Anonymous
09/06/2023 06:45
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
We've got a 3% mortgage. I don't want to sell until we have enough equity to buy the next place with cash (or close to it). That would be a downsized house or condo once the kids are out. I don't want to maintain a large SFH with only two occupants and a lot of empty rooms.
Anonymous
09/05/2023 22:43
Subject: Re:Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous
09/05/2023 11:36
Subject: Re:Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Oh, and lemme add.
The ONLY thing and I mean the single biggest ONLY thing going/went for housing is leverage. Where else can you get 1:20 leverage for a normal person? Nowhere.
But leverage works both ways. When it's going up, it's fantastic. When it's going down, your "investment"/money down is wiped out in a heartbeat and you're underwater.
Lol no one gets wiped out in real estate with a 30 year fixed mortgage. These aren’t stock options.
If you only want to be somewhere for 1-3 years, don’t buy. But if you aren’t going to want to sell for 5+ years there’s no better move to make. Unless you can live somewhere rent free.
DP here. Are you a realtor?
Being under water is a very serious risk. It means that the best case scenario is you're stuck and can't sell without bringing money to the table. Life happens. I've bought 3 "forever homes" now. The worst case scenario is that you lose your job and can't pay the mortgage. You could go into foreclosure and lose it all.
Sounds like you’re bad at making decisions if you keep buying houses think they’re your forever house and they’re not.
Home values tank once a generation or so. And if you just don’t sell during that time, you’re fine. You buy a house within your means, just like you rent within your means, so you don’t end up homeless if you lose your job.
Buying is still BY FAR the best financial decision.
Thanks for confirming that yes, you are a realtor.
No, I’m not a realtor. I’m just good at math.
Anonymous
09/05/2023 10:51
Subject: Re:Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Oh, and lemme add.
The ONLY thing and I mean the single biggest ONLY thing going/went for housing is leverage. Where else can you get 1:20 leverage for a normal person? Nowhere.
But leverage works both ways. When it's going up, it's fantastic. When it's going down, your "investment"/money down is wiped out in a heartbeat and you're underwater.
Lol no one gets wiped out in real estate with a 30 year fixed mortgage. These aren’t stock options.
If you only want to be somewhere for 1-3 years, don’t buy. But if you aren’t going to want to sell for 5+ years there’s no better move to make. Unless you can live somewhere rent free.
DP here. Are you a realtor?
Being under water is a very serious risk. It means that the best case scenario is you're stuck and can't sell without bringing money to the table. Life happens. I've bought 3 "forever homes" now. The worst case scenario is that you lose your job and can't pay the mortgage. You could go into foreclosure and lose it all.
Sounds like you’re bad at making decisions if you keep buying houses think they’re your forever house and they’re not.
Home values tank once a generation or so. And if you just don’t sell during that time, you’re fine. You buy a house within your means, just like you rent within your means, so you don’t end up homeless if you lose your job.
Buying is still BY FAR the best financial decision.
+1
If you think about it, food and shelter are the two things you have to consume constantly throughout your life in order to stay alive. They are very similar in that sense. So buying a house is like locking in the price you pay for food for 30 years. Then, when your house is paid off, it’s like only having to pay the tax on the food you buy at the grocery store or restaurant. How awesome would that be? That’s the true financial benefit of owning a home.
Anonymous
09/05/2023 10:28
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:I’m dealing with elderly parents and in-laws at the moment. Both are in big homes where they raised their families. One set refuses to leave…ever. They will die in that house. The other couple is preparing to downsize dramatically and relocate. Why? It’s become dangerous to do stairs, maintaining the house and landscaping coupled with the ridiculous taxes (they aren’t in the dc metro area) is actually quite costly.
I bet if we had better housing options for retirees then more people would downsize. Nobody wants to leave their nice neighborhood with good neighbors in highly desirable areas (read: safe, near good amenities, etc.) for a cheaper, less desirable area. Not everybody wants to live in Leisure World.
And now that prices spiked in Florida and/or their politics went bananas, plenty of folks in the dc area are no longer interested in relocating down there.
DH and I will think hard before downsizing, but I would be up for it if we could make the numbers work and land in a desirable area.
Agree with this. My parents sold my childhood home a couple years ago in part because of the stairs issue, also upkeep. They were fortunate in that there are a few over-55 type communities in their area with rental options within their price range. My ILs live in an area that does not have great options for retirees- seems like most stay in their homes until it’s time for assisted living- and their current house is huge. They say they want to downsize, and have had young families offer to buy their current house, but they don’t know where to go.
My parents sold their house and moved into an apartment in DC. It's a nice 2-bedroom in a nice neighborhood, but easily affordable after selling their 4 bedroom house. Elevator, doorman, and they don't have to deal with any maintenance. If the city doesn't feel comfortable to you, there are lots of suburbs around DC with these kind of apartment buildings that are near metro and in safe neighborhoods with good amenities.
Bonus is that living in a place like this ensures you will stay reasonably active -- walk places and be around people. I think often older people get very set in their ways living in residential areas where they drive everywhere and don't really have to make much effort to interact with others. It makes you old faster.
PP here- well, they don't live in this area (nor would they ever relocate from their small southern city to DC, the horror!). I did not really understand the limited options in their area until recently. I think DH and his sibling have accepted their parents will just have to age in place and hire help as needed (which they can afford to do) until they need levels of care that are not sustainable in their house.
Anonymous
09/04/2023 18:06
Subject: Re:Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Oh, and lemme add.
The ONLY thing and I mean the single biggest ONLY thing going/went for housing is leverage. Where else can you get 1:20 leverage for a normal person? Nowhere.
But leverage works both ways. When it's going up, it's fantastic. When it's going down, your "investment"/money down is wiped out in a heartbeat and you're underwater.
Lol no one gets wiped out in real estate with a 30 year fixed mortgage. These aren’t stock options.
If you only want to be somewhere for 1-3 years, don’t buy. But if you aren’t going to want to sell for 5+ years there’s no better move to make. Unless you can live somewhere rent free.
DP here. Are you a realtor?
Being under water is a very serious risk. It means that the best case scenario is you're stuck and can't sell without bringing money to the table. Life happens. I've bought 3 "forever homes" now. The worst case scenario is that you lose your job and can't pay the mortgage. You could go into foreclosure and lose it all.
Sounds like you’re bad at making decisions if you keep buying houses think they’re your forever house and they’re not.
Home values tank once a generation or so. And if you just don’t sell during that time, you’re fine. You buy a house within your means, just like you rent within your means, so you don’t end up homeless if you lose your job.
Buying is still BY FAR the best financial decision.
Thanks for confirming that yes, you are a realtor.
Anonymous
09/04/2023 17:48
Subject: Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
This guy seems to be pushing the argument that higher rates decrease the value of financial assets. This is true. In fact higher rates have decreased the value of my mortgage to the mortgage holder dramatically.
But I'm not the mortgage holder, and I'm paying a devalued mortgage back in rapidly devaluing dollars. I'm winning bigly as the debtor. Houses are not financial assets like bonds... so they don't react quite the same way to rate changes. We can see that already in nominal housing price stability despite falling demand and rates that have more than doubled. House prices are adjusting down in real terms and will continue to do so for years, but that is meaningless to me as someone with a fixed rate mortgage.
But I'm not the mortgage holder, and I'm paying a devalued mortgage back in rapidly devaluing dollars. I'm winning bigly as the debtor. Houses are not financial assets like bonds... so they don't react quite the same way to rate changes. We can see that already in nominal housing price stability despite falling demand and rates that have more than doubled. House prices are adjusting down in real terms and will continue to do so for years, but that is meaningless to me as someone with a fixed rate mortgage.
Anonymous
09/04/2023 17:35
Subject: Re:Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Oh, and lemme add.
The ONLY thing and I mean the single biggest ONLY thing going/went for housing is leverage. Where else can you get 1:20 leverage for a normal person? Nowhere.
But leverage works both ways. When it's going up, it's fantastic. When it's going down, your "investment"/money down is wiped out in a heartbeat and you're underwater.
Lol no one gets wiped out in real estate with a 30 year fixed mortgage. These aren’t stock options.
If you only want to be somewhere for 1-3 years, don’t buy. But if you aren’t going to want to sell for 5+ years there’s no better move to make. Unless you can live somewhere rent free.
DP here. Are you a realtor?
Being under water is a very serious risk. It means that the best case scenario is you're stuck and can't sell without bringing money to the table. Life happens. I've bought 3 "forever homes" now. The worst case scenario is that you lose your job and can't pay the mortgage. You could go into foreclosure and lose it all.
Sounds like you’re bad at making decisions if you keep buying houses think they’re your forever house and they’re not.
Home values tank once a generation or so. And if you just don’t sell during that time, you’re fine. You buy a house within your means, just like you rent within your means, so you don’t end up homeless if you lose your job.
Buying is still BY FAR the best financial decision.
Anonymous
09/04/2023 16:29
Subject: Re:Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Anonymous wrote:Oh, and lemme add.
The ONLY thing and I mean the single biggest ONLY thing going/went for housing is leverage. Where else can you get 1:20 leverage for a normal person? Nowhere.
But leverage works both ways. When it's going up, it's fantastic. When it's going down, your "investment"/money down is wiped out in a heartbeat and you're underwater.
Lol no one gets wiped out in real estate with a 30 year fixed mortgage. These aren’t stock options.
If you only want to be somewhere for 1-3 years, don’t buy. But if you aren’t going to want to sell for 5+ years there’s no better move to make. Unless you can live somewhere rent free.
DP here. Are you a realtor?
Being under water is a very serious risk. It means that the best case scenario is you're stuck and can't sell without bringing money to the table. Life happens. I've bought 3 "forever homes" now. The worst case scenario is that you lose your job and can't pay the mortgage. You could go into foreclosure and lose it all.
Anonymous
09/04/2023 07:21
Subject: Re:Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.
Anonymous wrote:Oh, and lemme add.
The ONLY thing and I mean the single biggest ONLY thing going/went for housing is leverage. Where else can you get 1:20 leverage for a normal person? Nowhere.
But leverage works both ways. When it's going up, it's fantastic. When it's going down, your "investment"/money down is wiped out in a heartbeat and you're underwater.
Lol no one gets wiped out in real estate with a 30 year fixed mortgage. These aren’t stock options.
If you only want to be somewhere for 1-3 years, don’t buy. But if you aren’t going to want to sell for 5+ years there’s no better move to make. Unless you can live somewhere rent free.