You are now entering your spicy years. 🌶️
My office has quite a few fresh grads who own their own places.
Their parents bought it for them for a graduation present.
No no no see you pay a mortgage, but you won’t own anything.
Affording a mortgage is the easy part.
Then you have to somehow get your mortgage-contingent offer accepted by the seller when you’re up against cash offers, $50k over asking, with no inspection, no appraisal, unlimited possession, and a free hit of adrenochrome.
Mortgage payments are cheaper than rent
My wife and I were able to buy a ridiculously priced starter home only because we had the privilege of her parents being able to help with the down payment. We had to move farther away from work than where we were renting just to be able to even consider homes.
Our mortgage is twice what our rent was, and we only gained about ~100 sq ft of interior space. Plus a whole host of problems because the previous owners were jackasses who DIYed everything and did it all wrong.
You get 0% back when you move out of an apartment. It is much more expensive to rent than own considering this, even if you sell at a loss. Only a portion of your mortgage payment (interest) won’t be able to be recouped, whereas all of the rent is gone forever.
You incur interest and fees with a home that you pay in addition to your principle. It can be seven years or more before you begin actually storing any value in that purchase because it’s eaten by the cost of borrowing.
It depends on your time horizon and relative costs of overhead and rent. NYT has a great new rent vs own calculator that really opened my eyes to how long it takes to build home equity.
Mind throwing a link in for the one you found? <3
That fucking sucks, but don’t apply your anecdotes as general truths. I have the opposite experience.
Wife and I built a new home with family help on the downpayment. Doubled sq ft, 1.5x previous rent, house increased value significantly between contract and move in. Farther from work but closer to highway so commute times unaffected. Saved up enough to pay back the downpayment help over the course of a year.
I’m a massive outlier, and most people have experiences closer to yours, but it’s not an across the board thing. So fucking much of the housing market depends on location.
So you got a zero percent loan requiring no collateral for a piece of land? I’m happy for you, but you do realize how few people that’s available to right?
no shit cry baby. guess you only seen “zero interest loan” and not MASSIVE OUTLIER
Look I’m happy for you, but I’m from an area where this is all very different from where I ended up.
Im sorry, but I do think thats a massive part of this conversation. There are plenty of places where housing is still affordable, but relocation is a thing, and more importantly, so is the tie to pensions funds and investment in major metros.
All of that to say, I’m glad to say it worked out for you and yours, but it’s just not relevant in this conversation, at least as long as social security requires people changing tires in Atlanta Georgia.
if it’s so terrible, why even do it?
Edit: no answer, just downvotes.
The answer is qualifying for a mortgage is not as simple as you might think. Even if you do, good luck squaring that with prices that will almost certainly leave you “holding the bag” because none of it is sustainable ore makes sense. Wrap that into the best choice when you might get laid off at any second is not always a mortgage…
That last point seems like it’s a great point for what rentals but I’ll save you some time: for the vast majority of jobs thats strictly because of people enforcing office mandates unnecessarily because something like 1/3rd of assets in the USA are in commercial realestate.
My point being: the deck is stacked. There is not an actual housing shortage, there’s just a housing shortage for human beings. An entire generation has gotten boxed out of the most classic way to build wealth.
I’ve got a mortgage, so I know the ins and outs.
Yes, the deck is stacked against us. My point is that it’s overall a better deal financially to own than to rent.
I’m not attacking you for something that worked for you, but trying to offer perspective.
Do you know that medical debt doesn’t show up on your credit score but does show up on a mortgage?
But more important: imagine you’re a nurse living paycheck to paycheck in a major metro. You’ll never be able to own where you live.
OK, so move to demoines, we’ll, if they all do that the realestate prices collapse, and it’s in such a situation that the 401ks for people in demoines nose dive… That’s where we’re at.
Sorry, I didn’t have a chance to get back on Lemmy until now. Bit of a now-or-never situation. The housing market is absolutely bonkers where I live (maybe where you live too, from your username). We had both made big leaps in salary recently that put the monthly payment in the barely-doable range, and her parents had some fixed funds available to help with the down payment.
Both the gift money and our salaries were going to be outpaced by the housing market if we waited, and interest rates were already on the post-COVID rise. I don’t think it was a terrible financial decision in the long run, because at least now we’re building equity and the house value will rise with the market. But until we sell (which we won’t be able to afford to for a long time), those assets aren’t liquid, so our month-to-month finances are a lot tighter than when we were renting. Which makes the repair work from the dipshit former owners hurt a lot more since it’s gonna take a long time to recover from big financial hits.
I’m not sure why you’re being downvoted. This isn’t true everywhere or for every home, but yeah, I pay less on my mortgage than some friends did for a two-bedroom apartment in more or less the same area.
It’s seriously unfair.
Oh, it’s more disgusting than that. You can re-finance which brings your monthly payment lower than what you could possibly afford when buying the same house anew. Yeah, the 30-year horizon for paying off gets reset, but there are ways to work around that.
Back when I was renting the landlord offered a 3-year instead of a 1-year lease. I immediately asked “does that mean I get a discount on rent or lock-in a rate?” When they told me “no”, I asked “why would I do that?” Renters really have no such luxuries.
Wouldn’t a three-year lease lock in the rent for those three years?
It should, but it depends on how the contract is written.
That’s not even counting that a significant fraction of each mortgage payment is going towards the principal, increasing your equity, so you’re basically paying yourself back each month.
You pay a mortgage, just not your own.
Wow that’s true. Renting is someone letting you borrow their debt because you can’t afford your own debt.
You’re not even really borrowing their debt, you’re paying it off in exchange for the basic human need of shelter.
You thought college radicalized people? Renting and student loans will have them on the verge of revolution.
I’m just waiting for people to start filling the streets
Sorry, streets are full. No vacancy here
Also: no loitering. Keep moving.
You are the people.
don’t know where you live, but where i live people love whining about how they can’t afford rent while they go on $5000 international vacations every year.
one of my ex-friends who is a trans anarchist, just did this. they work part time in a bike shop, and yet they can afford a two week long tour of Taiwan. But they will talk your ear off about how landlords are evil and the revolution is coming because they can’t afford their rent in one of the nicest areas in my city. irony.
Sure.
And what country are you in?
deleted by creator
This meme is inaccurate. The college grad wouldn’t be in the office with them because they already promised the CEOs son the job.
Cries in middle aged, highly specialized, poverty class worker…
And may whatever God you believe in help you if you’re poor, because the government sure won’t.
FSM blesses me with low cost noodles every night. May he bless you my brother or sister. R’amen 🙏
Tiny deists get cookies!
God I love that show.
Seriously so good all the way through
Just date someone rich. I know a lot of attractive women who are doing something like that.
Step 1: Be attractive. Step 2: If not attractive, rent Face/Off and take notes. Stalk attractive person and swap faces with them when they aren’t looking. Step 3: Free rent.
Anyone can be attractive by putting in some effort. And even if you’re not attractive, just use your personality to attract someone rich. Looks don’t matter as much as incels say it does. Personality matters more.
I don’t think you’re considering the demographic.
Personal hygiene matters immensely.
Nah there are some seriously unfortunate people out there.
And you have to commute an hour because you won’t be able to afford rent where the jobs are.
Get back the future that was taken from you. Eat the rich
U first
I love that dude’s expression. It’s like game theory editing.
I never understood the obsession with homeownership.
I’ve owned. It kinda sucked. The things most people think of as “pros” (like being able to renovate) were not that great for me. I’d spend a lot of time thinking about things I could change/improve, and then doing them.
My brain operates differently renting. I don’t really care about things like that since its not an option in the first place. It saves me time/money/stress and I spend more time living my life instead of maintaining a property.
Of course there are drawbacks with renting, specifically shitty landlords, but to me there are more pros than cons.
Property ownership is the clearest path for generational wealth. It may suck to own, but you are building an asset and you can hand it off to future generations to have a head start with.
It’s a broken system, I am not advocating for it as a good system, but it’s the primary reason to own a home.
the thing is - there’s a lot of variables that shift the balance towards renting when looking within a time frame, even from a financial perspective.
- how long you can stay in one place and whether that fits your needs both today and in a few decades
- % of down payment and missed earnings if this money went towards another investment
- interest rates
- property taxes
- HOA fees, if any
- likely higher insurance rates over renting
- maintenance costs
In the end of the day, since many variables have a large uncertainty, that’s a bit of a gamble. Home ownership tends to win over time, but the longer one looks into the future, the higher this uncertainty also is.
You’re missing a few advantages to owning-
- If you have to move, you can often get the money that you spent on the mortgage back, or even make a profit.
- A mortgage is generally cheaper than rent.
- While some may not be interested in renovating, it’s a relatively low-effort activity that pays for itself if you sell the property.
- Can have a garden
I’m missing all advantages of owning (or renting), that was not the intent.
you can rent and have a garden and rent is cheaper than a mortgage in a comparable area.
when people buy they often have to move further out to a cheaper area to get a mortgage
my mortgage is more than my rent and isn’t as nearly in as nice of a place and convent of a location. on top of that and having to do home reapir (not renovation) i have less disposible income than I did a few years ago.
it’s trade offs. i miss being in a more social area and having more disposible income, and somtimes i regret buying.
Ah yeah, not the case in my area. Rent for an apartment is about twice as much as a mortgage.
What if you’re not going to have a next generation? Is there still a good reason to own?
It’s still the most effective way to accumulate wealth within a single generation, so it can be an asset to use for retirement.
Again, not advocating for the system, I think property ownership is problematic, but I am explaining why it can be beneficial within the current system
The only hobbies I actually enjoy require space: gardening and lapidary “arts” (gem/stone cutting). I can’t buy equipment because I don’t have the space to store them and having to move every 2-3 years is not only very difficult when you have more stuff but also really damn expensive.
So there’s that, and there’s retirement. Having set expenses (aside from taxes) is super important and you’ll never have that with renting when you’re retired.
Then again who am I kidding, I’m 38 and working in a factory. My retirement will be whenever I decide to buy a gun lol
I’m currently renting a home for space for gardening. Tomato seedlings went out last weekend :)
So there’s that, and there’s retirement. Having set expenses (aside from taxes) is super important and you’ll never have that with renting when you’re retired.
I don’t consider my home a retirement vehicle. I save separately for that. But I do understand that for some people, it is, and that’s understandable.
Its a retirement vehicle in that it prevents future rent raises from threatening your retirement, not in that you can/should live off of your home’s equity. Nobody wants to go back to work at 85 because their rent doubled.
Especially if you aren’t financially that well off or on a good career track, I think it’s really appealing just for the stability it affords. My current landlord has been a pretty good guy for us, but if I owned my apartment rather than renting, I wouldn’t have to worry that I’ll suddenly need to pay a ton more money if he dies and his kids decide to jack up the rent, or worse, having to uproot my life entirely and move out because of someone else’s whims.
You don’t have to go all the way to renovating before you see the advantages of homeownership. It shows up even in much smaller home improvements.
A small example: a few years ago my refrigerator broke, and the technician said it’s behind repair. My landlord had to buy a new one, and of course he picked a cheap model.
If I was an homeowning instead of renting, I would have bought a much better refrigerator at trice the cost. But I won’t pay that much for an appliance I’m not going to own, and my landlord won’t pay it for one he wouldn’t use, so I’m stuck with a cheap and noisy refrigerator.
And this is the situation with everything that’s considered a part of the house. Even if I have the money to buy nice things - I can’t have them.
If I was an homeowning instead of renting, I would have bought a much better refrigerator at trice the cost. But I won’t pay that much for an appliance I’m not going to own, and my landlord won’t pay it for one he wouldn’t use, so I’m stuck with a cheap and noisy refrigerator.
Right, I’ve been on both sides of your example. I’ve both bought a refrigerator while owning a home (and picked a more expensive model), and I’ve also had a fridge replaced by a landlord with a cheap model.
Again, for me the renting side of this is a “pro”. I will second guess not splurging if I know it is an option while owning. If I rent, I just don’t care because its not an option in the first place, and I love that.
Ugh, the whole renovation thing is a pain in the ass. My mom watches renovation shows all day while the house has fallen into smelly disrepair over the last twenty years.
She keeps talking about painting this or knocking out that wall or installing all new fixtures 'so it can be nice for the next people (she’s in her 80s and plans on dying there).
I keep telling her that no matter how much money she wastes ‘fixing’ the place up, the people that eventually buy it are going to gut it and do their own thing.
One little old lady using a total of three rooms in a 4br3b house.
She dreams that I’ll settle down and want a quiet place in the suburbs, but I hate the neighborhood and most of the people that live there. If she were hit by a bus tomorrow I’ll call the first Cash For Houses scam I see so I don’t have to deal with any of that.
/Rant
I feel the same way. I currently own a home, but I honestly want to sell. For me, it’s mostly about the flexibility. I hate not having the flexibility to up and move if a new job opportunity presents itself or I just want to try a new place.
There’s also a crap ton of expenses associated with owning beyond just the mortgage, insurance, and taxes.
Homeownership is still cheaper. Every cent that goes towards rent you’ll never see again. At least at the end of your mortgage you have something you can sell to recoup most of what you spent. Or rent it out.
While although taxes can go up your mortgage never will. Your rent will.
My mortgage is $1700. If I were renting this place it would easily be going for $2400 if not more.
Sure, there are advantages and disadvantages to both. For me, it’s about flexibility. And I put a crap ton of money into the house that I will never see again. Just regular maintenance, landscaping needs, etc. Thinks you don’t have to think about or pay for when renting.
It’s basically finances vs convenience. By renting you’re paying for convenience. But you’re taking the hit in your finances.
And just because you’re renting doesn’t mean you’re absolved of the landscaping fees. If you rent a house it’s expected that you’re still mowing the lawn and paying those expenses. Otherwise you live in an apartment where those costs are handed down to you through rent.
There is a lot to consider there but in the end you’ll be spending more money which you’ll never see again by renting.
not paying 1/2 to 3/4 of my salary on rent is a big upside to me. but then again if we are talking about the us, there are probably a thousand fees and ways they siphon your money away anyway.
I absolutely loved my apartment, but I pulled myself out of it because it was just far too much money and I knew that nearly all of that money was going into a hole.
Lived with a buddy for 2 years to save up a down payment, and got a house that’s nice - but honestly the renovation bit that I couldn’t do with an apartment that I really like is that I put solar panels on it. I wouldn’t have that option if I was still in my apartment.
And of course I pay people to mow the lawn, so some money still goes in a hole for sure, as it is with paying mortgage interest. But I have way more control now over how much, and whenever I plan to move I can trade a lot of that money going into the mortgage for wherever I go next, or pass it on.
because in usa culture homeownership grants you higher social status and it’s seen as an investment.
renting = lower status, second class citizen, poor
owning = high status, first class citizen, ‘successful’
that’s it.
Workforce needs stay mobile these days.😒
Gen Z owns homes at higher rates than millennials, x’ers, and boomers.
https://www.economist.com/finance-and-economics/2024/04/16/generation-z-is-unprecedentedly-rich
