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I’d love to see the same charts in terms of monthly payments on a new mortgage, rather than sticker price. The price itself matters in terms of downpayment, but
by 6gvONxR4sf7o 5y ago
I’d love to see the same charts in terms of monthly payments on a new mortgage, rather than sticker price. The price itself matters in terms of downpayment, but ultra low interest rates are a huge factor. Right now, interest rates are so low that a huge mortgage has the same payments as a small one years ago would have been. Especially when you take inflation into account.
- patrickthebold 5y agoOne thing I think people overlook is that there's a hidden cost to buying at low interest rates: if rates go up that will eat into your resale value, and it's less likely you can refinance at a lower rate in the future. If you bought at a high interest rate and then rates drop you really make out, and that's less likely to happen to people buying now.
- deleted 5y ago[deleted]
- cudgy 5y agoAlso, artificial low rates are causing increased inflation of prices, which means cash buyers and buyers that would pay off their mortgage quicker are at a disadvantage.
- milkytron 5y ago> artificial low rates What do you mean by artificial here?
- cudgy 5y agoFor example, Interest rates are so low that the traditional alternatives of stock investments are no longer present. Traditionally, a bond would include a rate that is beyond inflation. Nowadays, government bonds return rates below inflation. This is artificially low and creates a bubble in the stock market (and other assets like real estate) since the traditional option to put money in bonds has been artificially devalued.
- danuker 5y agoRates depressed by the central bank buying everything deemed "safe". Very few "natural" investors (as opposed to "artificial" central banks) would accept a 0.25% yearly return on their capital. https://tradingeconomics.com/united-states/interest-rate https://tradingeconomics.com/united-states/interest-rate