glomag

I’m sorry to be pedantic but this is a pet peeve of mine. If you bought a house you would not have any mortgage payment. You (and everyone else usually) are talking about financing a house.

Maybe I’m the crazy one but when I buy something I like to look at the total amount that I’m paying for it.
If I wanted a house listed for $300,000 5-years ago and I wanted to finance it, the rate might have been 3% so the total amount I would be paying would be $455,332.36 over 30yrs. Therefore I would only finance if I thought ~$450,000 was a fair price. If I thought the house was only worth $300,000 then I would need to pay in cash.

Today rates are at 7% so a house listed at $300,000 actually costs $718,526.69 when financed. Do I think the houses I see listed for $300,000 are worth over $700,000? No. Do I have more than $300,000 needed to afford to pay in cash? Also no. Therefore, I’m not buying.
*These calculations are ignoring the down payment but the principle is still valid.

If this is true it might help explain the recent divergence between GDP and GDI.

Yes it sounds like everything worked out great for you. Good job on timing your investment! But this is a perfect example of the type of financialization of the housing market that I’m against. You used leverage to buy an expensive, risky asset and sold it for a profit just a few years later. This doesn’t always work out so well (ask anyone who bought a house in 2007) and I don’t want to put essentially all my savings into a wallstreetbets style gamble just so I can have somewhere to sleep at night.

I’m not saying mortgages should completely go away. I’m sure a mortgage is the right decision for many people’s situations. It’s just the way that people talk about buying a house, a mortgage seems to be assumed. If it wasn’t just assumed then maybe people would put more thought into whether they want to save for a larger down payment (or the full price) or whether they want to pay $750,000 for a $400,000 house.
I don’t know, maybe people see these numbers and think its a great deal. All I see is a bank making a huge amount of money from me that I would rather keep for myself. Also, if people stopped stretching their budget to the absolute limit with financing nonsense (3% down, variable rate loans, rate buydowns), in aggregate there would be less demand for houses at these high prices and sellers would have to start accepting lower offers.

Your partner wants to finance a house someday. I know I’m on the losing side of this battle but I really wish people would stop associating BUYING a house with taking out a LOAN from a bank.

It just feels like people are only deceiving themselves by saying “I need good credit to buy a house” when what they really mean is “I need good credit so I can take on a lot of debt and pay out hundreds of thousands of dollars in interest over the next 30 years.”

I don’t have any evidence for this but it seems like the vaccine pushback is at least partially a desire to avoid responsibility. If they choose to vaccinate and their kid is in the 0.000001% who experience adverse effects then it would be their fault the kid was hurt but if they don’t vaccinate and their kid just happens to die of measles or whatever then it was all part of god’s plan and they didn’t do anything wrong.