How U.S. can lower housing prices? And Could Trump look at Broker model as Broken?

[Jay Hinrichs]

I think there is a pretty easy way to lower prices of housing to some extent.. And that is to do away with Mortgage Broker and have all home loans orignated by the direct lender/ Banks..

I personally bought a home in British Columbia in 2001 and thats how it worked there .. you went to the bank They charged a nominal fee and the interest rate was competitive to other banks.

We have gotten home loans so convoluted with the Mortgage Broker Model that causes buyers to pay 10 to 20k more just in the Broker fees and service release premiums / rebates Thousands in Junk fee's etc those should go to the borrower to lower their cost..

We all know the loans end up at the banks or investors and their servicers.. ???

Any thoughts. 

[JD Martin]

Personally, I don't think home prices are really that different than years ago.

In 2024, the median house price in the US is about $400k. The median SF is 2140, which means the median price/sf is $187/sf. Median household income is $75k, which is 1:5.3 ratio for affordability. 

In 1963, the median house price in the US is about $18,500. The median SF is 1365, which means the median price/sf is $13/sf, or $134/sf in 2024 money. Median household income is $6200, which is $64k in 2024 money. Affordability is about 1:3

So yeah on the surface it looks like a big difference, but there's a lot of things not controlled for in the stats

- There were a crazy amount of houses built in the years just after the war, so housing stock was easy to come by everywhere;

- Homes had nowhere near the kind of features they have now - 2 car garages, dishwashers, OTC microwaves, W/D hookups, high efficiency windows, central heat & air conditioning, etc - all those doodads and niceties drive up the cost of housing;

- Fewer mortgages were 30 year, so homeowners had to pay (relatively) higher monthly payments;

- Rentals were almost exclusively apartments, so there was more supply for buyers;

ETC

I think these things tend to be more stories that make for good press but aren't really that grounded in reality overall. In fact, considering how many people are working remotely, there are some superb opportunities for people to make good money and live in really cheap places. One problem is that everyone wants to live in great places, so those places are inordinately expensive relative to income, but the places no one wants to live - Nebraska, or Iowa, or Columbus Ohio (just to tweak the Cabal!) are still relatively cheap. Americans have always had a history of moving to where land and housing was plentiful and cheap, but no one wants to do that any more.