Why does it take 30 years to buy an old house for the typical family?

[Anonymous]

If our economic situation is always improving from previous generation.

[Anonymous]

Very few people actually pay a 30 year mortgage for 30 years. Most refinance, pay it off early, or sell the house well before then.

[Anonymous]

Amortization.

With prices and rates rising expect to see more 40 and 50 year products soon.

[Anonymous]

Our mortgage interest rates are lower than the returns on our investments.

[Anonymous]

You mean why are mortgage terms for 30 years? I would say it's because they assume you buy the house from age 30-35, and then it's paid off before you retire.

[Anonymous]

Most people will never have enough money to pay over significantly less time.

[Anonymous]

Anonymous wrote:You mean why are mortgage terms for 30 years? I would say it's because they assume you buy the house from age 30-35, and then it's paid off before you retire.

Not about mortgage but affordability.
If our economic situation is always getting better shouldn’t housing cost go down with improvements in construction and other technology ?

[Anonymous]

Anonymous wrote:

Anonymous wrote:You mean why are mortgage terms for 30 years? I would say it's because they assume you buy the house from age 30-35, and then it's paid off before you retire.

Not about mortgage but affordability.
If our economic situation is always getting better shouldn’t housing cost go down with improvements in construction and other technology ?

One element may be that standards are going up too. Once upon a time kitchens were tiny. Bedrooms were smaller. Kids were expected to share rooms. Most houses now are bigger, much bigger. It would be interesting to compare what it would cost in 1930 to build a house, and what it would cost today to build the same house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You mean why are mortgage terms for 30 years? I would say it's because they assume you buy the house from age 30-35, and then it's paid off before you retire.

Not about mortgage but affordability.
If our economic situation is always getting better shouldn’t housing cost go down with improvements in construction and other technology ?

One element may be that standards are going up too. Once upon a time kitchens were tiny. Bedrooms were smaller. Kids were expected to share rooms. Most houses now are bigger, much bigger. It would be interesting to compare what it would cost in 1930 to build a house, and what it would cost today to build the same house.

Forgot to add that also there is a larger population so old houses that were built "out in the sticks" are now highly desirable "close in" areas like Arlington. There are simply more people competing for fewer resources. That drives prices up too.

[Anonymous]

Anonymous wrote:If our economic situation is always improving from previous generation.

LOL. That's quite a presumption.

[Anonymous]

In Japan, for decades, mortgages exceeded the lifetime of owners and were passed on to their descendants.

[Anonymous]

Housing costs obviously vary widely, as do incomes and financial discipline, so this claim is only valid in some locations for some people.

[Anonymous]

It's better than never being able to afford to buy a house. Neither set of grandparents could afford to buy until after mortgages became commonplace. You previously had to save a huge payment to afford to buy a house, if not buy it outright or build it yourself on land you purchased outright.

[Anonymous]

Anonymous wrote:Our mortgage interest rates are lower than the returns on our investments.

And they should be because they are collateralized by an asset.

[Anonymous]

Because the government wants you to use the money for other things, like propping up the economy with frivolous spending