I get the feeling that most people buy the most expensive house they can afford the monthly payment on. In theory a mortgage should start low and increase to track rent inflation, but that's not how it works. In a high rate/high inflation environment the payment is too low 30 years out and too high at the beginning.
Everyone who locked their rates in at 3% got a windfall because their payment is going to be a lot less than rent over the next 30 years. This will be more obvious over time when you're paying $2k on a house that would rent for $4k or whatever.
The owner of the 3% mortgage in 5% inflation is the loser. I'm told that is the government and/or entities we all know the government will bail out.
Personally, I think we need some way of buying out people with 3% mortgages. We shouldn't need to freeze up our entire housing stock just so people can cash in on the windfall. If it makes sense for people to move they should be able to move without having to give up the entire windfall (making mortgages transferable minus a haircut would be a hit to mortgage owners, but also encourage people to move rather then sit on their 3% even when they would rather not).
I get the feeling that most people buy the most expensive house they can afford the monthly payment on. In theory a mortgage should start low and increase to track rent inflation, but that's not how it works. In a high rate/high inflation environment the payment is too low 30 years out and too high at the beginning.
Everyone who locked their rates in at 3% got a windfall because their payment is going to be a lot less than rent over the next 30 years. This will be more obvious over time when you're paying $2k on a house that would rent for $4k or whatever.
The owner of the 3% mortgage in 5% inflation is the loser. I'm told that is the government and/or entities we all know the government will bail out.
Personally, I think we need some way of buying out people with 3% mortgages. We shouldn't need to freeze up our entire housing stock just so people can cash in on the windfall. If it makes sense for people to move they should be able to move without having to give up the entire windfall (making mortgages transferable minus a haircut would be a hit to mortgage owners, but also encourage people to move rather then sit on their 3% even when they would rather not).