US home prices surge 17% in May, fastest in 17 years

Re:US home prices surge 17% in May, fastest in 17 years by willio58 on Wednesday July 28, 2021 @05:37PM (#27990054)

I guarantee the average home buyer does not know that houses are a hedge against inflation. There's a good chance the average home buyer doesn't even know what hedge means in that context.

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Re:US home prices surge 17% in May, fastest in 17 years by mortenjorck on Wednesday July 28, 2021 @06:06PM (#27990378)

The average homebuyer is also only putting 5.3% down [1], so even if they know what hedging is, they’re not exactly moving significant amounts of capital around.

[1] https://www.housingwire.com/articles/49443-the-average-down-...

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Re:US home prices surge 17% in May, fastest in 17 years by gedy on Wednesday July 28, 2021 @05:41PM (#27990103)

They know houses "always go up" and "a good investment", which is another way of saying the same thing.

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Re:US home prices surge 17% in May, fastest in 17 years by throwawayboise on Wednesday July 28, 2021 @05:47PM (#27990172)

Anyone who was in the market in 2008 knows that houses don't always go up. Over the long term, it's a pretty safe bet that they do, but it's not always a smooth ride.

And there are still neighborhoods that are in decline. Opportunity to get in before they gentrify? Maybe, but it's a gamble.

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Re:US home prices surge 17% in May, fastest in 17 years by jollybean on Wednesday July 28, 2021 @06:06PM (#27990370)

I don't think they know what 'hedge' means, but they understand the concept that the value of the money may be going down.

That said, it's probably not a driving sentiment, rather, just the basic overall impetus of inflation and low rates.

It could be that there are whispers of increasing rates and everyone is looking to lock in.

That said, in around 2006, this was the feeling as well. The major crash. And as soon as things were getting frothy again - COVID and major turmoil.

Finally, it should be noted, that there are external factors driving inflation, if even some of it is temporary, which is cost of transport, and supply chain issues in China, and of course, tarriffs.

That said, Fed probably needs to raise rates.

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Re:US home prices surge 17% in May, fastest in 17 years by EpicEng on Wednesday July 28, 2021 @06:04PM (#27990346)

Yet, how does the fed fight inflation? By raising rates, i.e., home prices will be dropping. By how much, no idea, but sure reeks of bubble territory.

Of course the loan itself is worth less to the bank during inflationary times. You make more money, your payment stays the same, and real estate prices will rise somewhat, but it's not as simple as you make it seem. I'd be worried if I were planning to sell within the next few years.

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Re:US home prices surge 17% in May, fastest in 17 years by c7DJTLrn on Wednesday July 28, 2021 @05:39PM (#27990086)

BlackRock might skew the average there.

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Re:US home prices surge 17% in May, fastest in 17 years by SomewhatLikely on Wednesday July 28, 2021 @05:43PM (#27990125)

https://awealthofcommonsense.com/2021/06/is-blackrock-buying...

BlackRock owns around $60 billion in real estate assets. The value of the housing market in the United States is more like $36 trillion.

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Re:US home prices surge 17% in May, fastest in 17 years by Guest42 on Wednesday July 28, 2021 @05:46PM (#27990161)

Given when they started, I imagine they’ve bid on a fairly high percentage of the sales in the last 5 years and had an impact on the prices and perceived value of the housing market.

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