idk much about this topic
median home appreciation rates seem to be similar to mortgage rates in a lot of places. does that mean the average home buyer basically breaks even over the duration of a mortgage?
idk much about this topic
median home appreciation rates seem to be similar to mortgage rates in a lot of places. does that mean the average home buyer basically breaks even over the duration of a mortgage?
I think the thing to recall that makes a mortgage a net positive over the long term is the rate of inflation. This effectively reduces the debt's value over time. Now that doesn't amount to anything if the labor market never adjusts to inflation either, but that's always been the finance advice I've heard about paying a mortgage. It's kinda supposed to be like a hedge vs inflation that you hopefully also get to live in.
This is on par with my experience. We bought a house in 2019 at around $200,000. Over the life of the mortgage (30 years), it's going to be like we paid $300,000 with the interest rate.
However, we bought right before COVID hit and jacked the prices up on everything. We gained around $50,000 in equity over the span of COVID and it's like we got a free $50,000. It makes it so we can refinance sooner, once the mortgage rates drop back down to lower than what we locked into.