{"id":98982,"date":"2025-11-11T04:00:36","date_gmt":"2025-11-11T09:00:36","guid":{"rendered":"https:\/\/quotulatiousness.ca\/blog\/?p=98982"},"modified":"2025-11-10T16:47:58","modified_gmt":"2025-11-10T21:47:58","slug":"how-not-to-solve-your-housing-affordability-crisis","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2025\/11\/11\/how-not-to-solve-your-housing-affordability-crisis\/","title":{"rendered":"How <em>not<\/em> to solve your housing affordability crisis"},"content":{"rendered":"<p>On the social media site formerly known as <em>Twitter<\/em>, <a href=\"https:\/\/x.com\/Devon_Eriksen_\/status\/1987400343437693106\" target=\"_blank\">Devon Eriksen<\/a> explains why allowing fifty-year mortgages are not the solution that financial journalists seem to think they are:<\/p>\n<blockquote>\n<ul>\n<p><strong>Wendy O<\/strong> @CryptoWendyO<\/p>\n<p><em>I don&#8217;t think a 50 year mortgage is bad. <br \/>\nIt gives everyone more flexibility financially <br \/>\nYou can pay a mortgage off early <br \/>\nNot sure how else to lower home costs in 2025<\/em><\/p>\n<\/ul>\n<p><em>Buyers: &#8220;How much will this house cost me?&#8221;<\/em><\/p>\n<p><em>Sellers: &#8220;What&#8217;s your budget?&#8221;<\/em><\/p>\n<p><em>Buyers: &#8220;Well, it was 500K, but with these new fifty year mortgages, I think it could stretch to million.&#8221; <\/em><\/p>\n<p><em>Sellers: &#8220;I have an astonishing coincidence to report.&#8221;<\/em><\/p>\n<p>Look, I don&#8217;t know exactly who&#8217;s retarded enough to need to hear this, but if you throw money at something, you get more of it. <\/p>\n<p>Which means that <strong>if you subsidize demand, you get more demand<\/strong>. <\/p>\n<p>And if you have the same supply, and more demand, price goes up. <\/p>\n<p>This is how the federal Stafford Loan program made college a gateway to permanent debt slavery. Subsidize demand, price goes up. <\/p>\n<p>The reason people don&#8217;t understand this is that most people are only smart enough to think about individuals, not populations. <\/p>\n<p>They think if you have more money, you can buy more things, as if things come from the item store in a Japanese console RPG, where the store always has infinity stuff to sell you, and infinity money to buy your loot. <\/p>\n<p>People who are capable of thinking about large groups quickly realize that money is just a way of distributing things. <\/p>\n<p>Like, there&#8217;s a limited supply of things, and you&#8217;re just choosing who gets them. Having more money doesn&#8217;t make more things. <\/p>\n<p>Except &#8230; it should, shouldn&#8217;t it? <\/p>\n<p>Eventually? <\/p>\n<p>Like, if apples get super expensive, because somebody invented a new kind of apple that&#8217;s so delicious that everyone wants them, then the price of those apples goes up, so more people start growing them. <\/p>\n<p>So why doesn&#8217;t that work with houses and colleges? <\/p>\n<p>Why don&#8217;t the super-inflated prices of those things inspire profit-minded people to make more? <\/p>\n<p>It&#8217;s almost as if there were some sort of gatekeeper, whose permission you needed to make a house or a university. <\/p>\n<p>But that&#8217;s impossible, because this is a totally capitalist country, so you can just do things, right?<\/p><\/blockquote>\n<p><a href=\"https:\/\/x.com\/IanRunkle\/status\/1987574775271621078\" target=\"_blank\">Ian Runkle\/Runkle of the Bailey<\/a> chimes in:<\/p>\n<blockquote><p>Okay, let&#8217;s talk about 50 year mortgages. <\/p>\n<p>First, let&#8217;s talk about what sets the price in a market where there&#8217;s more demand than supply. It&#8217;s set by what people can afford to pay, which means the payment\/month. <\/p>\n<p>What that means in practical terms is that the total price isn&#8217;t the limiter. It&#8217;s the monthly payment. <\/p>\n<p>So, if X house is going for a price that has a 2500\/month payment, the market is going to land total prices on a 2500\/month payment. <\/p>\n<p>So, increasing the mortgage terms makes things more affordable for about six months before the market adjusts. After that, it stops making it more affordable. <\/p>\n<p>But &#8220;affordable&#8221; here doesn&#8217;t mean inexpensive. In fact, quite the opposite. Extending from a 30 year to a 50 year mortgage is likely to double the cost of credit. <\/p>\n<p>But that&#8217;s before the prices adjust upward to &#8220;eat&#8221; the supposed affordability gains. <\/p>\n<p>This doesn&#8217;t make houses more affordable, it makes them more expensive by far.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>On the social media site formerly known as Twitter, Devon Eriksen explains why allowing fifty-year mortgages are not the solution that financial journalists seem to think they are: Wendy O @CryptoWendyO I don&#8217;t think a 50 year mortgage is bad. It gives everyone more flexibility financially You can pay a mortgage off early Not sure [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[25,84,13],"tags":[436,71,426,755,165,425,1033],"class_list":["post-98982","post","type-post","status-publish","format-standard","hentry","category-economics","category-government","category-usa","tag-banking","tag-debt","tag-housing","tag-incentives","tag-inflation","tag-mortgages","tag-unintendedconsequences"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-pKu","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/98982","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=98982"}],"version-history":[{"count":4,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/98982\/revisions"}],"predecessor-version":[{"id":98986,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/98982\/revisions\/98986"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=98982"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=98982"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=98982"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}