I find it ironic that inflation-adjusted home equity is at record highs yet many households can't do anything about it because selling their home would mean giving up a low interest rate for a high one.
@dollarsanddata About 10% of Americans own more than one home so some people can monetize this without any consequences
Rate buy downs and a hefty down payment resolves this. Plus statistically people move every 7-13 years and the value of a home goes up about 100% in that time frame. I think they’ll be okay. Another thing that will fix this is a rental rate crash. Equity is imaginary until there’s a sale/refi. It’s like holding a stock you bought for $50 bucks that’s priced at $100 but the only bids are at $60 bucks. Your stock isn’t really worth $100 it’s worth what someone’s willing to pay for it.
@dollarsanddata Won't not can't. Depending on how much equity, they have they can maybe downsize to a less expensive house
This is why your interest rate on your primary home does not really matter. It's what you can afford in monthly payments. You have to live somewhere. If you have to sell it to move...you're going to be buying another home in the same environment that you're selling in.
@dollarsanddata As a Brit, the lack of mortgage portability in the US is puzzling to me but then, so is the idea of a 30 year fixed rate mortage, so 🤷♂️
@dollarsanddata Price and availability have to be much bigger factors than interest rates.
@dollarsanddata This is probably why the equity is so high. The lack of inventory drives up the prices.
@dollarsanddata When rates fall we’re going to see a massive HELOC boom