Mortgage Hackr?

This is what the inflation chart should actually look like. :eyes:

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I just wanna know who these lucky people are with $577 and $2,300 mortgages (in 2013 and 2023 respectively). That is bananas. I can’t imagine how baller one must feel to have bought a home in 2013 and be paying under $600/mo for it in 2023.

Feeling good, I can tell you. One such guy bought four townhomes in a row ,in LA, back when market was down in 2011, and couple more single family homes around the same time. He has been paying a mortgage on them all ever since, renting 3 units/townhomes (he lives in fourth) + 2 single homes, using that rent money to pay off his mortgage. He was hit hard during pandemic, with all the laws protecting tenants who turned into squatters under health emergency, but he is still far ahead of the game considering how much his properties have appreciated and how much equity he had gained. Before investing into properties he worked as property manager on site in one of the apartment complexes in LA, receiving full salary of prop. manager and free apartment in the complex. His wife also worked full time as accountant all those years, so they were able to save some good money (not paying for rent for 20 years, since 1993) , investing it into 6 properties in 2011, and benefiting from insane appreciation and built-up equity. They started as a young couple in early 90’s, just a couple of lost people trying to figure what to do in LA when they moved there, and ended up with 7 figure equity.


Those mortgage payments are P+I only. Escrow (property tax/insurance/mortgage insurance if required) isn’t included. Escrow will go up and is probably more than P+I for a lot of houses bought in 2012

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Please point to the area where “Home Price Collapse” is the same with “Monthly Mortgage Payment Using Existing Home Price- U.S. with a 20% down Payment and Average 30y Mortgage Rate”

Perhaps a better link would be this.

And a better chart would be this:

Maybe you don’t trust the Fed like half the people here. Cool.

Here’s Stanford

Don’t trust America?

How about the Chinese/HK?

Bottom line, huge decreases in home prices are correlated with high unemployment and higher use of government assistance. Now, I’m not saying a 5% drop in home prices is going to cause the great depression but a massive housing crash? Be careful what you wish for people.

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I’m not sure about other states but in CA, your property tax increases are capped at 2%. So for people who held $1,000 mortgages in 2011, their property tax is probably no more than a few thousand a year. :cry:


Definitely a perk of owning in CA.

TX limits the appraisal value increase to 10%/year for primary homes. The tax rate has slowly been going down over the last few years as values have increased and TX is trying to get the first $100k of the appraisal taken off for primary homes.

DC, VA and CT don’t have any perks like these that I’m aware of.

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Might not be the case for too much longer going forward:


I like this take, but I do feel there is one point it does miss on:

The gains are basically not usable until sold. Right now it’s just on paper. Selling locks them in and equity becomes capital, which technically could also be invested, but from a pure mental health standpoint, using them to live mortgage free is worth it, imo.

This was actually part of the conversation with the wife, and the thought of just parking enough money in a 1 year T Bill to cover a $5k a month rental for the next year is a thought and seeing what happens in the market. Same thing really (less the tax being paid) in that we’d be living with no major housing overhead.

Things always revert back to the mean, so really, I’m not very concerned at all about any more appreciation. Even with a drop in rates, income simply can’t keep up with where prices are. We got like 15-20 years of appreciation in 3, simply unsustainable, imo of course.

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Also how many people have said they’ll be a buyer if rates dip to 5%. That will just increase demand again and bidding wars. Unless supply changes which new construction starts are down, I’m not sure the situation gets any better. Only issue would be unemployment goes over 10% and people actually can’t afford a home. Someone will always chime in and say they are waiting for 2008 style crash and will buy up every home for pennies on the dollar, but I don’t see that happening.


Highly unlikely.

People go to much greater lengths to avoid foreclosure when there’s a lot of equity involved.

This only goes to 2022, so we are probably well over 3x compared to 2008.

(not sure if these are nominal or real dollars)

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Wild. We’re going to see massive wealth/equity divides in the years to come. That number is going to keep climbing but what it won’t reflect is the fact that some people are earning equity super quickly and others are hardly earning any at all. Folks who bought pre-2022 at 1.8-2.8% are building equity 2-2.5x quicker than people buying homes today.


It’s not getting any easier for those who aren’t already in.


In general I am a huge believer of pulling that 500K tax free gain and rolling it into another house. Just be careful not to overpay for your next house because with the inventory shortage there are too many overpriced houses out there. In my area I see houses with asking price that is several 100K above current market value. Also, if you buy treasuries, in 12 months you could find yourself in a scenario where treasuries no longer pay enough and lower mortgage rates bring a ton of buyers from the sidelines chasing limited inventory. What will be your next move if prices move 10% up without you? Many people thought that the market topped in 2019 but had too much ego to adjust and watched this whole move on the sidelines.

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Banks will adjust… return of the minimum payment O-ARM!!! :slight_smile:

Absolutely brutal for non-homeowners.


Just throwing out a different perspective – The US has one of the lowest house price to income ratios when comparing to other countries. When thinking about the average home owner, you are correct, but if we go down the direction of many other countries (where the wealth disparity is considerably larger than in the US), and the share of housing owned by investors (whether mom & pop, medium-large private landlords, or institutions) keeps increasing, then housing can go a lot higher.

Couldn’t believe how little was going towards when I ran amortization schedules at ~3.5% versus 7%. on a $400k house, it was approx $250 towards principle and $2000 towards interest on a 30 year. At 3.5%, it was about $500 towards principle and something like $550 towards interest. We’re opting for 15 year mortgages now at these rates, but the deal needs to be really sweet for us to bite at these rates.

If these union strikes work, I wouldn’t be surprised to see incomes rise enough to support these higher home prices. Especially in middle class areas.

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The average annual gain has been 4.5-5% for basically infinity. 3 years it’s over 50%, where I am almost 70%. It simply isn’t sustainable. Reversion to the mean is inevitable, imo. I feel like every day I don’t list I leave money on the table.

And if rates do go down substantially, I’d anticipate a shit ton of building to take place. Builders are historically reactive, not proactive. Rates drop, demand through the roof, houses will be built left and right.

Also to add, a lot of greed in housing right now. Pigs get slaughtered, always. Nobody ever sees the swan until it happens. Just my .02.

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