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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (45010)	11/8/2005 8:29:14 AM
From: orkrious	Read Replies (2) \| Respond to of 110194

There is no question that the interest issue mitigates the argument that a dollar isn't worth what it was in the past. However, it is a specious argument. Over time the interest doesn't keep up with inflation, IMHO even if you exclude the tax effect. You are right loantech. Without debt, it is much tougher to make ends meet than it used to be. It's all due to inflation.

To: loantech who wrote (45010)	11/8/2005 10:29:53 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

i think most of the sustainable gain in housing prices is due to real household income growth. the rest of the gain is due to temporary factors that will be unwound when the housing bubble implodes. also, the 1953 home and the 2005 home are not an apples-to-apples comparison. it's not like the 1953 quart of milk vs. the 2005 quart of milk, or the 1953 gallon of gas and the 2005 version. from indoor plumbing and wiring, to HVAC, to two-car garages, to...granite countertops, jacuzzi baths, walk-in closets, skylights, home theaters, bonus rooms, vaulted ceilings, crown mouldings, Anderson windows, Infinity pools, Crestron home automation systems, yada yada...in short, as everybody knows, houses have become much more of a consumption item. also, back in 1953, i think people bought houses with the idea that they'd actually one day own them outright. today, as you must certainly know being in the mortgage business, people don't buy a house so much as a monthly payment. and often these monthly payments are manipulated in ways which make them cheaper in the short run (option ARMs, etc.) but don't really "purchase" the houses the way people did in 1953. so, back then one person's wages, without a credit bubble, enabled real purchase on 1yr of income-equivalent of very modest dwellings. today, two people's wages, with a credit bubble, enable pseudo-purchase on 3yrs of income-equivalent dwellings that would have been considered luxurious in 1953, but today are considered modest.