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Strategies & Market Trends : Items affecting stock market picks
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To: Elroy who wrote (8256)11/12/2025 5:14:17 PM
From: russet  Read Replies (1) of 8307
 
The problem is that homes are a depreciating asset unless you spend a lot of money updating them. Additionally, there are a lot of costs associated with homes other than the mortgage, like property taxes, insurance, maintenance etc., which are all rapidly increasing. And rapidly appreciating home prices are a recent phenomenon that could easily stop and reverse, like what is happening in most states now.

The article points out that the difference between a 30 year and 50 year is about $90 a month in payments, but over 50 years you pay much more interest. Their example is that in 15 years you pay more interest than the original mortgage principle (or cost of the home) with a 50 year mortgage.

Renting is now a lot cheaper than home ownership as shown by many recent studies.

The solution to the housing crisis is lower home prices. Artificially low interest rates caused most of the appreciation after adjusting for inflation. Prices doubled in a little over 5 years, which is way more than inflation. This is not normal based on price appreciation over the last 70 years during which home prices basically mirrored inflation.

Is a $90 savings in monthly payments going to spur massive home buying demand?
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