📈🏡 Surging home prices suggest many who are working from home or desperate to escape the city are in the market for a new house.
But given all the uncertainty, buying real estate right now is actually a terrible idea trib.al/fHwXIzX
Record low mortgage rates have enticed new buyers, while urban virus hotspots drove people out of cities.
In July, there was a 📉56% drop in Manhattan property sales and a 📈44% increase in nearby suburbs trib.al/fHwXIzX
But regret is already in the air.
One survey of 1,000 mortgage holders found that most people who bought houses after March 2020 already regretted taking out a mortgage trib.al/fHwXIzX
Buying in a sellers’ market is not a good move.
Home sellers are taking their once-in-a-lifetime moment to sell their house substantially over asking prices trib.al/fHwXIzX
Owning a home might be beneficial over the long run if:
🏠The house price appreciates more than a financial portfolio
🚗You don’t have to move
💍Your marriage lasts
🛑If neighborhoods stay the same
These things aren’t guaranteed, especially not right now trib.al/fHwXIzX
But many buyers forget to budget for home repair and maintenance, which typically costs 2-4% of a house’s value per year
Then there’s all the weekend time spent mowing the lawn and cleaning the gutters trib.al/fHwXIzX
Another advantage to renting is avoiding the down payment.
Putting $50,000 into a down payment forgoes earning higher returns on a low-fee index fund, which is more liquid and less expensive to manage trib.al/fHwXIzX
Renters have more flexibility than homeowners, and that’s good for employees, especially in a time of so many uncertainties.
Renters can more readily move for a pay raise or new job trib.al/fHwXIzX
While there can be certain tax advantages to owning a home, these may not last forever.
Government support for policies subsidizing homeownership may wane as future Congresses look for new revenue to forestall soaring deficits trib.al/fHwXIzX
A pay cut or job loss might even lead homeowners to sell assets in their retirement accounts to pay their mortgage.
That’s a terrible setback: Some of the worst-hit families lost their jobs in the Great Recession and were stuck in their homes trib.al/fHwXIzX
Wait to buy a home until the economy, the virus and Congressional politics stabilize.
Sharing a small space is tough. Paying for a bigger one is even tougher trib.al/fHwXIzX
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$700 billion is about nine times current US customs revenue, and 2.4% of the most recent estimate of US GDP.
Tariff revenue hasn’t surpassed 2% of GDP since the early 1870s, and hasn’t surpassed it on a sustained basis since the 1820s and 1830s
Trump often cites President McKinley’s high tariffs as an inspiration, but during McKinley’s presidency (1897 to 1901) tariffs generated less than half the share of GDP that $700 billion would amount to now
We *just* learned that #SVB’s downfall was announcing it was raising equity without having buyers lined up, says @matt_levine.
So why would Credit Suisse’s biggest shareholder announce they would “absolutely not” put more money into the embattled bank? trib.al/aS9oy3I
After Saudi National Bank ruled out providing more assistance, #CreditSuisse closed down 24% at 1.697 Swiss francs per share, its lowest closing price on record trib.al/nnFD2F8