Makes no sense to me. You take a loan to buy something you cannot otherwise afford, then you pay back the loan. Bank wants % on the loan, this is legal, therefore you pay back more than you borrowed. The amount gets split into two buckest, "interest" and "principal", presumably because of size and length of the loan, but arguably mostly to let the bank do various shenanigans that lead to them making more money on it.
replyNothing in this gives any good reason for one to expect homes to appreciate in value, other than that some buyers want it to, and I haven't heard any good reason why those buyers shouldn't just be told, "no". If these people then decide not to get mortgages, due to it not being an investment, then all the better for everyone else, who want a home to live in.
But at the same time most people do the bare minimum to maintain their house, so the quality of the property continually decreases. I don't drive a car for 20 years and then expect to make a profit on selling it.
replyYour analogy might be applicable to the sale of an RV.
replyWhat makes a house that has set outside rotting for 30 years more valuable than the day it was originally purchased?
replyChatGPT suggests the land might have appreciated, the neighborhood may be more desirable, inflation, or development potential. We don't need programmers anymore because LLMs can do it. It must be an expert on home values too.
replyI don't give a rats ass what ChatGPT said. Use your brain. Think for yourself.
replySorry, I don't understand. Can you explain again please?
reply