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If we're talking California, I'd argue a 200k down payment on a million dollar house is a bigger barrier.
by 999900000999 4y ago
If we're talking California, I'd argue a 200k down payment on a million dollar house is a bigger barrier.
- parineum 4y agoThat's exactly my point. If a house is a million dollars with a 3% loan, that house will be significantly cheaper with a 15% loan but the payments will remain relatively static making a 20% down payment significantly easier for those who are trying to get in the market for the first time. When people bring up the prices of houses for baby boomers they totally overlook the interest rates and monthly payments. The price of a house doesn't really matter. The payment and the down payment are what matter and the volatility of those isn't based on the piece of land changing value (in the shorter term). In the last 6 years, my house doubled in value. Also, I recently refinanced for less than half the rate. When borrowing money is cheap, there's a lot more competition for things bought with loans. On the other hand, the market rates for rent don't really change because the people don't suddenly have more disposable income.