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I think BI could mean the end of homes as an asset class. Mortgages will become a super low risk loan meaning that interest rates will go through the floor, in

I think BI could mean the end of homes as an asset class. Mortgages will become a super low risk loan meaning that interest rates will go through the floor, in turn making home ownership supremely affordable. If everyone can afford a mortgage then why would anyone rent?

branchless 11y ago
I don't see why you would think any of this would follow. Why would mortgages be "super low risk?". Why aren't they low now? Also lower rates means higher prices. Your post makes no sense.
- rorykoehler 11y ago
  They would be super low risk because everyone would have a guaranteed way of paying them every month. If you have to ask why they aren't low risk now then I assume you have no experience in being broke and not being able to make rent. High demand with unmatched supply means higher prices. Rates can influence demand but if you take the majority of rental properties out of the market because people sell them due to low rental demand it will sort itself out.
  - pc86 11y ago
    > High demand with unmatched supply means higher prices. You've just negated your own argument that home ownership is more affordable under BI. BI would increase disposable income across the board, increasing demand for purchased homes that is not necessarily coupled with an increase in supply. Prices go up overnight. And home mortgages are low risk now - rates are about 3.5% which is among the lowest you can get for any loan, especially one multiple times higher than the borrower's yearly income over multiple decades, and any responsible person will be paying their rent long after they've switched their diet to PB&Js and ramen noodles. It's the first thing coming out of every check.
    - rorykoehler 11y ago
      In the short term you are right but long term rental market could drop out as people choose to buy instead of rent freeing up lots of housing (people selling their rental investments as their returns dwindle) so that supply matches demand. Regarding low rate mortgages... you remember 2008 and the years leading up to it?
surfmike 11y ago
If everyone pours much of BI income into mortgages but the supply of housing stays limited, then the price of existing houses will just go up-- and much of the BI income will get eaten up by housing price inflation.
- rorykoehler 11y ago
  Supply is limited in large part because everyone wants to live in the same place (ie where there is lots of work). BI will change that too, allowing people freedom to move where they can afford to live without worrying whether there will be jobs waiting for them. The free market in action. The impact a BI will have on society means that many of the patterns we see now will be flipped on their heads.

branchless 11y ago

I don't see why you would think any of this would follow. Why would mortgages be "super low risk?". Why aren't they low now? Also lower rates means higher prices. Your post makes no sense.

rorykoehler 11y ago
They would be super low risk because everyone would have a guaranteed way of paying them every month. If you have to ask why they aren't low risk now then I assume you have no experience in being broke and not being able to make rent. High demand with unmatched supply means higher prices. Rates can influence demand but if you take the majority of rental properties out of the market because people sell them due to low rental demand it will sort itself out.
- pc86 11y ago
  > High demand with unmatched supply means higher prices. You've just negated your own argument that home ownership is more affordable under BI. BI would increase disposable income across the board, increasing demand for purchased homes that is not necessarily coupled with an increase in supply. Prices go up overnight. And home mortgages are low risk now - rates are about 3.5% which is among the lowest you can get for any loan, especially one multiple times higher than the borrower's yearly income over multiple decades, and any responsible person will be paying their rent long after they've switched their diet to PB&Js and ramen noodles. It's the first thing coming out of every check.
  - rorykoehler 11y ago
    In the short term you are right but long term rental market could drop out as people choose to buy instead of rent freeing up lots of housing (people selling their rental investments as their returns dwindle) so that supply matches demand. Regarding low rate mortgages... you remember 2008 and the years leading up to it?

surfmike 11y ago

If everyone pours much of BI income into mortgages but the supply of housing stays limited, then the price of existing houses will just go up-- and much of the BI income will get eaten up by housing price inflation.

rorykoehler 11y ago
Supply is limited in large part because everyone wants to live in the same place (ie where there is lots of work). BI will change that too, allowing people freedom to move where they can afford to live without worrying whether there will be jobs waiting for them. The free market in action. The impact a BI will have on society means that many of the patterns we see now will be flipped on their heads.