A news release from real estate company Redfin said Monday that prospective homebuyers have way more purchasing power in 2024, even though that’s utter garbage.
“Buyers can afford a more expensive home now that mortgage rates have dropped to 6.7%, down from nearly 8% in October. Redfin economists don’t expect rates to rise or decline significantly in the foreseeable future,” Redfin started their “news release,” as if a 6.7% mortgage rate doesn’t destroy most people’s financial futures.
For some reason, the people over at Redfin think that someone who has barely a $3,000 monthly budget can afford a $435,000 home with a 6.7% mortgage. The firm went on to list a bunch of reasons why they think this is true. Unfortunately, if you have even an ounce of financial literacy, you know these claims are crap.
The hellishly reckless reportage from Redfin is designed to convince financially-savvy Americans that selling the next 30 years of their financial lives to the bank who owns their mortgage is a good thing. And, oddly, this news comes right as the housing market is starting to stall, and prices appear to be dropping (at least, they were at time of writing).
One Of America’s Highest-Growth Cities in North Carolina Is Starting To Fracture https://t.co/GdLmPgMXbu via @dailycaller
— Terri (@River_City) January 29, 2024
In reality, a 6.7% mortgage rate will ruin your life. It means you’ll end up paying through the nose for a property that likely isn’t even worth its current asking price. And you’ll be stuck paying that amount for potentially the rest of your life, with limited options to refinance if rates come down (because your property value will drop, and financial institutions won’t typically refinance loans on potential losses).(RELATED: Real Estate ‘Apocalypse’ Could Destroy American Economy, Midsize Cities, WaPo Finally Realizes)
“My advice to serious house hunters: Trying to time the market around mortgage rates is probably a waste of energy, as affordability is unlikely to change meaningfully in the next several months,” Redfin chief economist Daryl Fairweather stated in the news release. “Instead, buyers should consider their own personal and financial circumstances: What matters most is whether the home meets your needs long term and whether you can afford it. Timing the market mattered in 2021, when we were in a golden window of record-low rates–but that window is closed.” (RELATED: REPORT: Goldman Sachs Claims Four Cities Will Suffer 2008-Size Home Value Crash)
To counter Fairweather’s ridiculous point: rent until you can afford to buy somewhere outright, or spend your life enslaved to a financial system you’ve never been able to trust before … So why would you trust it now?