3 ms·
> People are betting on which of these cases we are in now. Very, very few US homeowners are betting on profiting from home price changes within 10 years. The
by lotsofpulp 2y ago
> People are betting on which of these cases we are in now.
Very, very few US homeowners are betting on profiting from home price changes within 10 years.
They are betting on reducing monthly shelter cost volatility, and the freedom to modify their home, by purchasing a home with a very long fixed rate mortgage and maybe selling after a couple decades.
- jen20 2y agoNote that this is not the same worldwide - for example, in the UK mortgages are typically not fixed rate for a long time, and so interest rates are a much more useful tool for the Bank of England to cause economic pain.
- tossandthrow 2y agocause economic pain -> reduce spending. That is certainly one of the cool things about entering the housing market: Now you are a monetary instrument.
- WheatMillington 2y agoTrue here in New Zealand too, and across most markets in the world outside the US.
- tossandthrow 2y agoI agree, and I was not precise enough. People will tell different stories about them entering into the housing market based on them entering in 2006 and 2009. Someone loosing 15% equity on a geared investment over 10 years are probably not going to say "buying a house was by far the best decision I ever made in my life".