191–200 of 510 posts
My wife and I will be moving to Chicago soon and we intend on buying a house when we get there. How screwed are we by the current housing situation and interest rates?
Anecdata - I have friends that lived there for 8+ years, then moved to the south in the last 2 years and their property value barely budged.
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Not sure I want to leverage up on housing through the boomer die-off. Plus, there are way better investments.
Doesn't the boomer die-off mean that the boomers' children will be inheriting, not just homes, but piles and piles of liquid assets, much of which they will use to get into the housing market? After all the boomer generation, on average, has over-provisioned for old age, whereas millenials are still underhoused.
Have they over-provisioned? Everything I have read indicates meager savings for the vast majority of the population, who will need to rely on Medicaid and Social Security to eek out the remainder of their living costs.
Nursing home care is especially costly in the event one does not die quickly, and the government can and I assume will seek to reimburse itself from the estate once the elder dies.
My wife and I will be moving to Chicago soon and we intend on buying a house when we get there. How screwed are we by the current housing situation and interest rates?
I grew up in Chicago and love Chicago, so I'll try to say this as politely as possible - don't expect your property to hold any value in IL. Anecdata - I have friends that lived there for 8+ years, then moved to the south in the last 2 years and their property value barely budged.
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Well most people aren't going to take the money and invest it at a higher rate of return, either. With 30-year rates around 6% right now, the math becomes a lot tighter as well. Where are you going to find 6%+ investments right now?
You don’t actually have to invest at all. Over time inflation makes your payments cheaper and cheaper. By the time you reach the end of your 30 year fixed mortgaged in the year 2052 you’re still paying in 2022 dollars which is probably less than half of what the average mortgage in 2052 is. If you invest on top of that and get some small decent return you come out even more on top.
If I have $300k in cash today, and I want to buy a $300k house, then I can get a mortgage and let inflation shrink my mortgage payments, but it's also shrinking the $300k I have in cash.
I don't see how you can profit from the mortgage unless you find an investment for your cash with yields significantly higher than your mortgage interest rate.
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> Going into debt at the lowest interest rate you'll ever be offered to buy a leveraged asset that's likely to increase in price and reduce the overhead you pay on your largest expense, housing, and hedge against the risk of rent increases and security against the whims of landlords? Look, if I had enough money around, I'd maybe consider the gamble. But I don't want to buy property to sell it later, I just want to li…
> I just want to live somewhere Same. Which is exactly why I bought a house in 2011. In hindsight it was the perfect time, but at the time the market was still bumpy. At the end of the day, I had a stable job and needed to live somewhere. > I make enough money not to worry about rent, even if it should substantially increase The house next door to me rents for 2.5x my mortgage. My salary has continued to go up, while…
And you were more likely to be able to because it was 2011. Fewer people can do the same today, at least at a similar comfort level of cost of house to income ratio.
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Not sure I want to leverage up on housing through the boomer die-off. Plus, there are way better investments.
Doesn't the boomer die-off mean that the boomers' children will be inheriting, not just homes, but piles and piles of liquid assets, much of which they will use to get into the housing market? After all the boomer generation, on average, has over-provisioned for old age, whereas millenials are still underhoused.
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> that people were given loans they should either never have gotten (2008) or that they shouldn't have asked for I bought my house in early 2007 and mortgages were indeed crazy back then. My analysis said that at the mortgage rates for a 30 year fixed mortgage back then (a tad over 6%) said that my ideal home financially would be around $H or less, that I could go up to 1.25 $H without house payments being high enoug…
Out of curiosity, would a new well have been possible for less than 0.26 $H? (to separate the house from the group, not a maintenance hedge)
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> that people were given loans they should either never have gotten (2008) or that they shouldn't have asked for I bought my house in early 2007 and mortgages were indeed crazy back then. My analysis said that at the mortgage rates for a 30 year fixed mortgage back then (a tad over 6%) said that my ideal home financially would be around $H or less, that I could go up to 1.25 $H without house payments being high enoug…
Out of curiosity, would a new well have been possible for less than 0.26 $H? (to separate the house from the group, not a maintenance hedge)
Could also have assumed that a well problem would entirely fall on you (worst case) and budget accordingly.
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> that people were given loans they should either never have gotten (2008) or that they shouldn't have asked for I bought my house in early 2007 and mortgages were indeed crazy back then. My analysis said that at the mortgage rates for a 30 year fixed mortgage back then (a tad over 6%) said that my ideal home financially would be around $H or less, that I could go up to 1.25 $H without house payments being high enoug…
Out of curiosity, would a new well have been possible for less than 0.26 $H? (to separate the house from the group, not a maintenance hedge)
Earlier quoted context omitted.
I mean, it's not really a burst, we're just hearing the hissing noise of the obvious leak. The true demand from people with the intend to actually live in the estates has been constantly decreasing since around 2000; the real salarys dropped since then, so did the buying power. The only reasons people found buyers at x3-x10 (!) prices were a) that there is a class of people wealthy enough to still afford the purchase…
You're forgetting a.2) the "wealthy" people usually have high incomes, and the x10 houses are usually in high tax states, and housing is a huge tax break. ~20% or my housing "cost" is paid for by a tax break for owning a house. Another ~20% is principal. When you also factor in that the Fed guarantees to devalue money at AT LEAST ~3% per year, and you have 5x leverage (or more) - that's another ~15% effectively subsi…