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this post was submitted on 02 Apr 2024
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Who gives a shit about a couple years when people regularly buy 30 year mortgages? How much would rent increase over that timeframe?
I'd be moreso worried about the eventual housing market collapse. I believe there is legislation being discussed that would force corporations to sell of their house holdings within the next 5-10ish years. I imagine that as soon as investment groups aren't allowed to make the obscene amounts of money they have been by abusing the housing market, is when the bottom will fall out. Fits with the rich mentality of privatizing profits while socializing pain.
That would absolutely not pass. Housing corps have far too much influence in politics. A lot of politicians have real estate investment interests too.
Zero chance that legislation passes. As amazing as it would be, roughly zero politicians would vote for it. Sure, you might get Bernie on board.... maaaaaybe AOC, but that's about it. Although the long term would be so much better for the US, the short term crash would be bad for corporations, rich people, and for recently and soon-to-be retired people.
I imagine that as soon as investment groups aren’t allowed to make the obscene amounts of money they have been by abusing the housing market, is when the bottom will fall out.
Meh, we've been through those results before in 2008. Homelessness and unaffordable housing is a much larger problem than rapid housing value declines. The worse case of housing value decline is personal bankruptcy which is a paper exercise you can financially recover from in 5-7 years of effort.
The worst case of homelessness or unaffordable housing is death.
Every retirement fund in existence is banking on housing investments. Which is exactly why the sooner it crashes the better. Rip the bandaid off. Let people have a place to live.
Not like most people born this century ever expected to retire anyway.
Let's say an 18 year old moves out and starts renting
The average rent in US is 1.5k
30 years of payment is 540k
When that person is 48, they would have paid 540k in rent expenses
This is assuming that rent doesn't increase
Throwing 600k out the window before you're even 50 is not a recipe for success
76 is US average life expectancy. That's ~25 more years of rent.
If they retire at 63. 13 years of 1.5k a month rent is 234k. They need a quarter million in retirement funds just for rent to live up until 76.
45 years of working for that 18 year old would need to make ~750k.
That's 16.5k a year just to pay for rent
Again this is assuming rent never goes up.
That's 8 dollars an hour 40 hours a week every week.
10% more than minimum wage, just for rent.
It's crazy
And this assumes you die and don't have to rent after the age of 76
In my city, rent for a decent 2-BR apartment will cost you $1800-$2500 a month. I finally bought a house and the actual mortgage is gonna be $1600. With taxes, insurance, HOA, etc., it's gonna cost me around $2500 a month. I'll be paying around the same as renting, but at least I own the property I'm paying for.
And when prices go up your equity goes up too instead of your monthly payment.
I’ll be paying around the same as renting,
For now you will. However rents will rise, while your fixed mortgage payment will not.
Years ago I remember buying my first house. I was renting for $700/month and the mortgage was $1000/month for the house. 14 years later the mortgage was still $1000, but I went and looked at the rent for my former apartment, which had risen to $1300/month.