"Keep interest rates very low. It can be done for homes."
Homes are appreciating assets, fixed in place. This lowers risk, and interest rates.
Kids with $100k in debt and a Social Justice degree are depreciating assets with a flight risk. High rates are well justified. If you want to borrow money cheaply, don't borrow as a member of a high-risk pool.
When you buy a car, it loses value once you drive it off the lot. Why do old homes go up in value? Scarcity and supply/demand doesn't explain this phenomenon.
This is one of the oldest banking rackets around, and it's blatant wealth transfer in this never-ending class warfare where the rich use the the government to enrich themselves.
Old houses usually go up in value because the land they sit on gets more valuable , they retain utility, and the labor and materials to replace go up in value. The land often becomes more valuable because the income one can generate nearby has increased over time, or a more pleasant environment has been created, often through investments made by others.
The average car depreciates because it has a very finite service life which is consumed over time and distance, millions of similar or better make are built each year, and the utility decreases as its reliabilty comes into question at some point.
You're making a case for inflation in general, but not for how housing prices dramatically outpace overall inflation. I suggest it would not absent government intervention, or at least not to the same degree.
That government intervention clearly benefits certain businesses and the wealthy.
Not all land is equal in value nor is its value static and fixed for all time.
You could have two houses that are nearly identical with identical acreage; if one is located near a town that grows and offers more and better services and employment opportunities over time then that house increases in its valuation Even if it never physically changes. The other could be located in a shithole town with no jobs, schools, stores, police/ems....its valuation is going to tank.
While I mostly agree with you, there’s another point here. Banks vet the shit out of you for a mortgage because they are not usually in the business of dealing with the real estate you leave behind if you default on your mortgage. It’s. Collateral, yes. Students who default in massive loans don’t have the collateral.
"Keep interest rates very low. It can be done for homes."
Homes are appreciating assets, fixed in place. This lowers risk, and interest rates.
Kids with $100k in debt and a Social Justice degree are depreciating assets with a flight risk. High rates are well justified. If you want to borrow money cheaply, don't borrow as a member of a high-risk pool.
"Homes are appreciating assets, fixed in place"
Would they be absent government incentives?
When you buy a car, it loses value once you drive it off the lot. Why do old homes go up in value? Scarcity and supply/demand doesn't explain this phenomenon.
This is one of the oldest banking rackets around, and it's blatant wealth transfer in this never-ending class warfare where the rich use the the government to enrich themselves.
Old houses usually go up in value because the land they sit on gets more valuable , they retain utility, and the labor and materials to replace go up in value. The land often becomes more valuable because the income one can generate nearby has increased over time, or a more pleasant environment has been created, often through investments made by others.
The average car depreciates because it has a very finite service life which is consumed over time and distance, millions of similar or better make are built each year, and the utility decreases as its reliabilty comes into question at some point.
You're making a case for inflation in general, but not for how housing prices dramatically outpace overall inflation. I suggest it would not absent government intervention, or at least not to the same degree.
That government intervention clearly benefits certain businesses and the wealthy.
There is no shortage of land in this country.
Not all land is equal in value nor is its value static and fixed for all time.
You could have two houses that are nearly identical with identical acreage; if one is located near a town that grows and offers more and better services and employment opportunities over time then that house increases in its valuation Even if it never physically changes. The other could be located in a shithole town with no jobs, schools, stores, police/ems....its valuation is going to tank.
While I mostly agree with you, there’s another point here. Banks vet the shit out of you for a mortgage because they are not usually in the business of dealing with the real estate you leave behind if you default on your mortgage. It’s. Collateral, yes. Students who default in massive loans don’t have the collateral.
Very solid point!