Slashdot Mirror
America's 'Rent Crisis' May Be Ending (fortune.com)
An anonymous reader quotes Fortune:
A new study suggests that nearly a decade of housing shortages and rising rents in the U.S. may be reversing course... From 2010 to 2016, America added nearly a million renter households a year. But the census showed a decline in that growth rate in 2016, and some early 2017 data shows an actual decline in renters so far in 2017. Recent census data also shows a rise in vacancy rates.
According to Harvard's Joint Center for Housing Studies, that's because foreclosure numbers have declined and young homebuyers are re-entering the market. Home ownership in the U.S. took a big hit from the foreclosure crisis and Great Recession of 2007-2012, while the rental market struggled to meet the new demand. Other insights in the report mostly follow from that shifting reality. Rents are increasing more slowly. Fewer renter households are "cost-burdened," or paying more than 30% of their income in rent, than they were two years ago.
The report also predicts that many high-income households may continue renting rather than buying a home. But it'd be interesting to hear how that compares to Slashdot readers around the world. Are you renting or buying -- and if renting, do you feel that your rent is too high?
According to Harvard's Joint Center for Housing Studies, that's because foreclosure numbers have declined and young homebuyers are re-entering the market. Home ownership in the U.S. took a big hit from the foreclosure crisis and Great Recession of 2007-2012, while the rental market struggled to meet the new demand. Other insights in the report mostly follow from that shifting reality. Rents are increasing more slowly. Fewer renter households are "cost-burdened," or paying more than 30% of their income in rent, than they were two years ago.
The report also predicts that many high-income households may continue renting rather than buying a home. But it'd be interesting to hear how that compares to Slashdot readers around the world. Are you renting or buying -- and if renting, do you feel that your rent is too high?
Some of you may have noticed that California is, has been, and likely will continue to be on fire. This is driving people out of the state. While it will eventually result in higher-density housing being built in some of the affected areas, eventually improving rental pricing, rents in nocal have gone straight through the roof. The same will soon happen in the rest of the state, thanks to the fires currently ablaze in socal. Since California is the most populous state in the union, what affects us affects everyone.
The places with cheap rents are hellholes like Flint.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
The number of renters is decreasing. Coincidentally, the number of homeless people seemed to increase by an almost identical amount.
I'd vote for Jimmy McMillan. Let me put it that way.....
The millennials are having kids, and finding out that hip loft or apartment in the inner city, along with it’s school district, ain’t all it’s cracked up to be. They are fleeing to the suburbs. Soon they’ll be ditching the Feel the Bern shirts and voting Republican.
I was renting for a long time until a house in the neighborhood came on the market. We did the math and after mortgage, taxes, insurance, and other fees we came up with 300$ less than what we paid in rent. Buying not only saves us a lot of money, it builds equity. As a first time buyer we made use of the available assistance that allowed us to invest into remodel and a new roof. "New roof?" you say, an expense that a renter does not have to worry about. True, but even with the loan payment that will end soon we still pay less per month compared to renting....for a house twice the size.
I rent my car...and sleep in it. Hard to get by on 50k in the valley
With the deportation of the millions of illegal aliens California will have more rental vacancies available for Americans to rent
"...while the rental market struggled to meet the new demand."
Really? Yeah, those poor landlords had to raise their rents...oh, the horror.
Just another day in Paradise
I own my house outright. It is one of nine homes in a small HOA in Miami FL that are worth about $400k to $450k. There are two rented for $3,500 per month wich sounds insaine considering the property value.
"This message was sent from an Apple
I see new home construction all around us. What I see is a dearth of housing that is suitable for young families as opposed to middle age, dual income families. You want a $600k+ home? No problem. We have a ton of them. What you won't see is anything in the $200k-$300k in major regions that isn't either in the ghetto or looks like it should be.
This is one of the fatal flaws in "free trade." You can't have "free trade" in land and housing. If wages harmonize between the US and China such that an American worker's wage goes down 25%, the cost of land and housing won't go down with it.
Just wait 'til everyone who mortgaged their home to buy bitcoins has to pay that mortgage back, that should put some cheap houses into the market.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Considering folks don't have buckets of cash to just throw away, perhaps the " Rent Crisis " has simply reached the peak of what folks can afford.
Perhaps folks have figured out that throwing so much away in rent every month is money better spent elsewhere ?
At least owning a home builds equity.
Of course all is moot if you live in a golden bubble market area where rent or ownership require absurd monthly payments.
In my neighborhood there were a whole bunch of rental homes, all owners who couldn't sell their homes because the home values have dropped (some have been holding onto those since before 2008). This year home prices finally reached pre-2008 levels and a whole lot of those rental homes suddenly went up for sale - owners happy they can finally get rid of them without writing the bank a large check.
That's completely fucking bullshit.
Vote McMillan!
sudo rm -r -f --no-preserve-root /
I'm wondering if some of these numbers are happening because more people are choosing to live together to save money. This could include all sorts of situations that don't involve romance like friends sharing an apartment, college graduates moving back with mom and dad, and so on. It's interesting to note that the actual article didn't paint as rosy a picture as the excerpts above did. It says that people with higher incomes are now renting and a higher percentage of renters are older, white, and have kids (or may just fall into one of those categories). In my metro area, all the new home construction I see is extremely expensive (roughly $500,000 and up) and I have my doubts as to how wise it is to build those expensive homes given that we're not a high cost metro area. I don't really see any new construction that I would deem "affordable" for the average person.
You might be "interesting" if you actually proofread your own posts. I'd be "interested" in reading something like that.
Yes, it is too high.
However, the monthly cost to buy, even with 20 percent to put down, is still more and saddles you with maintenance costs either directly or in the form of condo fees and special assessments. You also face the very real possibility that the value deflates, even temporarily, at a time when you need to sell.
In my late 30s and still saving. I feel for everyone younger. I have no idea how a young couple could pay enormous student loans, buy a home, pay for children, and save for retirement these days. A select few get high pay jobs and the rest may languish always hoping.
My wife and I had been renting for a few years, paying about $1,350 per month for a 2-bedroom ranch with a fenced in yard. Earlier this year our landlord moved out of state and sold his rentals, giving us 2 months to find a new place. We discovered that our rent was incredibly cheap relative to anything similar: we'd have to pay at least $1,700 to $1,800 to rent anything comparable to what we were living in in the same area.
It turns out that a mortgage for a similar house around here is about $1,800 to $1,900, so we hurriedly applied for mortgages and got an FHA loan and bought a house before we had to leave the rental. So fortunately I am now a homeowner living in a better house than earlier this year, and paying only a little more than if I were renting. The fact that I know so many people around me renting tells me that they have so little extra income that they can afford to rent, but not the little more it would cost to buy.
In other words, yes, around here the rent is way too high when it's barely cheaper than buying a home.
You thought 2008 was bad... Do the simple math with the baby boomer generation.
Those born from 1945-1958 will be dieing soon, the wealthiest generation who often own multiple homes. In about 5 years as the first year(1945) get sick, they will sell off all their extra properties; and a few years later begin dieing off, leaving those estates to be sold off.
Theres simply not the numbers to replace them... If immigration steps up, they still won't be able to afford anywhere near the 'value' placed on them now.
Personally I'm not a fan of the immigration route, as a hundreds of studies show that crime/culture is more genetic than we would like to believe.
We could see corporations taking up primary residential ownership; and attempt to keep prices high(so as to keep rent high).
Houston has had stable rents and housing prices for decades. Even during the worst of the housing collapse, home values only decreased a few percentage points. This is because they do not have zoning laws. This means that occasionally you have something weird like an office building near a residential area, but you don't end up with factories in the middle of apartment buildings as factories are built where land is cheap, and residential areas are relatively expensive.
So the question is what is more valuable, a stable housing market with a good mix of affordable and expensive homes, or being able to control it? Most of the time you can't have both.
My Other Computer Is A Data General Nova III.
-Belgium. Home-owner like about 60% of households here. age:40-45. Brick house, 150m2, nearly paid off. part-time software engineer.
Isn't a condo, or a townhouse, or even a "starter home." It's a clapped out duplex that they can renovate. It's lovely to have someone else (tenants, babeh!) paying most of your mortgage and property tax at age 35.
San Diego's East County. No more rent and no more nazi landlords.
I got half acre 3 bed 2 bath for 125,000 and a rate of 3.5. You rent instead of jump on things like this.
Soon will be paid off.
Never rent. Always buy/own even if itâ(TM)s a shack in the boonies. Always live in a house with a garden or land â" ideally measured in acres. Why? Because if you get fired or caught up in some scandal such that you canâ(TM)t get a decent job you can always live out on your land. Just knowing that reduces your level of stress and feeling of enslavement. Life should be about being productive while not feeling pressured to work for fear of losing everything. Ideally you would own a home in the country but live and work in the city.
Also I donâ(TM)t like living in high rise buildings it is kind of scary.
I was divorced 3 1/2 years ago, and the ex and I sold our house. I was house hunting and was not having much luck, so I was looking into renting.
This is a college town, so rentals were super expensive and not much available. Finally found a house, 3 bedroom rambler, bit of a fixer-upper, but certainly livable while I update it. My house payment is HALF what the rental on a similar apartment would have been. Plus I have plenty of quiet and privacy where I am at now, something impossible with apartments. There were some apartments I could have for a similar cost but they were absolute shitholes.
THE SOFTWARE, IT NO WORKY!!!
Two years ago I owned my own home with over 75% equity in the home. Now I rent. Mainly because I live in NYC and when you live in NYC, the mortgage + taxes + maintenance often exceed the cost to rent.
In other words, rent is cheap compared to buying (although it is very high as compared to most of the rest of the country).
When you buy real estate in most of the US, you are both saving money and doing a reasonably safe, reasonably profitable investment.
But in NYC, particularly Manhattan, you are most likely to be spending MORE money every month to buy rather than less, and investing in a riskier, high profit investment. I decided that it was too high risk for more and I did not have the extra cash to do it.
excitingthingstodo.blogspot.com
Rent and the price of homes should reduce if there are self driving cars or vans. You can commute two hours each way if your vehicle is self driving. You can sleep in the car or take work calls. Hmm working on commute might become a thing. Though I would prefer sleeping.
12-1/2 months ago we left 25 years in a metro rental complex in the Mpls/St. Paul beltway when the gentrifying new owners raised the rent on the townhouse three times in a year. Exiled to a mortgage in the far xurbs 25 minutes from the beltway. At least an M-F city bus terminal ends a mile+ away. I would say our market is just heating up on moving the non-well off out. "Maturing" into a typical world metro market perhaps.
It is incredible for 60% of the Americans, the home they live forms more than 50% of their networth!. Homes are very very illiquid. It ties you down. You are not able to follow the economic trends and go where the jobs are. Makes you do stupid things to "protect the value of home". They are expensive to maintain. It is really a dumb way to save money. Renting is a far better solution for most Americans.
This especially true now. The babyboom peaked in 1952, and their retirement is peaking in 2017. The market is awash with four bedroom, three car garage, quarter-to-half acre lots. The demand will fall, not rise for these properties. Younger generation is not as car obsessed as the previous generations. They do not see the point in maintaining lawns or raking leaves. Any fool buying a half a million four bedroom 0.5 acre lot home in the suburb today would be lucky to sell it at cost 20 years from now.
You can add me to that list of fools. I could not convince my own wife about this. "Millions of people can't be fools. We do what they (meaning richer White people) do". Lucky for me, I can secure my retirement even if lock away half a mill in such a non performing asset. So I agreed to be smack dab right in the middle of affluent white neighborhood. Government always takes care of them, so I would not lose much.
But for younger generation starting out, "stay away from owning homes. Wait for a down turn, buy only if the mortgage is less than rent, and you are assured of job safety for 20 years, and you are planning to stay in that neighborhood for 20 years. Always watch the affluent white class is doing and do that". Invest in index funds. Put 33% in SDY, VNQ or such high dividend yield large cap. 33% in MidCap, 33% in SmallCap. Treat your credit card limit as the emergency funds. You have six month lead time to cash in some securities. Don't fall in love with cars. Start with civic, corolla level, and upgrade to pilot, crv, rav4 level. Don't pay for luxury car brands. Enjoy life.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
The GOP tax bill originally removed all deductions for mortgage interest and property taxes. The latest word is that those have been put back but with a $10,000 cap. Either of those provisions will dampen enthusiasm for home ownership and cause rents to continue upward.
My favorite topic that everyone always gets upset about. You don’t buy a house because it makes sense from the financial point of view; you buy it because it makes you feel good.
There is sufficient literature showing that the long-term inflation-adjusted returns—or savings—on homes have been lower than those of risk-free bonds, to say nothing of equity. Since the article asks about “readers around the world”, here is one such book in German. The author does a financial evaluation of home ownership over several decades in Germany and other developed countries. It makes no sense to buy a home outright and even less sense to buy it on credit as is typically the case.
An important factor in this discussion that is usually pulled out of the air by well-meaning but not financially savvy individuals is that homes are “safe investments”. They are not. By buying a home, you are putting a large portion of your net worth into a single asset type: homes in your area. Any decrease in housing prices or the quality of your area in general immediately results in a huge decrease of your net worth. If you have to sell your house for any of a myriad of reasons, you lose a lot of money. Furthermore, an uninsured home is a very risky asset, as it may just burn down one day, whereas an insured home further reduces the growth of its value due to the costs of insurance. Lastly, if you actually want to sell your home and you are lucky to get some kind of profit out of it, you are facing considerable transaction costs and much lower liquidity than you would be if you were trying to sell a market-listed instrument.
All of these make personal housing bad investments. The only two good things that come out of such a purchase is that you have the freedom to restructure your house as much as you like and that you are effectively forced to save more by the virtue of the home financing company breathing down your back. Both come at a great cost.
I rent and I strongly encourage everyone to briefly study the available literature on the topic before coming to erroneous conclusions that you will be “saving on the rent” or “investing into something very safe”. On the bright side, these erroneous conclusions are the reason why those of us who did do due diligence get to rent so cheaply. Thanks homeowners.
P.S.: This does not transfer to commercial properties and REITS.
From my standpoint, "the great recession" was a reversion to the mean, and the present resurgence in prices is the real crisis.
Where I live, over 80% of new developments are "luxury apartments." Man, fuck that, where are the affordable places for sale?
And I write this as someone from a household that earns north of $300k a year.
I want to live close by to family and most of my earnings are going to rent. I guess that is the price I have to be willing to pay in order to make that happen. However, come the end of my lease, I will have to move into a not-so-great area. I pay 990.00 a month for rent and that is just too high considering that my base pay is about 15.10 per hour and overtime is infrequent. The areas where I will be looking will certainly not be as comfortable or quiet but since when did the poor have any real options?
I've been a landlord for 25 years (in my 40s now). I've sold my rental assets only once before -- right before the housing bubble popped. That's because I always live by the method of buying properties when they're selling for less than 60X rent, keeping them if they're 60-120X rent and if they breach 150X rent, I sell them.
My areas are consistently edging up towards 150X rent, which means it makes more sense to sell than rent them. They're 100% occupied and stay that way always (I have a waiting list on one or two units consistently).
So right now I am 90% certain I'll sell everything. I bought a new home (for cash) 2 years ago and the comp price in my neighborhood is up 40% -- totally unsustainable. Folks again are competing to buy homes and then paying way too much compared to income.
In the last bubble, I sold a rental I had bought for $43,000 to a bidding war that ended up paying $120K for it. After the crash, the new "owners" foreclosed pretty quickly and I bought it at auction with no other bidders for $60k. Now that same unit 8ish years later is back up to $110K but it only rents for $785 a month (just over 140X rent). So if it edges up a bit more ($120K) in comps, it'll be on the market and I'll be out and hope that I can buy it back in 3-5 years at a significant haircut.
This market is yet again pushing bubble stages at least in my neighborhoods. As I get older, I realize these are the paths to wealth because people are too emotional about "their" home that they don't even have a title to.
These people will absolutely try to export their failed governance to the states they end up in.
It's amazing how liberals and Islamofascist, "refugees" are similar in this regard,
I just hope sidewalk rent doesn't inflate
Yeah, yeah. Pour some hot grits down your pants already.
Thanks AlecStaar. I think you are overdue for a medcheck
> Unless all those leaving are concentrating in one area when they settle back down
They ARE concentrated in Denver, Austin, and Dallas. A significant percentage of Austin residents came to Austin from the bay area.
I live in a 2 bedroom house, the rent is $1200. The landlord is selling it. I have no choice but to move if the buyer wants to live in it, which is of course the easiest type of buyer to sell to, so that's what they are doing. Thanks to the Rent Stabilisation Ordinance, they have to pay me $10k to move, however, there are no 1-bedroom houses available for rent for less than $1600, and no 2-bedrooms available for less than $1900 anywhere in the city. If I want to stay close to city center where I already am, which I do, the only 2-bedrooms are $2400 and above. So my rent will more than double. That 10k will not help much when the deposit eats it, and 2 months later the extra for rent is gone too. I can't afford to buy. I never have been able to. Even when I had low debt, mid 700's credit score, and a decent income, even with a "no-money-down" loan, they still require the closing costs, the taxes, to the tune of 15k or so. I've never been able to save up anything near 15k because I live pay-check to pay-check. Even worse, I no longer work for "the man", so I don't even get a "paycheck", it's more like I live invoice-to-invoice from clients, and they all love to pay late as hell. But at least I pay less taxes. But now I have a ton of debt, and there's no way in hell I'll ever own a home unless my business really takes off.
There are enough empty houses/apartments/condos within the borders of the USA to house every homeless and "homeless" individual in America. But there are too many people making too much money in keeping those houses/apartments/condos off the market in a greedy attempt to make every dollar possible.
Course none of this applies to Seattle...the problem is getting worse and rather quickly. Renters I know are considering leaving the city due to too high of rental costs and houses are still selling immediately despite being slowest time of the year for the market.
I misread the headline as saying "America's Rant Crisis May Be Ending."
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Like housing crashes, it happens like clockwork. Every 11 years or so. Right before the 2008 crash, folks were excited about decrease in renters and lowering prices of rent. It was more cost effective to rent than to own, indicating the bubble.
No problem is "solved" here, you are just riding a pendulum and not addressing the "physics".
This sort of article is rarely objective. The people beating the drum most often about the necessity of homeownership are people like real estate agents and mortgage brokers. In the linked article, the interview is with the CEO of a paint company. They make their money from home improvement projects - something less frequent in a rental property. In reality, the purchase vs rent question is closer to 1:1. Here are some of the disadvantages of owning a house.
1. Not an investment, it is a capital asset - over the long term housing tracks inflation almost exactly
2. Highly illiquid asset
3. Variable maintenance costs and also depreciates in value over time
4. Most people will have a large portion of their net worth tied up in a single asset, increasing risk
5. Substantial costs to buy and sell the house, in the form of broker fees, etc.
How much cash on hand do banks require before they loan people (compared to 2005)?
How much money do people have in savings accounts for down payments? I see this:
https://fred.stlouisfed.org/series/PSAVERT
How many ex-homeowners messed up their credit in the last 7 years making it more expensive to get a mortgage now?
How many are graduating from college in the last few years with student debt weighing on their income to debt ratio?
Are mortgage interest rates increasing? How does that affect affordability?
Is the gig economy (eg: AirBNB) negatively affecting availability of affordable homes/condos?
Instead of downsizing to a retirement condo or vacation home, are suburban seniors getting a reverse mortgage on their current home to fund their retirement? Can they find renters for the rooms their kids used to occupy?
Despite whatever trend is shown in the OP census link, I think the available pool of buyers will continue to be depressed. Based on your location/region, YMMV.
So what. It is already too late. Most of these units already existed anyway. In Manhattan almost half of them sit empty as investments for part time residents who pay no taxes. I call BS and PR on this one. https://www.theguardian.com/wo...
The U.S. has one of the lowest home price to income ratios in the developed world. If it's dumb to own a home in the U.S., it's super-dumb to own one elsewhere in the world.
It sounds more like you bought more home than you could afford. I spent almost a year shopping for a home, and the one I finally bought was in a nice area I liked, in decent shape, but the price was depressed because the owners had been trying to move for years so the house had been "on the market" for a really long time in MLS. After I bought it, even after mortgage and expenses, I was still able to sock away 20%-25% of my income in savings/investments. I like living here, there's no HOA, I pay someone half the HOA fees I normally saw when shopping to rake the leaves and maintain the lawn (though I'm considering doing it myself because I could use the exercise - why pay for a gym membership when there's work to do around the house), and I'm handy enough to do most of my own repairs.
Where I live, there is this problem of (what is believed to be) foreign investors buying up everything they can get their hands on and driving up the prices beyond what anyone local can afford. They then sit on the empty houses and wait for the market to rise, leaving entire subdivisions of "Starting in the low 300's" brand new, never been lived in houses all empty. This is also due to the fact that they don't WANT to rent them out, as that devalues the houses (due to renter abuse/damage and simple, regular old wear and tear). There are also cases of multiple families living over-capacity in some houses (usually immigrants/refugees) getting multiple government hand-outs and tax breaks and treating the area like the slums they were escaping, and wondering why their neighborhood is going downhill so fast...
This bubble happened in the GTA (Greater Toronto Area) for a while, and the local government had to step in. Now, the effect is spreading to any neighboring areas as far south as Niagara Falls, with houses being bough up at over list price (sometimes double or triple, due to bidding wars).
When there are so-called "affordable housing" units built, they are still entirely too expensive for a single income, minimum wage earner to hold onto and still eat more than KD and cereal. That's also assuming they don't have a car and can walk to work.
Charging Taxes on any units that remain unrented for more than a year is a good place to start motivating owners to get tenants, or lower expected rental rates to more realistic levels. Verifying that places aren't simply being rented by "token occupants" to dodge the taxes, etc. That's where the GTA started their push back. Too little, too late for a lot of folks. I hear that average housing costs (to buy) there are upwards of a million for a tiny house.
Add to that, cities like St. Catharines that have lost G.M. jobs to Mexico, and you have a large population base that has no more big-paying industry to keep its local economy going, and the kids of said (now retired, or deceased) boomers all having to commute to the GTA for a better paying job, only to have any financial advantage of said job eaten away by commuting costs. And the local city hall can't swallow the fact that the great majority of the population can't bear the tax burden that the previous generation could. Don't forget about the boomerang millennials! They can't even be bothered to Try to look for a minimum wage job locally, as they're all being filled by marginalized elderly people trying to eek out a living by supplementing their laughable old-age pensions.
Any rent that takes more than 50% of the occupants' income is too much. It's simple math. Hell, if it's more than 30%, it's still too much.
Then you can add to that, the *7 YEAR* waiting lists that exist for "rent based on income" housing! There is a Crisis waiting list, but it's still 2 years long (if they can find where the cardboard box is that you're living in to let you know it's come available, that is.)
So, the crisis is reversing?
I'd really like to see details on that.
Never mind the displaced locals that have to still live, work and eat, now that everything has been displaced by people working eating, and shopping out of town, but just "living" in their "bedroom community".
Just how do people afford to mortgage a $1.4 million house, drive a BMW, feed 3 kids, and send the eldest to college, when 2 full-time, minimum-wage jobs can't get better than a $950/month skid-row rental in a federal co-op?
-
Reversing crisis?
No signs of it here.
And it's not looking too good for the near future, either.
Young adults are all living at their parents house. They canâ(TM)t afford rent and student loan payments at the same time.
then vacancies don't matter a whole lot. If all the properties that are full make up for the cost of vacancies, they will keep them vacant with a high price tag.
If the market were dominated by for rent by private small owner, then this would be different.
Meanwhile, my rent is up 45% in 2 years. Still the cheapest in the area.
Does the study include rates of folks *sharing* housing/apts?
Now, given that I read in the media earlier this year that hedge fund and other scum of the earth were buying up rental properties, and raising rents, I'd like to see a real study (shut *up* LIbertidiot trolls) that shows the rate of shared housing.
For example, a friend who's sharing a house with three other people. Or one of my daughters, who, with her husband, bought a house with another couple, which makes it *not* "single family" housing.
When that lovely tenant you rented to fails to pay their rent, and invites their friends over for late-night parties that keep you awake, and you realize that you have to file 6 months in advance of evicting them (renter protection), and then when you do evict them you had better call the sheriff to stand by while you drag all their stuff out to the street, you find out how lovely and fun being a landlord is..
I think this last question in your post is a big key to our nation's issues....
Despite the lip service paid to encouraging people to go into skilled trades, the overall mentality is that those "blue collar" jobs are less desirable and make you a citizen of a lesser status in society than if you can finish college or a university with a "prestigious" degree.
In reality, we need FAR more people who have learned how to do quality work with plumbing installation and repair, carpentry, electrical work, roofing, flooring and HVAC work than we do more attorneys or business majors. Last time I needed some concrete work done around the house, I couldn't even find anyone in my city who claimed to have skill at repairing the concrete wall that divides my property line from my neighbor's. I was typically told, "I'm primarily skilled at doing flat work like sidewalks or driveways, but not especially good at patching up part of a vertical wall."
Overall, we're just paying far too much for a higher education. People keep focusing on how much they owe (or have the prospect of owing) on student loans, but that's just the symptom of the REAL problem; we're overcharging for and overselling the benefits of a diploma. Last I checked, nations like France had a more sensible system in place -- where you'd be steered towards learning a skilled trade if that was your area of proficiency. The people who have their heart set on being a rocket scientist or a marine biologist or a professional photographer or a lawyer? They'll still pursue that path and there will always be schools happy to take their money to try to teach them. But we need to be more realistic about teaching people the things that really make them functioning, money-making members of our society - especially when they don't really know what they want to do for a living.
Buying a house has always been the single smartest thing I did with my earnings.
Homes aren't incredibly liquid, but they're absolutely possible to resell. Just look how many people make a good living as realtors, if you have doubts.
If you're just starting out on your own and have your very first "career job", then no. You *likely* are better off renting for a while. A home is a big commitment (just like any large purchase would be) and you don't want to become one of the statistics who signed up for a 30 year mortgage, only to find out your employer wasn't going to employ you after 2-3 years and you couldn't find equivalent pay with another company.
But assuming you're going to be ok, earnings-wise, to afford what you're getting into? A house makes plenty of sense. Look at it this way: What else are you going to spend your money on? Unless you're one of the VERY few who is disciplined enough and content enough putting the bulk of your money into long-term investments you can't touch or do anything with you're going to spend it on tangible and intangible things. Most of those things will rapidly depreciate in value from the moment you bring them home and begin using them, if they're not just "entertainment" like travel, where you have ZERO to show financially for 100% of what you spent on it.
At least when you buy a home, you're buying something that you literally use every moment of every day or night when you're not at work or out and about someplace. You're also investing in the plot of land that the property sits on, which gives you some options other people don't have. Maybe you're in an area where the local government allows you to drill your own well for water? Maybe you want to use some of your land to put up rows of solar panels and drop your electricity costs to 0? Maybe you like working on cars and with your land, you have enough room to hang onto a spare car or two that's in a state of partial assembly? Or maybe it's just a safe place for your young kid(s) to play while you can keep an eye on them, without having to travel someplace first?
A given home may or may not turn out to be a "good investment" in the traditional sense that it appreciates in value over time. But you can't live in and enjoy stocks or mutual funds or even gold bars.
Additionally, when I rented, I hated the lack of privacy and control over my surroundings. I had a next door neighbor who used to constantly irritate me over little things like turning off the light that lit the stairway leading up to our units. I'd invite people over and they'd almost trip and fall, trying to get up to our place. The neighbor was convinced (incorrectly) that the light for the stairs was wired to HER circuit, so she was paying for it to stay on. That's not even mentioning the issues of having to be quieter than you might want to be, just because someone below you or next to you would complain. To me, that's no way to live if you can help it. It's certainly worth paying a few hundred bucks per month over and above what rent would cost (which is pretty much how my current mortgage payments work).
The $750K cap on mortgage interest deductions is going to drive the higher end buyers down. Homes just above $750K will stop selling as most buying in that range try to get under the limit. For a while, they will sell at a loss, but as that settles, the market just under $750K will be gutted.
The prices of those less than $750K will then start climbing as the availability near $750K falls. The cascading effect will suck up homes that would otherwise have been rented until the construction industry rebalances itself.
The rebalancing in the construction industry will be painful as in progress development projects have to be redesigned or abandoned. There will surely be a rash of bankruptcies because contractors often exist well out on a limb. Recovery will take time.
It's only gotten better because so many people are now home less, living on the streets, cars and in old RVs . Old RVs parked on the street are the new ghettos.
Before, I just thought you were hosts file specific crazy. Now I realize you're all around crazy.
It sounds more like you bought more home than you could afford.
I live way below my means. By standard metrics I would qualify for one to two million mortgage. I choose to live in a half a mill. I come from very poor background. This already feels like the palace of the Maharajah of Mysore to me.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
My wife and I rented until recently, when we bought a place outright. We'd been looking to downsize because we're empty-nesters, and between escaping rent and dramatically reducing our utility bills (in our smaller, more efficient home) we're no longer enslaved by our shelter. We endured four long decades of every decision beginning with consideration of our housing burden, and being free of that burden seems truly fantastic. We're now in a very sustainable, very resilient situation, and won't be splashed when the middle class economy dives back into the sewer because we've never been lured into the consumer credit trap.
As the predatory lenders are so fond of saying: no credit, no problem.
Warning: This signature may offend some viewers.
I was excited for a second. I misread the title of the story as America's "Rant Crisis" May Be Ending. I was hoping for a study of social media trends that indicated a marked decrease in rantiness. Oh well, maybe someday.
should be: "...feel that your rent is too damned high."
If you are looking to move every 18 months, you are best renting. If you found a place you want to live for a long time, you are better buying. Short term investments are always a gamble. Long term investments (typically) increase in value in the long term.
People within your social network are just as likely to take advantage of you as a stranger.
The problem with renting to people you know is if you have to kick them out, or when it comes time to raise the rent.
Renting to someone I don't know is far less stressful than renting to someone I know.
What does this have to do Technology?
Ken