Assume mortgage rates remain Assume mortgage rates remain constant at 3-4% (I know, big assumption). And assume no 100% financing, ALT-A or stated loans. And home must be for primary occupancy.
peterb
September 21, 2008 @
10:10 AM
So you’re spending 3% and So you’re spending 3% and losing 1% every year?
an
September 21, 2008 @
11:21 AM
There would be no reason not There would be no reason not to buy in areas where mortgage is already equal or less than rent. Even if rent doesn’t rise for the next 40 years, in 30 years, you’ll have no more mortgage payment and you can retire w/out too much expense going to housing.
Coronita
September 21, 2008 @
2:14 PM
….Just exploring would kind ….Just exploring would kind of drastic action the government would need to take in order to get sidelined people to massively start buying again, minus drastically reducing inflated home prices overnight….Seems like if the Fed throws a low interest bone and enough guarantees to keep the home price decline elongated for a long long time, some people would be biting, even at current inflated prices…..Hmmmmmmm.
CA renter
September 21, 2008 @
3:47 PM
Seems like if the Fed throws Seems like if the Fed throws a low interest bone…
——————
Isn’t that what got us into this mess in the first place?
Perhaps I’m in the minority, but we will not be buying as long as prices are artificially inflated (interest rates do not reflect the true cost of money).
The goal of ownership should be to get the lowest price possible, not to get the lowest monthly payments (and highest price).
Just get on a mortgage calculator/amortization table and see how, over your lifetime, these decisions can make a very big difference in your financial life.
peterb
September 21, 2008 @
4:28 PM
At 3% fixed for 30 years, At 3% fixed for 30 years, you’d have paid about well over twice the original loan amount. And the price will have dropped by about 33%? Not sure about reverse compounding at 1% annually?
This would surely drive the investors out of the housing market. And maybe a lot of potential owner/occupants.
September 21, 2008 @ 5:50 AM
Assume mortgage rates remain
Assume mortgage rates remain constant at 3-4% (I know, big assumption). And assume no 100% financing, ALT-A or stated loans. And home must be for primary occupancy.
September 21, 2008 @ 10:10 AM
So you’re spending 3% and
So you’re spending 3% and losing 1% every year?
September 21, 2008 @ 11:21 AM
There would be no reason not
There would be no reason not to buy in areas where mortgage is already equal or less than rent. Even if rent doesn’t rise for the next 40 years, in 30 years, you’ll have no more mortgage payment and you can retire w/out too much expense going to housing.
September 21, 2008 @ 2:14 PM
….Just exploring would kind
….Just exploring would kind of drastic action the government would need to take in order to get sidelined people to massively start buying again, minus drastically reducing inflated home prices overnight….Seems like if the Fed throws a low interest bone and enough guarantees to keep the home price decline elongated for a long long time, some people would be biting, even at current inflated prices…..Hmmmmmmm.
September 21, 2008 @ 3:47 PM
Seems like if the Fed throws
Seems like if the Fed throws a low interest bone…
——————
Isn’t that what got us into this mess in the first place?
Perhaps I’m in the minority, but we will not be buying as long as prices are artificially inflated (interest rates do not reflect the true cost of money).
The goal of ownership should be to get the lowest price possible, not to get the lowest monthly payments (and highest price).
Just get on a mortgage calculator/amortization table and see how, over your lifetime, these decisions can make a very big difference in your financial life.
September 21, 2008 @ 4:28 PM
At 3% fixed for 30 years,
At 3% fixed for 30 years, you’d have paid about well over twice the original loan amount. And the price will have dropped by about 33%? Not sure about reverse compounding at 1% annually?
This would surely drive the investors out of the housing market. And maybe a lot of potential owner/occupants.