By Ryan McMaken
Total mortgage debt will increase as actual ownership in equity will go down. If homeownership does increase, it will be “ownership” of the sort where the homeowner has little to no actual equity.
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72 sats \ 2 replies \ @Cje95 12 Nov
I love the memes going around of people having their future grandchildren down as guarantors lmao
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10 sats \ 1 reply \ @SimpleStacker 12 Nov
@Cje95 as a staffer in conservative politics I suggest you read this: #1280919
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0 sats \ 0 replies \ @Cje95 12 Nov
I am on it!
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154 sats \ 5 replies \ @freetx 12 Nov
Houses are depreciating assets. Its doubtful that a modern construction house will last for 50 years without major rework.
Due to the way amortization works, during the first 10-20 years the buyers will get almost 0 equity....by the time the buyers do start accruing equity, the house will be dilapidated.
Its ironic that the push towards lower construction standards (particle board + wood frames) was itself driven by inflation...so now we are fixing one inflation problem with another.
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18 sats \ 4 replies \ @Undisciplined OP 12 Nov
You aren't accruing equity via your house payments, but when inflation drives up the nominal value of your home, you do get to pocket the difference at time of sale.
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154 sats \ 3 replies \ @freetx 12 Nov
True.
The old adage of real estate is very true: Location, location, location.
I learned that. The house I owned from age 25-36 was in a poor location but it was a low price. I made almost nothing on that after accounting for property tax and repairs I did over those years. Maybe I netted 1% annually.
My current house, in a very high demand location, is growing at 5-6% annually.
My point on that is those who will likely need a 50 yr loan will not be buying "premium location" houses on average.
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21 sats \ 2 replies \ @Undisciplined OP 12 Nov
My expectation is that these will just become the norm and 30-year mortgages will be similarly niche as 15-years are today.
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154 sats \ 1 reply \ @freetx 12 Nov
Quite likely.
Although the savings in monthly payment reaches diminishing returns at some point. Nearly doubling the term (50 vs 30) only produces a ~13% reduction in monthly payment.
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21 sats \ 0 replies \ @Undisciplined OP 12 Nov
True, but how devalued will that payment be for years 31-50. In real terms, it'll be peanuts.
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0 sats \ 0 replies \ @Machiavelli23 13 Nov
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