The other reason is if rates rapidly rise housing is going to get crushed again. Our whole system is based to some degree on (or was) on steady growth. Well, if the population flatlines or starts declining what are we going to get? More deflation. Housing will go down or at least run flat. What is the biggest "asset" most Americans have? Their home.

I took a lot of flack for paying off my house on this sub and others. Invest they say. Of course these are the same people that tell me buying slightly on margin at 1.3% with IB is somehow different and bad, but not paying on my home loan at 3.8% and investing is good.

If history repeats itself and the market does history I'll end up with more money than I will spend regardless.

If history doesn't repeat itself I at least got a roof over my head. I don't believe without some sort of inflation driver we will see the high returns of the past.

Also most people move after 7 years anyways and if rates rise you'll relock at the new rate.

People borrowed all the money they wanted to borrow. If rates suddenly pop to 5% you think anyone is going to buy anything? No, if anything it will lead to less spending because people won't want to take on 5% loans.

Rates I think are going to rise but it isn't going to be by much and it isn't going happen quickly.

That said I basically pulled everyone I had (minus retirement accounts) out last year and paid off the house. It was time to lock in some fat gains. So far it has been a good choice on my part.

I'm looking to reenter both bonds and stocks in the near future. I'm hoping there will be an over reaction. I really think the feds are going to raise rates this year and their will be a short term over reaction. Either way I'll start back up in a few months.