Mortgage payments are based on the loan amount, not the value of the property. Excluding transactions costs, if you buy a $X house and have $Y month payments, then the property value doubles to $2X, you can sell and still buy another house that costs $2X, add $X to the down payment, and still have a $Y/month mortgage.
So if you own a home, not only do you have mobility, but if you move to another house of lesser value you can extract equity without increasing monthly costs.
Now Prop 13 is what restricts mobility for homeowners, because property tax can be 10x on a new purchase if you've been in the old house long enough. Rent control and Prop 13 both need to go.
If you buy a house at $X, and it adjusts to $X/2 because of speculation or job losses in the area, you're still paying down the $X + $Y mortgage, where $Y is interest, fees, and whatever else the bank tacks on, now or in the future, and have no way to recoup your losses. And you still have to pay property tax, based on the assessed value of your property circa pre-collapse.
> If you buy a house at $X, and it adjusts to $X/2 because of speculation or job losses in the area,
Historically that is almost unprecedented - and no, a few thousand homes in a couple of areas does not make it any better an argument. Over time, property values go up - it's not a theory, it's a fact.
>you're still paying down the $X + $Y mortgage, where $Y is interest, fees, and whatever else the bank tacks on, now or in the future
The bank can't 'tack on' arbitrary 'fees, and whatever' in the future on any decent mortgage - in fact I've never seen a residential mortgage that allowed that. If you don't get a fixed rate mortgage then your rates may rise, but that's an argument against variable rate mortgages, not home ownership.
> And you still have to pay property tax, based on the assessed value of your property circa pre-collapse
No, at least not in California - counties were required to reassess property value down after the crash, and they did. In fact from what I've seen they haven't been assessing value back up enough to keep up with the market.
> And you still have to pay property tax, based on the assessed value of your property circa pre-collapse.
Most jurisdictions have regular reassessment schedules, and while some have formulas that delay or limit the effect of market value increases, most don't for decreases which take full effect immediately.
Mortgage payments are based on the loan amount, not the value of the property. Excluding transactions costs, if you buy a $X house and have $Y month payments, then the property value doubles to $2X, you can sell and still buy another house that costs $2X, add $X to the down payment, and still have a $Y/month mortgage.
So if you own a home, not only do you have mobility, but if you move to another house of lesser value you can extract equity without increasing monthly costs.
Now Prop 13 is what restricts mobility for homeowners, because property tax can be 10x on a new purchase if you've been in the old house long enough. Rent control and Prop 13 both need to go.