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# housing
b
đź‘€
m
Very interesting! My initial thoughts is that this is a bad idea but curious what others think
p
Seems idiotic to me, the answer to not enough housing is build more housing, not manipulate financial products. Although current homeowners should be happy if this happens as this would just push the price of all housing up
g
It means 2 things • People will end up paying much more • And for much longer so retirement age will be bumped Those don't sound good to me
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b
It’s such a distant path to homeownership, it almost feels like “locking in your lifetime rent to a bank” rather than building your own equity
g
Exactly, even though it's already like that at least we can retire without a mortgage
I don't know how accurate this is, but if it is this whole idea is madness, $200 per month is not a good enough incentive and won't move the needle, it might help more people be eligible for mortgages but then we're back to 2007
p
I wish people who understood mortgages would do these breakdowns. The same way a 15 year fixed is not the same rate as a 30, a 50 year mortgage would be at a different rate as well. It’s not just about duration, you could always choose to pay it off more quickly, or take the extra savings and invest it. The main issue I see is if your ceiling is 600k for a house and 50 year rates come in, your ceiling is going to be 900, so you haven’t saved anything.
g
I believe it's about getting more people eligible for mortgages
You don't actually have to make something more affordable if you can trick people into buying it regardless
p
Of course it will…..but you are keeping the supply constant and increasing the demand, ergo more expensive for the same house
The solution is incentivizing building more housing. Easier said than done but that would actually accomplish something.
g
I guess in 30 years when people start defaulting on mortgages the price will finally drop
An important part to building more housing is pushing for remote work and public transportation, this way developers can build anywhere
Like you said, housing is a complex problem and it's easy to think you're fixing it while actually making it worse
I don't think we can count on people paying their mortgage off sooner, most people just get more expenses as they get older and not that much more income, maybe with the right investments, but we can't count on that There should be an easier way to buy a house (maybe lowering down payment requirements) but not at the expense of future retired people
p
This is really not my field and I would love if someone here in banking or mortgages would chime in, but I think it’s just basic economics. The reason why we have stretched it as far as we have is because banks are offering 49% dti loans, 3% down payment, 30 year loans etc. That’s a form of stretching somebody’s ability to afford, which just jumps right into making housing more expensive, and kicks the “default” can down the road. In my understanding, a healthy market with less manipulation would actually bring things much more under control.
g
It won't because at this point no one can afford housing without those manipulations
@mysterious-tomato-10057 I am really hoping you'll jump in with some optimistic data that proves me wrong
p
I don’t know at what point it would work but housing would go down without the manipulations in place, by limiting the demand.
g
You'll end up with an owe nothing generation
And get rid of the most common type of generational wealth — houses
t
“An important part to building more housing is pushing for remote work” - they are pushing for remote work. In other countries.
Not an expert but I agree with the sentiments that this seems like an awful idea that will result in more people not owning anything.
g
I don't want to turn this political but this administration has been pushing rto
t
Sorry, will keep those sort of comments to myself. It’s a touchy subject for me.
I agree RTO is silly for some professions
g
Sadly trump is going about it all wrong, the right way to bring housing prices down is to actually restrict existing loan products and make the market tougher not easier. Until it becomes incredibly painful to afford payments things will just keep on going up. However if they hike rates to 10% or get rid of the 30 year mortgage (not advocating for these, just using them as extreme examples) all of a sudden housing prices will be forced to come down.
t
To add on to the remote work topic - I do think it would be nice if we could spread out across the country and build new communities that we grow, instead of everyone being somewhat stuck in big decaying cities.
We have so much space, but we don’t build new cities.
Jack - what is your take on raising salaries instead of bringing existing prices down?
p
@tall-angle-89997 are you asking employers or employees?
t
If the goal is to make housing more affordable, why should the admin focus on policies that would result in housing prices crashes as opposed to policies that result in more income for citizens?
g
If the goal is to make housing more affordable, why should the admin focus on policies that would result in housing prices crashes as opposed to policies that result in more income for citizens?
Because that’s socialism 👻
t
A lot of new graduates are essentially locked out of the job market because they are last on the “to hire” list
I don’t mean any policies that would redistribute wealth. I mean things that ensure a) new graduates can find jobs before visas, ending offshoring and h1b, etc
g
new graduates can find jobs before visas, ending offshoring and h1b, etc
won’t make a dent
t
Also I’m sorry if my comments seem naive. I appreciate the way people here reason about things and I appreciate everyone’s insight.
g
Artificially raising income will only remove jobs from the US, we already have the highest average income (besides maybe some oil rich states with fake economies), the focus has to be on 4 things • Removing the unnatural barriers for income increase (like encouraging unions) • Getting people out of the poverty pipeline and into the middle class pipeline • Lowering cost of living, this is the hardest problem to solve but there are many low hanging fruit • Lowering housing costs
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Can we consider for a moment the outlandish idea that the housing market got so expensive because the stakeholders wanted it this way? everyone (except the average person) loves an overpriced market, banks get to issue larger loans, landlords increase their buying power, and developers (and even some home owners) get to sell houses faster because they are now selling investments not just homes My grandfather bought his house for 30k (currently worth roughly 1.5m), his mother bought hers for 6k (he sold it for over 1m and has been living on that his whole life), one of the neighbors bought theirs for 100 (currently worth well over 1m) Something happened and it wasn’t just cheap mortgages
r
A few points: • 50 year mortgages aren’t new, they do exists in weird corners of the market and are prevalent enough that even Ramsey wrote about them • The federal government has 0% ability to create these without Congress. This is all a distraction - as per multiple comments above, there are more fundamental causes which won’t be solved via this bandaid • There are transitions happening all over the economy including the job market, housing and other places. It will take some time to settle.
g
This is all a distraction
This is a given for anything coming out of the white house But it’s still an important conversation, I believe this topic will become a decisive election issue in the coming years, many of us will become single issue voters
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