Ok, that's a bit over the top. But yet again another piece of evidence that while homeownership is nice for the owners, it should be driving the US' economic policy decisions. http://www.startribune.com/462/story/155828.html HOME-OWNING 2nd Minnesota's ranking in the percent of households who own their own homes is often pointed to by governors as a sign of economic health. But get this: Rural West Virginia, with high poverty rates and low incomes, is No. 1, and affluent, urbane New York is No. 50. Owningest: West Virginia Rentingest: New York
Home ownership is the greatest scam in the history of this nation. It promotes an unsustainable way of life by spreading out all resources, encourages debt that is unmanagable by many and causes us to fight wars in crappy sandboxes to make sure that we can continue the self defeating cycle.
The current phenomenon of no-money down floating rate loans are the scam. Home ownership in itself is not.
As are the government's home ownership subsidies in the form of mortgage interest deduction or the GI bill's support for home ownerhip over any other sort of dwelling. I guess the scam in my mind is the social engineering involved with the whole home ownership process.
Not to mention contributing to urban sprawl and the death of mass transit and related environmental and social consequences.
While I agree with the sentiment about social engineering, I think that: 1. You guys exaggerate the impact of the mortgage interest deduction on homeownership 2. Homeowner ship is a good thing, given the anemic saving rates of most Americans.
Well, I realize that it's anecdotal but every time either my family or my wife's family mentions that we should buy a home I hear about the deduction. Apparently in their mind, the government is paying you to buy a house and that if you rent, you are throwing money down a bottomless hole. I then procede to tell them that I invested the difference in money between where I live now and a similar owned property in the same area, at a conservative return rate, I would wind up with an extra $4 million dollars at the end of a 30 year cycle. That's when I get gazed at as if I had 3 heads. Could it be that the low savings rates of American can be attributed to home ownership itself? I mean, most people have to pay for a car, possibly two or three, to get to work. You have to pay for maintenence, property tax, insurance etc. Then if you have one of these interest only mortgages, you have to pay interest before you even own anything. I doubt that it's a coincedence that as home ownership rates have risen savings rates have dropped.
Makes perfect sense for you to rent and personally I’m glad I don’t have to help subsidize you purchase. The mortgage interest deduction only benefits those that itemize, so the deduction is basically a middle class subsidy to the rich. That’s why I smile whenever the board’s Left proclaim it as a sacred right. Don’t know about America’s poor savings rate, but if people aren’t going to save I want them to own the house they live in. TBH, in most cases interest only mortgages are the scurge of the devil.
Why? There's nothing wrong with encouraging savings. By this definition the capital gains tax is an evil too, because its lower than income tax. Which is all this is - if you invest in a home, your tax is a bit lower. You mean as opposed to RVs and paper boxes? That's not a scam. That's called an incentive. Frankly, I think its a good idea. That people are taking "advantage" of historically low rates to get into all kinds of deep financial ******** by getting interest only loans is the problem. I suppose you could claim that its a negative consequence that could be forseen, but the government can't really account for 3 years with low interest rates - you can't change the tax code that fast. People will speculate if they want to. The internet bubble wasn't due to positive tax incentives; its not remotely the chief problem here.
The capital gains tax is evil. Income is income and should be taxed at the same rate. Anything wrong with a nice rental on E. 86th street. Why just the focus on owning? IMO, this is one of the reasons why NYC and other major metropolitan areas failed in the 1960's and 1970's as well as some cities still feeling the pain today. If you are given free money to get a place to live but the money does not apply to where you live now, you would move too. My concerns are larger than people's poor choices. Because of a focus on ownership, we are at the mercy of OPEC. Convoluted or not, I believe that our sprawl towards the American dream is a national security nightmare.
The economic aspect of homeownership is but one reason why people want to get out of their apartments. Here are some other reasons: - owning a piece of property in a community with better school systems - more room than an apt. and the ability to expand & remodel - cities can be noisy, dirty and crowded and not always the best place to raise a family - cities like NY & San Fran are ridiculously expensive. if you're not clearing $150K you're probably not going to live like you want to. - i can kick a soccer ball, throw a baseball, grill a steak and walk my dog in my backyard without walking blocks or miles to a crowded park - it's the American dream. this might be an NAR talking point but talk to someone in East New York or the South Bronx and I guarantee after saying "I hope i win a million in a lottery" they'll say "i want to own a house in a nice suburb."
Rent, unless you're lucky enough to get something rent-controlled (and that's almost nobody in most of the country), stays at market rent for your entire life. Your mortgage payment, assuming that you have fixed rate and/or rates stay reasonably stable, will go decrease in real dollars every single year. While home ownership isn't for everyone (and I've never owned one, though I desperately want to) to say that it's not a good thing overall is ridiculous on the face of it.
I think the more relevant question is whether we're spending to much of our resources on housing and not enough on more productive assets.
Well, one of the reasons I don't own a house is because I have an aversion to spending more than a quarter to a third of my take home pay on housing - be it rent or mortgage. The closer to a quarter the better. Too much more makes me feel insecure. Besides, what do you mean by "productive"? Having a space that makes your life and your family's life worth living is certainly productive. It's just choices. What's right for some people isn't right for others, which is why blanket statements about this really bug me. There are 100's of variables, for god's sake.
You can say the same thing about cars. Housing is a more basic need so I don't understand why it's a "scam." Paying several grand a month for a matchbox you don't own in a city like NY is an even BIGGER scam IMO. DOWN WITH LANDLORDS!
Given the pathetically poor savings rate in the US, that's not a great idea. Yes - there's really not that much to do there. If I was to rent in NYC (wait, I DO rent in NYC) why would I live there, of all places? But, at any rate, I build up 0 equity by renting. I don't think that was the problem - being priced out of the city in a bad economy was. We had an ownership concern before OPEC became important. And the fact that we have a huge country makes the dynamic completely different anyway. My parents live in Cleveland - there's nothing you can do to put really effective public transportation there. It takes my dad 15 minutes to get to work and he lives in a house. What's the problem? Um, yeah.................that's really not at the top of the reasons for our security nightmare.
If you own a home, you have to go to Home Depot pretty much every weekend to buy something to fix it or improve. (OK, maybe this is only true where I live; the Home Of The World's Most Bipolar Weather.) Home Dept spent a lot of money on soccer. So home ownership is a good thing. With Home Depot's money, hopefully US soccer & MLS will hire people who are smart enough to never repeat mistakes like the Galaxy's 1996 home uniforms or those 1996 Baby Blue US Cup USMNT uniforms.
Not my problem Just an example. I wouldn't live there either. I think most of Manhattan is way overrated for living in, with Inwood being the exception. And it not like I have a problem with people owning. My problem is the government encouraging owning over any other type of living arrangment You're honestly gonna tell me that the GI bill had nothing to do with the white flight of the 40's and 50's which led to the decline of cities in the 60's and 70's. Really? 15 minutes is responsible. 1.5 hours in a car isn't. The more our government encourages home ownership to people who can't afford it, the more 1.5-2 hour commutes become commonplace. More gas consumed = more dependence on middle easter despotic nations = national security threat. If more people lived in cities and less drove we wouldn't care what happened half a world away, just like Africa.
Oh, I didn't realize you lived in MattintheHatistan. What a majority of the country does sure as hell is your problem, as it is mine. The government is encouraging savings. Besides, there are tangible advantages to people owning their dwellings. It promotes more care/involvement in the community in a way that renting does not. There were many factors, and given that Manhattan's as expensive as ever, its clearly not all bad despite the GI Bill. You're effectively blaming the GI bill for making people better off. Before the GI Bill people couldn't move out to the suburbs. I love living in NYC, but if I kept my current job and had to raise a family, my ass'd be in Weschester. People moved out to the suburbs for a more convenient life. My Mom, as un-suburbanite as they come, now chafes at having to spend a week in NYC without her backyard and her lawn. She lived 40 years in the middle of one of the largest cities in the world. Now, you'd have a hell of a time persuading her to move back. Most people do not commute 1.5 hours, although you did throw that strawman under the Hummer. We can give people incentives, we cannot legislate against stupidity. If we were more like Europe, your aunt would be your uncle. Seriously, why should we move everyone back into cities they left? Most people have reasonable commutes and a more convenient way of life. The Economist recently had an interesting piece on how home ownership helps minority integration. The United States is a huge country with vast open spaces. Why should everyone cram into big cities to please you? You're grossly overstating this as the biggest problem to our national security.
That's a different issue, isn't it? But I guess it's because if you own a home, you have a stake in the well-being of your community. It's a sign of stability and commitment. What's your problem with the interest deduction, anyway?