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The Rise of Renting in the U.S

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Re: The Rise of Renting in the U.S

#101

Post by lowglow »

seivan wrote: post #89
lowglow wrote: post #64

I've sorta turned my back on the standard american dream. Racing to new areas of growth, working to build someone else's dream, getting paid well immediately for performance, paying high rent, etc to afford the image of success, and making friends that participate in this same high ambition culture. Instead of making markets, markets start making you. All the rules, and "norms" we've collected around ourselves to par…

How does it work with having a companion. It might be easier to find someone with the same outlook. But if you're already in a relationship it's going to be an uphill battle.

Yeah, it's all about them. If they're into it, awesome, but in my personal experience the people I dated were very much used to a standard of living, and had some expectations of my contributions to uphold an image. But this journey is ultimately up to you. You start out by asking yourself what do you truly find valuable? Are all of these things you've collected simply working together because in combination they've found some local maxima to sustain your current life?

One thing I've found is that even if the people you knew before aren't available to make the transition, there are plenty people on the other side that will know you for who and what you are to them. Taking a stand and fighting for your change and growth takes some guts, and people find that admirable. Dating has also never been better because you both immediately enter into these relationships without pretense.

Re: The Rise of Renting in the U.S

#102

Post by maxerickson »

floppydisk wrote: post #66
maxerickson wrote: post #44

Earlier quoted context omitted.

This makes me wonder if 30 year mortgages even end up making housing more affordable. (I guess it would be a prisoners dilemma situation, where individuals benefit by taking them out but the overall situation is made worse)

30 year mortgages make the monthly payment smaller, which reduces the monthly cost of housing, BUT you end up paying more interest since you aren't paying principal off as fast which means the total long term cost of the asset is more due to compound interest. A 15yr mortgage takes more out per month, but it's cheaper overall since you're paying off principal faster and interesting isn't accruing or compounding as qu…

People scale the principle of the mortgage to the monthly payment they can manage though. So I'm wondering if the bigger effect is upward pressure on home prices. Which probably doesn't make housing more affordable.

Anybody staying in a home would be insulated from the price effect, but anybody buying a first home or moving would feel it.

Re: The Rise of Renting in the U.S

#103

Post by lowglow »

toomuchtodo wrote: post #95
seivan wrote: post #89

Earlier quoted context omitted.

How does it work with having a companion. It might be easier to find someone with the same outlook. But if you're already in a relationship it's going to be an uphill battle.

I might be able to answer that. My wife and I are early 30s. I spent my 20s in the rat race, working 60-80 hour weeks for material possesions (nice vehicle, luxury townhouse, etc). At some point, I got tired of it and said, "Can we try something different?" I switched to a fully remote job. We disposed of the townhouse (no equity in it). We downsized our lives (1 car! I ride a bicycle everywhere! You would not imagin…

Beautiful. You are an inspiration! :)

Re: The Rise of Renting in the U.S

#104

Post by dsp1234 »

kchoudhu wrote: post #55
chishaku wrote: post #13

Why are mortgage debtors referred to as home owners? Edit: I was being a bit facetious. With liar loans, no down payment mortgages, deferred interest, "prices only go up," etc, it's been too easy to sell home "ownership" to people without their requisite understanding of the risks involved and the constantly changing market realities. I'm all for personal responsibility but the use of language is powerful.

Because in theory, they own the deed to the property, which can in a pinch be sold to pay off the debt. I know this is an unpopular opinion, but it is true: if done correctly, the purchase of a house should have zero effect on the buyer's net worth.

if done correctly, the purchase of a house should have zero effect on the buyer's net worth.

What is the hedge here against falling home prices? In other words, if you purchase a home a reasonable price of $500k, but changes outside of your control cause the market for that house to fall such that you could only sell it for $400k, how is your net worth not affected?

Re: The Rise of Renting in the U.S

#105

Post by matheweis »

danielvf wrote: post #84
floppydisk wrote: post #66

Earlier quoted context omitted.

30 year mortgages make the monthly payment smaller, which reduces the monthly cost of housing, BUT you end up paying more interest since you aren't paying principal off as fast which means the total long term cost of the asset is more due to compound interest. A 15yr mortgage takes more out per month, but it's cheaper overall since you're paying off principal faster and interesting isn't accruing or compounding as qu…

I don't think this works, because 30 year mortgages have a higher rate of interest than 15 year mortgages do.

Pedantically true, but in practice with interest rates what they are there's only a few thousand difference between in the long term a 4% 30-year that is paid off in 15 years, and an actual 15-year at 3%. (Source; I'm doing this with mine, and ran the numbers)

Re: The Rise of Renting in the U.S

#106

Post by akhatri_aus »

jpmattia wrote: post #73

I'm a little surprised that there hasn't been a populist rebellion over interest rates. Low rates have inflated pretty much every asset class. This is especially so in housing: The Fed needed to reinflate housing prices in order to make many systemically important players (banks, AIG) solvent again. I have to wonder though: In re-inflating house prices, have we just off-loaded the bad investment to non-systemic insti…

The real interest rate is positive. If interest was low and the prices of commodities and their processed product increased there would be a motive for a rebellion.

A $100 bill, with interest, buys alot of stuff these days compared with 10 years ago.

Re: The Rise of Renting in the U.S

#107

Post by 300bps »

dragonwriter wrote: post #86
jpmattia wrote: post #73

I'm a little surprised that there hasn't been a populist rebellion over interest rates. Low rates have inflated pretty much every asset class. This is especially so in housing: The Fed needed to reinflate housing prices in order to make many systemically important players (banks, AIG) solvent again. I have to wonder though: In re-inflating house prices, have we just off-loaded the bad investment to non-systemic insti…

> I'm a little surprised that there hasn't been a populist rebellion over interest rates. Low interest rates are in immediate terms good for net debtors and bad for net creditors. In broad strokes, this makes them good for the poor and bad for the rich (they are usually responses to conditions for which the reverse is true -- or, at least, which are more bad for the poor than the rich, but I'm just considering the in…

Low interest rates are great for the rich. Wealthy people in general know how to effectively utilize capital to make more money and if that capital is cheaper then all the better for them. I mean cost of capital is one of the chief components of calculating the net present value of a prospective project so the lower the interest rate the more profitable various projects are.

Re: The Rise of Renting in the U.S

#108

Post by toomuchtodo »

lowglow wrote: post #103
toomuchtodo wrote: post #95

Earlier quoted context omitted.

I might be able to answer that. My wife and I are early 30s. I spent my 20s in the rat race, working 60-80 hour weeks for material possesions (nice vehicle, luxury townhouse, etc). At some point, I got tired of it and said, "Can we try something different?" I switched to a fully remote job. We disposed of the townhouse (no equity in it). We downsized our lives (1 car! I ride a bicycle everywhere! You would not imagin…

Beautiful. You are an inspiration! :)

Thank you! But I can't take the credit. These other people I found organically online gave us the push we needed:

http://www.thenomadtrip.com/

http://fattygoodlander.com/

http://www.sailingtotem.com/

I love technology. I love the work I do. But I will only live so long. Work to live, don't live to work. Make enough to live well enough to spend time living well.

You won't lay on your death bed wishing you crammed a few more hours in at the computer. You will regret the extra hours you could've spent with those you care about.

Re: The Rise of Renting in the U.S

#109

Post by nugget »

jpmattia wrote: post #73

I'm a little surprised that there hasn't been a populist rebellion over interest rates. Low rates have inflated pretty much every asset class. This is especially so in housing: The Fed needed to reinflate housing prices in order to make many systemically important players (banks, AIG) solvent again. I have to wonder though: In re-inflating house prices, have we just off-loaded the bad investment to non-systemic insti…

Bernie Sanders, a proud socialist and outspoken advocate of wealth redistribution, just pulled even with Hillary Clinton for the Democratic nomination for President. In the Iowa and New Hampshire primaries, voters under the age of 30 broke for Sanders by 70% (compared to 57% for Obama in 2008). Meanwhile Donald Trump, who has the most liberal social record of all the GOP candidates, and who continually insults the GOP establishment, is 20 points ahead of the rest of the field. For us fans of politics, this is like witnessing two black swans simultaneously emerge within one pond and begin loudly mating. Your populist rebellion may be here.

Re: The Rise of Renting in the U.S

#110

Post by kazinator »

This article is full of "no kidding" like, oh:

> In fact, metros with greater shares of renters have higher wages, higher productivity (measured as economic output per capita), and greater concentrations of high-tech firms, according to Mellander’s basic correlation analysis.

People are attracted to where the jobs are, and so everything gets bought up and inflated, and the late comers have to rent.

In related news, you never see rental apartment buildings among rural grain elevators. Gee, why is that?

Correlation analysis? Yeah, we wouldn't want to jump to any premature conclusions like that the jobs and presence of industry leads to renting; there is a glimmer of hope that we might be able to prove that renting actually causes higher wages, higher productivity and the presence of high-tech. It could be that people come to the city just for the privilege of participating in expensive rent. Then when their bank accounts drain dangerously low, they realize they need high wages, and so they create companies and give themselves salaries.

Fact is that renting is not some way of the future or a shift. Even if 99% of the people rent, it will be because they have to, and all will continue to foster the dream of owning a home, and continue to envy the squirrels in the park that de facto own their own space in the hollow tree, or the birds that have their own nest, and don't pay a fucking thing to anyone.

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