This has been quite a bearish day on the WSJ. Two articles came to my attention.
Yes, its a paid subscription, so here are some "fair use" quotes.
"If you don't qualify for a loan because you have no down payment, stop shopping for homes and start getting your house in order. To save more, spend as if you've already bought a home. If your mortgage payment would be $2,500 and your rent is $1,500, deposit the $1,000 difference automatically into a high-yielding savings account each month."
But but but... that's what I'm already doing! ;) But a mortgage payment of only $2,500... how I wish. This used to be common old advice. Click on my $2,859/month article from last month if you want to know more on what I'm doing.
Q: But I have to live somewhere! And I have to pay something for a place to live. Certainly it's better to pay "deductible" mortgage interest than rent.
A: Buying a house with a long-term mortgage is just another form of renting.
Mortgage interest is rent that you pay to your lender for the use of its money rather than to a landlord for the use of his house. Yes, the government picks up a portion of that with the tax deduction, but most of your monthly payment neither builds equity nor is deductible. It just goes down the same black hole that sucks up any other renter's money. And it takes 20 years before a typical borrower pays more principal each month than interest.
"I have to pay something" is a rationale that home buyers use for going deeply in debt and paying tens or hundreds of thousands of dollars in interest to buy a house that, they mistakenly believe, will make a big profit for them down the line."
Ok, which of you secured a job at the WSJ? ;)
I'm thinking the lead Sheeple are noticing that their is a burning smell in the theater. They're quietly slipping out the exits. Pretty soon a lot of people are going to be walking away from their investments and that won't be pretty.