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The housing market is FUBAR because the people who already have a house absolutely 100% need prices to go up indefinitely to fund their lifestyle. The governmen

The housing market is FUBAR because the people who already have a house absolutely 100% need prices to go up indefinitely to fund their lifestyle. The government can't do anything either besides tell banks to lend starters more $ because the system cannot be allowed to collapse.

haram_masala 6y ago
Doesn’t this depend on whether those homeowners have borrowed against their (rising) equity? I wonder what fraction of homeowners actually do so. Personally I wouldn’t dream of it, so rising prices don’t really affect my lifestyle at all.
- chii 6y ago
  A lot of home owners use their equity to invest (typically, in another property).
- MomoXenosaga 6y ago
  I think a lot of people see their family house as their pension plan. A house is an asset now.
Spivak 6y ago
You say “fund their lifestyle” like people’s houses appreciating is paying for their summer home or m5 when in reality it’s funding their ability to move with work and not get their equity eaten by inflation. People need their houses to not deprecate and to roughly increase by value of the work put into the house during their time lived there.
- stevehawk 6y ago
  i bet there's a lot of people refinancing their homes right now and rolling their car loans and other stupid stuff into the new mortgage by using the equity. i watched a lot of people do that in 2006-2008. hell even i'm considering taking out a loan against my increase in equity from the last two years to buy a plane because interest rates are so low.
bradleyjg 6y ago
With interest rates having nowhere to go but up, look for the government to introduce the fifty year mortgage in order to keep the party going.
- chii 6y ago
  why would the gov't be in control of the mortgage period? That's between the borrower and the bank.
  - bradleyjg 6y ago
    In the vast majority of US mortgages the bank is the government. It’s deceptive because borrowers deal with private originators and servicers, but they are just contractors for the government.
  - lotsofpulp 6y ago
    In the US, most of the mortgage market has the government as the guarantor, via Fannie Mae, Ginnie Mae, and Freddie Mac. If you have a conforming loan, then whoever is collecting interest is basically insured by the US taxpayers. https://en.wikipedia.org/wiki/Conforming_loan https://en.wikipedia.org/wiki/Conforming_loan

haram_masala 6y ago

Doesn’t this depend on whether those homeowners have borrowed against their (rising) equity? I wonder what fraction of homeowners actually do so. Personally I wouldn’t dream of it, so rising prices don’t really affect my lifestyle at all.

chii 6y ago
A lot of home owners use their equity to invest (typically, in another property).
MomoXenosaga 6y ago
I think a lot of people see their family house as their pension plan. A house is an asset now.

Spivak 6y ago

You say “fund their lifestyle” like people’s houses appreciating is paying for their summer home or m5 when in reality it’s funding their ability to move with work and not get their equity eaten by inflation. People need their houses to not deprecate and to roughly increase by value of the work put into the house during their time lived there.

stevehawk 6y ago
i bet there's a lot of people refinancing their homes right now and rolling their car loans and other stupid stuff into the new mortgage by using the equity. i watched a lot of people do that in 2006-2008. hell even i'm considering taking out a loan against my increase in equity from the last two years to buy a plane because interest rates are so low.

bradleyjg 6y ago

With interest rates having nowhere to go but up, look for the government to introduce the fifty year mortgage in order to keep the party going.

chii 6y ago
why would the gov't be in control of the mortgage period? That's between the borrower and the bank.
- bradleyjg 6y ago
  In the vast majority of US mortgages the bank is the government. It’s deceptive because borrowers deal with private originators and servicers, but they are just contractors for the government.
- lotsofpulp 6y ago
  In the US, most of the mortgage market has the government as the guarantor, via Fannie Mae, Ginnie Mae, and Freddie Mac. If you have a conforming loan, then whoever is collecting interest is basically insured by the US taxpayers. https://en.wikipedia.org/wiki/Conforming_loan https://en.wikipedia.org/wiki/Conforming_loan