But rents go up even though the mortgage rate is locked in. In some markets a bad 30 year mortgage turns into a great deal 10 years later.
I would argue expensive single family homes in supply restricted markets is a toxic product
I would argue expensive single family homes in supply restricted markets is a toxic product
Many people who aren’t buying are really just trying to time the market, it’s not because they can’t put a down payment. No one wants to be caught bag holding a house that may be worth a lot less in a few years.
Which brings up another piece of "conventional" homebuying: the need for a 20% down payment. Many Americans are still taught this magic number, but the reality in many big cities is that you won't always be able to afford that amount.
Think about the externalities, the fed prints money whenever the economy is in trouble and needs help (ex: recession, pandemic), this money is to be well invested for growth (real state, stocks, etc.): this injection/debt engenders more jobs, construction, population and demand growth. As long as this last part is done right [more money supply = more production] the economy will be kept healthy.
The problem arises when the above equation does not balance out- ex: Argentina, Greece, Turkey, etc. (i.e. crypto arguments), when people and governments do not produce to justify that investment (aka corruption and stealing).
Money's purpose is to be used for growth, so unlike the popular view of "inflating fiat steals your money", I don't think people understand money's purpose in the 1st place.
Except for artificially supply restricted markets (ex: single family zoning in California [recently abolished] or money laundering on empty homes in Canada, UK & Australia), mortgages are not intrinsically toxic.