morning, and she asked me what I thought of the current real estate market.  She probably regretted asking since I told her my honest opinion about the shenanigans currently playing out in the markets. Like many Realtors (and much of the U.S. population), this particular individual hadn't given much thought about what was being done to inflate asset prices.  Most people don't like to discuss unpleasant things. My thoughts immediately turned to the Fed's unwinding of QE slated to come to an end later this month.  Even [...]

By | 2016-11-20T15:53:13+00:00 October 2nd, 2014|Housing Policy, Markets, Mortgage Rates, Spin Cycle|0 Comments

“Re-Assessing” And Miscalculating Houston’s Housing Affordability

I was browsing articles this morning, and came across a piece in the Houston Chronicle that caught my attention because the headline mentioned affordability.  Affordability metrics are often cited by Realtors and media pundits to show that houses are still cheap and affordable, thus you should run out and buy a home. The problems is, many of those "affordability" measures are seriously flawed. The statistic cited by the Houston  Chronicle this week is one such example. In the article, Prime Property reporter, Nancy Sarnoff, looks at the $204,000 median price of a Houston home and [...]

By | 2018-02-02T23:48:10+00:00 August 28th, 2014|Education, Real Estate, Spin Cycle|1 Comment

Mortgage Purchase Applications Still At 1993 Levels

The MBA's index of mortgage purchase applications dipped slightly from last week, falling one percent.  This is after a 2 percent gain in the previous week.  As Anthony Sanders notes, the mortgage purchase application index is still hanging around 1993 levels.  Part of the reason for the sluggish growth is that real owner-occupied purchases have stagnated with diminished affordability.  Las Vegas is already experiencing this in a big way.  Non-contingent inventory is up 78% year-over year in Vegas, and December sales were down 19.6% year-over-year.  The fall in Vegas home sales in December is easily explained [...]

By | 2018-02-02T23:54:17+00:00 January 9th, 2014|Housing Market, Mortgage Rates, Real Estate|0 Comments

KB Homes: Sales Flatten As Cancellations Edge Higher

KB Homes reported that net orders for the fourth quarter were flat compared to a year ago. Actual homes delivered to buyers fell 4% from a year ago while average prices rose 11%. KB Homes' cancellation rate ticked up to 36% in 2013 compared to 35% a year ago.  With yesterday's FOMC taper and the subsequent bump in mortgage rates, that cancellation rate could push even higher.  The stock is down today because housing cheerleaders are coming to grips with what I've been talking about for several weeks.  Home buyers are tapping out, and affordability is likely to cause [...]