I prefer the term over-asset’ed

From Fortune:

House poor is back: ‘the new normal for the foreseeable future’

While many first-time home buyers struggle to afford a down payment on a house in today’s market, one of the long-term affordability issues centers on monthly payments resulting from escalating mortgage rates. The current 30-year fixed-rate mortgage is 7.18%, according to Freddie Mac, a stark difference from the sub-3% rates seen during the early days of the pandemic. 

The surging mortgage rate results in higher monthly payments for new buyers. Indeed, monthly payments are up 60% (or $871) year-over-year, according to real estate data and analytics firm Black Knight. The average monthly principal and interest payment for borrowers on a 30-year fixed rate loan in July 2023 was more than $2,300, which is the highest average principal and interest payment on record, according to Black Knight.

Now, more than half of homebuyers face a monthly mortgage payment of at least $2,000, while one-fourth are paying $3,000 or more, Black Knight data shows. Meanwhile, average U.S. monthly earnings in July 2023 were just $4,600, according to economic data firm CEIC. That means some home owners could be spending more than 60% of their paychecks on their mortgage.

Keep in mind that principal and interest figure is before factoring in expenses like property taxes and insurance.

“When did the $2,000 monthly mortgage payment become the norm?” questions Andy Walden, Black Knight vice president of enterprise research in the report. “Nearly one in four July homebuyers has payments north of $3,000, up from just 5% in 2021. We’ve been talking about affordability for quite some time now, but this puts the situation in stark relief.”

Based on current mortgage rates, average income levels, and home prices, most first-time home buyers using a “minimal” down payment could be paying more than 40% of their monthly income toward housing, says Buck Horne, director of equity research, homebuilding and residential REITS at Fortune 500 investment banking firm Raymond James.

“All else equal, that number certainly looks unsustainable relative to long-term averages closer to 30%,” Horne tells Fortune. 

This entry was posted in Crisis, Demographics, Economics, Housing Bubble, Mortgages. Bookmark the permalink.

60 Responses to I prefer the term over-asset’ed

  1. Fast Eddie says:

    That means some home owners could be spending more than 60% of their paychecks on their mortgage.

    Keep in mind that principal and interest figure is before factoring in expenses like property taxes and insurance.

    All I can say is thank goodness we have the In-flatulence Reduction Act to save American Democracy!

  2. Juice Box says:

    Surprised it too them this long to sue. The government forces them to pull it from regular shelves so they load up the isles with scam products instead.

    I tried it once and I knew it was a scam after that. I always asked for the good stuff behind the counter, and kept a stash at home. In fact, I have sniffles now…I may need to take one later if my nose becomes a full-on raging rapid river.

    “The Combat Methamphetamine Epidemic Act of 2005 has been incorporated into the Patriot Act signed by President Bush on March 9, 2006. The act bans over-the-counter sales of cold medicines that contain the ingredient pseudoephedrine, which is commonly used to make methamphetamine.”

  3. 3b says:

    Zillow offering 1 percent mortgages in Arizona, buyer puts down 1 , Zillow puts down the other 2 at closing. The buyers need a 620 credit score or better, and are required to take a home ownership course. Sounds like the no money down mortgages form the last time.

  4. Juice Box says:

    In-flatulence Reduction Act – tax credits to the manufacturers and people buying EVs
    will be paying to strip mine all that Lithium. The plan is to make sure that the new mine in Nevada is numero uno in the world. In order to be “Green” we will drive right over the indigenous protestors with bulldozers to get the lithium out of the ground. Onsite fossil fuel enough to power a small city will be burned onsite to make sulfuric acid to leach the lithium out of the clays. Every ounce of Nevada desert water will be used as 500,000 gallons is needed to get 1 ton of lithium refined.

    From the Inflation reduction act. No tax credits unless….

    “40% of critical minerals found in EV batteries will have to be extracted or processed in the United States or countries with which it has free trade agreements; or, they will have to have been recycled in North America. That percentage rises to 80% by the end of 2026. Also starting in 2024, 50% of battery components will have to be manufactured or assembled in North America, with this number rising to 100% by the end of 2028.”

  5. Fast Eddie says:


    I’ve asked the question endlessly regarding the process and residual effects. This is considered environmental friendly? Does Kerry and Gore approve?

  6. Fast Eddie says:


    Do I have to feed the squirrels if I get one of those mortgages?

  7. Chicago says:

    Ten 434.3. Touched 439.8

  8. 3b says:

    Fast: This isn’t last time, this is serious, taking a test means serious business!

  9. Juice Box says:

    3B – Zillow with another attempt at housing innovation?

    Those Arizona Zillow loans cannot be conventional. It must be FHA or something government-backed no? They won’t hold the loans. Seems they are just paying the other 2 percent with the commissions that they get from being the loan broker and perhaps the agent too.

    By the way Zillow’s iBuying fiasco two years ago? Many of those homes were in the Phoenix area. So they want to create the super app where you find your home and get it all for 1% down. HooRah!!!

  10. Fast Eddie says:

    I think they should just give the muppets the house of their choice for nothing and it’ll be their responsibility to pay the mortgage and taxes. Here you go Biff and Becky, enjoy your new house in Saddle River.

  11. 3b says:

    Juice: I don t know the particulars on the Zillow loans. They must be FHA I would think, there are also income restrictions. But, 3 percent down or really 1 percent for the buyers, it certainly sounds like the no money down loans before the last housing bust. Of course Zillow says they are doing their bit to help buyers.

  12. Juice Box says:

    3B – Seems they aren’t the only ones. Rocket Mortgage too.

    Backed by the GSEs too… Fannie Mae’s HomeReady mortgages and Freddie Mac’s Home Possible loans + plus a first-time homebuyer grant to lower the downpayment.

    Few months back.


  13. 3b says:

    Juice: Dis not know about Rocket, will probably be more too going forward. Everything old is new again..

  14. Phoenix says:

    Taxes are just money owed to GOVERNMENT UNION BOOMERS. Debt they wrung up since the 1970’s, and continue to do today.

    I find it interesting that Repubs are extremely anti-union, they hate the UAW, the teachers unions, or any other unions, except, except the police union.

    Repubs actually support a union. But just one, cause for some reason, although they hate other unions, they support that one. It’s like being anti gay but supporting certain gay people. You want to kill the others, but leave this one alone.

  15. Phoenix says:

    Where my tax money is going, not to my neighbors that need help- say it isn’t so:

    Ukrainian president Volodymyr Zelensky has fired all six of his deputy defence minister with no explanation weeks after dismissing his top defence minister go.

    Ukraine’s cabinet said that the decision was made today, according to a post that revealed the mass dismissal.

    No explanation was given as to why Vladimir Gavrilov, 65, Rostyslav Zamlynskii, 47, Hanna Maliar, 45, Denis Sharapov, 50, Vitalii Deineha, and Kostiantyn Vashchenko, 50, were all dismissed.

    But the move comes just two weeks after Zelensky fired his wartime defence chief amid allegations of graft and corruption.

    Oleksii Reznikov’s tenure at Ukraine’s wartime defence chief was marred by serious allegations of graft, which he denied.

    He was accused of signing off on a deal with a Turkish company for winter uniforms that were ‘tripled’ in value.

  16. Very Stable Genius says:

    “ The Ukrainian leader has been seeking to demonstrate that his government is tightening its management of the defense ministry, which oversees billions of dollars of military assistance donated for the war.

    Some U.S. critics of the funding have said that reports of corruption were a reason to place stricter limits on military aid, and some members of the North Atlantic Treaty Organization are nervous that military aid could be deflected from its intended purpose.”

  17. Phoenix says:

    Americans can’t afford houses, and the American government sends tax dollars, that could help other Americans, to a foreign country.

    We never help our own. We help ourselves, we help foreigners, but we consistently screw our own.

    This society is going to fail. May take 10 years, or 20. Or just some triggering event like a housing or stock market crash. Thank Boomer, boomer greed is a major cause of the downfall.

  18. Phoenix says:

    80 year old women act like this. Narcissist, entitled. Thank engineers again for body cameras:

    Virginia Ann Wargo Pitzner was arrested and charged with battery on a person over 65 and disorderly conduct, the arrest report states.


  19. Juice Box says:

    Phoenix – During the various wars we fought there was plenty of war profiteering, so no shock. This time it seems it goes all the way up to the Top of the Defense ministry of Ukraine. Rumors are Zelensky had no choice, start getting rid of these people or further aid won’t be approved. Recent rumors are something like a 1/2 billion dollar food contract for the soldiers and another huge military contract for uniforms that were inflated over 300 percent.

    He will be here hat in hand to beg for more, this week UN visit to NYC and then a visit to Washington. The corruption rumors will be even harder to keep out of the media, there is enough false stories on social media, about the children of the rich and powerful from Ukraine all living it in the west and not holding a rifle in the trenches. These other ones about massive grift only make it seem much much worse.

  20. Libturd says:

    “Does Kerry and Gore approve?”

    Of course they do. Anything related to solar, or battery or wind keeps the large campaign contributors happy. Go look up the name of the shell companies these contributors all own. It’s as if the politicians have found the golden goose to finance their political campaigns. You give me 100K of your own money and we’ll give you a million dollar grant from tax payers money to pay you and your wife 200K a year each as CEO and CFO of Windy Panel Photovoltaics LLC. Don’t worry if you don’t produce a single thing. Just make sure you contribute every two years. Elections ain’t cheap.

  21. Libturd says:

    3B. Juice.

    Housing affordability is going to become a really large issue. The FED is caught here because they thought raising interest rates (causing mortgage rates to rise with the ten-year) would cause housing prices to fall. They did not account for the willingness of homeowners to stay put to avoid needing to obtain a new license to move. There are not a lot of good options out there. One solution, completely of my own demented mind, is to allow the government to incentivise a mortgage holder to move. For example, offer the same terms a homeowner currently has as long as they have a credit score over 700 and have paid off half of the term in their mortgage. This way, you know you have strong buyers unlikely to default on the loan, freeing up inventory. There could even be a sliding scale of incentives based on the quality of the purchaser. A sort of, take your current loan with you for qualified buyers deal. New homeowners would still have to pay the current mortgage rate, but tons of inventory should free up driving prices down. It shouldn’t cost the government much to back these new prime mortgages as they would only be offered to those qualified.

    It’s an idea.

  22. Juice Box says:

    Also I should mention Zelensky has made some recent statements against the corrupt “Oligarchic clans” in Ukraine. They are all going to be prosecuted. There was also an issue with recent legislation, he wants an immediate declaration of assets (to prevent corruption) their legislature wrote the new the with loopholes instead so he vetoed it.

    He as the NY Times said is now fighting two wars, one against Russia and one against ingrained corruption.

  23. Fast Eddie says:

    The president of the UAW said Musk is greedy and wants to play with his rockets! Did he see the salaries of the Ford and GM CEOs? Isn’t SpaceX a whole different entity? And don’t they develop star shields and star links and satellites and whole bevy of other things?

  24. grim says:

    One solution, completely of my own demented mind, is to allow the government to incentivise a mortgage holder to move.

    I’m sure the lending industry can find a way to make portable mortgages work, or alternatively, allow mortgages to stay with the property).

    Both will likely have huge unintended consequences.

  25. Juice Box says:

    Lib – we are now about two decades from the peak of home ownership.


    All they have to do is stop buying the bonds. But like any junkie in recovery, withdrawal might kill the patient.

    Heck we know that won’t happen so let’s say they keep buying the bonds but lower the conforming loan limit instead.

    FYI ——> GSE conforming loan limit is 726,200 for 2023, up from $647,200 in 2022.

    So fat chance… FU Pay me, Millenials and Gen Z..

  26. grim says:

    Curious what happens to NYC rentals post AirBNB ban.


    Airbnb listings in September fell to 4,600, a staggering 77% drop since June.

  27. Juice Box says:

    Transfer mortgages? No way. Real property transfer requires starting from scratch and paying off the original loan and whatever tranches owns it etc. Our GSE-issued debt securities are sold everywhere to everyone banks, pension funds, mutual funds, hedge funds, insurance companies, foundations, other corporations, state and local governments, foreign central banks, institutional investors and individual investors.

    We will go back to rent to own first.

  28. Libturd says:

    “Both will likely have huge unintended consequences.”

    Why of course.

    Something’s gonna have to give eventually or there are going to be a lot of homeless people.

    Or the economy is going to get so hot that all of this will be forgotten among the bags of cash all investors are about to make.

  29. Fast Eddie says:

    Transfer mortgages… oh God, what could go wrong?

  30. Libturd says:

    Speaking of Rent To Own. Just before the new iPhone is announced, the battery in my 23 month old iPhone 13 Pro Max bites the dust. It won’t hold a charge anymore. I actually use it with a small battery plugged into the lightning port now, which works for the day and isn’t too obtrusive. Was like $25 and it’s a quality battery (Anker).

    Well I go to preorder the new iPhone with Verizon (I continue to buy through them for a lot of reasons, but mainly because it is the cheapest option), and low and behold, I still owe nearly a year’s worth of payments (minus the trade in from my iPhone 11). I guess I wasn’t watching carefully when they gave me that monthly number that was too low to believe and they put me on a 36 month payment plan instead of a 24 month. It was like $299 dollars and they are giving me $800 for my batteryless iPhone 13, but still, I hate these surprises on principal. At least the APR is 0%.

    And anyone who buys their iPhone protection through Apple is a sucker. It’s so much cheaper through third parties like Square Trade. Some credit cards offer you coverage for free too, but you have to pay for the phone with THAT credit card. Of course, I have a $20 month discount already on FIOS/Verizon Wireless for pulling directly from my checking account.

  31. Fast Eddie says:

    Starlink availability map. Cool stuff for a guy who according to some, makes rolling pieces of shit cars:


  32. Libturd says:

    “Transfer mortgages… oh God, what could go wrong?”

    It sounded good in my mind.

  33. Fast Eddie says:

    Compare what Musk does to the green bullshit fake companies operating as money laundries during the Obammy and O’Biden administrations.

  34. grim says:

    I had thought that there was an FHA portable mortgage option for servicemembers in the military.

  35. ExEx says:

    12:54 get back to work peasant

  36. grim says:

    Starlink – 4700+ sats in orbit


    It makes one wonder if the purpose of SpaceX was to be a space logistics company, or a if that was just the side gig that would allow SpaceX to achieve its real goal – to disintermediate every wire and wireless communications company on earth.

  37. grim says:

    Not too different from the Tesla roadster approach – Tesla never had any intention of widespread manufacture of the Roaster. Building the roadster his was never the goal, only a convenient way to attract investment, interest, and capitalize on early adopters to fund the real Teslas. There was a somewhat famous interview with Musk, where he was asked about why he didn’t just start with an economy car. He basically laughed that off, nobody would get excited by a low-cost economy electric car. It needed to be sexy, fast, sleek, modern. The point was to generate excitement, interest, investment, not to be a profitable car at all.

  38. Fast Eddie says:

    The dude is amazing. To witness the creation of new industry outside the laziness and flatulence of bloated government is stunning.

  39. 3b says:

    Lib: If the Fed thought people would give up their 3 percent mortgages, then it shows how far removed from reality they are.

  40. Libturd says:

    You are not understanding my product. If you are paying on time, have good credit and built up some equity over time, you can transfer your 3% mortgage rate and equity to a new property. Buyers of your old property would either be first time or non-qualified and would still have to pay the current rates. The person selling, if in good standing gets the benefit of not having to pay higher rates. But again, only if they are qualified. Wouldn’t cost much for the government to backstop since prime borrowers rarely, rarely default. This would free up some inventory for new buyers and current owners alike, hopefully driving down prices a bit and incentivising people to move.


  41. leftwing says:

    There are HNW availability for what you describe Lib. Bespoke.

    The mortgage markets are structured and priced off the probabilities of prepayments as rates move. Your idea and its implementation is just taking that complication out of the structure and making the loans an HTM asset on the lender’s balance sheet.

    Doesn’t work in the way you’re suggesting – post fact – as someone would have to take the mark to market loss now given the yield differences.

    At origination though it works….back in the day of ZIRP taking 15 or 20 year paper at 150-200bps over the ten year for very liquid clients with very low LTV was a no brainer for the originator….the loan for the client was ‘transferable’ to a new residence with certain provisions…similar low LTV, updated financials/creditworthiness, etc.

  42. Bystander says:

    Major blocker, lib – how can Menendez or Rick Scott types profit?

  43. Phoenix says:

    Starlink satellites collect all of the data from Tesla cars.

  44. Juice Box says:

    Starlink’s Future is cellular, however, they are not there. The current satellite constellation supports only the current broadband. The new satellites that support cellular are currently known as V2, and V2 Mini. There are not that many in the sky folks. First launch of V2 Mini was in February, they have larger antennas to create a”cell tower in the sky”. There is a much larger version V2 Large planned but won’t fly yet as they don’t fit into the Falcon 9 rocket platform. They will have to wait until Starship is fully operational.

    It will be a few years for full on Starlink Cellular.

    There is also a spectrum issue. T-Mobile is offering theirs if they get to be first. Elon says they are working it out with them and the FCC. The other carriers are crying foul etc as well.

  45. JUice Box says:

    re: “you can transfer your 3% mortgage rate”

    So Fannie, Freddie, FHA etc which is 90% of the US market has to bundle and sell investments that are below inflation? No magic is going to turn that into any kind of marketable product.

  46. chicagofinance says:

    Lib: I’ve skimmed today’s postings. Are you referring to, or were you inspired by, some version of this?


    A 3% Mortgage Rate in a 7% World? This Startup Says It Can Do That

    Loan assumptions, which let a home buyer essentially take over a seller’s mortgage, are hard to find and hard to pull off

    By Ben Eisen

    There are millions of outstanding mortgages with a 3% interest rate. A new startup says it can help today’s home buyers get their hands on them.

    Mortgage rates are now above 7%, leaps and bounds above the 3% they grazed two years ago. Buyers and sellers alike are giving up, sucking demand and supply out of the housing market. And things are expected to stay that way, with the Federal Reserve signaling plans to keep rates high for the foreseeable future.

    Roam, a real-estate company that launched Wednesday, is betting that it can popularize an obscure workaround. “Assumable loans” allow sellers to transfer their own mortgage loans to the buyer alongside the house.

    In theory, the idea sounds great, at least for discouraged house hunters who can inherit a lower-rate loan. Sellers, in turn, might fetch higher prices for their houses.

    But Roam’s vision faces an uphill battle. Loan assumptions haven’t gained much traction recently, even though rates are up. Many lenders are cool to the idea because for them it would mean more work for less money.

    Some 22% of active mortgages are part of the government programs that have assumption features, according to the mortgage-data and technology company Black Knight. That includes loans extended through the Department of Veterans Affairs and the Federal Housing Administration programs.

    Few consumers know about the option, and fewer still follow through with it. The FHA has processed 3,349 assumptions in the fiscal year that ends Sept. 30, up from 2,566 in the year prior.

    Raunaq Singh, Roam’s founder and chief executive officer, says his new company will find and advertise home listings attached to attractive assumable mortgages. It is initially launching in Georgia, Arizona, Colorado, Texas and Florida.

    The company aims to help with the paperwork and other bureaucratic hoops. That means working with the seller’s mortgage company on behalf of the buyer and seller.

    “Have you ever called someone every day until you get what you wanted?” says Singh, who earlier in his career worked at the online real-estate company Opendoor. “That’s the kind of service we do on your behalf.”

    A loan assumption is different from a standard sale, in which a buyer takes out a mortgage at the going rate to pay the seller. In that case, a seller uses the money to pay off his or her own mortgage and pockets the rest.

    An assumable transaction doesn’t replace an old mortgage with a new one, but instead transfers the old mortgage to the new owner. The seller is relieved of the remaining mortgage liability, so the balance is subtracted from the purchase amount owed. The buyer must come up with cash to cover the rest of the purchase price.

    Take a $500,000 house that is tied to an assumable mortgage with a $300,000 balance. Even after the buyer assumes the mortgage, the buyer still needs to come up with $200,000. Unless the buyer can pay that amount, he or she would need to take out a second loan at going rates.

    Roam says it will recommend lenders to provide additional financing. It wouldn’t specify which lenders it will work with. Roam will collect a fee from the buyer that equals 1% of the purchase price.

    Roam, with 10 employees, received $1.25 million in a seed funding round led by the venture-capital firm Founders Fund and Eric Wu, who co-founded Opendoor. Tim Mayopoulos, the former Fannie Mae CEO who briefly ran Silicon Valley Bank after it failed, is an adviser.

    The startup could run up against the Luddite world of mortgage banking, where assumption documents are still often transmitted by fax machine. Lenders sometimes drag their feet in processing assumptions because they earn only a few hundred dollars for processing them, often not enough to cover the cost and far less than they make originating new mortgages, according to Ted Tozer, nonresident fellow at the Urban Institute’s Housing Finance Policy Center.

    For loan assumptions to become popular, lenders will need to be allowed to earn more on them, Tozer says. “There’s not much you can do with that if the lenders aren’t going to be efficiently processing assumptions,” he says.

    If assumptions did take off, mortgage investors could effectively demand higher rates on new loans to compensate for being stuck holding assumable mortgages for longer, according to John Kerschner, head of U.S. securitized products at Janus Henderson Investors.

    Another challenge: Not every seller wants to part with a loan. If a seller with a VA loan bequeaths a mortgage to a civilian buyer, the seller might not be able to take out a new VA loan immediately.

    Veterans United Home Loans, the largest VA lender, expects to process about 150 assumptions this year, up from roughly two dozen last year.

    Jessica Pardinas and her family assumed a Veterans United loan with a rate of just over 3% when they bought a four-bedroom home in Bowie, Md., in August. She knew loan assumption was a possibility because it was mentioned in the listing. Because Pardinas is a veteran, the process was a little easier.

    The seller hadn’t paid down much of the loan balance, so a second loan wasn’t needed. She estimates taking the lower rate will save about $10,000 a year.

    “It was a very welcome surprise,” she says. “We certainly will be able to put the money we are saving to good use.”

  47. Fabius Maximus says:

    I always said that the loan should be able to move with you. But what I think we will see first will be the 50yr mortgage. Extend the period, lower the payment.

  48. OC1 says:

    “Compare what Musk does to the green bullshit fake companies operating as money laundries during the Obammy and O’Biden administrations.”

    You do know that Tesla got one of those green bullshit Obammy loans, right?

  49. Hold my beer says:

    We will have 100 year mortgages that your future great great grandchildren will be liable for. Just like in Japan and Korea the heirs inherit both assets and liabilities.

  50. Dumdum says:

    Received a quote to build a sun-room as an addition in the rear of the house. The quote for a 350 sf ( bigger than average apparently) is $130K. Prefabricated in Ohio and will be installed – electricity and all, 4- season, with double panel glass, in 3 weeks.

    The same thing – as an addition (not prefab) about 7 years ago, was quoted by a local contractor for $50K!

    In fact, we got the entire kitchen redone with granite and top-line cabinets + a basement remodel for $50K about 12 years ago.

    I am curious if this will ever go down. The pricing is not sustainable

  51. Fast Eddie says:

    You do know that Tesla got one of those green bullshit Obammy loans, right?

    And where did the money come from? And he didn’t stuff campaign coffers with it, he produced something of value.

  52. Libturd says:


    Interesting, but didn’t know about it. Thanks for posting.

  53. Fabius Maximus says:

    This is quite scary, we are back into the Subluminal messaging.
    Squint and you should see it.


  54. Hold my beer says:


    That’s creepy.

  55. Fabius Maximus says:


    One for you. Howard on Boebert. NSFW


  56. Phoenix says:


    Not for me, but I did enjoy that.

    She is a hypocrite. And a lying female. End of story.

  57. Phoenix says:

    Some “Coffee City” to go with your morning coffee.


  58. The Great Pumpkin says:

    Yields ripping, Vix at 13

    Dollar soaring, Vix at 13

    Oil skyrocketing, Vix at 13

    Taiwan encircled, Vix at 13

    Republicans shut down the Government, Vix at 13

    Zombie apocalypse, Vix at 13

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