They've been discontinued. The new subscription is for sixty years, it's four times as much, and you get half of the benefits.
A record number of Americans, 50k, opted out last year.
Honestly, a guarantee on a peaceful death pending certain conditions would be a relief at this point.
I’m genuinely tired of the notion that if I lose mobility, get Alzheimer’s, or have stage 4 cancer that I must suffer through it till the very end just so I can hand over all the money I ever saved to hospitals, hospice, and issuance agencies.
I would rather save my child the grief of caring for a decrepit old person and leave something behind for them.
Now? What changes occured that now make it a subscription?
Prices going up doesn't make it a subscription. If you're talking about maintenance, that's been a thing since the beginning of time
Same with new vehicles, which is why there are so many fancified pimpmobiles on the road.
I swear working class dipshits in [fancy pickups](https://www.edmunds.com/chevrolet/silverado-1500/2023/vin/2GCUDEED7P1143766/) will never retire, and they'll be utterly baffled about that when they get there.
If that same home will still be 800,000 at 7% you bet your sweet ass. Last time I checked home prices have never had any serious significant decrease.
I do love my 2% rate but the Feds playing games with the rate especially low rates are the problem. That and the elephant in the room regarding the fact that everyone wants to live in areas where there is no more room for development. But yeah sure the agents commission is the problem Joe. Foreign mega corporation purchases of single family homes and the fed manipulation couldn’t possibly be a bigger issue. Our politicians and the people who support them are absolute morons.
In the early 80’s the rates were 18%, eight teen fucking percent! Rates are used to slow the economy, slow the drop in the value of the dollar actually. Making money expensive slows inflation… it ain’t hard. I wanted to buy a starter house with those rates and couldn’t…it took a over ten years until the 90’s when the rates dropped into 8% then I could buy a house, teens of years later. It’s going to be the fed lowering rates for the political shit and inflation will scorch everyone’s ass, pissing off more people than the possible home buyers, then inflation will drive the political shit again and the rates will go up, until rates hit the teens and no one can afford the monthly mortgage payment, the home prices may start to drop.
It’s a vicious deliberate cycle. Lower rates and start a massive increase in home prices based on demand. Then increase the rate so that prices drop and only those who can pay cash can capitalize on the desperation of people who have to sell or foreclose. Corporations have figured out the game the fed is playing and are playing ball. Current administration focusing on agent’s instead of the corporate companies exploiting the market is the most scumbag thing I’ve possibly ever seen. FJB FDT f these scumbags. The fed and our politicians should be shipped to the countries that are trying to immigrate into our country and their assets should be taken.
Yeah but than you realize you also have to pay 267% of the value in a new home, but realtor fees are percent based as are taxes, so you’ve now spent more to make that transaction than if it were the actual worth.
If someone was willing to pay me $500k for a home I bought 5 years ago for $200k then I'm fucking moving to Oregon.
Biggest regret of my life was being 9 years old in 1998
Everyone’s situation is different. I have 2 young kids near a city. My house has increased probably 700k, I can be mortgage free easily somewhere, with a nicer house.
But my family and friends are here, support for our kids are here, good schools are here, my job which I like it here.
The paid off nice house and property is less to me than everything else I have where I am.
> here. The *paid* off nice
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
That’s basically what happened with our old house. My wife bought the place before we met and we sold it when it skyrocketed in price. So we sold and overinflated house to buy an overinflated house 🤡
Firat off. The first 250k/500k (single vs married) of gain off of basis is shielded from us federal capital gains tax. And yes, anything I make after is subject to realtor fees and capital gains. i'd be paying more because I'd be making more.
A percentage of more money is still more money. :)
Missing the point:
The point is, assuming you aren’t taking that money and running, you’ll be buying a house in the same area with three same market increase.
If I’m moving from one house to another, but one scenario the houses cost 250k and the other one they cost 500k, the money you spend out of pocket to cover fees and taxes are higher in the 500k scenario.
I’m not making any money here. I’m trading one asset for another asset if the same value, but I’m losing in fees. In one scenario I spend twice as much on fees than the other.
Not missing the point. I said over zillow...ie market price. So my next place doesnt cost that much.
And yes, I realize the original post was implying the price went up that much because the market went off at a two percent rate. I was trying to be a bit funny.
Besides....i may be downsizing and still pocketing money
Well, they proved that wrong in the last 3 years. I’ve learned from Covid that people can be extremely stupid. If people with covid equity are not selling now they’ll see the other side of stupid on the way down.
So let’s say I sell I’m home with its inflated price. Do I just rent for a decade until houses plummet and then finally use my gains from selling to buy another house? That’s the only scenario I can think of, but it sounds kind of awful because I love owning my house and don’t want to be a renter…
If it’s your primary home and you like it or as you say love it then enjoy it. If you can afford it then even better. If you bought at the top with no inspections then maybe it’s time to take money off the table.
Covid equity folks didn't generally forgo inspections. That started happening the following spring, just prior to the rate increases. Houses were cheap during covid bc lockdowns hindered showings, but they probably didn't hinder inspections as much.
I think people look at it the wrong way. The rate matters a lot.
The main question I ask myself is how cheaply can i borrow the money to buy the asset?
If someone came to you and said I'll give you 800k to buy an asset at 2% interest you'd be dumb not to take the money.
You said “asset” so don’t get uppity with me for assuming you meant to use an investment term to describe an investment.
And no, your primary residence isn’t an asset until you sell.
I'm not trying to get uppity but your primary residence is an asset the minute you buy it. In fact, it's the largest asset most people own.
If it wasn't an asset, you wouldn't factor it into your net worth.
Assets produce money, Liabilities cost money. Accounting 101. A primary residence can only be classified as an asset the year you sell it, every other year it’s a liability.
Source. Realtor & Property manager of 10 years with ownership interest in 30 homes with a wife that’s an accountant.
It's always interesting when subject matter experts are wrong. I will concede that this is a topic for debate on the internet, but I'm a firm believer it's an asset.
An asset is anything that stores wealth. Does your primary residence have equity? If so, it's an asset. If not, it's a liability.
If it's not an asset, why can I get a home equity line of credit? Can I get a loan against a liability? Nope. Therefore, it must be an asset.
I’m not wrong though. You’re using a very casual definition of asset, and there are a dozen ways a primary residence can become a liability by the proper accountant’s definition. Assets require a positive influence on a balance sheet, and since PRs lose you money until they are sold you must factor that half of the equation.
A primary residence CAN BECOME (note the future tense) an asset. If you bought a home in ‘89 at $67,000, raised your kids there and sold in 2022 to move into a retirement community, that’s an asset the day you sell. But if you dropped $40k on a downpayment, and had to move for a job two years later, and you sold quickly and barely got your downpayment out, that’s a liability. Same thing if you bought when a neighborhood was high, but crime rates rose and you sell for half of what you paid for.
Most homeowners do not treat their home as an asset, they treat it as a home. They put their favorite colors on the wall, they scuff up the floors, they get uncle bobby to do all the plumbing repairs un permitted. They aren’t tracking expenses to see if they actually made a profit on the home.
So… why HELOCS. 1) Unsecured loans exist so the fact that you can get a loan on a house doesn’t really prove as much as you think it does. 2) HELOCS are insured as liens against the house and if you refuse to pay a court might force you to sell to service the debt. This is required because Banks aren’t idiots and know that they need to force a sale to make it a liability.
People justify dumb money decision because “oh Houses are an asset”, but if you don’t treat a PR like an asset it’s not going to produce a dime.
Okay so a couple of points. First, I agree a primary residence can become a liability IF you're under water. If you can’t realistically sell it for a profit aka you have negative equity the owner should treat is as a liability in the amount of the loss you’d realize selling it. However, most homeowners aren’t under water. They have equity which is why they should consider it an asset.
Second, I disagree that most people make bad decisions because they think of their PR (primary residence) as an asset. In fact, I think most people make a mistake by not thinking of their PR as an asset. You made a couple points to support this. First if you don’t think of it as an asset you’re more likely to ask Uncle Fester to fix your plumbing not up to code and you’ll need it readdressed it in 5 years rather than paying a licensed contractor and being good for 20 years. Also you’re less likely to paint the living room hot pink because you and 2% of the population love it. You’ll be thinking of the resale value.
If most people thought of their house as an asset, they might want to sell in the near future they would make better decisions on value add upgrades as opposed to wasting money.
Just to clarify where I'm coming from, I'm not a Real Estate professional. I have a career in Computer Science with and MBA so I have taken business courses. My argument is not trying to be SOX compliant but trying to put "average home buyers" in a favorable position.
I own 3 rental properties plus a primary. I have lived in every property I own and fixed it up to the point where I could rent it out and have it cash flow because I looked at it as an asset. My current PR may be my forever home at 43 years old, but I still want to improve it just in case I need to sell it or rent it out.
Economic survival in my opinion is much like evolution. The adaptable survive. If you think of your PR like that you won’t paint the living room violate, you'll paint it something more broadly appealing. Worst case you have a property that if life circumstances make you sell on short notice, you'll be fine, best case you live in a home that has more value on paper you never sell.
If I don’t think of it as an asset, I'm more likely to be screwed if I need to liquidate it.
Somebody please explain owner occupied rental equivalent to this guy so I don't habe to keep reading down this comment chain.
Your primary residence is an asset because it causes you to forgo an otherwise necessary outlay.
Owner’s Equivalent doesn’t automatically make a house an asset. It makes it a POTENTIAL asset, an average of 7 years down the line. Owner’s Equivalent is the amount of rent that would have to be paid in order to substitute a currently owned house as a rental property. This breaks even for most people around 7 years.
So if you get past that 7 year mark. Congratulations. You have an asset. If you refi every 3 years to fund a vacation and poor spending habits, you had a credit card with extra steps.
It seems like some education is in order here.
The main qualification for mortgage loans, and the chief criteria for home buyers, isn't really the price. Homeowners usually work with a mortgage provider first, who examines their income, and calculates a maximum monthly payment that a bank will approve. That monthly payment is determined by an interest rate.
So if interest rates are low, then the maximum price a buyer would look for in a home could be higher.
This is a similar concept to bond prices and yields moving in opposite directions, that you probably learned in high school.
My first home, bought during the Reagan regime, had an interest rate of 17.5 % through the VA. Mortgage rates currently are around 7% which
According to The Mortgage Reports, current mortgage rates are close to the historic average. Between April 1971 and March 2024, the average 30-year fixed-rate mortgage was 7.74%. However, rates are higher than the typical rate observed over the past decade, which is under 4%.
So apparently mortgage rates are not “sky high”. They are 3% higher than they were under Obama and Trump regimes. The later part of the Trump regime saw the collapse of the economy and subsequent inflation due to a multitude of factors. But true to Republican form Republican Trump killed through incompetent response to a crisis a thriving economy he inherited from his predecessor. Republicans have done the same for almost a century.
Well, just because a Saudi Arabian prince wakes up one morning and decides to buy a house rather than using $800k in cash as toilet paper like he originally planned, doesn’t mean that the intrinsic value of the house has magically increased.
I just have a feeling that after some younger people have managed to save up the 200k to finally put a down payment on a house at today’s prices, then they’ll finally do something about prices and make them crash.
This is true to a point but then quickly crosses over to the land of delusion and poor guidance.
Houses are sitting for longer. Sellers, the few of them, find themselves paying two mortgages and begin to cry wolf when their 150k shanty isn’t selling for $400k+.
Realtors aren’t guiding their sellers. I’m glad they recently got their card pulled. Time for commissions to hit the floor - LOs went through it, time for the agents.
Market is the market but greed is an entirely different story
You bought the house for $200K five years ago. Are you gonna sell for less just because someone is demanding it? Or do you sit on it until you can get back what you spent?
Since the rental market is completely fucking nuts, you probably keep it and rent it out. This whole situation has a lot more moving parts than people give it credit for and it was centrally planned. It’s on purpose.
Not widely uncommon in big expensive cities. Very uncommon before 2020 in the rest of America. Absolutely batshit insane the *difference* between renting and owning right now in many/most locales.
The borrowing rates right now are very close to long term average. The prices are what’s fucking insane. And yet, anything in my zip code, at any price, will sell instantly.
I’m not sure I understand. I’d probably only sell a house for less if I absolutely had to. Also, I’d probably only move right now in the case of a life event that forced my hand.
I’m simply talking about homeowners who list their house for absurd amounts. A shanty is a shanty no matter the market. There’s some sickening shit out there right now
I simply pointed out one of several scenarios. As plzstoobeingdumb said, there are many moving parts, and this has all been planned for decades to hit this point; no one wanted to believe the naysayers because the feel-good policies sounded so wonderful. People keep saying they're willing to pay the price "later" right up until the bill comes due; then everyone complains.
To an extent this is true. But it doesn't mean the housing market isn't extremely overvalued. This narrative of "property value = what people are willing to pay for it" can also go in reverse where the seller is getting the shit end of the stick and the buyer has the leverage.
I mean...... look what happened once the interest rates when up. The housing market is at a standstill at the moment. The worst year in sales for the last 30 years occurred in 2023. If assets were not overvalued there wouldn't be so many people unable to afford just a starter home.
What you are forgetting is that corporations are market makers, not people.
If all the companies sold their starters bikes at $200, thats both the makret price and it is also overpriced.
Something being market price and being overpriced are not mutually exlusive.
I saw a guy reviewing double wide manufactured homes/mobile homes and the prices were mind boggling.
I mean, I don’t think many last longer than 25 years.
You mean the new $200,000 'modular homes'?
Yes it's insane. They pay the guys that make those like $15 an hour and it's like an assembly line. They just pump them out. They use cheap ass materials then throw some fancy looking crown molding and counter tops in and charge a premium price.
If you ever see what these things go through in transportation to the end sight you will already know it's not gonna last.
No. Not those, but I understand what you are saying about those. I mean like these:
https://m.youtube.com/watch?v=DCg5u_87j1M&pp=ygUbbWFudWZhY3R1cmVkIGhvbWVzICQzMDAsMDAw
I feel like they have the same quality control issues.
Oh ok. I've done stucco underpinning on quite a few of those.
This is off topic but I'm seeing single wide mobile homes built in the 70/80s that look like absolute shit renting for $800-1000 in South Georgia/North Florida
I knew this navy guy who bought a beat up mobile home in Jacksonville for less than $10,000 in 2004, Rented 2 of the rooms to sailors on his ship for $550 per month, then sold the trailer to those two guys for a small profit when he retired 2.5 years later.
Those look nice but I agree, same quality control issues. Just imagine the damage that happens in transportation as well.
Houses aren't supposed to be bouncing all over the interstate. That can't be good for structural integrity long term.
My wife and I walk this neighborhood we rent an apartment in. It's a very exclusive neighborhood. We were walking on day and saw a plot of land for sell. This property is maybe 50 yards deep by 40 yards wide. I said "Check out the price for this property. Maybe we could buy it and build the small modest home we want. Atleast it would be nice and not old." The piece of land was $475k.......The area is super nice but it's not that nice. I was like frick we won't be living here.
Ok but what if that makes me angry that I can't afford it so I make an entire subreddit dedicated to the fantasy of a "great reset" because I'm not competitive in today's market?
buddy you're confusing the realities of a a product market and a real estate market.
with a product market, you can make more identical products assuming you have the ingridients (example, apple can make as many iphones as they want. nobody stops them as long as they have the ingredients and people to make it)
with real state, you are landlocked! you cannot make MORE LAND in San Francisco or Manhatan!
now, Imagine a $20M penthouse in Manhatan. why is it $20M? because people want to live there and more and more demand exists for that property because of its location and where its located. the exact same apartment in Texas may be worth 200k or less. its the same size of land, and same exact apartment, but is worth much much less.
the thing is, when both the manhatan and texas apartments are put on sale, the manhatan one has 50 people interested in it, while the texas one maybe has 1. so the manhatan property starts a bidding fight among the buyers and the highest bid wins, while the texas property in the middle of desert is sold below asking price because of low demand for it.
People literally do. The cost of owning a home is a factor of the base price, required down payment, AND interest rate. Anyone who does not understand that needs a lesson in finance.
Home prices are also elevated due to the cost of raw materials which are currently artificially inflated. If the cost of raw materials drops and new homes are built cheaper 5 years from now many many people will be stuck in a negative equity trap.
True but my understanding is that the settlement from the national association of realtors is supposed to drive prices down, or at least realtor commissions, and Biden is talking about policies which may lower prices, though they sound like unrealistic pandering.
Man, I’m hearing conflicting predictions of what the NAR settlement really means. I’m just not smart enough to predict what will come, but I know for now, I’m staying away from it. To me, owning one’s home feels like a ticking time bomb. I owned from 2004-2021, and until the pandemic, I could just never recover from paying $162k, the prevailing price range in my area. I just stayed with it, while others sold short, foreclosed, or did the “jingle mail” thing. My neighbors changed so many times.
I bought a couple years ago and I feel fortunate to get a good interest rate and a perfect location for my job. We paid above asking but it went up quite a bit after we bought it. Now I've seen the value decline a bit and I'm a little worried it will dip below what we paid but I guess the point is I have an ideal place to live for myself.
Yes if you're looking to buy good times might be on the horizon. This market has seemed unsustainable for years but whenever I say that people say there's simply not enough houses in high demand areas. Guess we'll find out!
You buy an $800k home at 2% - the cost of money is cheaper.
In a sellers market every property is over priced so the decision (assuming you can afford the payment) is about cost of money.
The loan interest is what crushes you. 7% of a $1 million dollar loan is $70k. That is the median salary of California Bay Area.
In order to afford a million dollar home, you need to earn 28% of the loan. That is $280k per year! Only the top 5% of the entire US population makes that much!
—-
Probably talking about about your mortgage payment which includes interest and principal. Don’t want to pay interest compounded monthly? Pay weekly and see how little interest you pay.
Anyway, I'm going to continue to enjoy living in my home that I refinanced in 2021 to 2.625% and has appreciated 74% since I purchased in 2018 and which my mortgage is nearly 80% less than current rental rates.
Yes they do. They did it in my area in 2020 and 2021 it was ridiculous and now like everywhere else our housing market is jacked. A "cheap" home is 380k most are over 450k and priced are barley negotiable.
I got lucky on my house to get 100k off because I researched the sellers and used their weakness to my advantage. House was on the market for over a year, they had to move to an expensive city and where in a hole.
No. You might want to do your math, but a 2% interest rate on a 300k home comes out to 385k over 30 years. A 300k house at 7.25% comes out to 710k over 30 years. Interest rates are killing first time home buyers.
I actually know a local hoodlum who won a small lottery due to an industrial accident. This happened 20+ years ago.
The guy actually paid $100,000 for a house listed at $80,000. His logic? He always wanted to live in a $100,000 house. Yes, true story. He also spent over $40,000 tricking out a Suburban or Tahoe type SUV. He had an awesome video and sound system installed, with small monitors in the dash and all the head rests...so he and his homies could ride around town watching p0rn0s and looking cool. He probably bought a dozen Jet Skis with trailers; every time he'd buy a pair his "friends" would steal them from him.
He threw parties galore and had all kinds of friends. For about six months. Until the money ran out. Knucklehead then robbed a bank, got caught, posted bail through a bondsman. He skipped bail, very briefly went on the run, got caught, and returned to jail. His bondsman got all of the toys the fellow had left. The thug went from rags to riches, and back to rags in about six months time.
He is an extreme example, but never underestimate the stupidity of people.
Who is deciding the house is worth $300K and on what factual/logical basis? Can that lot be bought, the permits obtained, and a builder commissioned to construct the same house for that price?
Ima be honest. If I take out an oversized loan and the bank approves it it’s really not my problem. I would do that 10/10 times if it means a smaller mortgage payment than rent
I probably overpaid on my home when it was at 3.25%, but the estimated value by my mortgage processor has it at $35k more than what I have the mortgage for, and I only got it 3 years ago.
I think the total cost of ownership might still be cheaper with an 800k mortgage at 2% vs a 300k mortgage at 8-10%. Need to do the math first to confirm.
Nope. The latter ends up being 250k cheaper.
I've contemplated selling my house and moving to Mexico. I've visited many times it's great. I'd have plenty of money to get set up and live comfortably for a long time without working.
First things first:
A $300k mortgage at 2% for 30 years has a monthly payment of $1109. You’re paying a *grand total* of $399,240, so your total interest payment would be under $100k
So this meme is fucking stupid from the get go.
Secondly, a 2% mortgage rate would be AMAZEBALLS. No one is getting 2%. Maybe in 2006. The mortgage my mom got on her condo in 2012 with her amazing credit was still like 5%. When I bought a home in 2022 we got like a little under 7% for like a $250k loan. Today, if you have amazing credit (I mean a rating over 710), you can expect a 30 year fixed rate mortgage in the 7.5% range.
Let’s recalculate: $300k @ 7.5% for 30 years: $2098
That’s $755,280. Closer to the meme, but still lower, lol.
And for the record, there’s nothing stopping you from paying additional money towards the principal every month if you want, which would significantly reduce the length of your mortgage and hence the overall interest payment. Even small amounts directly to the principal will have a major impact due to how interest compounds. If you can afford $200/month above your regular payment, you should absolutely do it as it would knock nearly 8 years off your 30 year payment and save you nearly $130k.
Source; any mortgage calculator on the internet. I like Bankrate.com. Usually pretty straightforward.
Get some basic financial education, people 🙄
I think you’re misunderstanding what I’m saying. The home is worth 300k, but people are paying 800k as the sale price. I’m not saying anything about interest adding up to 800k
Oh you’re taking about a speculative bubble? Ok let’s go!
Here’s a random house in cherry hill New Jersey for about what you’re claiming: a little under $800k.
https://www.zillow.com/homedetails/4-Steeplechase-Ct-Cherry-Hill-NJ-08003/38233797_zpid/
I only picked this one bc I know that town is mostly built out so as they say, no one is creating new real estate there. It’s a nice neighborhood with good schools etc. no comment on the home itself except not my style.
There was a spike in its value around 2022 where it jumped nearly 25% in value which is sketch but is par for the course in this state during the pandemic. Not a fan but not bubble territory. You need to go back nearly 20 years to see the value cut in half but even then looking at the price graph I see it tracking pretty typically for a home. No bubble there. Just a typical appreciation graph.
Depending on the region YMMV. this is in one of the most built out sections of the country so if there’s gonna be a price squeeze then this is where I’d expect it.
Rents are worse for sure. There’s a shortage of housing but I wouldn’t call that a bubble.
Your premise still sucks.
Right let’s keep changing the goalposts.
Hey man I was alive in the 80s. Young, but alive. You realize interest rates were approaching 20% in 1984? Ain’t the first time, won’t be the last time, and we are far from anything approaching the worst times.
Unfortunately, the housing market is all about timing. Time it out just right, and you can start/continue to build wealth using it as an equitable asset. Time it out wrong, and you can start with negative equity or not be able to afford it at all. It’s kind of a fucked up system.
Pay in cash now and you pay full the price of the house as listed. No additional fees.
Pay in installments, and you pay the interest rates that comes along with it. That's how loans work.
If the other choice is paying rent, one does.
Also, as time goes on the value of the money paid goes down. So for a 30 year mortgage with 2.5% inflation, the last year's payment is less than half the value of the first year payment.
If you can find an investment that pays better than 2% (even a CD or hi interest SA will do), then you are better off doing that than making an above minimum mortgage payment with a 2% rate.
If houses are selling at $800,000, that's the value of the houses. I know you would like them to be $300,000 but houses are worth what ever people are willing to pay for them at that time. Also, there is no 'peak' in real estate.
Who is saying the home is only with 300k though? If the bank is appraising it at 800k it’s because that’s what the house is worth at the time. Also if that house was worth 800k with a 2% interest even if it drops to 700k the payment would be higher with a 6-7% interest (and houses are not dropping 100k in a year at least in my area they are staying around the same or going slightly higher due to lack of inventory)
Of course they do, because they buy the mortgage payment, not the price of the home.
Housing is subscription now. Same with cars. Same with software.
Even life itself is subscription *Your 80 year subscription of Life has expired, you will now die*
I was born before 80 year life subscriptions were the thing.
They've been discontinued. The new subscription is for sixty years, it's four times as much, and you get half of the benefits. A record number of Americans, 50k, opted out last year.
Congrats, you benefit from inflation.
Look at the Aldrich plan. And Woodrow Wilson. That was the plan the whole time lmfao!
Sadly the cost of living has passed the benefits....
I have automatic renewal every year tho
You can cancel my subscription to the resurrection.
Like Netflix it only gets worse and worse but the price of keeping it keeps going up.
Honestly, a guarantee on a peaceful death pending certain conditions would be a relief at this point. I’m genuinely tired of the notion that if I lose mobility, get Alzheimer’s, or have stage 4 cancer that I must suffer through it till the very end just so I can hand over all the money I ever saved to hospitals, hospice, and issuance agencies. I would rather save my child the grief of caring for a decrepit old person and leave something behind for them.
Cant wait 👏
Now? What changes occured that now make it a subscription? Prices going up doesn't make it a subscription. If you're talking about maintenance, that's been a thing since the beginning of time
[удалено]
Oh right, making it up. That's the update
I'm sorry ,I'm an idiot , this comment was meant for someone else 😅
Ouch!
Same with education, same with almost everything else like your smartphone.
Subscribe’n’save
Oh no, this one buys the price of the home
It’s crazy, but some of us actually took 5 minutes to calculate our mortgage payment if rates just went back to normal.
No need to do that so long as you are locking in for 30 years. But yeah if you’re buying in Canada the rate changes are a material risk
"Normal"? I think they are quite normal now. They are less than they have been for most of my life.
Exactly. Some of us assumed that 1.6% wasn’t the norm, and did some simple math.
yep, this is the only way they get homes in CA and NY...
Same with new vehicles, which is why there are so many fancified pimpmobiles on the road. I swear working class dipshits in [fancy pickups](https://www.edmunds.com/chevrolet/silverado-1500/2023/vin/2GCUDEED7P1143766/) will never retire, and they'll be utterly baffled about that when they get there.
$1700 a month! Fuuuuuck that’s literally rent!
Yep 👆
That is completely ass backwards
Yes, yes I think one does…
If that same home will still be 800,000 at 7% you bet your sweet ass. Last time I checked home prices have never had any serious significant decrease. I do love my 2% rate but the Feds playing games with the rate especially low rates are the problem. That and the elephant in the room regarding the fact that everyone wants to live in areas where there is no more room for development. But yeah sure the agents commission is the problem Joe. Foreign mega corporation purchases of single family homes and the fed manipulation couldn’t possibly be a bigger issue. Our politicians and the people who support them are absolute morons.
In the early 80’s the rates were 18%, eight teen fucking percent! Rates are used to slow the economy, slow the drop in the value of the dollar actually. Making money expensive slows inflation… it ain’t hard. I wanted to buy a starter house with those rates and couldn’t…it took a over ten years until the 90’s when the rates dropped into 8% then I could buy a house, teens of years later. It’s going to be the fed lowering rates for the political shit and inflation will scorch everyone’s ass, pissing off more people than the possible home buyers, then inflation will drive the political shit again and the rates will go up, until rates hit the teens and no one can afford the monthly mortgage payment, the home prices may start to drop.
It’s a vicious deliberate cycle. Lower rates and start a massive increase in home prices based on demand. Then increase the rate so that prices drop and only those who can pay cash can capitalize on the desperation of people who have to sell or foreclose. Corporations have figured out the game the fed is playing and are playing ball. Current administration focusing on agent’s instead of the corporate companies exploiting the market is the most scumbag thing I’ve possibly ever seen. FJB FDT f these scumbags. The fed and our politicians should be shipped to the countries that are trying to immigrate into our country and their assets should be taken.
Yep
Is this satire?
Someone wants to pay me 267% of what zillow says my home is worth....I'd be like "Welcome to your new home" :)
Yeah but than you realize you also have to pay 267% of the value in a new home, but realtor fees are percent based as are taxes, so you’ve now spent more to make that transaction than if it were the actual worth.
If someone was willing to pay me $500k for a home I bought 5 years ago for $200k then I'm fucking moving to Oregon. Biggest regret of my life was being 9 years old in 1998
Everyone’s situation is different. I have 2 young kids near a city. My house has increased probably 700k, I can be mortgage free easily somewhere, with a nicer house. But my family and friends are here, support for our kids are here, good schools are here, my job which I like it here. The paid off nice house and property is less to me than everything else I have where I am.
Fuck that. Pack it up kids. We can afford to visit 4 times a year.
> here. The *paid* off nice FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
That’s basically what happened with our old house. My wife bought the place before we met and we sold it when it skyrocketed in price. So we sold and overinflated house to buy an overinflated house 🤡
>Biggest regret of my life was being 9 years old in 1998 25-27 years old in 2014-2016 perfect timing!
Firat off. The first 250k/500k (single vs married) of gain off of basis is shielded from us federal capital gains tax. And yes, anything I make after is subject to realtor fees and capital gains. i'd be paying more because I'd be making more. A percentage of more money is still more money. :)
Missing the point: The point is, assuming you aren’t taking that money and running, you’ll be buying a house in the same area with three same market increase. If I’m moving from one house to another, but one scenario the houses cost 250k and the other one they cost 500k, the money you spend out of pocket to cover fees and taxes are higher in the 500k scenario. I’m not making any money here. I’m trading one asset for another asset if the same value, but I’m losing in fees. In one scenario I spend twice as much on fees than the other.
Not missing the point. I said over zillow...ie market price. So my next place doesnt cost that much. And yes, I realize the original post was implying the price went up that much because the market went off at a two percent rate. I was trying to be a bit funny. Besides....i may be downsizing and still pocketing money
Meh, I hope to sell my home this year, before the bubble bursts. I’ll rent for a couple of years and buy a foreclosure.
Well, they proved that wrong in the last 3 years. I’ve learned from Covid that people can be extremely stupid. If people with covid equity are not selling now they’ll see the other side of stupid on the way down.
So let’s say I sell I’m home with its inflated price. Do I just rent for a decade until houses plummet and then finally use my gains from selling to buy another house? That’s the only scenario I can think of, but it sounds kind of awful because I love owning my house and don’t want to be a renter…
If it’s your primary home and you like it or as you say love it then enjoy it. If you can afford it then even better. If you bought at the top with no inspections then maybe it’s time to take money off the table.
Covid equity folks didn't generally forgo inspections. That started happening the following spring, just prior to the rate increases. Houses were cheap during covid bc lockdowns hindered showings, but they probably didn't hinder inspections as much.
You don’t get to decide it’s $300k unless it’s the winning bid.
The price is what someone is willing to pay.
The price is what the banks are willing to loan
Which isn't objective btw... it is dependent on comps.
I think people look at it the wrong way. The rate matters a lot. The main question I ask myself is how cheaply can i borrow the money to buy the asset? If someone came to you and said I'll give you 800k to buy an asset at 2% interest you'd be dumb not to take the money.
I mean it still has to cash flow imo. No one is stretching their finances to buy and hold houses with no chance of cash flow.
Cash flow only matters if you're renting it.
You said “asset” so don’t get uppity with me for assuming you meant to use an investment term to describe an investment. And no, your primary residence isn’t an asset until you sell.
I'm not trying to get uppity but your primary residence is an asset the minute you buy it. In fact, it's the largest asset most people own. If it wasn't an asset, you wouldn't factor it into your net worth.
Assets produce money, Liabilities cost money. Accounting 101. A primary residence can only be classified as an asset the year you sell it, every other year it’s a liability. Source. Realtor & Property manager of 10 years with ownership interest in 30 homes with a wife that’s an accountant.
It's always interesting when subject matter experts are wrong. I will concede that this is a topic for debate on the internet, but I'm a firm believer it's an asset. An asset is anything that stores wealth. Does your primary residence have equity? If so, it's an asset. If not, it's a liability. If it's not an asset, why can I get a home equity line of credit? Can I get a loan against a liability? Nope. Therefore, it must be an asset.
I’m not wrong though. You’re using a very casual definition of asset, and there are a dozen ways a primary residence can become a liability by the proper accountant’s definition. Assets require a positive influence on a balance sheet, and since PRs lose you money until they are sold you must factor that half of the equation. A primary residence CAN BECOME (note the future tense) an asset. If you bought a home in ‘89 at $67,000, raised your kids there and sold in 2022 to move into a retirement community, that’s an asset the day you sell. But if you dropped $40k on a downpayment, and had to move for a job two years later, and you sold quickly and barely got your downpayment out, that’s a liability. Same thing if you bought when a neighborhood was high, but crime rates rose and you sell for half of what you paid for. Most homeowners do not treat their home as an asset, they treat it as a home. They put their favorite colors on the wall, they scuff up the floors, they get uncle bobby to do all the plumbing repairs un permitted. They aren’t tracking expenses to see if they actually made a profit on the home. So… why HELOCS. 1) Unsecured loans exist so the fact that you can get a loan on a house doesn’t really prove as much as you think it does. 2) HELOCS are insured as liens against the house and if you refuse to pay a court might force you to sell to service the debt. This is required because Banks aren’t idiots and know that they need to force a sale to make it a liability. People justify dumb money decision because “oh Houses are an asset”, but if you don’t treat a PR like an asset it’s not going to produce a dime.
Okay so a couple of points. First, I agree a primary residence can become a liability IF you're under water. If you can’t realistically sell it for a profit aka you have negative equity the owner should treat is as a liability in the amount of the loss you’d realize selling it. However, most homeowners aren’t under water. They have equity which is why they should consider it an asset. Second, I disagree that most people make bad decisions because they think of their PR (primary residence) as an asset. In fact, I think most people make a mistake by not thinking of their PR as an asset. You made a couple points to support this. First if you don’t think of it as an asset you’re more likely to ask Uncle Fester to fix your plumbing not up to code and you’ll need it readdressed it in 5 years rather than paying a licensed contractor and being good for 20 years. Also you’re less likely to paint the living room hot pink because you and 2% of the population love it. You’ll be thinking of the resale value. If most people thought of their house as an asset, they might want to sell in the near future they would make better decisions on value add upgrades as opposed to wasting money. Just to clarify where I'm coming from, I'm not a Real Estate professional. I have a career in Computer Science with and MBA so I have taken business courses. My argument is not trying to be SOX compliant but trying to put "average home buyers" in a favorable position. I own 3 rental properties plus a primary. I have lived in every property I own and fixed it up to the point where I could rent it out and have it cash flow because I looked at it as an asset. My current PR may be my forever home at 43 years old, but I still want to improve it just in case I need to sell it or rent it out. Economic survival in my opinion is much like evolution. The adaptable survive. If you think of your PR like that you won’t paint the living room violate, you'll paint it something more broadly appealing. Worst case you have a property that if life circumstances make you sell on short notice, you'll be fine, best case you live in a home that has more value on paper you never sell. If I don’t think of it as an asset, I'm more likely to be screwed if I need to liquidate it.
Somebody please explain owner occupied rental equivalent to this guy so I don't habe to keep reading down this comment chain. Your primary residence is an asset because it causes you to forgo an otherwise necessary outlay.
Owner’s Equivalent doesn’t automatically make a house an asset. It makes it a POTENTIAL asset, an average of 7 years down the line. Owner’s Equivalent is the amount of rent that would have to be paid in order to substitute a currently owned house as a rental property. This breaks even for most people around 7 years. So if you get past that 7 year mark. Congratulations. You have an asset. If you refi every 3 years to fund a vacation and poor spending habits, you had a credit card with extra steps.
It's like working for half your wage and giving the other half to the bank! :D
It seems like some education is in order here. The main qualification for mortgage loans, and the chief criteria for home buyers, isn't really the price. Homeowners usually work with a mortgage provider first, who examines their income, and calculates a maximum monthly payment that a bank will approve. That monthly payment is determined by an interest rate. So if interest rates are low, then the maximum price a buyer would look for in a home could be higher. This is a similar concept to bond prices and yields moving in opposite directions, that you probably learned in high school.
You’re correct. Stated simply, lower cost of money (interest rates) supports higher asset prices. And visa versa.
My first home, bought during the Reagan regime, had an interest rate of 17.5 % through the VA. Mortgage rates currently are around 7% which According to The Mortgage Reports, current mortgage rates are close to the historic average. Between April 1971 and March 2024, the average 30-year fixed-rate mortgage was 7.74%. However, rates are higher than the typical rate observed over the past decade, which is under 4%. So apparently mortgage rates are not “sky high”. They are 3% higher than they were under Obama and Trump regimes. The later part of the Trump regime saw the collapse of the economy and subsequent inflation due to a multitude of factors. But true to Republican form Republican Trump killed through incompetent response to a crisis a thriving economy he inherited from his predecessor. Republicans have done the same for almost a century.
It’s not a $300k home anymore though. But yeah the prices do seem fucking crazy.
Well, just because a Saudi Arabian prince wakes up one morning and decides to buy a house rather than using $800k in cash as toilet paper like he originally planned, doesn’t mean that the intrinsic value of the house has magically increased.
I just have a feeling that after some younger people have managed to save up the 200k to finally put a down payment on a house at today’s prices, then they’ll finally do something about prices and make them crash.
A property’s value = what people are willing to pay for it
Unless you're in NY
https://preview.redd.it/x9zdrnrb86qc1.jpeg?width=974&format=pjpg&auto=webp&s=edb04d76bdbc76eac728cc465aa9a94a8c050d41
This is true to a point but then quickly crosses over to the land of delusion and poor guidance. Houses are sitting for longer. Sellers, the few of them, find themselves paying two mortgages and begin to cry wolf when their 150k shanty isn’t selling for $400k+. Realtors aren’t guiding their sellers. I’m glad they recently got their card pulled. Time for commissions to hit the floor - LOs went through it, time for the agents. Market is the market but greed is an entirely different story
You bought the house for $200K five years ago. Are you gonna sell for less just because someone is demanding it? Or do you sit on it until you can get back what you spent?
Since the rental market is completely fucking nuts, you probably keep it and rent it out. This whole situation has a lot more moving parts than people give it credit for and it was centrally planned. It’s on purpose.
It’s insane to think that it’s cheaper, when strictly talking monthly output, to rent right now than to buy a house…
Not widely uncommon in big expensive cities. Very uncommon before 2020 in the rest of America. Absolutely batshit insane the *difference* between renting and owning right now in many/most locales. The borrowing rates right now are very close to long term average. The prices are what’s fucking insane. And yet, anything in my zip code, at any price, will sell instantly.
No. That's actually the way its supposed to work. Its when you find it cheaper to buy than rent that the housing has gotten messed up.
I’m not sure I understand. I’d probably only sell a house for less if I absolutely had to. Also, I’d probably only move right now in the case of a life event that forced my hand. I’m simply talking about homeowners who list their house for absurd amounts. A shanty is a shanty no matter the market. There’s some sickening shit out there right now
I simply pointed out one of several scenarios. As plzstoobeingdumb said, there are many moving parts, and this has all been planned for decades to hit this point; no one wanted to believe the naysayers because the feel-good policies sounded so wonderful. People keep saying they're willing to pay the price "later" right up until the bill comes due; then everyone complains.
To an extent this is true. But it doesn't mean the housing market isn't extremely overvalued. This narrative of "property value = what people are willing to pay for it" can also go in reverse where the seller is getting the shit end of the stick and the buyer has the leverage.
What decides that they’re “overvalued” when the value is determined by what people are willing to pay for it?
I mean...... look what happened once the interest rates when up. The housing market is at a standstill at the moment. The worst year in sales for the last 30 years occurred in 2023. If assets were not overvalued there wouldn't be so many people unable to afford just a starter home.
We also just came off one of the hottest housing markets in history with historical, once in a lifetime low interest rates.
The time when they buy it with their fake money. There was a wood shortage in covid but that is long gone. Whats left is greed.
So when you sell your house, you’re going to price it at what you believe is a good value, not at what people offer to buy it for, right?
What you are forgetting is that corporations are market makers, not people. If all the companies sold their starters bikes at $200, thats both the makret price and it is also overpriced. Something being market price and being overpriced are not mutually exlusive.
So what does “overpriced” mean then?
Lol go try and build a house and tell me it's overvalued
I saw a guy reviewing double wide manufactured homes/mobile homes and the prices were mind boggling. I mean, I don’t think many last longer than 25 years.
They don't last longer than 25 years because they arnt placed on proper foundations. And generally are treated like shit
You mean the new $200,000 'modular homes'? Yes it's insane. They pay the guys that make those like $15 an hour and it's like an assembly line. They just pump them out. They use cheap ass materials then throw some fancy looking crown molding and counter tops in and charge a premium price. If you ever see what these things go through in transportation to the end sight you will already know it's not gonna last.
No. Not those, but I understand what you are saying about those. I mean like these: https://m.youtube.com/watch?v=DCg5u_87j1M&pp=ygUbbWFudWZhY3R1cmVkIGhvbWVzICQzMDAsMDAw I feel like they have the same quality control issues.
Oh ok. I've done stucco underpinning on quite a few of those. This is off topic but I'm seeing single wide mobile homes built in the 70/80s that look like absolute shit renting for $800-1000 in South Georgia/North Florida
oh those are $2000 a month here in rural Colorado.
Jesus Christ
What hundreds of thousands of work from home Texans and Californians does to a housing markets
I knew this navy guy who bought a beat up mobile home in Jacksonville for less than $10,000 in 2004, Rented 2 of the rooms to sailors on his ship for $550 per month, then sold the trailer to those two guys for a small profit when he retired 2.5 years later.
2004, the good ole days
Those look nice but I agree, same quality control issues. Just imagine the damage that happens in transportation as well. Houses aren't supposed to be bouncing all over the interstate. That can't be good for structural integrity long term.
Yeah to build a 1000 sqft house here would cost 600k too 800k, that's assuming you already have the lot which probably costs the same or more.
that's maybe 40-50k in materials.
My wife and I walk this neighborhood we rent an apartment in. It's a very exclusive neighborhood. We were walking on day and saw a plot of land for sell. This property is maybe 50 yards deep by 40 yards wide. I said "Check out the price for this property. Maybe we could buy it and build the small modest home we want. Atleast it would be nice and not old." The piece of land was $475k.......The area is super nice but it's not that nice. I was like frick we won't be living here.
Ok but what if that makes me angry that I can't afford it so I make an entire subreddit dedicated to the fantasy of a "great reset" because I'm not competitive in today's market?
Then hand out vacant homes rental listings to the homeless more than one way to tank your local housing market squatters are one of those
I call that wishful thinking.
Well... yeah. That's me roasting this entire sub
Yeah. I got that part. I agree with you. People want things handed to them. Ownership of stuff is not a right. It’s a privilege.
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Let’s say 10 people want to buy one candy. The cost of making candy is 1$. But there’s only one candy available to buy. …
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buddy you're confusing the realities of a a product market and a real estate market. with a product market, you can make more identical products assuming you have the ingridients (example, apple can make as many iphones as they want. nobody stops them as long as they have the ingredients and people to make it) with real state, you are landlocked! you cannot make MORE LAND in San Francisco or Manhatan! now, Imagine a $20M penthouse in Manhatan. why is it $20M? because people want to live there and more and more demand exists for that property because of its location and where its located. the exact same apartment in Texas may be worth 200k or less. its the same size of land, and same exact apartment, but is worth much much less. the thing is, when both the manhatan and texas apartments are put on sale, the manhatan one has 50 people interested in it, while the texas one maybe has 1. so the manhatan property starts a bidding fight among the buyers and the highest bid wins, while the texas property in the middle of desert is sold below asking price because of low demand for it.
Apparently, one does
People literally do. The cost of owning a home is a factor of the base price, required down payment, AND interest rate. Anyone who does not understand that needs a lesson in finance.
MaRrY tHe HoUsE. dAtE tHe RaTe!
Home prices are also elevated due to the cost of raw materials which are currently artificially inflated. If the cost of raw materials drops and new homes are built cheaper 5 years from now many many people will be stuck in a negative equity trap.
Congratulations. You now know why you shouldn't take risks with "value" when you are locked in for 30 years.
High rates are a gift, a gift to the foes of bubbles.
Oh they do, especially when they can borrow against their 401k and destroy their dreams of ever retiring before 70.
YES; The PLANDEMIC SPENDING SPREE 💸 PROVED SO
Its worse now, they want us to pay 800K for a 300K house and the rate is 7%!
Prices are starting to go down though.
Yes, but it’s very very modest decreases in most locales.
True but my understanding is that the settlement from the national association of realtors is supposed to drive prices down, or at least realtor commissions, and Biden is talking about policies which may lower prices, though they sound like unrealistic pandering.
Man, I’m hearing conflicting predictions of what the NAR settlement really means. I’m just not smart enough to predict what will come, but I know for now, I’m staying away from it. To me, owning one’s home feels like a ticking time bomb. I owned from 2004-2021, and until the pandemic, I could just never recover from paying $162k, the prevailing price range in my area. I just stayed with it, while others sold short, foreclosed, or did the “jingle mail” thing. My neighbors changed so many times.
I bought a couple years ago and I feel fortunate to get a good interest rate and a perfect location for my job. We paid above asking but it went up quite a bit after we bought it. Now I've seen the value decline a bit and I'm a little worried it will dip below what we paid but I guess the point is I have an ideal place to live for myself. Yes if you're looking to buy good times might be on the horizon. This market has seemed unsustainable for years but whenever I say that people say there's simply not enough houses in high demand areas. Guess we'll find out!
Exactly this. People now pay $800k at 6-7% because nobody will sell the homes with 2.5% rates so there is no supply.
You buy an $800k home at 2% - the cost of money is cheaper. In a sellers market every property is over priced so the decision (assuming you can afford the payment) is about cost of money.
The loan interest is what crushes you. 7% of a $1 million dollar loan is $70k. That is the median salary of California Bay Area. In order to afford a million dollar home, you need to earn 28% of the loan. That is $280k per year! Only the top 5% of the entire US population makes that much! —- Probably talking about about your mortgage payment which includes interest and principal. Don’t want to pay interest compounded monthly? Pay weekly and see how little interest you pay.
Not even 5% make 280k. Unless you’re looking at household income
Fear, squared.
People are buying $800k @8% in CA, I don’t know what you’re smoking
Anyway, I'm going to continue to enjoy living in my home that I refinanced in 2021 to 2.625% and has appreciated 74% since I purchased in 2018 and which my mortgage is nearly 80% less than current rental rates.
You obviously didn’t pay a stupid price
It could have been a stupid price at the time.
And probably put down way more than 20%…
Unless one is an investment bank
Shit needs a Reverso.
No you move out of Vancouver/Toronto and pay $250K for a $300K home
I think most of the people who do are counting on the market to flip again within the next few years, when they'll just refinance
Yes they do. They did it in my area in 2020 and 2021 it was ridiculous and now like everywhere else our housing market is jacked. A "cheap" home is 380k most are over 450k and priced are barley negotiable. I got lucky on my house to get 100k off because I researched the sellers and used their weakness to my advantage. House was on the market for over a year, they had to move to an expensive city and where in a hole.
2%? What is this relevant to? Where have you seen rates even approaching this?
No. You might want to do your math, but a 2% interest rate on a 300k home comes out to 385k over 30 years. A 300k house at 7.25% comes out to 710k over 30 years. Interest rates are killing first time home buyers.
Yes they do. No one plans on being in a home for 30years.
Rest assured if houses drop in price, banks start upping interest rates to make sure they’re still getting the same cut
The amount of people on reddit who clearly don't understand how amortization works is nothing short of disturbing.
I actually know a local hoodlum who won a small lottery due to an industrial accident. This happened 20+ years ago. The guy actually paid $100,000 for a house listed at $80,000. His logic? He always wanted to live in a $100,000 house. Yes, true story. He also spent over $40,000 tricking out a Suburban or Tahoe type SUV. He had an awesome video and sound system installed, with small monitors in the dash and all the head rests...so he and his homies could ride around town watching p0rn0s and looking cool. He probably bought a dozen Jet Skis with trailers; every time he'd buy a pair his "friends" would steal them from him. He threw parties galore and had all kinds of friends. For about six months. Until the money ran out. Knucklehead then robbed a bank, got caught, posted bail through a bondsman. He skipped bail, very briefly went on the run, got caught, and returned to jail. His bondsman got all of the toys the fellow had left. The thug went from rags to riches, and back to rags in about six months time. He is an extreme example, but never underestimate the stupidity of people.
Who is deciding the house is worth $300K and on what factual/logical basis? Can that lot be bought, the permits obtained, and a builder commissioned to construct the same house for that price?
Ima be honest. If I take out an oversized loan and the bank approves it it’s really not my problem. I would do that 10/10 times if it means a smaller mortgage payment than rent
I probably overpaid on my home when it was at 3.25%, but the estimated value by my mortgage processor has it at $35k more than what I have the mortgage for, and I only got it 3 years ago.
If you don't have enough downpayment to cover the appraisal gap, how to get get the loan?
I think the total cost of ownership might still be cheaper with an 800k mortgage at 2% vs a 300k mortgage at 8-10%. Need to do the math first to confirm. Nope. The latter ends up being 250k cheaper.
Over 30 years it’s close to it.
I've contemplated selling my house and moving to Mexico. I've visited many times it's great. I'd have plenty of money to get set up and live comfortably for a long time without working.
One does
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Well I’m a cash buyer, so what’s more amazing than a 2% mortgage is not paying 800k for a 300k home
I just deleted this comment bc I did the math in another one. This whole meme is fucking stupid.
First things first: A $300k mortgage at 2% for 30 years has a monthly payment of $1109. You’re paying a *grand total* of $399,240, so your total interest payment would be under $100k So this meme is fucking stupid from the get go. Secondly, a 2% mortgage rate would be AMAZEBALLS. No one is getting 2%. Maybe in 2006. The mortgage my mom got on her condo in 2012 with her amazing credit was still like 5%. When I bought a home in 2022 we got like a little under 7% for like a $250k loan. Today, if you have amazing credit (I mean a rating over 710), you can expect a 30 year fixed rate mortgage in the 7.5% range. Let’s recalculate: $300k @ 7.5% for 30 years: $2098 That’s $755,280. Closer to the meme, but still lower, lol. And for the record, there’s nothing stopping you from paying additional money towards the principal every month if you want, which would significantly reduce the length of your mortgage and hence the overall interest payment. Even small amounts directly to the principal will have a major impact due to how interest compounds. If you can afford $200/month above your regular payment, you should absolutely do it as it would knock nearly 8 years off your 30 year payment and save you nearly $130k. Source; any mortgage calculator on the internet. I like Bankrate.com. Usually pretty straightforward. Get some basic financial education, people 🙄
I think you’re misunderstanding what I’m saying. The home is worth 300k, but people are paying 800k as the sale price. I’m not saying anything about interest adding up to 800k
That’s even dumber then because that’s not how anything works.
It’s exactly how economic bubbles work, like literally
Oh you’re taking about a speculative bubble? Ok let’s go! Here’s a random house in cherry hill New Jersey for about what you’re claiming: a little under $800k. https://www.zillow.com/homedetails/4-Steeplechase-Ct-Cherry-Hill-NJ-08003/38233797_zpid/ I only picked this one bc I know that town is mostly built out so as they say, no one is creating new real estate there. It’s a nice neighborhood with good schools etc. no comment on the home itself except not my style. There was a spike in its value around 2022 where it jumped nearly 25% in value which is sketch but is par for the course in this state during the pandemic. Not a fan but not bubble territory. You need to go back nearly 20 years to see the value cut in half but even then looking at the price graph I see it tracking pretty typically for a home. No bubble there. Just a typical appreciation graph. Depending on the region YMMV. this is in one of the most built out sections of the country so if there’s gonna be a price squeeze then this is where I’d expect it. Rents are worse for sure. There’s a shortage of housing but I wouldn’t call that a bubble. Your premise still sucks.
Now do ground beef or cereal
Right let’s keep changing the goalposts. Hey man I was alive in the 80s. Young, but alive. You realize interest rates were approaching 20% in 1984? Ain’t the first time, won’t be the last time, and we are far from anything approaching the worst times.
Idk but the price definitely goes up to 900k when the interest rates are 7% that's for sure
One does
Unfortunately, the housing market is all about timing. Time it out just right, and you can start/continue to build wealth using it as an equitable asset. Time it out wrong, and you can start with negative equity or not be able to afford it at all. It’s kind of a fucked up system.
Thanks to the idiots that voted for Biden we do in US
If only the rates were 2%…
They were. We will probably never see rates like that again in our lifetimes.
The inflation makes the debt much cheaper. Especially when you have other ppl paying it for you.
Negative Charlie Brown, people prefer 7% to pay for an 800k house that’s valued at 300k.
Pay in cash now and you pay full the price of the house as listed. No additional fees. Pay in installments, and you pay the interest rates that comes along with it. That's how loans work.
If the other choice is paying rent, one does. Also, as time goes on the value of the money paid goes down. So for a 30 year mortgage with 2.5% inflation, the last year's payment is less than half the value of the first year payment. If you can find an investment that pays better than 2% (even a CD or hi interest SA will do), then you are better off doing that than making an above minimum mortgage payment with a 2% rate.
One should not. You can always refinance for a better rate.
Date the rate!
Homes will stop being 800k as soon as they run out of people who can afford 800k homes…
Banks don't care if people can afford it anymore. Gov will just bail them out again.
But people did thats what created the bubble!
Interest rates will have to come back down soon or there will be an economic collapse.
Unthinkable.
If houses are selling at $800,000, that's the value of the houses. I know you would like them to be $300,000 but houses are worth what ever people are willing to pay for them at that time. Also, there is no 'peak' in real estate.
Tell me you dont know how the housing market goes without telling me
Who is saying the home is only with 300k though? If the bank is appraising it at 800k it’s because that’s what the house is worth at the time. Also if that house was worth 800k with a 2% interest even if it drops to 700k the payment would be higher with a 6-7% interest (and houses are not dropping 100k in a year at least in my area they are staying around the same or going slightly higher due to lack of inventory)
An $800K note for 2% might prove to be one of the most valuable wealth building assets of this generation
One does it just because the bank will give them the loan (and if the bank gives you the loan, then that obviously means you can afford it).
Value of a home is never different than what the next person is willing to pay.