In a coincidence of timing, shortly after I listened to this CD episode, we had a post here about a similar topic in California. Some takeaways from the episode: Ratings agencies are doing similar...
Ratings agencies are doing similar cooking of books when evaluating insurer solvency as they did about bond quality in the Bush years.
Climate-related weather disasters increase insurers to exposure that may wipe them out
Even without climate change increasing risks, inflation in the construction sector means that premiums need to rise for insurers to maintain solvency.
(this bit wasn't directly in the testimony presented in the episode) It's implied that any state-level regulator who approves premium increases sufficient to break even with inflation will be immediately recalled—either by the state legislature or directly by the voters.
Therefore, insurers are exiting many of the higher-risk markets: not just California and the Atlantic coast, but also Tornado Alley.
An uninsurable property is an unmortgageable property.
That last point is just one more point in the "you will own nothing, and you will like it" feeling we have going on. It's rare that someone can just buy a house outright with cash, but private...
That last point is just one more point in the "you will own nothing, and you will like it" feeling we have going on. It's rare that someone can just buy a house outright with cash, but private equity firms can.
I don't think paying off a mortgage is all that rare in the US? It's just rare with young people. But it's definitely going to put a damper on house prices, because that's a huge uninsured risk to...
I don't think paying off a mortgage is all that rare in the US? It's just rare with young people.
But it's definitely going to put a damper on house prices, because that's a huge uninsured risk to take. An alternative might be an RV or something like that, which has the advantage that you can move it out of harm's way. (And probably could be insured.)
A mortgage quite literally means death pledge. First time homebuyers are now in their mid 30s or later, not in their 20s. 30 year mortgages are the norm. That means, generally, people won't be...
First time homebuyers are now in their mid 30s or later, not in their 20s. 30 year mortgages are the norm. That means, generally, people won't be paying off their houses till they retire, and thats presuming they never need to take on additional debt in order to maintain it.
That may change with the pending mass boomer death train in the next 10-20 years, but the way things are now, without some heavy devaluation of the market there's gonna be a lot of homes being snapped up by private equity more than people.
Depends on if those PE firms are paying with cash in the bank or taking out business size billion dollar loans. Banks may say no in the later case if they think disaster may wipe the housing...
Depends on if those PE firms are paying with cash in the bank or taking out business size billion dollar loans. Banks may say no in the later case if they think disaster may wipe the housing investment before they get paid back.
In a coincidence of timing, shortly after I listened to this CD episode, we had a post here about a similar topic in California.
Some takeaways from the episode:
That last point is just one more point in the "you will own nothing, and you will like it" feeling we have going on. It's rare that someone can just buy a house outright with cash, but private equity firms can.
I don't think paying off a mortgage is all that rare in the US? It's just rare with young people.
But it's definitely going to put a damper on house prices, because that's a huge uninsured risk to take. An alternative might be an RV or something like that, which has the advantage that you can move it out of harm's way. (And probably could be insured.)
A mortgage quite literally means death pledge.
First time homebuyers are now in their mid 30s or later, not in their 20s. 30 year mortgages are the norm. That means, generally, people won't be paying off their houses till they retire, and thats presuming they never need to take on additional debt in order to maintain it.
That may change with the pending mass boomer death train in the next 10-20 years, but the way things are now, without some heavy devaluation of the market there's gonna be a lot of homes being snapped up by private equity more than people.
Depends on if those PE firms are paying with cash in the bank or taking out business size billion dollar loans. Banks may say no in the later case if they think disaster may wipe the housing investment before they get paid back.