seneca
@seneca
This broke my brain a bit. Chart shows a typical $500K mortgage at 8% fixed. You’re mostly paying interest for decades. Equity only kicks in the last 7–10 years. Total paid: ~$1.2M. Interest alone: ~$700K. I get its pros but levering up into an illiquid asset in a post-ZIRP world .. ?? Pls help me make sense why this is sold as the safe and very normal thing to do.
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Erik
@eriks
most are desensitized to the risks and it doesn’t help that realtors are most times trained on only that single market, i don’t think the next 30 will be anywhere close to as easy as the last 30 in terms of real value appreciation can be a good *life* choice tho while potentially not being the optimized financial choice
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seneca
@seneca
this angle i am fully aligned with. good friend told me a long time ago that home ownership is a luxury, treat is as such.
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Erik
@eriks
yep, where ppl can get into trouble is thinking of primary home as an investment
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nicholas 🧨
@nicholas
agreed on mortgages, but in many metropoli the demand for housing is only going to increase. even with a population decline, immigration plus continued urbanization seem likely to make demand for homes in cities grow over time.
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Erik
@eriks
do u think it’s city specific? last 50 yrs was down only rates, population increase, and the biggest generation in their buying/family years - tide lifted all boats what worries me today: •less need for *large* homes bc of smaller families or no family •boomers aging and they hold most of the supply •much higher debt (student loans, vehicle, etc) for would be first time home buyers •wildcard: tech advancement makes the labor/cost of building a home come down i see some cities doing rlly well and others struggling to keep up
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