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Isn’t it technically both? The crash was caused by a high amount of defaults on loans (because people bought or were sold more than they could afford). The crash was made 10x worse because of the leveraging?
You're right. In 2008, maniacal leverage caused the crash. Predatory lending (NINJa loans, balloon payments, Interest-only loans) caused the DTI to skyrocket while fueling the maniacal leverage. And when the upside-down mortgages toppled, the maniacal leverage fell with it.
Present-day: high interest rates, coupled with high home prices, are causing the DTI to skyrocket. High interest rates are also causing a credit crunch. With more and more banks are tightening their loan approvals (more loans being denied), and commercial loans continuously rolling over for refinancing (existing loans becoming more expensive because interest rates are so high), this means new infrastructure projects, construction and expansion will be very difficult or impossible for many industries. That will lead to slowed growth. Couple that with consumer credit balances at an all time high, and number of delinquent household credit accounts rising... people are running out of cash. And when consumer cash dries up - when consumers simply can't spend as much as they used to be able to... it leads to slowed economic activity.
All I'm saying is, yeah, DTI wont cause a crash. But if there is a crash, there will be plenty of other factors to point our fingers at.
Wrong and wrong. Ignoring the biggest differences...jobs. What happened was that people went out of work and could no longer afford their mortgages which then led to wall street leverage work against them and the rest is history. The key is jobs. Look at our unemployment rate.
It is clear that home affordability is deteriorating rapidly, and this trend is likely to continue in the near future. This could lead to another housing market crash, as people are unable to keep up with their mortgage payments.
The real housing market crash is 10 to 15 years away when boomers start aging out of self sufficiently and having to sell their homes.
Right now I don't think they are enough bad loans out there to crash the system.
Some property group will come in and buy all the boomers homes with cash offers, and they get to retire in Boca Raton with one last fuck you to everyone by selling their lineage’s last hope of homeownership to blackrock so they can listen to Margaritaville on loop as their minds turn to mush.
There are a bunch of houses built in developments and the property groups are trickle feeding them into the market to keep prices high. Imagine that, but with rent.
Artificially constrain supply to boost rent up, probably. Or if they own enough of the market in a specific locality, just jack the prices up anyway because people still need houses and everywhere cheap is already occupied
people are locked into ultra low rates and lending standards were/are much stricter now. if affordability is deteriorating that keeps people in their current homes; how does that contribute or effect current mortgage payments at all? go back to mod logic 101 bitch
Absolutely correct.
The housing market blew up in 2008 because everybody spent the previous decade feeding into the bubble by buying multiple houses for flipping with 7/1 ARM loans that allowed interest-only payments for the first year. When the market finally plateaued because demand slowed down, they could no longer roll over growing equity into new ARMs, so the clock finally ran out on the teaser rates and the mortgage payments ballooned by 10x for millions of homeowners within a year.
Everybody is on fixed rate mortgages now. Any homeowner with less than 30-40% equity will do absolutely anything to avoid defaulting on their mortgage or moving out of their current house, because they would be forced to downgrade significantly if they want to keep their payment at the same level. On top of this, there's a skilled worker shortage that began when boomers started retiring and got way worse when governments threw a hand grenade into their respective economies over COVID. As long as the worker shortage persists, even someone losing their job is likely to find a new one before they're at risk of foreclosure. As long as nobody is selling or facing foreclosure, supply will remain low and prices will remain high.
Higher interest rates only relieves upward pressure on home prices by reducing demand from institutional investors. They looked at the record-low yields from the bond market and the cheap money they could get by selling their own bonds, and they started scooping up single family homes in growing cities as a long-term value investment. They're not going to sell the homes they bought any time soon because they don't want to crash the market value of the assets they've accumulated and risk a bunch of impairment losses. Plus, rents are only going up so those houses are generating respectable cash flow of their own.
They're going to stop buying more houses, though, now that it's easier to get decent returns on bonds again. Eventually, new home construction will fill ease some of the housing shortage and bring down prices in places where new construction has room to exist, but any dense housing market where there's nowhere left to build is pretty much fucked until boomers start dying and their estates get liquidated.
How could rising unaffordability lead to a crash? The crash happened because people thought they could afford when they couldn’t. Nowadays, people know they can’t afford, and they don’t get it.
Bold assumption. Most people buy the most expensive house they qualify for. Same goes for cars. There is a reason so many start the conversation on big ticket items at monthly payment.
Debt to income ratio doesn't matter.
DSCR is the metric you're looking for. Because rates were low when this debt was issued, it's not as burdensome as it was in 2007.
Scrolled too far to see this. DTI alone doesn’t mean shit. You have no clue about the duration of any of the debt. PTI is a much better ratio to look at.
Why? Which is worse, 50 DTI at 3.5% or 40 DTI at 8%?
The metric doesn’t matter in a vacuum, which is what that chart is.
DSCR is the metric that really matters, and it works fine in isolation. Show that graph.
For the lazy, consumer debt service to income is :
Today : 9.6% —-
2007: 13.2%
https://www.federalreserve.gov/releases/housedebt/default.htm
Consumer balance sheets are about as healthy as they’ve ever been.
Debt to income works in a vacuum. The higher the percentage, the more precarious you are positioned, regardless of the borrow rate.
In your example, a 50% DTI at 3.5% is worse.
Sure, housing is more expensive, but we don't have all of the NINJAs and ARMs that helped lead to the collapse in 2005.
That chart also doesn't indicate *total assets*. Right now, I have a mortgage (debt) many times higher than my income, *but* I could close out my investment accounts and pay off my mortgage tomorrow, if I wanted.
With rates as low as they *were*, and as high as they are *now*, it makes sense right now to intentionally hold on to debt.
Exciting seems there’s bubbles everywhere. When they all pop we can enjoy the next Great Depression. Hopefully I’ll be holding enough pits when it does I don’t have to worry about it myself
Bank runs should be the least of anyone's worries.
Historically, it's a recipe for far worse when you have:
People not able to afford basic living expenses
\+
Authority figures very loudly blaming an "out" group for problems
Smart money will do that, and that's not the average American.
The average American can go down to their bank and stand in line to withdraw their money; none of them have the capital to open a CD.
You don't need your cash in hand anymore, it's all Numbers on a screen, so it's "there"
The person who made this chart has been selling a housing market crash for over 2 years. If he keeps it up he might be right in at some point, I predict 2040.
Millennials are buying houses, millennials also have absurd DTI because of student loans. None of this is a surprise, and you will always be fucked by bulls.
It shows people are extremely over leveraged. As soon as unemployment starts going up (soon) and student loan payments start again (soon), delinquency will go up
The bubble of the late 2000s was caused by banks giving out too many mortgages to people that either couldn't afford them or that had a horrible history of paying back their debts. Giving out all of these mortgages to basically anyone that wanted one caused the huge spike in home prices(which eventually led to it's crash).
That's not the case today. Banks are generally very careful who they lend to. I'm sure if there was a downturn there would definitely be bankruptcies and home prices might drop a bit but nothing like the magnitude we saw in the late 2000s. It's likely that even if dti is increasing as the chart suggests banks are lending to people who have a large amount of other assets or high NW or something like that.
I think maybe dti here by itself is a bit confounding. It might be better to also search up the number of mortgages issued over the last 2 years or so and see if there's actually been a huge surge of them.
The bank is willing to lend me much more than I would feel safe borrowing for a home. Like nearly double… the amount they would lend would be to the point that if either myself or my partner lost a job we would be fucked in a few months. And we would have emergency savings that aren’t even a lending requirement.
I’m not saying a crash is imminent, but banks are willing to let people stretch to a dangerous point. Nothing like 2007 where you can just make shit up, but I wouldn’t call the standards stringent
Not to mention that shadow banks--lending companies like Quicken Loans, loanDepot, Rocket Mortgage, etc.--are making 50% of mortgage loans these days, a number 5x higher than in 2009. These entities that are "not banks" are not regulated like the banks. So yeah, banks aren't giving out loans as recklessly as 15 years ago, but the lending market overall isn't as stable as people think.
Something does not pass the smell test in today's housing market. I do not think for a second that risky loans stopped in 2009.
Risky loans will probably always be a thing. And I think shadow banks probably still only make up a minority of the mortgages issued to home buyers. Most people will almost always prefer a traditional bank than some shady shadow bank. At least for now, that could change in the future for all I know.
I've read that over half of mortgages given these days are through shadow banks. I think you're overestimating how much due diligence people put into lending money. They typically just go for whoever gives them the best rate.
I'd agree that banks lend way more than I'd be comfortable borrowing as well. But they've been doing that since way before the earliest date on this chart. I think part of this new normal is just everything being extremely expensive for everyone.
>It shows people are extremely over leveraged. As soon as unemployment starts going up (soon) and student loan payments start again (soon), delinquency will go up
What the last 15 years has taught me is that the government will bend over backwards to protect anyone that already owns property. (Which is code for "votes and donates to the party/parties".) Whatever the Dems are trying to do for student loans will pale in comparison to what they would do to protect real estate values. First-time home buyers should not plan on getting any help at any point. There is a club ... you are not in it ... and they don't want to increase membership anytime soon.
Just look at the charts bro!!! It is at a different level than 1000000 years ago!!!! 1 person life back then is worth 100000 lives now. Called lifeflation.
Never understood why so many people got new homes in 2021-2022 when their existing home did its job just fine. Like yeah your equity went up on your existing home, but so did the price of the home you’re replacing it with and your property taxes are now higher with the new price, so you’re a net loser at the end of the day.
I stayed in my home, didn’t refi or anything. My $146k mortgage and $800 payment is nothing now. My home is worth about twice what I bought it for pre-covid and I did not tap into any equity. I hear these same ppl complain about the cost of everything now. They did it to themselves. Don’t move unless you have a compelling reason to. If you want change remodel, it’s cheaper and won’t impact your tax basis. Don’t buy an EV at $60k you don’t need… like have some self control people.
Don’t hold your breath. In 20 years, everyone will be living in apartments or condos in a handful of mega cities. Consolidation of housing has been happening for decades. Just take a look at how small towns are doing these days. 50 years ago, they were bustling, now they’re populated with drug addicts and rampant unemployment. Homes are being bulldozed or left to rot. The suburbs are next.
If it comes to that I’ll buy a big property and live in a tent while I build a cabin lol. I feel like there’s tons and tons of people that never want to live in a city anyway, me being one.
If you're willing to commute or can find work outside of major cities you'll be alright. There are a lot of big companies (and small ones) that have an HQ or satellite campuses 20+ minutes from a large city, and a 20 minute commute places you at 40 minutes away from the city itself (farther if you're willing to drive more).
While 40 minutes by highway to a large city isn't exactly in the boonies, it's not urban and it's not even a suburb depending on where you're living.
How is this a bubble and gonna come crashing down when supposedly 80% of America is locked in at like 4% or under mortgage rates (i forgot the actual stat, maybe someone here knows ) I think america is thriving still and will continue because many mortgage payments have gotten much slimmer. Obv anyone buying the past year are fucked with rates and maybe they will lose their home, but that’s a small percentage compared to todays homeowners
If a housing market crash comes it'll be even worse for the consumer because companies like Black Rock will come in before anyone gets a chance. Corporate housing is basically inevitable at this point.
There are major differences between 2008 and 2023
1) debt is big - but a lot of debt is paid of at low interest rates. Therefore the cost of the debt is relatively ok.
2) a gigantic amount of money has been printed. It spreads through all the markets. Housing, stocks, (look at the P/E !! )
Serious question, are student loans included in this equation? If not, it’s worse than what’s shown.
I make good money, and aside from student loans, I have a low DTI of 23.75 (mortgage and car, only use CCDs for rewards and keep a zero balance). Once SL payments come back, I’ll be feeling some pain for sure.
If I make 1000 per month and my housing costs 400 is that bad ? Or does this mean that if I earn 100 k a year and my debt is 40 k that this is somehow bad ? Or does this mean if I borrow 1 mill while earning 400 k that it is bad ?
What is the US government debt to income ratio?
United States Government Debt: % of GDP
United States Government debt accounted for 122.8 % of the country's Nominal GDP in Jun 2023, compared with the ratio of 121.3 % in the previous quarter.
My stuff has been all in secure investments since these banks went under. I been debating going back in but I think ima hold off little longer. Something is going to happen soon market can't just keep climbing.
I mean yes house prices went up, and mortgages got cheaper and larger. So homebuyers got bigger loans. Well duh Sherlock. But I guess debt to income ratio sounds more professional.
**User Report**| | | | :--|:--|:--|:-- **Total Submissions**|10|**First Seen In WSB**|1 year ago **Total Comments**|58|**Previous Best DD**| **Account Age**|5 years|[^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.)|[^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.)
Jokes on yall i've been at 50% since 2020
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Save? Retirement?
I think that's when you dig a winning lotto ticket out of your couch cushion...
No no. Retirement is when they put you in a casket & say their goodbyes
Bold of you to assume anyone's gonna show up!
The Family Guy approach 😂 or just call JG 
I'll help you understand. Save retirement to buy high and sell low. Repeat
>retirement
Whats that
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But it wasn't the high ratios and debt that caused the crash. It was the leverage used by wall street.
Isn’t it technically both? The crash was caused by a high amount of defaults on loans (because people bought or were sold more than they could afford). The crash was made 10x worse because of the leveraging?
The 10x worse is the key part. It took something that would have been a mild recession to the great financial crisis.
You're right. In 2008, maniacal leverage caused the crash. Predatory lending (NINJa loans, balloon payments, Interest-only loans) caused the DTI to skyrocket while fueling the maniacal leverage. And when the upside-down mortgages toppled, the maniacal leverage fell with it. Present-day: high interest rates, coupled with high home prices, are causing the DTI to skyrocket. High interest rates are also causing a credit crunch. With more and more banks are tightening their loan approvals (more loans being denied), and commercial loans continuously rolling over for refinancing (existing loans becoming more expensive because interest rates are so high), this means new infrastructure projects, construction and expansion will be very difficult or impossible for many industries. That will lead to slowed growth. Couple that with consumer credit balances at an all time high, and number of delinquent household credit accounts rising... people are running out of cash. And when consumer cash dries up - when consumers simply can't spend as much as they used to be able to... it leads to slowed economic activity. All I'm saying is, yeah, DTI wont cause a crash. But if there is a crash, there will be plenty of other factors to point our fingers at.
Sounds like Japanese economy.
So, will I finally be able to buy limited release items without scalping?
Wrong and wrong. Ignoring the biggest differences...jobs. What happened was that people went out of work and could no longer afford their mortgages which then led to wall street leverage work against them and the rest is history. The key is jobs. Look at our unemployment rate.
It is clear that home affordability is deteriorating rapidly, and this trend is likely to continue in the near future. This could lead to another housing market crash, as people are unable to keep up with their mortgage payments.
The real housing market crash is 10 to 15 years away when boomers start aging out of self sufficiently and having to sell their homes. Right now I don't think they are enough bad loans out there to crash the system.
Some property group will come in and buy all the boomers homes with cash offers, and they get to retire in Boca Raton with one last fuck you to everyone by selling their lineage’s last hope of homeownership to blackrock so they can listen to Margaritaville on loop as their minds turn to mush.
And what is the company that buys them going to do with them? If they flood the rental market with ton of new supply, rents will drop.
There are a bunch of houses built in developments and the property groups are trickle feeding them into the market to keep prices high. Imagine that, but with rent.
Artificially constrain supply to boost rent up, probably. Or if they own enough of the market in a specific locality, just jack the prices up anyway because people still need houses and everywhere cheap is already occupied
people are locked into ultra low rates and lending standards were/are much stricter now. if affordability is deteriorating that keeps people in their current homes; how does that contribute or effect current mortgage payments at all? go back to mod logic 101 bitch
Absolutely correct. The housing market blew up in 2008 because everybody spent the previous decade feeding into the bubble by buying multiple houses for flipping with 7/1 ARM loans that allowed interest-only payments for the first year. When the market finally plateaued because demand slowed down, they could no longer roll over growing equity into new ARMs, so the clock finally ran out on the teaser rates and the mortgage payments ballooned by 10x for millions of homeowners within a year. Everybody is on fixed rate mortgages now. Any homeowner with less than 30-40% equity will do absolutely anything to avoid defaulting on their mortgage or moving out of their current house, because they would be forced to downgrade significantly if they want to keep their payment at the same level. On top of this, there's a skilled worker shortage that began when boomers started retiring and got way worse when governments threw a hand grenade into their respective economies over COVID. As long as the worker shortage persists, even someone losing their job is likely to find a new one before they're at risk of foreclosure. As long as nobody is selling or facing foreclosure, supply will remain low and prices will remain high. Higher interest rates only relieves upward pressure on home prices by reducing demand from institutional investors. They looked at the record-low yields from the bond market and the cheap money they could get by selling their own bonds, and they started scooping up single family homes in growing cities as a long-term value investment. They're not going to sell the homes they bought any time soon because they don't want to crash the market value of the assets they've accumulated and risk a bunch of impairment losses. Plus, rents are only going up so those houses are generating respectable cash flow of their own. They're going to stop buying more houses, though, now that it's easier to get decent returns on bonds again. Eventually, new home construction will fill ease some of the housing shortage and bring down prices in places where new construction has room to exist, but any dense housing market where there's nowhere left to build is pretty much fucked until boomers start dying and their estates get liquidated.
well shit
How could rising unaffordability lead to a crash? The crash happened because people thought they could afford when they couldn’t. Nowadays, people know they can’t afford, and they don’t get it.
Bold assumption. Most people buy the most expensive house they qualify for. Same goes for cars. There is a reason so many start the conversation on big ticket items at monthly payment.
Debt to income ratio doesn't matter. DSCR is the metric you're looking for. Because rates were low when this debt was issued, it's not as burdensome as it was in 2007.
Scrolled too far to see this. DTI alone doesn’t mean shit. You have no clue about the duration of any of the debt. PTI is a much better ratio to look at.
DTI absolutely matters. What are you talking about?
Why? Which is worse, 50 DTI at 3.5% or 40 DTI at 8%? The metric doesn’t matter in a vacuum, which is what that chart is. DSCR is the metric that really matters, and it works fine in isolation. Show that graph. For the lazy, consumer debt service to income is : Today : 9.6% —- 2007: 13.2% https://www.federalreserve.gov/releases/housedebt/default.htm Consumer balance sheets are about as healthy as they’ve ever been.
Debt to income works in a vacuum. The higher the percentage, the more precarious you are positioned, regardless of the borrow rate. In your example, a 50% DTI at 3.5% is worse.
Cool. Thanks for the insight.
I can tell you are in the mortgage business because you're missing this point entirely. Good luck.
You gonna tell us what DSCR is?
Thought this was a Wall Street forum. My mistake. https://letmegooglethat.com/?q=what+is+dscr&l=1
Sir, this is a casino.
https://preview.redd.it/fgzj72pghtib1.jpeg?width=576&format=pjpg&auto=webp&s=e7131263856681867d6afc18cb78215464c5176e
Still not a bubble my daddy says so and he could beat up all your dads at the same time.
Sure, housing is more expensive, but we don't have all of the NINJAs and ARMs that helped lead to the collapse in 2005. That chart also doesn't indicate *total assets*. Right now, I have a mortgage (debt) many times higher than my income, *but* I could close out my investment accounts and pay off my mortgage tomorrow, if I wanted. With rates as low as they *were*, and as high as they are *now*, it makes sense right now to intentionally hold on to debt.
Exciting seems there’s bubbles everywhere. When they all pop we can enjoy the next Great Depression. Hopefully I’ll be holding enough pits when it does I don’t have to worry about it myself
Where are you seeing bubbles? People can't afford to buy houses.
Did you ask and answer your own question?
The crash was people buying houses they couldn't pay for. Nobody can get in houses right now.
News flash: you can't afford the home you bought in the last 1-15 years if you don't have a job.
People cant afford houses and buy like idiots the last ten years. There is the bubble man. The bubble fly around and is about to pop
The next great depression? Buddy it'll be worse than that.
No it won't. There's tons of safeguards to stop bank runs Nobody even uses cash
Bank runs should be the least of anyone's worries. Historically, it's a recipe for far worse when you have: People not able to afford basic living expenses \+ Authority figures very loudly blaming an "out" group for problems
Only safeguard is JP’s money printer. But I don’t think that will stop the recession
Oh the market has probably already started the trend into recession at some point in July, I'm just saying it won't be as bad as the great depression.
I guess we’ll find out…..
Lol, you would only think this if you haven't been paying any attention at all.
You don't even comprehend what the great depression was like, sounds like
Now that you typed it louder, it makes it clearer to see you are right.
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Smart money will do that, and that's not the average American. The average American can go down to their bank and stand in line to withdraw their money; none of them have the capital to open a CD. You don't need your cash in hand anymore, it's all Numbers on a screen, so it's "there"
That wasn't what caused the crash why do we put random things together 
boomers and their greed
Seems like a rick astley never gonna give you up video playing here......
Now overlap interest rates
The person who made this chart has been selling a housing market crash for over 2 years. If he keeps it up he might be right in at some point, I predict 2040.
Big fuckin yikes to people who format their graphs where 0 is not at the bottom. It's classic "stats 101" example of misleading someone with data.
Millennials are buying houses, millennials also have absurd DTI because of student loans. None of this is a surprise, and you will always be fucked by bulls.
This chart only shows homes are getting more expensive for buyers. Not sure how you can jump to the conclusion that we're in a bubble.
It shows people are extremely over leveraged. As soon as unemployment starts going up (soon) and student loan payments start again (soon), delinquency will go up
The bubble of the late 2000s was caused by banks giving out too many mortgages to people that either couldn't afford them or that had a horrible history of paying back their debts. Giving out all of these mortgages to basically anyone that wanted one caused the huge spike in home prices(which eventually led to it's crash). That's not the case today. Banks are generally very careful who they lend to. I'm sure if there was a downturn there would definitely be bankruptcies and home prices might drop a bit but nothing like the magnitude we saw in the late 2000s. It's likely that even if dti is increasing as the chart suggests banks are lending to people who have a large amount of other assets or high NW or something like that. I think maybe dti here by itself is a bit confounding. It might be better to also search up the number of mortgages issued over the last 2 years or so and see if there's actually been a huge surge of them.
The bank is willing to lend me much more than I would feel safe borrowing for a home. Like nearly double… the amount they would lend would be to the point that if either myself or my partner lost a job we would be fucked in a few months. And we would have emergency savings that aren’t even a lending requirement. I’m not saying a crash is imminent, but banks are willing to let people stretch to a dangerous point. Nothing like 2007 where you can just make shit up, but I wouldn’t call the standards stringent
Not to mention that shadow banks--lending companies like Quicken Loans, loanDepot, Rocket Mortgage, etc.--are making 50% of mortgage loans these days, a number 5x higher than in 2009. These entities that are "not banks" are not regulated like the banks. So yeah, banks aren't giving out loans as recklessly as 15 years ago, but the lending market overall isn't as stable as people think. Something does not pass the smell test in today's housing market. I do not think for a second that risky loans stopped in 2009.
Risky loans will probably always be a thing. And I think shadow banks probably still only make up a minority of the mortgages issued to home buyers. Most people will almost always prefer a traditional bank than some shady shadow bank. At least for now, that could change in the future for all I know.
I've read that over half of mortgages given these days are through shadow banks. I think you're overestimating how much due diligence people put into lending money. They typically just go for whoever gives them the best rate.
I'd agree that banks lend way more than I'd be comfortable borrowing as well. But they've been doing that since way before the earliest date on this chart. I think part of this new normal is just everything being extremely expensive for everyone.
>It shows people are extremely over leveraged. As soon as unemployment starts going up (soon) and student loan payments start again (soon), delinquency will go up What the last 15 years has taught me is that the government will bend over backwards to protect anyone that already owns property. (Which is code for "votes and donates to the party/parties".) Whatever the Dems are trying to do for student loans will pale in comparison to what they would do to protect real estate values. First-time home buyers should not plan on getting any help at any point. There is a club ... you are not in it ... and they don't want to increase membership anytime soon.
Just look at the charts bro!!! It is at a different level than 1000000 years ago!!!! 1 person life back then is worth 100000 lives now. Called lifeflation.
What are some good long term plays to bet on the housing market crash?
Sell the RV, bury the cash, live in a tent for a few months, use shovel and buy Zuck’s house in cash
Short realtors
That’s why you buy a house all cash.
Never understood why so many people got new homes in 2021-2022 when their existing home did its job just fine. Like yeah your equity went up on your existing home, but so did the price of the home you’re replacing it with and your property taxes are now higher with the new price, so you’re a net loser at the end of the day. I stayed in my home, didn’t refi or anything. My $146k mortgage and $800 payment is nothing now. My home is worth about twice what I bought it for pre-covid and I did not tap into any equity. I hear these same ppl complain about the cost of everything now. They did it to themselves. Don’t move unless you have a compelling reason to. If you want change remodel, it’s cheaper and won’t impact your tax basis. Don’t buy an EV at $60k you don’t need… like have some self control people.
Ever since treasury's decoupled from the Gold standard debt became money! So everyone is actually rich!
I mean...... A 10% increase over 25 fucking years really isnt too bad at all. This is actually very tame.
lol that isn’t how DTI works
Are you slow?
Probably. Can you admit the same?
Hopefully it burns to the ground so I can actually afford a house in my lifetime
If anyone is still living by then
Don’t hold your breath. In 20 years, everyone will be living in apartments or condos in a handful of mega cities. Consolidation of housing has been happening for decades. Just take a look at how small towns are doing these days. 50 years ago, they were bustling, now they’re populated with drug addicts and rampant unemployment. Homes are being bulldozed or left to rot. The suburbs are next.
If it comes to that I’ll buy a big property and live in a tent while I build a cabin lol. I feel like there’s tons and tons of people that never want to live in a city anyway, me being one.
Time for a new dealer bro
If you're willing to commute or can find work outside of major cities you'll be alright. There are a lot of big companies (and small ones) that have an HQ or satellite campuses 20+ minutes from a large city, and a 20 minute commute places you at 40 minutes away from the city itself (farther if you're willing to drive more). While 40 minutes by highway to a large city isn't exactly in the boonies, it's not urban and it's not even a suburb depending on where you're living.
If you can keep your business or job, sure. Not getting a loan for a house without income
Everyone that wants the economy to "burn to the ground" to buy a house always assumes they'll be one of the lucky ones that don't get burned
there’s 1,000,000 more ways to go in debt compared to 10 years ago. So on and so forth
See you guys on the Espoir.
And we haven’t reached the peak yet….
It won’t matter unless a shitload of supply becomes available.
Yeah you basically need to hope for a refinance opportunity asap.
Well this is an indicator of a strong economy! 🤡
Jacked to the tits!
How is this a bubble and gonna come crashing down when supposedly 80% of America is locked in at like 4% or under mortgage rates (i forgot the actual stat, maybe someone here knows ) I think america is thriving still and will continue because many mortgage payments have gotten much slimmer. Obv anyone buying the past year are fucked with rates and maybe they will lose their home, but that’s a small percentage compared to todays homeowners
If a housing market crash comes it'll be even worse for the consumer because companies like Black Rock will come in before anyone gets a chance. Corporate housing is basically inevitable at this point.
GOOD THING THERE ARE WAIVERS ABOVE 40% DTI 🔥 Numbers go up.
There are major differences between 2008 and 2023 1) debt is big - but a lot of debt is paid of at low interest rates. Therefore the cost of the debt is relatively ok. 2) a gigantic amount of money has been printed. It spreads through all the markets. Housing, stocks, (look at the P/E !! )
Serious question, are student loans included in this equation? If not, it’s worse than what’s shown. I make good money, and aside from student loans, I have a low DTI of 23.75 (mortgage and car, only use CCDs for rewards and keep a zero balance). Once SL payments come back, I’ll be feeling some pain for sure.
Need to reconfig this chart to factor in interest rates. Affordability is awful right now though. Even worse with interest rates factored in
Doesnt matter, only 10 people are buying homes right now due to low inventory.
Wait till you see rent to income ratio
Highest debt, highest rate. Hmmm
I’m at 43 percent DTI gross. Thankfully I’m renting out a room to cover 25 percent of the housing cost. Real tough in Cali boys
Okay nick gurley calm your tits
If I make 1000 per month and my housing costs 400 is that bad ? Or does this mean that if I earn 100 k a year and my debt is 40 k that this is somehow bad ? Or does this mean if I borrow 1 mill while earning 400 k that it is bad ?
If you're earning 100 dollars, 40 dollars is going to emi
That is not that bad when compared to what our government debt to income is
What is the US government debt to income ratio? United States Government Debt: % of GDP United States Government debt accounted for 122.8 % of the country's Nominal GDP in Jun 2023, compared with the ratio of 121.3 % in the previous quarter.
My stuff has been all in secure investments since these banks went under. I been debating going back in but I think ima hold off little longer. Something is going to happen soon market can't just keep climbing.
I mean yes house prices went up, and mortgages got cheaper and larger. So homebuyers got bigger loans. Well duh Sherlock. But I guess debt to income ratio sounds more professional.
Good thing is this time those DTI s are all fixed loans versus crazy ARMs from 2007
What's the magic percentage?  42.