Evaluations 1, Appraisals 0

[Joe Flacco]

You guys don't think that income increases are about to accelerate?

 

[Randolph Kinney]

Exactly.

True, but even then a limit is reached and do we go to multi generational loans like Japan? 100 yr mortgages? Even then the banks couldn't secure enough income, became zombie banks and were not foreclosed upon to avoid a total crash. The result is a 20 year recovery that still hasn't completely healed the Japanese economy.

And infinite QE and zero interest. Destroys savings. Wage growth is severely retarded.

 

[Joe Flacco]

You forgot the buying and selling cost, maintenance and the difference in renting versus PITI, and the money you can earn on not making a downpayment.

Over the long term those things can't come close to offsetting rising rents and owning nothing after 30 years.

 

[Terrel L. Shields]

You guys don't think that income increases are about to accelerate?

No
Labor in computerized society is at a surplus.

Wage growth is severely retarded

 

[Randolph Kinney]

You guys don't think that income increases are about to accelerate?

No. Inflation is happening on food, electricity, autos, houses (in certain areas), stocks, and assets in general. Wage growth hasn't kept pace with inflation for a decades.



When adjusted for inflation, wages haven't moved much in decades. The typical worker made just over $22 an hour last year, compared to a little more than $20 in 1973, according to the Hamilton Project's calculations. That's an increase of less than 10%.

http://money.cnn.com/2018/02/09/news/economy/wage-growth-inflation/index.html

 

[Joe Flacco]

https://www.epi.org/productivity-pay-gap/

 

[Evincere]

The main thing is how long you plan to stay in the property because the interest is front loaded. But locking in your housing payment when rent and home prices historically increase is a no brainer.

Aside from special programs The down payment is front loaded as well. As are closing costs. Acquiring a reasonable and affordable pmt usually requires a substantial down regardless of how long the Borrower plans to stay in the property. Any unforeseen calamity such as a job loss or medical crisis resulting in an inability to make that payment - a person could easily find themselves in the rental market.

From what I have read and direction things seem to be going that sizable down payment, imho is better securitized as a savings cushion that could be drawn upon

 

[Joe Flacco]

Aside from special programs The down payment is front loaded as well. As are closing costs. Acquiring a reasonable and affordable pmt usually requires a substantial down. Any unforeseen calamity such as a job loss or medical crisis resulting in an inability to make that payment - a person could easily find themselves in the rental market.

From what I have read and direction things seem to be going that sizable down payment, imho is better securitized as a savings cushion that could be drawn upon

I know real estate is local but in my area at the lower end of the market, 3% down payment mortgage payment is about the same as rent for the property. And rents will increase. So will the property value over 30 years by a lot. The historical rate is about 6% per year.

 

[Randolph Kinney]

I know real estate is local but in my area at the lower end of the market, 3% down payment mortgage payment is about the same as rent for the property. And rents will increase. So will the property value over 30 years by a lot. The historical rate is about 6% per year.

How well did your income keep up in the 2008 crash?

 

[Evincere]

I know real estate is local but in my area at the lower end of the market, 3% down payment mortgage payment is about the same as rent for the property. And rents will increase. So will the property value over 30 years by a lot. The historical rate is about 6% per year.

The mass migration from homeownership to renter occurred during our last crisis/ bubble /bailout cycle. Everyone saw it coming including the REITs who sat like salacious vultures waiting to pounce when the market collapsed. Who do you think was buying all those foreclosures? Our millenials are a fast moving crowd who won’t be buying with the intent of staying put for 30 years to realize 6%