HOUSE HUNTERS

There are two reasons I like forcing college seniors to read Babbitt. One is personal; Babbitt's monologue to his son about choosing his own path in life rather than doing what others expect of him is advice that I feel like the average 21 year old soon-to-be graduate can benefit from hearing. The second is that it allows us to think about the American Dream and how it has changed over time. Some parts of Babbitt's life are foreign to college kids – turns out that people born in 1992 don't really feel that success involves joining the Knights of Columbus and the Elks Lodge – but others still apply. Having a big, gaudy house is still integral to showing other people that you've Made It.

Is it, though? Sometimes I think home ownership is a good investment and a component of Success. Sometimes I think it's a massive con that I'm lucky to have escaped. Then sometimes I think that last one is an elaborate rationalization for the fact that I'll probably never be able to afford one.

If you're in your twenties or thirties today, what is the compelling argument for buying a home? We're supposed to accept as the new normal an economy that offers no long term security and hardly pays a livable wage in the short term. Our political process still encourages home buying; one look at the tax code makes that clear. But from where are we supposed to be getting the incentive, not to mention the down payment, to take on a thirty year financial commitment? It seems counter-intuitive to tell people that their employment situation is basically day to day and then expect them to settle down.

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57 Responses to “HOUSE HUNTERS”

  1. jazzbumpa Says:

    Traditional wisdom was that you bought a house, secure in the knowledge that the price would always go up, and the burden of your payments would go down, as inflation cheapened the dollars you used to pay it back.

    I bought my current house in 1997. It's not anything like a McMansion. There are multiple thousands of comparable homes in the suburbs of Detroit. It is now worth less than what I paid.

    Fourteen years into my home ownership, it is a losing proposition.

    Note that I bought a non-extravagant house, several years before the housing bubble even started.

    Your choice is to pay rent or pay a mortgage. I'd say look at it on a cash flow basis, recognizing that the house can be one hell of a mill stone when you try to get rid of it. Plus, an owner occupied dwelling has upkeep expenses in a way that a rental does not.

    But you can make it your own.

    It's a very personal decision.

    JzB

  2. Dbp Says:

    In my area, the majority of the apartments are in areas that have shootings. Not people being shot so much as "shots fired" type situations every weekend. Still not a place you'd want to live. It's either that or rent or buy a house. Renting isn't much cheaper than buying. So there's are those in the moment reasons.

    Looking ahead, it'd be nice to have a place I outright own. It's a fever dream, but I'd like to stop working some day without worrying where I'll live.

  3. giri Says:

    Don't buy a house unless you're really ready to commit to a geographic location. I value my mobility – sold my house in 2009 and have no desire to buy again.

  4. Croooow! Says:

    I dunno, landlords are hit and miss. Currently, mine's a hit, but I don't always have the time or money to be picky (especially with the dozens of other variables to consider when looking for housing). Financial commitment aside, I hate moving. Due to bad luck (buildings being sold or demolished, moving to a new city for work or grad school or just moving closer to work within a city when getting a new job across town-not so much a luxury as hating brutal commutes), I am in my mid 30s and have not lived in an apartment longer than 3 years. New neighborhoods/townships/cities every couple years used to be fun. I want something permanent. I want to stop moving. And I want to not have to go through a middleman for major repairs and changes.

    My apartment transience makes me not feel like an adult.

  5. Karl Says:

    I work in San Francisco. Anywhere remotely commutable is expensive as hell. I've lived in my current apartment for less than 18 months, and my rent has gone up twice. At no point has my landlord made any improvements to the property, and yet the all-knowing market has deemed my monthly contribution insufficient. (16 hundred a month for a one bedroom. No dishwasher).

    I'm looking into buying a condo, if only because locking down a monthly payment for a home for 15 or 30 years seems like the best plan to ensure long-term financial stability. I could lose it all, if this tech bubble bursts, or if the big earthquake hits and wipes out my investment. And now that I think about it, that sounds about as likely as me coming up with 200k for a down payment.

  6. Heywood J. Says:

    Definitely house over apartment, every time. People who sing the praises of communal or "vertical" living are either very lucky in their choice of neighbors, or just don't mind the random noise, chaos, and general inconsideration that one idiot can infect a given group with.

    Now as far as buy versus rent the house, depends on so many things, obviously. Interest rates are low enough to make it worthwhile for qualified buyers, etc.

    But really, for our betters, our societal planners who build mansions for themselves, and encourage the rubes to get in on those shoulder-to-shoulder vinyl-and-glue crackerboxes, home ownership is all about inculcating a false sense of stakeholderism. You now have some Skin In The Game, so you'll behave, be a compliant voter, help the gendarmes knuckle the unruly types, bring some casseroles to the fundraiser feed.

    Like our Prussian-based public school system, and our optimized wage-slave job market, the housing sector is just another way to keep you on the hook and in the system, until you're too old and worn-out to be disruptive.

  7. Ochtona_Princemps Says:

    I live in the Bay Area too, and I just bought a place in Oakland. I wasn't particularly vested in the idea of home ownership, but two big economic factos pushed us into buying:

    1) Price stability. Living without rent control in a hot market is impossible to plan for (esp. on a month to month lease). Whoops, rent is up $100, $200, $300 this month–time to re-jigger your budget/life. With owning, even if the underlying value of the property craters, at least you know what target you have to hit for the next 120/360 months.

    2) Tax benefits. The home mortgage interest deduction is terrible policy, but it is hard to ignore in a place like the bay area where both your income and expenses are 30-50% higher than someplace in the interior, bumping you up into higher tax brackets. Our monthly housing cost actually went down substantially when we bought. Some of that is a change in neighborhood, but a big chunk is tax benefits.

    If your month-to-month costs are lower, it is real tempting to buy rather than rent and wait to get hosed by a landlord.

  8. jjack Says:

    I currently rent a house. I am pretty sure I am literally making the landlord's house payment for him. Except eventually the house will be paid off and he will have gained something of value that I paid for. Seems kind of silly to me (but my credit is shit and I've been trying to save up that down payment for years now with $0 to show for it).

    Of course in my particular context I'm talking about renting a single-family home where the rent payment, if it were a mortgage payment, could buy something comparable or better. Your mileage may vary.

  9. Major Kong Says:

    I own a house to have a roof over my head. I'm not really sold on the idea of house-as-investment.

    You see, I have to live somewhere.

    If my house goes up X dollars over the years, it's really just paper money. If I sell it I have to go buy another house that has presumably also gone up by X amount.

    The only way you make out is if you move from an expensive housing market to a cheap housing market. If you sell your $500,000 mud hut in the Bay Area and move to Memphis you can buy a 5,000 sq foot McMansion.

    Except you'd be in Memphis so it's a wash.

  10. Eau Says:

    Not convinced of the investment aspect, but I'd love my own place. I'd like to visit Mars one day, too. Mars is probably more likely.

  11. Arslan Says:

    From the universal declaration of human rights, Article 25:

    (1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

    HA HA HA HA HA HA HA HA HA! No. Keep this in mind the next time you hear some member of the intelligentsia or a politician babbling about concern over "human rights."

  12. Linda Says:

    Home ownership (21 years and counting) has been good for me because I never viewed it as an investment like stocks or commodities: it's an investment in the way I want to live, period. I like having a yard (not a community garden I have to drive to) to grow herbs and vegetables. I like having my own space without accounting to a landlord how I use it (five cats? Foster a litter of 7 abandoned kittens? Bring it!). And I live in an area with low housing costs, and bought less than I can afford, so I can have a little bungalow and keep it fixed up without being house-poor. In fact, I will burn the mortgage in a few months. I never borrowed against the house, so it dropped in value, then gained some back, but it's just a place I keep up, inhabit and decorate to my desires.

    I live in a blue-collar neighborhood that is quiet and pretty peaceful, if you don't count a few times the cops have come around to deal with jealous husbands or the one resident shit-stirrer who finally moved away. I even have neighbors that taught me to play euchre.

    House buying is good if you want to stay in one area for a long time, and don't view the house as a financial investment that will have a particular payoff. Otherwise, you could hate your house.

  13. Anonymouse Says:

    I'm with Major Kong; you have to live somewhere, so you'll either pay to rent or pay to own. In my location, the rental apartments and townhouses actually cost *more than* my (very modest) house, and my house is in a much calmer, quieter area than most of the rental communities. I didn't buy my house to flip in 30 days; I bought it as a place to live, and as Linda pointed out, a place where I can plant a garden, paint the walls, and foster kittens (are you me, Linda??!). As far as a home making you more compliant; I wasted an awful lot of mental energy when I was renting, dealing with the constant noise (the apartment next door had 3 women and 7 kids crammed into a 2-bedroom apartment, there were drug deals outside the bedroom window, and the car alarms rang non-stop) and other disruptions (fire alarms, car alarms, screaming fights, etc.).

  14. Eli Says:

    When I started college I bought a home. I was very lucky, I had my parents assistance with the down payment. Essentially, the down payment on the house, 4k on 40k was chepaer than the were plannong on paying for a year in the dorms 8k. And the monthly payments were covered by the extra rooms I rented to friends.

    Now, this came about because I was looking at renting an apartment, and most one bedroom apartments were minimum six hundred a month. I noticed the mortgage on a house was less than that because of the housing crash. So for me, it makes sense. I had help, I wasn't planning on moving for awhile and I came in at the right time.

  15. c u n d gulag Says:

    The bad side of having a house rather than an apartment, is that there's no one to call and say, "Your toilet's broke. Please come and fix it! Thank you."

  16. Nan Says:

    Linda nailed it. If you know you want to stay in an area for an indefinite period, then buying a house makes sense. You have to pay for housing in any case, so you might as well spend the money on your own place where you don't have to negotiate things like interior paint colors or whether or not you can have a cat.

    IMHO, though, what's going to keep today's college students from turning into homeowners in their 20s and 30s isn't going to be mobility or job insecurity. It's going to be massive student loan debt. Way too many kids are graduating already owing the equivalent of a 30-year mortgage on a McMansion. How can anyone think about buying a house when they can't afford to rent an apartment without roommates?

  17. John Danley Says:

    Apartment or house. Just make sure there are no roaches *before* you sign the paperwork.

  18. Sarah Says:

    No one has mentioned what seems like a major issue to me: the fact that living in apartments makes you extremely vulnerable to other people's stupidity. There have been a few apartment fires in my area in the past few years, one of which was caused by somebody leaving a candle burning on a balcony for several hours. A fire that starts in one apartment can spread and affect dozens of people who suddenly find themselves without a place to live and most or all of their possessions. I mean, I'm all for apartment living under ideal circumstances–I think it's much more earth-friendly, for starters–but with so many humans in the mix, circumstances are rarely ideal.

  19. Jestbill Says:

    Major Kong. Nail. Head. Homes are not "investments."

    The tax code lures you into buying a bigger house than you can afford. Don't do that.

    In fact, you're better off saving for years and buying over a short period. Adjustable rate mortgages and planned refinancing every few years can be leg hold traps. You may have to chew off your leg to get out of them.

    If you can stand your neighbors, condo living can be pretty satisfying. The HOA handles most of the utilities and repairs; I don't shovel snow or mow the lawn.

  20. Rich Says:

    In the days before labor unions and a large salaried class of workers, home ownership was part of the dream in part because it was more secure than money in the bank (in an era when banks failed in the periodic "panics"). It was a goal in many of the countries from where immigrants came. It's much more woven into the culture than just a byproduct of political and other contemporary discourse.

    Babbitry is still very much a part of our culture. It's held up as something for which what people and communities should strive. A vulgar, shallow place like Atlanta where the economy sometimes seems to be based on suckers trying to sell stuff to bigger suckers is a good example, along with a lot of other sunbelt cities and places that try to emulate them like Columbus, Ohio (a less vulgar self-hyping version of Atlanta, but still a shallow place).

  21. Death Panel Truck Says:

    I was 42 years old in 2005 when my wife and I bought our home. We got sick of living in apartments: the noise, the rude neighbors, the lack of storage space.

    But mostly we wanted our own backyard. I wanted a lawn to mow and a vegetable garden to fuss over. The only pets we'd had in the apartment were cockatiels, and my wife wanted a dog. We now have two cockers who have a big backyard in which to play. At present our home is worth slightly more than we paid for it, and the mortgage payment is less than $1,000 (we only have 1,500 sq. ft. on a 1/3-acre lot. Since we have no children, it's the ideal size for us).

    I wanted a goddamn yard. It's as simple as that.

  22. GunstarGreen Says:

    As far as I'm concerned, home ownership is about lowering the month-to-month burden in a volatile job situation. When I was renting, my long-term risk was minimized — worst case, I lose my job and have to pay three months rent before moving back in with the folks (two months notice plus one penalty for contract break). Now that I have a house, losing my job means I'm on the hook for the rest of the mortgage, which is worse — but the money I save over renting every month means that I can last longer without having to go the drastic route, as I've got extra money going into savings every month and each month's required outlay is less than it was when I was renting.

    Wait, what? How am I mortgaging for less than I was renting?

    Because I kept it real. I don't have a McMansion. I have a single-floor, small-ish ranch-style home from the 70s that recently had its majors (roof, HVAC including furnace, septic tank) replaced. The home is bigger than the studio apartment I lived in prior, but not by much. 3 bed (really 2.5, no such thing as a 'master' bedroom), 1.5 bath.

    Barring something sudden and catastrophic, there's not too much that needs to be done around here that I can't learn how to do myself on the cheap, I'm paying less than I was paying to rent, and if I can just hold this job down for two or three years, I'll have it paid off. Yeah, it means that I live a pretty ascetic life for two or three years and really watch my outlays, but the end result — freedom from ever having to seriously worry about money again — is absolutely worth it. It's not glamorous, it's certainly "below my means", by a pretty large margin according to the home loan industry. But that's fine, because no amount of floor space or modern bells/whistles is a good trade for being able to walk into work and tell a bad boss to shove it.

    Caveat: I can't imagine trying to pull this off with the noose of children around my neck. I will never understand why people bother trying to have kids before 30. What a great way to utterly ruin your prospects, saddling yourself with the absolutely massive time and money costs of raising a child in your 20s. Let alone several.

  23. Christina McPants Says:

    I'm 32 and my wife and I bought a house last year. We live in Washington, DC and went from spending $1700 to rent a 600 square foot condo in the burbs to spending $1615 for a two story house with a nice backyard in the not as nice burbs. We qualified for down payment assistance and then spent a crap ton of money renovating the kitchen, which is an investment I'm pretty sure we'll recoup (1950's appliances and no dishwasher to a much nicer kitchen). We bought because housing prices were only going up and it was either live in smaller, less convenient apartments or buy something. And my wife loves her stuff. A lot. She wanted to paint and decorate without having to worry about a landlord. I wanted a dog. We're having kids in the immediate future. None of these things would have been possible if we rented.

    Yes, we have to pay to fix every damn thing that breaks (and the house is 60 years old, so there are a few things already!), but we also have a fixed payment for 30 years (except for property tax) and I get to deduct the interest from my taxes.

    We bought in an up and coming area and property in the DC metro area is almost as ridiculously overpriced as property in the Bay Area, so I'm fairly confident we'll recoup our investment when we sell in 5-8 years.

  24. Dan E Says:

    My wife and I bought a condo shortly after we moved to Denver. It is worth way less than when we bought it. When we bought our home, we were fortunate that we did not have to sell the condo and we are now landlords and rent it out. I know there are people who have lousy landlords. However, to those people who are upset when a landlord seemingly jacks up the rent, it is sometimes unavoidable. Our condo association fees keep going up. The biggest variable is property insurance and if you own a home, especially anywhere that has had any volatile weather (most places), the insurance premiums have skyrocketed. I have good tenants right now so have kept their rent the same and am just eating the increased costs for now. To any young person looking to buy, I would advise extreme caution. Home ownership costs more than you think, and unless you have a substantial down payment or can afford a 15 year mortgage, a huge percentage of your mortgage payment is going to interest payments.

  25. Misterben Says:

    I've rented for a long time, largely because I find myself moving to a new city every few years, and rental properties are just easier to get in and out of.

    Everyone says that renting is more expensive than paying a mortgage. This is often true, but I think it's worth pointing out that most renters I know don't take full advantage of the fact that they have a landlord, and taking care of the property is HIS job – not yours. I know, I know, lots of landlords are deadbeats and don't want to show up and do/pay for maintenance, but you need to find that out in advance, before you move in. Would they start eviction proceedings if you were even a day late with the rent? Then you should hold them to the same high standards: either they fix the broken thing, or you hire someone to do it and deduct the cost from your rent. (Every state has different laws about how this works, and you need to be careful, but the bottom line is don't EVER pay to improve a property you don't own.)

    I work in the real estate industry, and that leads me to echo one lesson from previous comments: if you're going to buy, buy less than you can afford. Then you have money left over to pay down your mortgage faster and/or make improvements to your house so that it is more to your taste. It also makes it easier to deal with if you get stuck having to move/sell your house, and you can't find a buyer for a while.

  26. Michael Says:

    It's interesting that most of the comments seem to assume that own = house and rent = apartment.

  27. SiubhanDuinne Says:

    I'm closing in on my 72nd birthday. By deliberate choice, I have never owned a home, nor have I ever regretted making that decision. Everyone else in my family owns, and they all think I'm financially stupid, but being locked into a mortgage and a physical place has just never appealed to me.

  28. bb in GA Says:

    @rich

    I lived in the Atl ex-urbs for nearly 40 yrs and I worked for short periods in the 80s in the Columbus, OH are (Circleville)

    Some of the very nicest, 'deepest', 'salt of the earth' people was my great fortune to live and work with.

    Please, could you provide an example of an area that you consider deep?

    //bb

  29. bill Says:

    IT ALL depends on where you live, that is, what city. Some make renting not really worth it, some make owning impossible.

  30. pathman Says:

    The housing crash isn't done. The banks are sitting on big piles of foreclosed homes that aren't even on the market. Prices are artificially inflated in the current market which won't last. Oh, and I'm underwater on my house too. Big fucking fun.

  31. Xynzee Says:

    One question to ask yourself: how long do you intend to stay in Peoria? If you're just marking time until you can find a better gig elsewhere then don't. It'll make the escape that much harder. Especially if the place is dying as you say. At least the uni will keep things viable for longer.

    You could be strategic in your purchase just to get into the market, and get something closer to Chicago to rent out.

    Provided you don't buy in Love Canal, usually property will go up. Sure there are cycles, but they'll increase over time.

    One advantage of a home over a unit for you are capybara cuddles.

  32. Rosalux Says:

    Ultimate benefit of owning a home though is that your monthly payments go, in part, to equity. With a rent payment, you're flushing money down the toilet every month. This is the key difference. All of the other considerations pale in importance. This is not to say that a home is a good "investment" because who knows what will happen to the housing market, but still each payment is actually purchasing something rather than simply being handed over to the landlord. This reinforces structural inequalities. Those wealthy enough to own a home can use their monthly payments to buy more equity in their home; those too poor to own a home "waste" their monthly payment. Mileages may differ based on your housing and rental market, but this all generally speaking will contribute to the rich getting richer, the poor getting poorer.

  33. Rosalux Says:

    Postscript to my comment above: Because of the fact that monthly mortgage payments purchase equity, buying a home clearly makes sense financially if the value of your home will rise over time, or stay the same over time. The question which would require some economic analysis is: how much would the value of your home need to depreciate over time for it to be worth it to rent instead of buy?

    Consider a 5 year time frame. If your rent is $1000/month, over five years you're "wasting" $60,000. If you buy, you're not "wasting" the $60K over five years but you're still absorbing the costs of interest payments and repairs that renters don't face. Factoring in these costs, your house would have to depreciate by somewhere UNDER $60K over five years for it to worth it to rent instead of buy. And this is assuming a world where your house will only continue to depreciate, and you have no faith that your house will GAIN value ever again. There must be an economic model of this somewhere.

  34. Juche Songun Says:

    It only makes sense if you want to live in an area where the average 10 year mortgage is less than the average rent by a significant amount. Or, if you have a lot of liquid cash that you want something that will at least keep up with inflation and buy it for cash.

  35. exlitigator Says:

    If you are going to be in an area for more than five years you should buy. The tax savings and the built equity outweigh renting. Even if your house stays the same value or decreases, it still is better than throwing away rent every month. However, the benefits are dependent on keeping the house payments affordable. Further, owning has a lot of other expenses (insurance and property taxes are two big ones) plus major potential repairs and maintenance. I live in Houston and owning a decent home is possible. In other parts of the country, I don't see how it makes sense.

  36. Mack Says:

    Do you care where you live? People like Rosalux (above) make it seem like it's a purely economic decision. I don't know about the rest of you, but I rent so I can afford to live where I want to and have enough left over to put away something for retirement etc. My calculation, where would I have to move in order to buy for the same amount I rent for?

    Answer is always unacceptable.

  37. Kevin Says:

    Sigh… home ownership… I bought because I was sick of moving every two years and wanted something I could make my own. It's been an emotional ride. I bought too close to the top of the market for comfort, and only very recently do I not feel sick to my stomach when I look at zillow.com.

    As for a house as an investment, don't take this as financial advice, because it is probably stupid; however, from a practical standpoint I like the idea of a house as investment much better than stocks. The value of both is virtual at best for any given moment, but at least I can still *live* in the house even if it isn't worth as much as I've paid into it. If the US Dollar goes into the toilet from inflation and my savings account is worth a loaf of bread, I still have a roof over my head. When I came to that realization (along with my monkey braid distrust of "the almighty market"), I just started dumping every penny of my disposable income at my house and paid the thing off (I do not have a fancy house, nor a fancy neighborhood). There's comfort in having secured it.

    However, I want to move. My partner is a public school teacher, and we need to get the hell out of a red state. The house is an anchor, even in this improved market, unless you live in the right school district. At least I live in the largest city in my state, so there are enough jobs to duke it out for. I wouldn't recommend that anyone buy a house in a small town. That's just asking for trouble.

  38. Bitter Scribe Says:

    I bought my condo at exactly the wrong time, but I'm still not sorry I did. The only way I can ever afford to retire is if I have a paid-off house.

  39. mothra Says:

    I bought the house that I grew up in after my mother died simply because I didn't want to have to move. Heh. No, I often fret whether I made the correct decision or not–I purchased it fairly late in life and now I worry that I was a freaking idiot to have taken on this burden. But then I realize that Armageddon is around the corner and I will likely have 20 other people living with me a la that scene in Dr. Zhivago, so I figure I'll hold onto my house so at least I have THAT going for me.

    I also don't want to have to call the landlord and wait until it suits him or her to fix whatever is broken. I don't know what fantasy world Misterben lives in, but it is impossible to determine whether your landlord sucks BEFORE you move into an apartment. Getting fronted repair money back from a landlord? Bwahahahahahahahahahaha

  40. Sarah Says:

    3 years into home ownership (or, more accurately, mortgageholdership) I've been battered down by all of the maintenance work we've had to do and how few of the fun renovation projects we've gotten to yet. It's a little bit exhausting. But I love our house, our neighborhood, our yard where we plant all kinds of delicious plants without so much as a by your leave from anyone. I don't have to worry if my dog or my cats are okay or are going to incur more housing fees than what I already pay or if they'll have enough space. Homeownership is draining, but still I cringe at the idea of renting again.
    And my mortgage, while it seems astronomical sometimes when I start looking at housing prices outside my area, is actually probably less than what I'd be paying right now for a nice 2-3 bedroom apartment in a multi-unit building.

  41. momesq Says:

    We bought our house 10 years ago in my hometown, with the expectation of staying there for the long haul. It's a small, classic 50s Cape in a middle class neighborhood. It was pretty close to the top of the market, and though it was nice to think we might have an asset worth more over time, the real reason for purchasing was to have the stability of knowing we could stay there and do what we wanted with the place. It was an investment in our place to live, not an investment in a financial asset. Our family has grown since and we're a little crowded in there, but nothing we can't live with. Buying made sense because I had a very stable job and we wanted predictability of costs and to know that our landlord couldn't just decide not to renew our lease.

    But despite being very happy with that — we've decided to sell it and move to where my husband is from, where we plan to rent. Hopefully a whole house, but otherwise something like part of a duplex. Part of the reason for renting is that in our new location, home buying prices are utterly overheated, but another reason is we want the flexibility to move around a bit if we want to before settling on a permanent location. Also, my work will be much less stable by choice so we also need the ability to change the amount we are committed to spend.

  42. Croooow! Says:

    If you hate moving and want to stay put for several years in your apartment, be sure to rent a place you can *comfortably* afford.

    I've had friends who stayed within their means, but rented right on the edge of what they could afford. After a couple of years of your landlord raising your rent, you're either reallocating money you should be saving or looking for a new place.

  43. dieselross Says:

    I prefer apartments. I hate grass, pets make me sneeze, and I have no fucking clue how to fix shit and don't particularly care to learn. Also, I live alone and work 9-5, and people in that situation in these parts tend to get their houses broken into while they're at work. Nobody breaks into fourth-floor walk-ups.

  44. Croooow! Says:

    I guess you don't live in New York? I've had my fifth floor walk up broken into. But that was BedStuy

  45. David Says:

    If you rent, you have no excuse to buy power tools. If you own, every little repair job might require a new shiny tool (if you're lucky).

  46. Champs mom Says:

    It depends on where you live and your family experience. I grew up in SoCal in the 50's and everyone I knew owned a home, mostly because of the GI Bill from WW2. And people who worked at so-so jobs, one wage earner, sold those homes when they were ready to go to assisted living or whatever for a huge profit – try buying at $20K for a nice 3-bedroom and selling for $250K or more, in the 1970's or 80's. It happened all the time. Then look at the rising cost of rent that, in my experience, has never been matched by rising wages, and it seems worth it to take the risk you describe to "lock in" your rent payment for life and be able to finance your retirement as well.

  47. Nancy the math teacher Says:

    We thought we'd never be able to afford a house, but both sets of parents, his and mine, contributed to our down payment and closing costs. There's no way we could have saved the money ourselves.

    If it were possible, I'd do the same for my kids.

  48. Mike Says:

    The lending rules in the conventional mortgage market do not favor informal jobs, small-time landlords, or arguably anyone who lives in an area with prices >2x the national median price. The lending requirements have snapped from dangerously loose (2004-2008) to absurdly tight. Thus people such as myself (30 years old) got fucked on the way up when home prices were out of reach, and got fucked on the way down when the more sober of us who didn't lie on our loan apps circa 2004-2008, now find ourselves ineligible for loans DESPITE 50% more income than we had in the 2004-2008 period.

    THANKS GUYS!

  49. Csicopper Says:

    Well, when you have an old 50s ranch house you inherited, you can sit farther from a big TV than in an apartment.

    I'm a long way from middle class but because of this place I get to pretend. It is kinda boring though.

  50. Robert Says:

    Our house in Oakland was US$650K. When I see what that could have bought us in some other parts of the country, well, I'm still glad to be here. Both my husband and I are from California. I myself was born here, grew up in San Leandro (just south of O-town), went to uni in Berkeley, and moved to San Francisco. I do not want to live in any other part of the country, and have no reason to move. Based on that, owning does make sense. But again, I left college with very little loan debt and got a stable civil service job right away.

  51. Anonymouse Says:

    @Champs Mom: The parents of the Baby Boomers were gifted with tons of stuff from Uncle Sugar: low-cost brand-new homes in the 'burbs (developers were subsidized) and shiny new roads and bridges to get from the 'burbs to work, the VA loan program to pay for those new homes and the GI Bill to pay for school. Those "gimmes" are long, long gone.

  52. Andrew Says:

    A lot of the supposed advantages of home ownership are really advantages of living in a detached house rather than an apartment. Since you can rent a house and buy an apartment, it would probably be beneficial to create two pro and con lists, one for renting vs. buying and a separate one for house vs. apartment.

    Mine might look like:

    Renting:
    Pro: flexibility – after your lease is up, you can move anywhere with 30 days notice
    Pro: someone else is responsible for fixing things
    Pro: If an earthquake demolishes the building, and you survive, you can move elsewhere, no questions asked. As a consequence, if you do carry insurance (and I recommend it), it is very inexpensive because it covers only your belongings and temporary housing, not the value of the structure (which you don't need to insure because you don't own it).
    Con: After your lease is up, your rent can go up with 30 days notice, provided rent control/stabilization do not apply in your area (the areas where they do apply are few and tend to be high-rent)
    Con: No matter how long you rent, you never build any equity.
    Con: You can't make modifications, and your landlord may restrict how many pets you have (and what kind) and how many people live in the dwelling.
    Pro: The market value of the property, and fluctuations therein, are of no concern whatsoever to you.

    Detached House:
    Pro: Your neighbors are farther away
    Pro: Detached houses tend to be larger than apartments
    Pro: In some cities, detached houses are in nicer neighborhoods than apartments, but usually you can find either one in a neighborhood you are willing to live in, unless you are unusually particular.
    Con: Detached houses tend to cost more than apartments
    Pro: It is possible to buy or rent a detached house without a homeowner's association. I have never heard of anyone buying apartment without one.

  53. Andrew Says:

    @Major Kong: The idea of a house as an investment makes more sense when you plan to downsize after your kids are grown, or move someplace less expensive upon retirement. THEN you can cash in your big fat house, spend some of the proceeds on a cheaper dwelling, and keep the rest. But in general, a house is a place to live. If the mortgage interest and property taxes (after applying the income tax deduction) are no more than what a comparable property would rent for, and you don't mind being shackled to a given area for 30 years, buying is probably a good deal, particularly since mortgage interest on a fixed-rate loan will decrease every month while rent tends to go the other way more often than not.

    My wife and I have owned a house since 2004. We love the house but don't love the responsibilities that come with homeownership. Since we bought it, the value has gone up and down and is currently somewhat above the sum of what we paid for the house and the improvements we've made, but if we sold it, the broker fees would probably eat the difference and we'd end up even at best.

  54. Bitter Scribe Says:

    If you do buy a condo, do not, under any circumstances, ever let anyone talk you into becoming building president.

    Signed,

    Bitter Scribe
    President
    Bldg. 13

  55. Nate Says:

    I've been renting since I was a junior in college. Me and a few friends rented this 3 bedroom house and everything was split 3 ways. It was super cheap and in a nice neighborhood within walking distance from IU. We even had a basement that wasn't leveled correctly. I still live in bloomington and the other places that I've rented have never seen a rent increase. I also like that I can call maintenance for stuff that my dumb ass doesn't know how to fix.

    Still, I'm planning to have a small family with my girlfriend (soon to be fiancee) so finding a decent 3 bedroom house is in the cards. Fortunately, most rich people give zero shits about the midwest so I don't have to worry about the crazy prices and shenanigans going on over in NYC or SF. I drive by lots of decent houses that are up for sale all of the time.

  56. Jak Says:

    I own a house, but that is largely a function of the preposterously low cost of buying one when I did (about 5 years ago) in the area I live (near Detroit). It is so much less expensive to live here than to pay rent, and while the property value has not soared, it is up from the pretty much rock bottom place it was when I bought it.

    So in regards to the "Settle down! But don't expect it to work out!" problem. ThinkProgress does this thing where they talk about "three good things conservatives wrote this week" which is pretty annoyingly left-handed-complimenty EVEN FOR A COMMIE LIKE ME, but at the same time I do see interesting things there so whatever.

    In any event, #2 on this list: http://thinkprogress.org/politics/2014/02/28/3344021/conservatives-3/

    is essentially saying "it's the liberal agenda to free everyone that makes us lack roots to our communities!" which I immediately felt was bs, but your point about not being able to afford a house while also being acculturated to view home ownership as important is just so classically USA. And that situation is not at all due to people being more tolerant and less oppressed, bur rather largely thanks to conservative economic policies and the behavior of employers.

  57. Jak Says:

    #1 on that list* sorry.