For all you smooth brains who pride yourselves in bagholding, the next wave of loss porn will come from those who bought a house in the last 2 years and are paying interest and principal on an overpriced asset that is losing value. And you’re getting screwed twice because not only are you making principal payments on an asset that is losing value but also interest payments which are much larger than the principal payments in most cases. Jpow and the rest of the fed thank you for your servicing of debt securities at your loss.
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At least you can live in the bag though.
It was either a 1900 mortgage, or 2200 for a two bedroom apartment. Shitty timing? Yea. But I can afford it on 1/3 my salary and it houses my family. Houses are not just an investment to most people, but a means to survive.
You must live in a covid market like boise or something. Prices haven’t softened one bit in NY/NJ.
Interest payments are much higher than principal? I guess my 15 yr loan at 2.25% missed the memo.
Op doesn’t own a home and smoking that copium
The difference between jpow tanking your home equity vs your stock holdings is that you can’t live in your stock holdings.
Absolutely. Locking in outrageously low interest rates on money for 20+ years, such a regrettable financial mistake. Whatever will all those people do?
Bought may of this year. 380k for a house that was 220k 3 years ago. Sucks yes but my rate is 3.25% and my mortgage is under $1500. Rents for this home would be $2500/month
It is all dependent on the mortgage rate you have. The bag holders will be those with 5% and up mortgage rates. Everything below that is just jelly.
A 20 year loan at 1,48 % on a new build house. I am sure I will manage to carry that bag.
Yes, excellent point OP. Much better to throw ridiculous amounts of money down the endless pit called ‘Rent’ for a couple of years and be ‘free’ of less than 2% interest
My mortgage payments are less than renting and my place is dope
OP lives in a shitty rental apartment and is butthurt
The wealth inequality between homeowners and renters is staggering. The Census data shows that the median net worth of homeowners is a whopping 80 times the median net worth of renters.
Hey dummy what if they, you know, stay and live in their houses for the next 10-15 years
Ever heard of a fixed rate
Not necessarily. i just bought a house 6 weeks ago for $420,000 I put down $75,000. My mortgage is $2,500. My rent the past 3 years has been increased from $1,600 to $2,200. So i decided to buy a house and build equity. If and when my property loses value, i’ll make it up by finishing the basement completely to add value to the home. Regardless, my interest rate is fixed at 5.9%. Fannie Mae predicts interest rates fall to 4.5% in Q3 of 2023. I can always refinance for a better interest rate anytime even if it’s 6 years from now. Doesn’t matter. My rent would have kept going up and I rather not pay $100,000 in rent every 4 years like i have been the past 6 years. That’s $150,000 me and my girlfriend have paid in rent. All that rent money is money thrown in a dumpster fire. I rather pay a mortgage and hope for an attractive interest rate in the 3’s sometime in the next 5-8 years
Guy without mortgage is spotted!
I’m happy every day looking with my $400k mortgage at 2% FU
I would qualify this as homeowners who purchased in the last year.
Bought my home in 2018 for $575k. It peaked at $1.1m. has since trended down to $1.03m. The interest rate is under 3%. The market would have to crater for me to be a bag holder.
Glad I bought 15 years ago, value up 40% and refinanced at 3.25. Don’t think I’ll lose enough to be concerned.
I’ll enjoy my 3.2% rate, thanks. Check back in in five years and we’ll see how I’m feeling lol
Depends if you plan to own your house for 10+ years or not. If you plan to own your house for 10 years, prices will rebound by then, so you may be sad you overpaid, but for people like myself buying a house was more about having freedom and a permanent place to live more than an investment.
I’m sitting on 2.8% rate for a loan issued in Feb 2021. Median rent in my neighborhood for an equivalent property is 50% more than my mortgage.
I’m pretty confident I’m not a bag holder with regards to real estate.
Bought my first house in 2001 and have rolled it into every subsequent home, I’m paying a 2001 mortgage on 4x the house with 1/4 the interest of the first home but 9x the value.
Pure fud. The only way this matters is if you can’t afford your mortgage, or if you plan to sell in a down market.
People need a place to live and the alternative to buying is renting – you pay either way. If you’re comfortable with your fixed mortgage payment, and you aren’t planning on selling in the next 5 years or so, the value of the home today is really irrelevant. Values will eventually recover, generally speaking.
(None of this applies to me personally, I own my home outright, but your fud is high time preference thinking.)
This is the coolest of hot takes ever.
Right I’d be much better off renting. Instead of a fixed payment, an ever increasing one. This is the knowledge I come here for.
Why don’t you look at all the money you spent in rent and jack off to that loss porn. You literally paid someone else’s mortgage
Think about how much food and gas and rent went up last year. Now think about how WORTHLESS a dollar will be in 2050. Think about how astronomically inflated prices will be.
“Bagholders” who bought houses in the last 2 years will be paying the same monthly mortgage they paid today, in 2050.
They are paying 3% interest while inflation is 10%! Just stop for a second and think about how absurd that is.
They are literally STEALING from the bank!
They borrowed hundreds of thousands of dollars in 2021, spent it, and they get to pay it back with worthless inflated money 10, 20, 30 years into the future. All while their house is appreciating.
The only reason the bank is OK with it is because the bank got the money from the government, who printed it out of thin air.
Who is getting fucked over here? Everyone without a house who has to pay rent and see their rent increasing by 10% every year. All the poor people who have to eat the inflation without having assets which benefit from it.
House prices may go down over the next 2 years, but having a 3% mortgage rate is unbeatable over 10+ years. It’s like a 7% interest multiplied by the amount of your mortgage.
And anyone with a 3% mortgage rate won’t be moving for a long, LONG time, so it doesn’t matter if the price goes down in the short term.
Also, did you know you get to deduct your mortgage interest from your taxes? Almost makes you think the entire system is designed to benefit property owners and fuck over poor people, doesn’t it?
Me!
I got a fixed rate. 2.2% and bought right before everything raised to the tits. I’m pretty happy.
I can’t believe the prices people were paying for houses. I bought my home in 2018 for $168k. Two of my neighbors homes sold for $300k last year, and they are identical to mine. My area has been getting a lot of people moving in from more expensive areas that’s why they are offering $30k over asking on $250k homes
Absolute regard take. The last two years had rates at rock bottom. Were prices high, yes, but monthly payments were 2/3 of what someone buying now could purchase. The only bag holders would be people who bought with ARM or other variable interest loans.