03/24/2022
Eye opening đ§
September of 2006 was the height of the US housing market. The average home was selling for just over $216,000, and we were about to witness the greatest housing crisis in US history. đ±
If youâd purchased in that monthâŠthe worst possible time you couldâve chosen to purchaseâŠyour average mortgage rate was 6.41%. And man would you have been in for a frightening rollercoaster of financial stress!! đŹ
If youâd lived in that home for 10 years, and sold in September of 2016, you wouldâve paid down just shy of $34,000 on your mortgage. Thatâs assuming you purchased with 0% down. Your home would now be worth an average of $225,509, and youâd be sitting on $42,000+ in equity.
While rental prices went up 33.24% in that time, your mortgage wouldâve remained the same. In fact, staying in that home until today, your home value wouldâve jumped to $374,900 (US average as of late 2021) and your payment wouldnât have changed, all while rents doubled in that same time.
Someone renting throughout that period would have no equity, and a rent payment twice the amount of what they were paying in 2006. Theyâd be at the mercy of their landlordâs asking price, and forced to move whenever the landlord decided not to extend the lease. That renter would have no equity, yet they wouldâve been making a monthly housing payment just as a home owner would. Instead of paying down their own mortgage, theyâd be paying down their landlordâs mortgage.
And guysâŠthat was the worst housing crisis weâve ever seen.
Want me to run the numbers on the last 10 years? It would blow your mind! đ€Ż
