It's only "$100K worth" because some other rich bums have collectively occupied and bought multiple houses that they don't live in and increased the price of land, AND lobbied for no more housing to be built to artifically keep the market price high. They treat housing as an investment, rather than a dwelling, which is exactly what's being discussed here.
It's ridiculous that 99%+ of people are not able to buy a reasonable place to live in by 30.
We should be subsidizing it for those who cannot afford housing, not charging them $216 more just to line the pockets of the already rich.
It sounds like your main objection is to the price of the house. That might indeed be pretty terrible. The answer is to build more houses in places that we need them, or extend the alternatives. (And we would, as a society, save for the barriers that are put up.)
But opportunity costs are real. The time value of money is a thing. If you distort the price of capital, then capital is misallocated, and society ends up with overbuilt nonsense like McMansions in Stockton that it didn’t ever need, as in 2007, and other damaging bubbles.
2.6% is dirt cheap for money. If anything it’s way too cheap, and encourages excess demand, raising prices all around.
For something that isn't a basic necessity, yes, money isn't free and that's a good rate.
But for basic things like a house, transportation, food, and clothing, I am of the view that we shouldn't be charging interest from those who cannot afford these things, particularly housing, since it's the most expensive of the four. Society should perhaps even be subsidizing it with negative interest rates while taxing the hell out of people who own more than one house.
Mortgages are part of the entire housing-as-an-investment scheme that's the very subject of this article and thread. It's capitalism at an extreme being used to extract an extra 2.6% from lower- and middle-class people who cannot afford it, instead of extracting that 2.6% from the billionaires who can afford it.
McMansions in Stockton is perfectly fine. We need more housing bubbles. We need the housing market to collapse. We need housing to become available for people to live in, not as an investment.
(Oh, and more direct, fast 300 km/h service between Stockton and SJ/SF with local light rail that reaches all the houses would make all that housing much more usable. The ACE train is an abomination.)
If you look at places in America where land is effectively free, a quality house will still cost you $100K minimum. It's not just land rent-seeking, housing structures cost money.
This simply doesn’t make sense without $0 materials and $0 labor (ideally robotic). Like it’s so far outside the realm of possible why even bother writing it?
