We are now Japan

HollywoodBQ said:

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jja79 said:

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This idea isn't new and interest only mortgages are available in states other than California. 20 years ago you didn't need to verify income or assets to get a mortgage.

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and then, in 2008, it all came crashing down

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And in 2025 San Diego real estate is at an all time high. I lived there in 2008. Higher rates is the only answer.

Waffledynamics said:

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As someone who is quite conservative with my money and not a fan of debt, I can't understand why debt is not seen as a huge problem.

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There is lots of debt that is good. A 30,000 credit card bill people make minimum payments on to carry over to next month is NOT one of them. We marginalize that debt as "tough economy" and "people gotta do what they gotta do" and that's why we don't chastise it like we should.

Personally, I think the issue is that we don't teach younger folks what good debt is and what bad debt is and how to use the system to build personal wealth.

Should teach people that all debt is bad. Average person is not figuring out debt arbitrage. Don't bother trying. They can figure out it's good if they're capable of understanding it on their own.

Higher interest rates may reduce prices, but won't improve affordability. Homes are purchased based upon the monthly payment amount, so the price would settle at equivalent payment levels. The higher interest rates would result in fewer new home starts, which exacerbates the actual problem, the country stopped building in the wake of the housing crisis and we're behind on construction relative to demographic and population changes.

End federal student loans other than STEM.
Make them dischargeable in bankruptcy.
Continue income based repayment plans and discharge after the term ends.
Accept federal student loans was a bad idea and has put young people in a position of needing a degree while also needing debt to acquire it despite the resulting knowledge not providing them marketable skills.
Reduce regulations, zoning, permitting process.
Build more homes.


There is an outrageous amount of "no don't do that" and "we'll help you do that" in the U.S. currently. Both drive up costs.

Peter Thiel: If you graduated in 1970 with no student debt, compare that to the millennial experience: too many people go to college, they don’t learn anything, and they end up with incredibly burdensome debt. Student debt is a version of this generational conflict that I’ve… pic.twitter.com/iX0AENyTyc

— The Free Press (@TheFP) November 7, 2025

hph6203 said:

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...debt arbitrage...

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LOL

Trees don't have debt

Good trump

You haven't seen the landscaping in my neighborhood. A real trunk of change being spent.

In my opinion, if you can't pay off a house note in 15 years you have bought too much house. Similarly, if you can't pay off a car within three years, you're buying too much car.
I'm lucky to have gotten a 15 year house mortgage at 3.5%.

Waffledynamics said:

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As someone who is quite conservative with my money and not a fan of debt, I can't understand why debt is not seen as a huge problem.

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We have a theoretical and practical disconnect between the federal government and state governments and individuals when it comes to holding debt and the outcomes from that.

For the federal government, uncontrolled debt is a feature of our fiat money system and our economic theory of choice (Keynesians). Add in that we are the global reserve currency and our federal government has operated carte blanche with a blank checkbook. There is no requirement to balance budgets and furthermore we haven't even had a budget since 1996. The bad outcome from that is an ever growing debt interest payment, but they have an outlet in that they can just steal from the public through taxes and printing more money to cover it.

In contrast, almost every state government has some form of requirement for a balanced budget, so there is naturally more discipline at this level. And that's because state governments are closer to their constituents and while they can tax us, they do not have the additional outlet to just go print more money.

Individuals feel debt even more acutely and have fewer options than either of the above. I can't tax someone else to fund my spending and I have no access to money trees, so our outcomes are homelessness and poverty if we don't manage our money well. However, people that don't manage their money well can still get bailed out by the federal government if they are ok living at a low standard.

This has worked for decades but now this entire system is finally starting to break down from the top down.

Federal debt has finally gotten so high that it's the #2 spending line item which means we have a massive opportunity cost for doing anything else with now $1T of our annual spend.

Blue states are approaching the point where the federal government having to bail them out is becoming foreseeable because they have manipulated their budgets and made off the books liabilities so high that they can't meet those obligations if they get called en masse.

Here at the bottom of this funnel of mismanagement, more and more individuals follow their leaders. Our government has taken us from $458B to almost $40T in debt in just my lifetime (51 short years). It's worked out for them for several generations now so I should be able to live and spend on a whim as well. Never mind that the federal government enables our own personal debt through school loans, 50 year mortgages, etc. And if I can't meet my obligation, then I shouldn't be held accountable. Why? Governments aren't.

In summary, we've created a system and culture where it's fine to spend money in perpetuity with unequal or no consequences. But we are now finally feeling them and can't escape it.

Avoid debt like the bubonic plague.

hph6203 said:

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Peter Thiel: If you graduated in 1970 with no student debt, compare that to the millennial experience: too many people go to college, they don’t learn anything, and they end up with incredibly burdensome debt. Student debt is a version of this generational conflict that I’ve… pic.twitter.com/iX0AENyTyc

— The Free Press (@TheFP) November 7, 2025

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Everything he just blamed on capitalism is a direct result of government interference; government getting out of it's lane.

Kenneth_2003 said:

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hph6203 said:

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Peter Thiel: If you graduated in 1970 with no student debt, compare that to the millennial experience: too many people go to college, they don’t learn anything, and they end up with incredibly burdensome debt. Student debt is a version of this generational conflict that I’ve… pic.twitter.com/iX0AENyTyc

— The Free Press (@TheFP) November 7, 2025

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Everything he just blamed on capitalism is a direct result of government interference; government getting out of it's lane.

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I think you TA'd one of my worthless geology courses though...

The 50-year mortgage is a systemic tool to extend the lifespan of debt and avoid a financial reckoning. By stretching loan terms, it artificially maintains affordability, prevents mass defaults, and props up asset prices, all while trapping borrowers in perpetual debt. This mechanism delays economic collapse by monetizing the future, prioritizing system stability over genuine prosperity, and masking stagnant wages and unsustainable debt levels with the illusion of accessibility. It is a desperate measure to sustain a saturated credit system without solving its underlying problems.

People buy $90k trucks and not bat an eye. Crrrrazy.

Most people are going to be paying a mortgage payment their entire adult lives anyway. What's a 50 year mortgage hurt?

TAMUallen said:

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Kenneth_2003 said:

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hph6203 said:

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Peter Thiel: If you graduated in 1970 with no student debt, compare that to the millennial experience: too many people go to college, they don’t learn anything, and they end up with incredibly burdensome debt. Student debt is a version of this generational conflict that I’ve… pic.twitter.com/iX0AENyTyc

— The Free Press (@TheFP) November 7, 2025

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Everything he just blamed on capitalism is a direct result of government interference; government getting out of it's lane.

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I think you TA'd one of my worthless geology courses though...

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I only TA'd the worthwhile ones.

ts5641 said:

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Most people are going to be paying a mortgage payment their entire adult lives anyway. What's a 50 year mortgage hurt?

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Most retirement calculators base on an 80% of pre-retirement income replacement. Predicated in this is the idea that you're mortgage free or very soon to be mortgage free in retirement.

Edit... Typo

titan said:

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You are leaving out one important category that also drives that. Term it tenability. "Hottest or trendiest" are shallow factors. But an area being crime riddled quickly imposes cost multipliers and even personal risk that cancels any savings being made. We just came out of an admin that worked to enable crime, and many DAs still greenlighting it, and this makes some areas untenable, rather than just merely not trendy.

So its not as simple as the youth can just go to the bad cheap housing locations.

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Many on F16 seem to ignore this.


The price ratio of average home to average salary is really out of kilter AND the average home now is just not as safe as when I grew up. Telling young adults their best option is living in dodgy, unsafe neighborhood may be reality, but it is a real reason why they are so upset and not forming families.

FCBlitz said:

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People buy $90k trucks and not bat an eye. Crrrrazy.

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You left off the good part:

People buy $90k trucks, finance them over 120 months, and not bat an eye. Crrrrazy.

50 year mortgage is still better then interest only payments (See CA and NY real estate markets) or 99 year land lease (See HI)

The US has a lot of problems, but problems abroad are even more severe. And with the global reserve currency, we can still QE print our way out of crisis. So the correction, pain, recovery is all relatively small and quick.

If/when the US loses global reserve status, then we will be suseptable to a mega great depression type reset at some point. But that may be a problem for current kindergarteners, as long as we keep can kicking. So just make sure guns and ammo are hoarded and passed down.

I just found out recently that people are doing 20-year loans on boats. I'm in the market but for the life of me couldn't figure out some of these guys were buying $130k Majeks and Mowdys, while pulling them with brand new F250's. Turns out they're all doing 20-year loans.

Incredible.

FobTies said:

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The US has a lot of problems, but problems abroad are even more severe. And with the global reserve currency, we can still QE print our way out of crisis. So the correction, pain, recovery is all relatively small and quick.

If/when the US loses global reserve status, then we will be suseptable to a mega great depression type reset at some point. But that may be a problem for current kindergarteners, as long as we keep can kicking. So just make sure guns and ammo are hoarded and passed down.

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We could always switch to nuclear weapons or military size as the basis of global currency standing and that immediately puts us, China, Russia and France in good standing. In a way military force has always been the ultimate fallback payoff.

(half joking)

Feeling cynical this morning.

Or maybe, I don't know... build a 1200 sq ft house and add on once you need more room.

Over_ed said:

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titan said:

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You are leaving out one important category that also drives that. Term it tenability. "Hottest or trendiest" are shallow factors. But an area being crime riddled quickly imposes cost multipliers and even personal risk that cancels any savings being made. We just came out of an admin that worked to enable crime, and many DAs still greenlighting it, and this makes some areas untenable, rather than just merely not trendy.

So its not as simple as the youth can just go to the bad cheap housing locations.

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Many on F16 seem to ignore this.


The price ratio of average home to average salary is really out of kilter AND the average home now is just not as safe as when I grew up. Telling young adults their best option is living in dodgy, unsafe neighborhood may be reality, but it is a real reason why they are so upset and not forming families.

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I think this is understood in your post but the price of an average home is inversely proportional to distance from downtown so to even get that home you are now suffering a negative commute. Then throw in the safety variable which may not hold constant depending on your locale, but you generally have to get further out to improve that as well.

agenjake said:

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Or maybe, I don't know... build a 1200 sq ft house and add on once you need more room.

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See my post. You aren't doing this until you get so far out of the city that you have large tradeoffs. So, yes, you can do this but there are tradeoffs.

(I think most of us are operating under the assumption that we are discussing larger urban areas as the starting point because that's where the jobs are for college grads.)

Similar to our national debt, there will be no goal of paying off that mortgage either.

jja79 said:

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Your mortgage payment is just a budget management tool. I was in banking for decades. Rich people alnost always asked what's the minimum payment and longest term. They realize borrowed money is cheaper than their own money.

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Tell that to Bartin... above your post.

I get it.

Kenneth_2003 said:

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Group and I were chatting about housing the other day. It's a spending and saving problem.

Take a young couple... Even if they're actively trying to have kids... Concerns about schools are 5 years away, you don't have to chase the good school areas to start. Plus in 5-8 years where the good schools are can change.

Yes it's $10 Starbucks. It's Netflix, Hulu, Disney+, and Paramount. It's going out to lunch everyday. It's happy hour after work 2-3 times a week. It's the newest iphone or Android when your current isn't even paid off. It's an 8 year car loan on a car that costs more than your parents first house.

It's not any one of those things I've listed above (ok maybe the car) but in aggregate they all add up.

There ARE affordable homes. They may not be in the hottest or trendiest areas. So what? So you want a home or do you want to keep chasing vibes in the trendy part of town where rents are almost equal to the mortgage?

Do you want to buy a home? Or do you want to ***** about not being able to afford it? Just pick one.

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Ok boomer.

(Only half tongue in cheek)

Due to cultural degradation the "good" neighborhoods keep getting worse. Yes, life is full of compromise, but you even admit the "starter home" has a shelf life that previous generations didn't need to account for. That worse deal home will require a massive down payment in proportion to that young couple's income.

Go look into the numbers. It's simply harder now. We do nobody any favors by lying that it's ALL within the frivolous spending. Kids need to out-earn their peers by 2-fold to have a chance at building up a down payment on a house with adequate proximity and neighbors.

That's fair. Didn't see yours when I was responding.

Part of the issue is we've converted wants to apparent needs, so people think they need giant houses. To the point where it's part of the business model for all the home builders, and it is very hard to find an option for a smaller house on a decent-sized lot. I don't think 50-year mortgages helps this situation at all.

And the commute is definitely a trade-off. If dad is willing to embrace the suck and commute, then mom may have a better option to stay home or work in a more rural area near schools that may be better than in the more developed areas. It's all trade-offs.

But I am old (school) and probably in the minority.

Get Off My Lawn said:

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Kenneth_2003 said:

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Group and I were chatting about housing the other day. It's a spending and saving problem.

Take a young couple... Even if they're actively trying to have kids... Concerns about schools are 5 years away, you don't have to chase the good school areas to start. Plus in 5-8 years where the good schools are can change.

Yes it's $10 Starbucks. It's Netflix, Hulu, Disney+, and Paramount. It's going out to lunch everyday. It's happy hour after work 2-3 times a week. It's the newest iphone or Android when your current isn't even paid off. It's an 8 year car loan on a car that costs more than your parents first house.

It's not any one of those things I've listed above (ok maybe the car) but in aggregate they all add up.

There ARE affordable homes. They may not be in the hottest or trendiest areas. So what? So you want a home or do you want to keep chasing vibes in the trendy part of town where rents are almost equal to the mortgage?

Do you want to buy a home? Or do you want to ***** about not being able to afford it? Just pick one.

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Ok boomer.

(Only half tongue in cheek)

Due to cultural degradation the "good" neighborhoods keep getting worse. Yes, life is full of compromise, but you even admit the "starter home" has a shelf life that previous generations didn't need to account for. That worse deal home will require a massive down payment in proportion to that young couple's income.

Go look into the numbers. It's simply harder now. We do nobody any favors by lying that it's ALL within the frivolous spending. Kids need to out-earn their peers by 2-fold to have a chance at building up a down payment on a house with adequate proximity and neighbors.

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Another thing noticing is if if you expect them to somehow "gut it up" and take the risk in a bad neighborhood when you get your car damaged or house stolen from enough, you have lost enough $$ to have canceled what you saved by having to do the repairs or replacements.

Sat down with one of my 25 year olds in a sales position asking for a raise. Making $80k right now and saying he needs another $20k just to support his family. Started going through his financials and it was dumb decision after dumb decision. Kids today just don't know how to budget.

And a lot don't know how to work hard, if you want a raise in sales…work smarter and harder!