4 ms·

If you're not buying all cash, the monthly cost of buying a home hasn't gone down, and theres a good chance its even gone up There's a big difference between t

by shmatt 4y ago

If you're not buying all cash, the monthly cost of buying a home hasn't gone down, and theres a good chance its even gone up There's a big difference between the banks are getting a bigger piece of the housing cost cake, and housing is now available to a group of people it wasn't available to a year ago

strikelaserclaw 4y ago
i mean, at least you don't have to engage in bidding wars with 30 other people foaming at the mouth trying to get this house at any cost while some rich investor scoops up the property.
jollyllama 4y ago
To the extent that you are buying cash i.e. the size of your downpayment, your hard earned savings are less-inflated, they have more power, and you are able to avoid debt. For those of us trying to live within our means and avoid pricing others out, this is good news. Plus, it's quite likely that buyers can refinance later.
ppvfy 4y ago
This is true, but - if you buy with a lower price + higher interest rate, you can potentially refinance to a lower interest rate down the road. Nothing you can do after the fact about a high purchase price though. Nothing's guaranteed of course, but I'd rather buy a home now than a year ago, even if the same monthly payment gets me the same house
- jeffbee 4y ago
  Exactly this. Every boomer who whines about 15% interest rates in the 1980s - rates which existed only briefly - is leaving out the fact that they got low prices and continuous opportunities to refinance at lower rates for the rest of their lives.
  - refurb 4y ago
    I mean super high rates lasted more than a decade, so if you add up all the interest paid, it was a horrible deal.
    - jeffbee 4y ago
      Super-high rates coincided with a low in the price-to-income ratio in the post-war era. It was > 6x in the 1950s, < 5x through the 80s, and now stands at > 8x. So why should I care if the bank took a higher share of a lower price? It was still a lower price.
      - refurb 4y ago
        You’d care because interest payments disappear while principle payments don’t. Back when interest rate were >6%, 80%+ of your first 5 years of payments went entirely to interest.

by shmatt 4y ago

strikelaserclaw 4y ago

i mean, at least you don't have to engage in bidding wars with 30 other people foaming at the mouth trying to get this house at any cost while some rich investor scoops up the property.

jollyllama 4y ago

To the extent that you are buying cash i.e. the size of your downpayment, your hard earned savings are less-inflated, they have more power, and you are able to avoid debt. For those of us trying to live within our means and avoid pricing others out, this is good news. Plus, it's quite likely that buyers can refinance later.

ppvfy 4y ago

This is true, but - if you buy with a lower price + higher interest rate, you can potentially refinance to a lower interest rate down the road. Nothing you can do after the fact about a high purchase price though. Nothing's guaranteed of course, but I'd rather buy a home now than a year ago, even if the same monthly payment gets me the same house

jeffbee 4y ago
Exactly this. Every boomer who whines about 15% interest rates in the 1980s - rates which existed only briefly - is leaving out the fact that they got low prices and continuous opportunities to refinance at lower rates for the rest of their lives.
- refurb 4y ago
  I mean super high rates lasted more than a decade, so if you add up all the interest paid, it was a horrible deal.
  - jeffbee 4y ago
    Super-high rates coincided with a low in the price-to-income ratio in the post-war era. It was > 6x in the 1950s, < 5x through the 80s, and now stands at > 8x. So why should I care if the bank took a higher share of a lower price? It was still a lower price.
    - refurb 4y ago
      You’d care because interest payments disappear while principle payments don’t. Back when interest rate were >6%, 80%+ of your first 5 years of payments went entirely to interest.