Originally Posted by
Gunfighter
P&I on 600K is $2,293 for a 30 year loan at 2.25%. Just a few years ago at the historically low rate of 4%, the payment was $2291.59 on a 480K loan. At 5.5% (2009-2009 rates) that payment would equate to a 400K mortgage. People buy houses on monthly payment more than purchase price. Buyers are skipping the middle home and going from the starter home straight to the forever home.
Inflation will wipe out much of the debt, might as well go big.
You have people with middle class dual incomes taking out 30 year notes at 50. With no means to make that payment at age 80. So the “forever” home is not forever as they realize they have to downsize. Average retirement savings in the US can’t cover a $2300 payment with taxes and no job.