by Calculated Risk on 10/16/2022 10:59:00 AM
Today, in the Calculated Risk Real Estate Newsletter: Monthly Mortgage Payments Up Record Year-over-year
This is above the previous record increase of 50% in 1980. This assumed a fixed loan amount – if we add in the year-over-year increase in house prices, payments would be up over 70% YoY for the same house.
This is one of the reasons I’ve argued Housing: Don’t Compare the Current Housing Boom to the Bubble and Bust, Look instead at the 1978 to 1982 period for lessons.
In the 1980 period, new home sales fell about 40% YoY and about 60% from the peak in the 1970s to the trough in 1980. A similar decline might push new home sales down to around 400 thousand SAAR in coming months. … Even though we can expect significant further declines in new home sales and single-family housing starts, the good news for the homebuilders is activity usually picks up quickly following an interest rate induced slowdown (as opposed to following the housing bust when the recovery took many years).