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Updated over 1 year ago,

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Carlos Ptriawan#1 Market Trends & Data Contributor
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Assuming the rate stays the same til 2032.

Carlos Ptriawan#1 Market Trends & Data Contributor
Posted

We have 75% of homeowners are having mortgage less than 4% with equity below 70% LTV. Now lets assume all of them is having one primary only, no rental. Also lets assume the mortgage rate remain 5-8% until 2032. Lets assume appreciation nationwide is 2.5% every year,nationwide. So what kind of trend we would see until 2032 ?

considering the homeowners are late 30 or early 40 in 2023 ; by 2032, they would be 50 to 55. Then this is significant, why ? because to keep their house they have to keep their job. Leaving their house is not an option if they stay in the same city. But by 2032, their LTV is perhaps already 80% which makes them again, not easy to move.
So there're only few viable choice :
1. If aging homeowner want to sell their house, they have to either move to a cheaper home or downsizing if they want to stay on the same location
or
2. they move out from their city to the area where it's cheaper, it's common to see migration outflow from people that lives in 1500 sqft $2 mil house in CA, and move to Texas/AZ 2500 sqft $700k house.

So it seems, if the rate stay this very long, it's like forcing people (and money) to move to different state/city ; and/or make people has much less job mobility option (eg: they stay longer within the company). What do I miss ? 

In the long run. i predicted city like OH, WI may receive much more migration from the coastal cities. Which also means more development in the same area, especially for aging population.

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