[nemo44x]

Interest rates have crumbled over that same period. As interest rates go down, housing prices go up. The problem becomes the down payment goes up making it difficult for a lot of people to get the initial equity.

People often forget that mortgages are essentially bonds. When you get a mortgage you are essentially selling the bond. As interest rates fall the bond gets more expensive which means the price of homes rises since servicing the bond gets less expensive in terms of interest. But the principal goes up which means you’re building equity more quickly. So this is good - if you can get to the down payment part.

And interest rates can still get lower. However there are large parts of the country where homes are relatively inexpensive. But they’re cheap for a reason - not many people want to live there.

[api]

What a huge driver of inequality this is... I wonder how much of the economic divergence is explainable by down payments alone?