I still think you're using commodity in the wrong context based on this post of yours.
People exchange currency for real estate and accumulate debt by putting their real estate up as collateral to a debtor. People exchange commodities for currency which they then exchange for real estate. No one ever exchanges a commodity directly for real estate these days, which would be more bartar style of a transaction.
Well, I agree that that isn't what I'm trying to say...
Because the purpose is to build a mortgage as a financial vehicle (because you don't have the capital to build a liquid cash supply), you are swapping out commodities for debt, and building the vehicle. You're not swapping a commodity for a different commodity, you are swapping a commodity (after improving it's value) for another commodity.
You use the mortgage product as a stand-in for capital and assets. You get a house on a mortgage, improve it's value, sell the house, and then refinance your mortgage with the profits you made as capital & assets to buy a better house; rinse and repeat. This is how the middle-class moves into upper-middle class. After that, there's buying multiple houses, renting them out, and doing a similar thing using them as investment products. This moves the upper-middle class into the full blown upper class.
At the end of the day, from the financial market perspective, housing is a commodity like any other. The mortgage system, and the slowly increasing price of houses, makes it a different kind of commodity market than copper, but it's still a kind of commodity for the purposes of exchanging into a financial product.
I'd say you're using commodity incorrectly for the way most people use commodity. There is a definition of commodity that could perhaps fit your description but no one really uses that definition of commodity in normal usage for the most part because it makes the term mostly useless as a term.
A better way to say what you're trying to say is that housing represents one of the only investable assets that an average person can purchase with financial leverage. It isn't the only one though because you can get a 50% loan on a diversified equity portfolio easily enough but there's other issues with this avenue.
Keep in mind using leverage to make money carries more risk. Many people learned that lesson the hard way 15 years ago.
I still think you're using commodity in the wrong context based on this post of yours.
People exchange currency for real estate and accumulate debt by putting their real estate up as collateral to a debtor. People exchange commodities for currency which they then exchange for real estate. No one ever exchanges a commodity directly for real estate these days, which would be more bartar style of a transaction.
Well, I agree that that isn't what I'm trying to say...
Because the purpose is to build a mortgage as a financial vehicle (because you don't have the capital to build a liquid cash supply), you are swapping out commodities for debt, and building the vehicle. You're not swapping a commodity for a different commodity, you are swapping a commodity (after improving it's value) for another commodity.
You use the mortgage product as a stand-in for capital and assets. You get a house on a mortgage, improve it's value, sell the house, and then refinance your mortgage with the profits you made as capital & assets to buy a better house; rinse and repeat. This is how the middle-class moves into upper-middle class. After that, there's buying multiple houses, renting them out, and doing a similar thing using them as investment products. This moves the upper-middle class into the full blown upper class.
At the end of the day, from the financial market perspective, housing is a commodity like any other. The mortgage system, and the slowly increasing price of houses, makes it a different kind of commodity market than copper, but it's still a kind of commodity for the purposes of exchanging into a financial product.
I'd say you're using commodity incorrectly for the way most people use commodity. There is a definition of commodity that could perhaps fit your description but no one really uses that definition of commodity in normal usage for the most part because it makes the term mostly useless as a term.
A better way to say what you're trying to say is that housing represents one of the only investable assets that an average person can purchase with financial leverage. It isn't the only one though because you can get a 50% loan on a diversified equity portfolio easily enough but there's other issues with this avenue.
Keep in mind using leverage to make money carries more risk. Many people learned that lesson the hard way 15 years ago.