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Save for 15-30 years? How about those who have to rent and can't save?
Usually money will always find another use other then the planned use. That is why buy term and invest the rest rarely pans out or why rent and invest the down payment money and the difference each month rarely pans out.
Odds are not only would living together with kids ,spouses and parents end up blowing up family's but the savings aspect would likely never happen.
i know this is a silly question, but if there were no 'credit' cards and no lending agencies and the only way to buy a house was to write a check for the full amount, wouldn't houses be MUCH cheaper in the supply and demand mode?
so, who gets rich? the lending companies. people with mortgages are essentially paying many thousands more for the house for the 'privilege' of doing business with a lending institution when if there was no lending institution to begin with, houses would be a fraction of what they cost now.
OR, do you think the houses would be exactly the same prices?
Probably much lower. Easy financing creates exorbitant demand by making homeownership possible for so many buyers who would be renters.
To clarify though, people are doing business with lending institutions because lending institutions make homeownership possible by allowing you to borrow their money. It's not a privilege to use a bank to buy your house. It's an absolute necessity, because most people have no money. So the lending industry should be thanked for risking their assets on home buyers, and allowing them to live the dream. NO BANKS. NO HOMEOWNERSHIP. At least for the vast majority of home buyers who have little or no money. And that is almost everybody.
i know this is a silly question, but if there were no 'credit' cards and no lending agencies and the only way to buy a house was to write a check for the full amount, wouldn't houses be MUCH cheaper in the supply and demand mode?
so, who gets rich? the lending companies. people with mortgages are essentially paying many thousands more for the house for the 'privilege' of doing business with a lending institution when if there was no lending institution to begin with, houses would be a fraction of what they cost now.
OR, do you think the houses would be exactly the same prices?
Wouldn't change much. Building materials and labor are still expensive.
The REAL money is in financing homes, not building them.
If there were no financing of houses, all the houses would be owned by corporations who have the money to build and finance them internally. They would be rented for money, but also loyalty or fealty - in short more like the days of kings and serfs.
It would be like "gold"... fewer people could "afford" to build a house in the first place. People don't have the skills to do it themselves either. Construction companies have to ask for money upfront or do a "pay as they build" model which sucks for efficiency
so what houses that are built, are kept for longer and sold for enough to buy the next house
mortgages help non wealthy people buy homes. A person can put down 20% for a house instead of 100%. A wealthy person who has no problems paying 100%, it makes no difference. A person who can't pay 100%, would benefit by only paying 20% up front. If that goes away, why would the house price go down? It means the poorer person wouldn't have a home but the richer guy can keep buying.
This. The mortgage industry is what helps America get to 60% + home ownership rates.
i know this is a silly question, but if there were no 'credit' cards and no lending agencies and the only way to buy a house was to write a check for the full amount, wouldn't houses be MUCH cheaper in the supply and demand mode?
so, who gets rich? the lending companies. people with mortgages are essentially paying many thousands more for the house for the 'privilege' of doing business with a lending institution when if there was no lending institution to begin with, houses would be a fraction of what they cost now.
OR, do you think the houses would be exactly the same prices?
How much does a house cost in countries where you have to pay cash for homes (or 50% down)?
Yeah. Usually a lot.
All we have to do is raise interest rates and speculation in housing is going to disappear. Higher interest rates would DESTROY speculators, would flush them to the bottom of the sewer system.
The Fed chose to support speculators and destroy savers, responsible Americans. ZIRP is a haven for speculators. No wonder we have all this speculations in housing and buy to rent schemes. This is all due to ZIRP. You have cities like Phoneix and Las Vegas where every other house is owned by Wall Street hedge funds and individual specuvestors. It's worse today then it was back in 2003-2007.
Home ownership rate is at all time low and Americans are not buying homes anymore, they rent instead. Higher interest rates would deflate prices and destroy speculators. This is all Fed's fault.
The Fed s playing a very dangerous game and is encouraged by government which wants to party on too. If inflation and interest rates rise they will be forced to pay the piper even if the economy doesn't rebound. And if we fall into a downturn at this low rate there is little that can be done to help us out given the economy continues to become overleveraged from Federal Reserve games.
How much does a house cost in countries where you have to pay cash for homes (or 50% down)?
Yeah. Usually a lot.
No. I had houses overseas. Until about 15 years ago it was impossible for the average person to get a loan. Then the world bank and others came in making money available for borrowing to buy a home.
The average house was 20-30k before the loans were made. That was because people had to save to buy one or build little by little.
Today the average hose is 150k. Big huge jump in prices after loans were offered.
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