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A loan which you have to pay back with interest. So unless home prices are rising faster than interest rates, you're losing on that deal
by fallingknife 3y ago
A loan which you have to pay back with interest. So unless home prices are rising faster than interest rates, you're losing on that deal
- epistasis 3y agoOr, you know, you rent out the place. And if you are your own landlord (ie a homeowner) you can pretend your rent is whatever you want, but the market rent is what one should impute as the value of that rent.
- fallingknife 3y agoWhich you can still lose on. Most major markets in the US now rent below cost to own.
- ozr 3y agoYes, but: 1) Historically they have. 2) Most people in the US that haven't purchased very recently are locked in at very low rates. Only 9% of mortgages are over 6%. 61% of outstanding mortages are <4% [0]. 3) There are a lot of incentives (and the ability) for governments to ensure home prices continue to increase, although at a rate lower than they are now. 4) We spent over a year with inflation that is double most people's mortgage rates. 5) You have to live somewhere regardless; the alternative is renting. For most of the country, at least until very recently, that was a worse option. [0] https://apolloacademy.com/the-distribution-of-mortgage-interest-rates-outstanding/ https://apolloacademy.com/the-distribution-of-mortgage-inter...