Re: “Save subprime borrowers, not bloated bankers” by Dean Baker
On Aug 21, 2007, at 2:03 PM, Jordan Hayes wrote:
Nationally, for the century before 1995, house prices on Shiller’s reckoning only rose about 1% above the rate ofinflation.
First of all, a century worth of data is useless in this thread.
Eh? I’m saying the last 10 years or so have been anomalous; the norm
is 1% annual real appreciation.
There’s no reason why, over the long term, house prices should rise faster than incomes, is there?
You just said that it did! If rents are going up at inflation and
home values are going up at 1% over that, you should buy a house as soon as you can after this event passes.
You’re forgetting mortgage interest in this calculation. But in any
case, I’m just saying that buying a house isn’t going to make you
rich, unless you’re very lucky and/or clever about time and/or place.
Doug