A weekend topic starting with the Idaho Press. "The typical price for Idaho starter homes has increased almost 80% since 2019, from around $171,000 to $306,000 as of January 2022. The problem: Homes are where jobs sleep at night, as the Federal Reserve puts it. And without affordable starter homes, young professionals find it harder to settle down and have a family. This could lead to professionals leaving this market, which could impact the Treasure Valley's economy."

"When housing prices increase, standards of living decrease for a significant portion of the population, said Steven Peterson, University of Idaho clinical associate professor of economics. 'The housing costs are crowding out other kinds of spending,' Peterson said. 'Rising housing prices hurt other businesses, downstream businesses ... it's hurting restaurants, drinking establishments, other kinds of services.' Entry level price points are now $450,000 to $500,000, said Brett Hughes, owner of Boise Premier Real Estate. A buyer can afford a $150,000 home on one income, Hughes said. The level of appreciation, almost 30% last year, is something 'you don’t want.'"

From Better Dwelling. "American real estate just spent another quarter in bubble territory, according to its central bank. The US Federal Reserve Exuberance Index shows US real estate was still exuberant in Q3 2021. A quarter before, the market fit the criteria set out by researchers to be considered a bubble. It also happened to be the quarter branch presidents warned a housing bubble is a concern. The Q3 2021 update shows US home buyers were still exuberant, logging a sixth quarter. People have been saying some markets are suffering from frothy activity for years. However, this is a national index. It’s the first time since the Great Recession that the entire US real estate market is now in a bubble."

"It’s also the first time the Fed had a quantitative model warning them of a bubble in real time. It also happens to be the first time they’re ignoring their real estate bubble model. Take it in for a moment. This is what it feels like when memories are made."

From Seattle PI in Washington. "Mortgage prices for the typical U.S. home have soared to an all-time high, surpassing a previous record set in the summer of 2006, according to Zillow. Seattle homeowners are not immune. The report said that monthly mortgage payments in the city have risen 35% since January of last year. That increase has resulted in homeowners paying an average of $675 more per month, bringing the average monthly mortgage payment in Seattle to a whopping $2,615."

"The report said that 31% increase in the buyer’s monthly payment, wrought by rising home costs and higher mortgage rates, is the highest increase on record."

The Mountain Democrat in California. "'My husband and I purchased a home in June of last year. Because we lost two previous homes where we had made offers, we bid $20,000 over the listed price. We love our home but feel we paid too much. I have two questions. Is the market slowing down? Do we need to be concerned?'"

"The answer to your first questions is definitely yes but it’s slowing down from warp speed. Bankrate conducted a homeowner’s survey last year and discovered that 64% of millennials regretted buying their home and 82% had at least one significant regret about their home purchase. There is a sense of economic security among long-time homeowners. They have a large amount of equity, a low or no mortgage and the maturity of experience. They correctly believe they will do well when they sell."

"First time buyers have poured their saving and a substantial portion of their monthly earnings into their homes. They are betting they will recover both in the future. That’s likely but with little equity and a large mortgage they are more sensitive to government policies that may affect future values. Mortgage rates are an example."

"Low mortgage rates have been an enabler of higher home prices allowing buyers to take on larger mortgages. Inflation, ignited by excessive government spending and restrictive energy policies, has created an inflationary spiral that began last summer. The Federal Reserve has finally admitted that they were slow to respond and announced they will increase interest rates. Higher interest rates will lower the pool of buyers who can qualify for a mortgage. In response to fewer buyers, sellers may need to lower their asking prices."

The Globe and Mail. "Next Wednesday will likely bring about the biggest test for floating-rate borrowers in years. On March 2, the Bank of Canada is expected to lift its key lending rate to restrain the most serious inflation threat Canada has seen in decades. The market expects next week’s hike to be the first of roughly two-plus percentage points of rate increases through 2023."

"That’s enough to give variable mortgagors the jitters. And no less than 54 per cent of borrowers have been choosing record-low variable rates, according to Statistics Canada. So it’s natural to wonder whether those without fixed rates can handle a two-point rate increase. The answer is generally yes. Most mortgagors have ample home equity or financial resources to fall back on and the overwhelming majority are stress tested – that is, they must prove they can afford at least a 200-bps rate increase."

"But not everyone is so comfortable. More than one in five are highly leveraged, according to Bank of Canada data. And while the government’s stress test makes you prove you can afford your mortgage payment, property taxes, heat, condo fees and major credit payments, here’s what it doesn’t factor in: groceries, child care, commuting/gasoline, utilities, home maintenance/repairs, internet, cellphones, TV (streaming/cable), vacations, dining/entertainment, education, home, car and life insurance, and so on."

"In other words, the mortgage stress test doesn’t assess your 'real-life' budget. Prior to these 31-year highs in inflation, most Canadians were already living beyond their means  – more than half being just $200 away from not covering their monthly expenses. A 150-plus-bps rate increase wouldn’t help. It would boost payments by more than $400 a month for someone mortgaging the average Canadian home with 20 per cent down and a 25-year amortization. That would challenge up to 61 per cent of those renewing their mortgage in the next year. That’s how many worry they’ll be in 'financial trouble,'according to a recent poll, if interest rates 'go up much more.'"

From News.com.au in Australia. "The price gap between houses and units has never been greater, and as a result, many buyers on tight budgets are setting their sights on apartments. However, with oversupply in some markets, stories of dodgy building practices and a post-pandemic obsession with space – purchasers need to be selective. Veronica Morgan, buyer’s agent, said unit buyers shouldn’t just concentrate on the purchase price."

"'There’s so much focus on just the acquisition, it’s a bit like the old fashioned rom coms where they only focus on the characters getting married. But what about the happily ever after?' She offered her two principles for smart apartment buying. 'Firstly, if it’s easy to buy it’s going to be hard to sell. If you’re struggling in this tough market, it’s to be understood, but don’t let the simple answer be to just buy something because it’s easy. The problem is, you could get stuck with it.'"

"'While it feels logical to start with a unit, where the danger comes in is if you buy a property you’ll either outgrow too quickly, or isn’t going to grow in value.' Ms Morgan said while small is tempting for budget-conscious buyers, 'Well-designed units in boutique buildings in locations without lots of units, they can be fine. But the problem in some areas is the sheer volume of stock particularly targeted towards first-time buyers, and investors. These solve the affordability problem but there’s no scarcity of stock.'"

From One Roof. "House prices are falling. After 18 months of rapid growth that saw New Zealand’s average property value rise from just below $800,000 to just over $1.1 million, the market has suddenly shifted down a gear - a new experience for homeowners who may have become accustomed to ever-rising prices. James Wilson, head of valuations at OneRoof’s data partner, Valocity, says 'You can’t afford to make mistakes in a softening market. In a good market, if you make a slight mistake, then the market will usually protect you. Whereas in a softer market a mistake might impact the price you get.'"