On a monthly basis, the New Housing Price Index (NHPI) fell 0.4% in October, the largest monthly decline since April 2009. However, the picture was mixed across the country, as prices were down in 9 out of 27 census metropolitan areas (CMAs) surveyed, but unchanged in 11 CMAs and up in the remaining 7.
Maybe I’m stupid, but “home prices” today mean very little when they can become unaffordable when mortgage rates, property taxes, and utilities inevitably climb to beyond someone’s ability to afford it.
Prices still aren’t affordable despite this % decline.
I agree. But things can get out-of-control unaffordable from year to year when you own a home and the expenses along with it.
If you think that’s unaffordable, you should try renting which is always more expensive than owning.
Really?
As a homeowner, I’ve had to replace a roof, an A/C, furnace, driveway, shed, washer/dryer/oven/fridge, fencing, removed trees, and had indoor renovations done… Tens and tens of thousands.
That doesn’t include any of the time and expense to maintain the property.
Unless renters have to cover expenses like that, I can’t possibly see renting as more expensive.
I have kids who rent their own place, and while the rent is expensive, they never have these kinds of crazy expenses to deal with.
But I really don’t want to get into an affordability pissing contest. Everything is expensive and unaffordable for the majority of the population.
Renters do cover expenses like that. Because they pay rent. And rent pays for all of that plus profit.
My current rent: $1600 (no utilities included).
Tenant insurance: $300 (per year!).
Tenant total: $1625 per month.Mortgage calculation: $1863 per month for a $300,000 mortgage with a 10% down payment.
Property tax: ~$300 per month.
House insurance: ~$150 per month.
Mortgage total: $2313 per month.And that is not even including the costs of repairs on the house. In my city a $300,000 house will be in need of some major repairs.
I’d say I’m doing pretty good. I am saving that extra $700 per month myself and am in a lot better of a position than if I was paying that mortgage.
Let me know when prices are close to where they were 15 years ago.
That will take Dr. Emmet Brown and a heavily modified Delorean.
I wonder if that had anything to do with the Bank of Canada cutting interest rates in October. People waiting for a better mortgage rate perhaps?
If anything cutting rates would lead to increase in housing prices. New home price decline is in line with existing home price trends as well so this could be an indication of demand pressure softening.
I was thinking more along the lines of people waiting on buying homes until interest rates fall which is a decrease in demand.
Logical, though that’s not an observed phenomena as far as I know. So many factors could be in play here too such as the mix of types of housing and floor sizes etc. Everything from tiny studios to 5 bedroom mansions are included in here.
True, we’ll just have to wait and see if more data becomes available. My original comment was more conjecture than anything else. It’s an interesting development though. Thank you for sharing.
