4 ms·

> taking into consideration that those mortgages were signed when the effective rate was close to zero Most mortgages rates are locked in when you buy the hous

> taking into consideration that those mortgages were signed when the effective rate was close to zero Most mortgages rates are locked in when you buy the house (unless you get an adjustable-rate mortgage, which is only about 9% of applications in the US as of September 2022)[1]. Like my mortgage payment hasn't changed hardly at all since I got it 5 years ago (it went up $100 because I have a PMI, but that's it, and that predated any rate increases). What it's actually caused is it's kind of locked millions of people into their existing mortgages, because they got in while rates were so low, they don't want to buy a new home at the much higher rates (especially considering home prices are still super inflated over the past couple of years), so they're kind of stuck. We kind of wanted to move but didn't buy a new home fast enough during the pandemic (we were looking late 2021, but didn't pull the trigger), so now it just doesn't make sense, the new rates would almost double our current mortgage payments, especially considering we'd have to buy a house at about +50% of our original purchasing cost. Selling our also inflated home will help towards that a bit, but not enough. So now we can't really afford to move, even though we'd like to. [1]: https://www.rocketmortgage.com/learn/40-percent-of-americans-adjustable-rate-mortgage https://www.rocketmortgage.com/learn/40-percent-of-americans...

klipklop 4y ago
Yup. As long as this crowd can keep making their mortgage payments they will never really be motivated to sell and move into a larger home. This will keep inventory low on what used to be called "starter" homes for likely the rest of this (millennial) generation in most US metro areas. If you could not buy into an expensive market then, you likely never will barring some huge windfall like doubling your salary or inheritance. Guessing most of Gen Y will be renting condo's or living with their parents until the homes are passed on to them. A dumpy 3/2 1400-1600 sq ft. in the south bay area is like $8000+/mo with taxes and $360,000 down payment. Good luck.

klipklop 4y ago

Yup. As long as this crowd can keep making their mortgage payments they will never really be motivated to sell and move into a larger home. This will keep inventory low on what used to be called "starter" homes for likely the rest of this (millennial) generation in most US metro areas. If you could not buy into an expensive market then, you likely never will barring some huge windfall like doubling your salary or inheritance. Guessing most of Gen Y will be renting condo's or living with their parents until the homes are passed on to them. A dumpy 3/2 1400-1600 sq ft. in the south bay area is like $8000+/mo with taxes and $360,000 down payment. Good luck.