This may be true only in the US. In Canada, for example, the maximum term a mortgage rate is fixed for is 5 years, after which you have to "renew" your mortgage and renegotiate the rate. So a lot of people are already being forced into higher interest mortgages here.
The people who suffer are those who bought 5 years ago -- prices going down means negative equity so you can't sell and move to a cheaper place, and you reach the end of your 5 year fix.
That said, wages have increased a lot over the last 5 years, so higher rates aren't the end of the world. My mortgage increased last year by about 25%, but as average wages are up at least that much that's not devestating.
For (2), absolutely. Tax advantages play their part (adding to investment demand relative to other investment options). Is it not also the case that interest payments on a residential mortgage are tax deductible in the US?
They are only if you itemize your taxes nowadays. During the Trump administration the tax law changed so that the vast majority of Americans now take the Standard Deduction. I received the mortgage interest deduction for about 15 years but haven’t received it for 5-6 years now.
It seems difficult to believe all the medical treatment advances and insane amounts of money spent are having zero effect on postponing date of death (Or even the date of loss of ability to live independently including death).
Of 100,000 people born in a nation 80 years prior, how many still alive and living independently in that nation. Compare with the same metric in 2004. This is to net out immigration, which can be considered separately.
Do we know if older people are living unassisted in their homes longer? That’s all we really care about in this context. Or not even unassisted, but family members moving in and taking care too.
I wish there were a $500k capital gains exemption for turning my ETFs into a house.
Yet another way in which real estate receives massive privilege.
1. People have mortgages with very low interest rates. If they sell the home, they give up that cheap mortgage for a much higher mortgage interest rate with the next home. So, they stay.
2. The capital gains tax exemption of $500,000 has not risen with inflation. Selling your appreciated home will result in a large tax bill. It makes sense to sit in the home until you die, then it gets a basis boost when transferred to the heirs.