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  • Jonathan Poyer

Housing: Spot the Asset & Liability

30-year mortgage rates have continued to increase, rising from 5.3% to 5.8% and that is up from 2.9% in January. Thus, a $500k mortgage in January would have cost you $2.081/mo. Today, that same mortgage would cost $2933/mo.; a $900 increase or 43% MORE.

As of July 28th, those rates have decreased back to 5.3%.

However, what if you do not need to purchase a home now or have not needed/wanted to purchase a home over the past two years?

As of June 2022, almost 40% of owner-occupied homes are owned free and clear. At the same time, you can see the LTV on these homes continues to decrease as well:

Furthermore, the U.S. has the lowest mortgage rate on outstanding debt in 43 years at 3.3%.

From a cash flow and balance sheet perspective, homeowners are on strong footing.

For these folks, the mortgage is the asset and the house is the liability. What a fascinating time!

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