Waiting 100 years for a home isn't a housing crisis, it's a moral collapse

Post by nly » Mon, Apr 21, 2025, 5:11 PM UTC

fc417fc802 wrote: post #190

nly wrote: post #162

Earlier quoted context omitted.

It's not neutral if you've borrowed to buy the home... If you're in negative or reduced equity your mortgage costs can increase dramatically when you refinance. This alone can easily cripple a large % of the population and tank the consumer economy

Why would you refinance if you're underwater? Wouldn't you walk away from the property in most cases? Of course that doesn't eliminate the economic impact. It just shifts it elsewhere. An decent case can probably be made for the government to take on such loans and offer some scheme to forgive the difference if certain criteria are met.

You can't walk away from your mortgage in the UK without going bankrupt. If you're underwater you still owe.

Post by dustincoates » Tue, Apr 22, 2025, 10:05 AM UTC

globular-toast wrote: post #194

dustincoates wrote: post #47

Earlier quoted context omitted.

> Uhh, why? Unless you were planning on selling up and spending it all on a cruise or something house prices are immaterial to home owners. I don't know how it is in the UK, but in Paris, I hear from a lot of people that their retirement plan is to sell their Parisian apartment and move to a lower cost area with what they've gained. Doesn't work out if your "investment" is underwater.

If the Parisian apartments become undesirable and the low cost areas become desirable then, yeah, it wouldn't work out. But that's not what we're talking about. House prices going down across the board makes no difference. You sell your apartment for a lower number but you buy the new place for a lower number too. The numbers are just made up and don't matter. You can't eat a number and it won't keep you warm or dry.…

You don't need the high cost and low cost areas to flip to be caught out. You just need the high cost areas to decrease in price and then it's immaterial whether the low cost areas increase in cost or not. There's no way they can decrease the same amount as the high cost areas, seeing as there's a floor. Then that excess that people had planned for is no longer there.

> The numbers are just made up and don't matter.

You've asked why people care. They care because they've made their retirement plans on a made up number. Is that reasonable? I don't think so, and it's why I'm renting not buying. But you're tilting at windmills at this point to explain to people who have a vested financial interest why they're wrong.

Re: Waiting 100 years for a home isn't a housing crisis, it's a moral collapse

Re: Waiting 100 years for a home isn't a housing crisis, it's a moral collapse