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I have noticed the same trend where I live and among my close group of acquaintances and friends. Some couples are buying houses way north of 600K even while st
by Mizoguchi 4y ago
I have noticed the same trend where I live and among my close group of acquaintances and friends. Some couples are buying houses way north of 600K even while still having a mortgage on a perfectly nice home a few blocks away. My wife and I look at each other completely puzzled. Like what is going on? Are people making this much money? Or are they getting into terrible deals due to FOMO? We could certainly afford a new home now but no way in hell we are jumping on this market, our money goes to buy discounted stock or sits on CDs.
- tonymet 4y agoWith savings & investments so volatile people are taking riskier bets in order to diversify
- lazide 4y agoAlso FOMO. Stress makes people have a harder time filtering and looking at the long term.
- bufferoverflow 4y agoIt could be an inflation hedge. You buy a house at a fixed rate, you pay your $5K/mo mortgage for 30 years. Meanwhile inflation makes this $5K less and less in real value. But you can rent it out for more and more.
- pascalxus 4y agoin other words, shorting the dollar. it's the same reason you buy just about any asset that's not bonds or cash AKA real assets. People know, it's only a matter of time before the feds default on the value of the dollar.
- bufferoverflow 4y agoNo, they just slowly devalue it. Though not so slowly in the last couple of years. Default is different, it's an inability to pay debts. They have no problem printing more dollars and paying debts.
- pascalxus 4y agoi mean by having inflation run hot at 5-10% for many years or decades, they're defaulting on their obligation to provide a stable value currency for the people.
- bufferoverflow 4y agoThere's no such obligation. USD purchasing power has been dropping pretty steadily.