A 50 year mortgage..

[Meatwad]

Next will be a 15 year loan on automobiles. Keep paying until the car is traded/lost its value/wrecked, and then get another one for a 15 year loan. Win win for the banks as you will pay in all that interest that goes in their pockets

[Captain Virgil Hilts]

With $120K vehicles now becoming common place, there might be longer loans. The lease is the go to method today. Or, as Dave Ramsey calls it, the fleece.

You can get what amounts to a mortgage on the massive RV's. We had a Freightliner Columbia chassis with a 30' living area box on it, when we were racing 20 events a year. It was over $400K in 2010, and had what amounted to a mortgage on it. It made sense because two hotel rooms for 3-5 nights for every race, plus meals, was more than the payment on the toterhome.

Hell, even if I were to get an allowance made available for a vehicle lease, I doubt I'd do it. There's still imputed income that is taxed.

[AKIron]

You gain equity as the value increases. After 10 years on a 50 year mortgage you may have paid little on the principal but if the value of that house goes up, like it has almost continuously in our lifetimes, that's equity. I'm not advocating 50 year mortgages. I want low interest rates to make payments on 30 year mortgages more affordable.

[CptTrips]

You gain equity as the value increases. After 10 years on a 50 year mortgage you may have paid little on the principal but if the value of that house goes up, like it has almost continuously in our lifetimes, that's equity. I'm not advocating 50 year mortgages. I want low interest rates to make payments on 30 year mortgages more affordable.

If you think your house if going to appreciate in the next 10 years like it did in the last 10 years, I think you are mistaken.

We've hit the peak valuation.  Not enough Zoomers want big houses to raise big families.  Housing markets across the country are starting to crumble. 

For the next 10 years I'd be surprised to see home values appreciate more than inflation except in particular cases. 

In that case, no, you would not be build REAL equity.  At best holding your own against inflation.

[AKIron]

If you think your house if going to appreciate in the next 10 years like it did in the last 10 years, I think you are mistaken.

We've hit the peak valuation.  Not enough Zoomers want big houses to raise big families.  Housing markets across the country are starting to crumble. 

For the next 10 years I'd be surprised to see home values appreciate more than inflation except in particular cases.

It depends of course. Some areas will depreciate, some will appreciate. Where I live right now is growing and will continue to do so for years to come. Areas in demand will appreciate. Especially since when they are relatively cheap like here and other parts of Texas.

[AKIron]

They are calling the Midwest, including here, the Silicon Prairie now. New plants being completed with more planned in Texas. Especially here north of DFW. Aside from being business friendly and a relatively low cost of living Lake Texoma has a LOT of water. Chip plants use a lot of water. 

[CptTrips]

It depends of course. Some areas will depreciate, some will appreciate. Where I live right now is growing and will continue to do so for years to come. Areas in demand will appreciate. Especially since when they are relatively cheap like here and other parts of Texas.

Of course it's always local.  But over time the Zoomers just don't need that big boomer houses because they will not be raising 3-4 kids.  The boomers will have to take a loss if they want to move them.

✅ Short answer

Prices are not strongly appreciating across the board right now. In fact, most data sources show flat to slight declines in many segments of the DFW housing market.

And just wait until 2026.   

Austin is going to become a Zombie Apocalypse with the coming layoffs.

[Captain Virgil Hilts]

You gain equity as the value increases. After 10 years on a 50 year mortgage you may have paid little on the principal but if the value of that house goes up, like it has almost continuously in our lifetimes, that's equity. I'm not advocating 50 year mortgages. I want low interest rates to make payments on 30 year mortgages more affordable.

My guess is, at 6%-7% interest, even at ten years, you'll not have really touched the principal. I'm guessing that the "value" increase will be more due to inflation.

As serious recession, market crash, or something of that nature, as seen in 2008, might put people so far upside down that they can't recover.


I think if inflation is under control, you'll see interest rates drop. Possibly to the 3% range for a 15 year mortgage.

The big problem is the companies investing in housing. Private equity firms have done absolutely nothing good for any market segment they have become involved in.

[CptTrips]

Anything you can't pay off in 15 years, you shouldn't be buying.

[AKIron]

Inflation hurts the renter. It does not hurt the home "owner". My mortgage payment remains the same as my income increases. Apart from tax and insurance of course.

[CptTrips]

Inflation hurts the renter. It does not hurt the home "owner". My mortgage payment remains the same as my income increases.

But the renter takes no financial risk of down markets, broken AC, foundation problems, termites...etc, etc, etc.

A renter is assigning risk to another.


I'm not saying make them illegal.  But I'll laugh at anyone falling for it.

[Captain Virgil Hilts]

Inflation hurts the renter. It does not hurt the home "owner". My mortgage payment remains the same as my income increases.

It may not hurt a fixed rate mortgage payer as much. The mortgage payment won't increase, other than escrow. Your wages will almost never keep up with inflation unless inflation is at 2.5% or below.

The value increase will vary with location. But you likely will not see value increases such as we have seen in the last 6-7 years happen in less than 25 years again in the next century.

I've done well, I bought mine on sale, and in 7 years, it has increased more than 50% over what I paid. That's likely a once in a life time occurrence for someone not in the business of investing in real estate. I live in one of the five fastest growing areas, my county specifically, in the entire nation.

[AKIron]

I'm hoping no one is doing variable rates anymore. I'm not advocating for inflation. It's a tax on most of us. I'm saying a mortgage will be a hedge against inflation. Compared to renting. Assuming you aren't buying in expensive areas that have questionable futures. Areas like NYC.

At least this has been the case for me for the last 30 years. Who knows what the next 30 years may bring. Pretty sure I won't be around to see it.

[CptTrips]

How you you like to be chained upside down to a 50yr mortgage  at a high rate (the longer the loan the higher the risk for the bank) and watch you house price drop in half?

You've had a completely unhistorical rise in home prices the last 15 years do to wild money printing.  Historically home prices didn't increase much more above inflation.  The last 15 years has been a historic anomaly.

I think that age is ending.  Housing will now begin to revert to realistic prices.  Return to the mean. 

If you've run the numbers and there is some unusual circumstance why a 50yr would end up beneficial, then via con dios.   But the 99.8% case is people buying 50yr mtg will be the same people who finance their lifestyle on CC debt.

[AKIron]

Maybe in places like California where real estate can be many times the cost of something similar in another state. Prices are not going to drop like that across Texas or other states where prices are more reasonable. Fluctuations and cycles will continue of course.