Very unpopular take, but backed by facts.
And I care much more about facts than opinions.
House prices are NOT expensive, when measured as one should reasonably do: in real terms, assuming a 10% down-payment and the remaining 90% financed with a fixed-rate mortgage.
1/4
And I care much more about facts than opinions.
House prices are NOT expensive, when measured as one should reasonably do: in real terms, assuming a 10% down-payment and the remaining 90% financed with a fixed-rate mortgage.
1/4
The median US house price has gone up 2.4x times since 1990.
In real terms, we are looking at a whopping 70% price increase over the last 10 years.
But houses are not paid for 100% in cash.
The median home buyer finances 88% of the house price with a fixed-rate mortgage.
2/4
In real terms, we are looking at a whopping 70% price increase over the last 10 years.
But houses are not paid for 100% in cash.
The median home buyer finances 88% of the house price with a fixed-rate mortgage.
2/4
What's really relevant is how much these mortgage installments weigh on your net monthly income.
The red line in the chart measures just that, with the index = 100 in 1990 for comparison.
So how can (mortgage payments / real wages) be pretty low if house prices are high?
3/4
The red line in the chart measures just that, with the index = 100 in 1990 for comparison.
So how can (mortgage payments / real wages) be pretty low if house prices are high?
3/4
In real terms, mortgage rates are lower and wages are higher.
Real wages are 20% higher compared to 30y ago.
30y mortgage rates are close to 0% today (2.9% nominal - 2.4% inflation swaps)
In 1990s, they were at 6%
House prices are NOT expensive.
Facts backed by simple math.
Real wages are 20% higher compared to 30y ago.
30y mortgage rates are close to 0% today (2.9% nominal - 2.4% inflation swaps)
In 1990s, they were at 6%
House prices are NOT expensive.
Facts backed by simple math.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
