The Case Against 30-Year Mortgages

By all means I can imagine the 30-year fixed loan could be driving up prices of the land itself (the lots). There is of course a non-trivial cost for materials and labor, below which you would never expect see the price of a new home fall.

I suspect though, for better or worse, if we had to pay cash for a home, builders would simply be putting up inexpensive mobile-home style houses on tiny lots. Suburbia would look very different from what it looks like today.

It also seems likely that if the 30-Year Fixed went away, only the truly wealthy would be able to buy homes … to rent to the rest of us of course.

American Suburbia should actually look more like the pre-automobile streetcar neighborhoods. That development style is far more sustainable, pleasant/walkable, reduces car dependency (biggest drag on individual wealth), etc.

I find that Americans want affordable homes but they also have a crazy list of demands that turns all “modest starter homes” into luxury homes by global standards.

The “must-have” checklist gets crazy. I’m not going to share a bathroom, I’m not going to share walls, I need a big yard, and I need a big garage to park my cars because I need to be far away from everyone/everything, I need a separate room for storing all the stuff I bought from Target and don’t use anymore, I won’t share walls, I won’t share outdoor space, the list goes on.

The thing that sucks about the expectations is that it’s also what the market builds. I’ve been looking with what I think is a reasonable list; 1.5 bath, 3 bedrooms, ideally a living room and dining room but if they are combined or I have to eat in the kitchen I’ll survive, partly finished basement and enough yard space for a 10’x10’ garden. I’d be fine with it being a duplex. But they don’t exist! At least not in my state. Everything is either gigantic, well by my standards, or a condo.