Mortgage payments way up.

House payments, or mortgage payments as I like to call them reached a new high last week in the US. The median U.S. monthly housing payment set a record high at $2,894 during the four weeks ending May 5, up 14% from one year earlier, according to new data from Redfin (NASDAQ:RDFN).

At the same time, the first quarter of 2024 ended with 45.8% of mortgaged residential properties considered equity-rich, according to new data from ATTOM. This is down from 46.1% in the fourth quarter of 2023, marking the third straight quarterly decline, and it is also down from 47.2% in the first quarter of 2023, hitting the lowest point in two years. [WRENews]

Local data shows that home buyers are on average paying more than the asking price for the homes they buy which indicates that prices are still going up.

I read a lot of news each day. I try to sort through the crap and find the facts.

Despite the hype over homeownership, I can’t see an upside to paying high interest rates on a mortgage for an overpriced house.  In other news, the New York Times just launched a new “Rent Vs. Buy” calculator, and under some scenarios, people save $130,000 by renting rather than owning.

Sure there is a tax deduction for mortgage interest paid on a home loan but that is only for people who can itemize.

Don’t get me wrong. I am strongly in favor of homeownership but not at any cost. Please buy responsibly and consider more affordable options when available.

To mow or not to mow

long grass

I confess we mowed the lawn over the weekend because it was a mess. The “No Mow May” movement started a few years ago. The idea was to leave the lawn and let it grow to feed pollinators and to protect the insects that hybernated in the lawn.

It makes sense to let the lawn grow in the spring but I am not sure letting it go until June is good for anyone. Tall grasses and weeds isn’t a good look. If you mowed your lawn already you are not alone. Does letting the lawn grow really help the pollinators? Once the temperature gets above 50 degrees for a week or so I don’t think anything is hibernating in the lawn. The blooming trees, lilacs, and spring flowers provide food for the bees.

For the last couple of years the grass was brown and crunchy by mid-June due to drought.

Turkeys and other traffic hazards

It is Friday and Fridays are for fun. It isn’t unusual to see a turkey walking down the street in St. Paul but lately, they have gotten pretty brazen. Sometimes they stand in the street and stop traffic. They can and do fly when properly motivated. As for other traffic hazards, most are lime scooters.

The Tom in the picture strolled through the neighborhood about a month ago with his seven wives or girlfriends. Turkeys walking down the street or blocking traffic are more common in the spring and the late fall.  I didn’t quite get the face on this one but you can see the pretty feathers.


Mortgage Interest Rates Matter

Will mortgage interest rates go down this year? Some experts are suggesting that rates will go down in September. Even with the higher rates home prices are rising and the number of home sales in 2024 will likely be up from 2023. Go figure!

Please borrow responsibly.  When you borrow it is a win for your employer because you will need to work hard to pay back your loan.

When rates go down the demand for houses will rise, which will drive prices higher still.

Keep an eye on rents. Rent growth was around 2.2% in the Twin Cities last year and less than half a percent for luxury properties. (Axios)

Chart of mortgage interest rates
Mortgage interest rates

Saint Paul is a river city

I have always enjoyed living near the river. When some of my suburban friends and family visit they often want to join me for a walk or a ride along the river. The Mississippi River isn’t just for recreation it is also used for shipping. Right now the water is high due to snow melt and spring rains. During droughts the river gets low and that impedes shipping. Barges have been around since ancient times and are low-tech. They don’t have engines they just float and get pushed around by tow boats.

Barges can hold a lot of cargo. A typical barge size is 195 feet by 35 feet and can hold up to 1500 tons of cargo. Newer barges can be up to 209 feet by 50 feet and hold twice as much cargo tonnage as traditional barges. Barges are efficient and cost-effective.

The river is a place to enjoy walking during any season and biking.

Barges waiting to be unloaded – Mississippi River
downtown St. Paul from the river
Mississippi River as it flows past downtown St. Paul
Robert Street Bridge
Walking paths along the river – Historic Robert Street Bridge

Is downsizing right for you?

If there is one thing I have learned over the years it is that there is not one size fits all housing solution for retirees. There isn’t a retirement age either. We used to assume that when we reach a certain age we will retire and want a smaller house. I have had clients who wanted to move into larger houses during retirement. They wanted space for family gatherings and for children and grandchildren.

You don’t have to move just because you are retiring. You can stay where you are. Don’t let anyone talk you out of it if that is what you want to do.

Downsizing is an option for those who can afford it. Buying and selling can be stressful but it has always worked out for my clients.

downsizing info graphic
Perks of downsizing

Call or write for a free consultation if you are interested in downsizing in the next year or so.