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Certainly, the last year as been absolutely stupid, but I would argue that we've actually, for the first time since 2005, gotten to unsustainable levels. The he

Certainly, the last year as been absolutely stupid, but I would argue that we've actually, for the first time since 2005, gotten to unsustainable levels. The headline is sensational, but please review the last graph here: https://realestatedecoded.com/real-monthly-mortgage-payment-home-price-index/ https://realestatedecoded.com/real-monthly-mortgage-payment-... What really matters to people are monthly payments relative to paycheck. Of course, if people also believe that inflation is underestimated, then the current housing situation is perfectly fine.

whimsicalism 4y ago
> What really matters to people are monthly payments relative to paycheck. I hear this repeated often, fail to see how it's true. Let's say I'm 50, just starting a 30 year mortgage. Monthly payments relative to paycheck? Sure that's important. So is the fact that I'll have to be paying until I'm 80..?
- hervature 4y ago
  Well, if you're 50 and agree to a 30 year mortgage, then the bank expects you to pay until you're 80 or sell your house to pay off the remainder. I don't understand how that's confusing? People have income in their retirement. They shouldn't take a big mortgage if their retirement savings are small.
  - whimsicalism 4y ago
    Yes, aka the amount of the loan matters, not just the monthly payment.
    - hervature 4y ago
      There is a one-to-one relationship between "amount of the loan" and monthly payments. I don't see how that's relevant. Do you mean the length of the loan? Banks don't give mortgages to 100 year olds because they know they won't be able to afford the monthly payment in 20 years (because they are dead), it doesn't matter of the loan amount. Even for a 50 year old, I would expect it would be hard to find any bank give you a loan for longer than 15 years. Each bank is different and a cursory search shows that some banks consider giving you a mortgage if the end date is before you turn 95. The point remains, this has nothing to do with amount.
      - whimsicalism 4y ago
        1. Only if you don't take into account the length of the mortgage. You can have the same monthly payment for two entirely different amounts if you are paying for different lengths of times. Borrowers are not agnostic to this. This is contrary to your suggestion that monthly payment is all that matters. 2. It is largely illegal to discriminate by age when lending, I know plenty of people in their 60s or 70s who have taken out 30 years.

whimsicalism 4y ago

> What really matters to people are monthly payments relative to paycheck. I hear this repeated often, fail to see how it's true. Let's say I'm 50, just starting a 30 year mortgage. Monthly payments relative to paycheck? Sure that's important. So is the fact that I'll have to be paying until I'm 80..?

hervature 4y ago
Well, if you're 50 and agree to a 30 year mortgage, then the bank expects you to pay until you're 80 or sell your house to pay off the remainder. I don't understand how that's confusing? People have income in their retirement. They shouldn't take a big mortgage if their retirement savings are small.
- whimsicalism 4y ago
  Yes, aka the amount of the loan matters, not just the monthly payment.
  - hervature 4y ago
    There is a one-to-one relationship between "amount of the loan" and monthly payments. I don't see how that's relevant. Do you mean the length of the loan? Banks don't give mortgages to 100 year olds because they know they won't be able to afford the monthly payment in 20 years (because they are dead), it doesn't matter of the loan amount. Even for a 50 year old, I would expect it would be hard to find any bank give you a loan for longer than 15 years. Each bank is different and a cursory search shows that some banks consider giving you a mortgage if the end date is before you turn 95. The point remains, this has nothing to do with amount.
    - whimsicalism 4y ago
      1. Only if you don't take into account the length of the mortgage. You can have the same monthly payment for two entirely different amounts if you are paying for different lengths of times. Borrowers are not agnostic to this. This is contrary to your suggestion that monthly payment is all that matters. 2. It is largely illegal to discriminate by age when lending, I know plenty of people in their 60s or 70s who have taken out 30 years.