Economics

“If we want to get serious about housing affordability, why not ban Blackstone, one of the largest donors to both parties, from buying up entire neighborhoods and forcing us to rent from them? If we are serious about housing, why not remove the 55 million people here on immigration visas who occupy homes that could go to Americans who have worked, fought, and bled for this country?” he wrote on X.

He was so close, had it going so well, and then decided to say some stupid shit that just ruins his argument.

So here’s a little breakdown for a 300k loan, that would save you a whopping $40/mo. Now, even worse though your total spend would be $400k more.

As if that weren’t bad enough, a couple, both making minimum wage, still could not afford a house as they would only net $1,700/mo after taxes.

This effectively does nothing except further line banks bottom lines.

Aside from all the other ways this proposal is stupid, a 30-year mortgage at least makes some sense compared to the timescale of a typical working person--at least historically. You get your career going in your early-mid 20s. By 30ish you are stable enough in your life and career to make the investment into a house. You make those payments dutifully for 30 years, and then by typical retirement age you own your home free and clear, and your largest individual living expense is gone.

With a 50-year mortgage, you are guaranteed to have that debt hanging around your neck well into retirement, or worse.

And yes, I'm aware of all the hand-waving and outdated assumptions in that first paragraph, don't @ me. Broadly speaking, the point is that the long-term implications of 50-year mortgages becoming common are pretty terrifying, since it's virtually impossible to expect to pay one of these off during period you are gainfully employed.

You pay for 30 or 35 years, then default in retirement (or die). The banks earn exactly as much in interest from you during that time period, compared with a 30-year loan, plus they get your house at the end.

Mortgage means "deaths pledge" doesn't it?

From the article:

Graham Stephan, a real estate investor and financial commentator, wrote on X: “A 50-Year mortgage would allow you to buy approximately 10 percent more house (or save about 10 percent) at the expense of nearly DOUBLING your payment schedule. There’s no way that ends well.

“A 50-year mortgage isn’t worth it and won’t add much benefit since your mortgage interest is front-loaded. Homeowners will have very little, if any, equity by the time they sell (homeowners keep their home an average of 11.8 years). It sounds good on paper, but financially, it makes very little sense.”

Montana Representative Lukas Schubert, a Republican, wrote on X: “The best way to help young homebuyers is to deport all the 30 million illegals from this country, that will free up a lot of housing!"

from me: Good point, Graham. As for you Lukas, who do you think builds houses and apartments in this country?

wasn't that the whole plan?

I’ve always wanted to own a home ~loan~

Don't worry. If the economy and housing market get even worse we will go to 100 year and then just generational mortgages.

He’s the businessman president. Expert on real estate.