3 ms·

The US contains also huge mcmansion-style houses that are actually only classified to hold a single family. I think if you speculated more for the average perso

The US contains also huge mcmansion-style houses that are actually only classified to hold a single family. I think if you speculated more for the average person, housing is less and less available to them all the time... Although the above poster attributes it to a lack of housing, the actual cause of housing shortage is likely far more complicated. The crash in real estate in 2008 froze construction for over a decade arguably, and also, real estate is considered a commodity/investment as opposed to something like a car. So people plan their financial futures assuming their assets will go up in value, ignoring that this means their assets will by necessity price out their own economic band.

quickthrower2 3y ago
Sweet spot is houses go up by wage inflation. Paying the mortgage off being a big source of the benefit.
Loughla 3y ago
The section about housing being an investment in your comment can't be stressed enough. We were turned down for a mortgage at the first bank we tried because we refused to finance enough to improve the landscaping. The bank wanted to see what the ROI on the home was. We were buying a forever home. Increase in value is someone else's problem after I'm dead. It was. Well. Fascinating.
- lotsofpulp 3y ago
  This is in the USA? I have never heard of anything like that. The bank would just be tasked with handling the paperwork (underwriting) of ensuring it is a conforming loan by getting an appraisal done and verifying your income/assets so they can get paid by the US government (fannie mae/freddie mac/ginnie mae/etc). Not to mention that a lender does not get a piece of the collateral's sale price, so why would they care what improved landscaping would do to the price of the home if and when a homeowner wants to sell it? Your scenario only makes sense if the lender was also getting a piece of the equity.
- userinanother 3y ago
  That’s wacky, I’ve never heard of that in the USA. You mortgage is a commodity that is packaged and sold off within a month or 2. It just need to meet the checklist of requirements and it gets sold off as a CDO or some other financial instrument. The mortgage writer just needs to make sure you meet the checklist and don’t default while they do the transfer.

quickthrower2 3y ago

Sweet spot is houses go up by wage inflation. Paying the mortgage off being a big source of the benefit.

Loughla 3y ago

The section about housing being an investment in your comment can't be stressed enough. We were turned down for a mortgage at the first bank we tried because we refused to finance enough to improve the landscaping. The bank wanted to see what the ROI on the home was. We were buying a forever home. Increase in value is someone else's problem after I'm dead. It was. Well. Fascinating.

lotsofpulp 3y ago
This is in the USA? I have never heard of anything like that. The bank would just be tasked with handling the paperwork (underwriting) of ensuring it is a conforming loan by getting an appraisal done and verifying your income/assets so they can get paid by the US government (fannie mae/freddie mac/ginnie mae/etc). Not to mention that a lender does not get a piece of the collateral's sale price, so why would they care what improved landscaping would do to the price of the home if and when a homeowner wants to sell it? Your scenario only makes sense if the lender was also getting a piece of the equity.
userinanother 3y ago
That’s wacky, I’ve never heard of that in the USA. You mortgage is a commodity that is packaged and sold off within a month or 2. It just need to meet the checklist of requirements and it gets sold off as a CDO or some other financial instrument. The mortgage writer just needs to make sure you meet the checklist and don’t default while they do the transfer.