re: Coming to a McMansion near you...the 50 year mortgage

Usury is demonic and our culture should be moving away from it

terrible idea.

better idea: deport the millions of immigrants who’ve flooded our borders the last decade. Kick out the H1Bs as well.

Now Pulte Homes can sell a lot more cardboard boxes.

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Not buying a house cost you money long term.

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I rented a house for a year, I wasn't sure if I wanted to live here long term and the market was sky high with peak interest rates. A year later I bought the house from the owner, he wanted to finance it for reasons, he was 1.5% cheaper than the bank and no PMI, no fees, and about $40k than similar houses were going just a year earlier.

I saved an arse load renting for a while and if I would have wanted to move after a year I would have lost my arse if I bought a house in the neighborhood.

Renting isn't always bad.

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Coming to a McMansion near you...the 50 year mortgage

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This is a kick-the-can-down-the-road solution, and we've seen it before in Japan, and it was CRAZY.

In the 80s real estate prices in Tokyo were high, so they started offering 50-year mortgages to make things "more affordable..." if you stretch the loan, the monthly payment looks easier. But it's just extra leverage and we know what happens with leverage...

Prices went insane. At the peak, a single 0.44 square mile parcel in central Tokyo was valued more than all real estate in the entire state of California. The total land value of Japan exceeded that of the entire United States many-fold.

Then the bubble burst, and it was BRUTAL. Prices in Tokyo fell 60 to 80%. Tokyo real estate today is still > 50 percent cheaper than it was in 1989. Many buyers from that era never recovered their equity. Banks spent years holding bad loans, and the broader economy stagnated.

Longer mortgages did not make housing affordable. They made prices higher, slowed down equity accumulation, and left households more exposed when prices fell. The crash was deeper and the recovery was longer because everyone had borrowed too much.

For most people in the US, the house is the retirement plan. At retirement ~75% of the median Americans net worth is their primary residence. The 30 year mortgage aligns with people's lives - it pays down fast enough that they own their home by the time they stop working.

A 50 year mortgage changes that. Equity builds slowly. Leverage stays high. People remain exposed for longer. I like that we are thinking outside the box but this doesn't solve affordability, it hollows out the main wealth-building mechanism for the majority of the population and will have other bad implications IMO

The only solution is to build more! We need supply-side solutions not induced demand, c'mon.

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Our house is about 4.4% of net worth near retirement. We’re not rich, so lots of folks are in terrible shape.

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Let's do the math here. Let's assume you have an older house and it is worth $250k. So you have a net worth of $5.5m and you're "not rich"?

Explain that to me like I'm 5.

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Plus appreciation plus interest write-off.

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Standard deduction for s married couple is $30,000+ now most families aren't deducting interest anymore.

Single homeowners may be able to take advantage of tax deduction for mortgage interest.

There's a little part of my brain that whispers, "They know something..." Does the financial sector know something coming down the pike in the next few years that will greatly extend functional lifespans?

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Does the financial sector know something coming down the pike in the next few years that will greatly extend functional lifespans?

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Holy shite .. you see a tweet about extending mortgages to 50 years and THIS is your takeaway ?? Jesus Christ .. this has to be a troll post, right ? Im going to give you credit for not being that much of a moron .. it would explain a lot about the mental capacity of the current American voter though, ill give you that .