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Can you elaborate on the housing part? I guess I would have assumed that people paid market rate in the short term and below market rate long term, assuming the

by tnel77 3y ago

Can you elaborate on the housing part? I guess I would have assumed that people paid market rate in the short term and below market rate long term, assuming they owned a house and were starting to see some benefits from locking in that lower mortgage.

lumost 3y ago
Assuming that in The long term individuals get below market rate housing presumes that A) individuals will eventually be able to afford home ownership B) the local economy is stable enough for them to purchase a house C) interest rates/principal are low enough at the time of purchase for this to be worth the opportunity cost D) Once I purchase a home, I needn’t move or purchase another at market rates. In the post war years the above conditions held for decades leading to relatively steady home ownership rates and ages of first home ownership. However due to the rapidly rising cost of housing since the late 80s home ownership is rapidly changing. Millennials have famously deferred home ownership, while gen z is starting to believe its is simply impossible to acquire. 22%[1] of all housing sales now go to private equity firms. Unlike the stats collection used by the Fed of asking private home owners what they would rent their house for - rental rates are now often the subject of collusion through pricing algorithms[2]. Finally, individuals rarely own a single house forever - this would reduce economic mobility and be problematic in and of itself. When a home owner purchases a new home, they are subject to market pricing. 1. https://www.dwell.com/amp/article/ban-private-equity-single-family-home-housing-shortage-geoff-smith-db8cbca0 https://www.dwell.com/amp/article/ban-private-equity-single-... 2. https://www.businessinsider.com/real-estate-apartment-rent-price-setting-landlords-realpage-lawsuit-illegal-2023-11?amp https://www.businessinsider.com/real-estate-apartment-rent-p...

by tnel77 3y ago

lumost 3y ago

Assuming that in The long term individuals get below market rate housing presumes that A) individuals will eventually be able to afford home ownership B) the local economy is stable enough for them to purchase a house C) interest rates/principal are low enough at the time of purchase for this to be worth the opportunity cost D) Once I purchase a home, I needn’t move or purchase another at market rates. In the post war years the above conditions held for decades leading to relatively steady home ownership rates and ages of first home ownership. However due to the rapidly rising cost of housing since the late 80s home ownership is rapidly changing. Millennials have famously deferred home ownership, while gen z is starting to believe its is simply impossible to acquire. 22%[1] of all housing sales now go to private equity firms. Unlike the stats collection used by the Fed of asking private home owners what they would rent their house for - rental rates are now often the subject of collusion through pricing algorithms[2]. Finally, individuals rarely own a single house forever - this would reduce economic mobility and be problematic in and of itself. When a home owner purchases a new home, they are subject to market pricing. 1. https://www.dwell.com/amp/article/ban-private-equity-single-family-home-housing-shortage-geoff-smith-db8cbca0 https://www.dwell.com/amp/article/ban-private-equity-single-... 2. https://www.businessinsider.com/real-estate-apartment-rent-price-setting-landlords-realpage-lawsuit-illegal-2023-11?amp https://www.businessinsider.com/real-estate-apartment-rent-p...