Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Rise of Renting in the U.S

citylab.com

Post reply on HN
Print view View original

191–200 of 380 posts

Re: The Rise of Renting in the U.S

#191

Post by horv »

rm_-rf_slash wrote: post #141

To anyone who noticed one of the cities with high rates of homeownership, that can work remote, withstand rough winters, and accept that their football team will never win the Super Bowl, MOVE TO BUFFALO! Buffalo used to be a very wealthy city. It was the first American city with widespread electricity (thanks, Niagara Falls!), and because it's had some hard times, you can literally buy a mansion at (relatively) barg…

I grew up in Buffalo and I would not recommend this for a lot of reasons. There are plenty of other cities with affordable housing (including lower property taxes) and much more pleasant weather.

Re: The Rise of Renting in the U.S

#192

Post by kazinator »

awakeasleep wrote: post #154
kazinator wrote: post #110

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, y…

Property taxes should basically kill the dream of "and don't pay a fucking thing to anyone" for anyone that lives in the US. Especially city dwellers. I was surprised to see tax for properties I could technically afford cost more per year than I had been paying in rent.

Running water, sewage and garbage collection/recycling are nice, though. The birds have to fly somewhere else just to get a drink of dirty water.

Re: The Rise of Renting in the U.S

#193

Post by kazinator »

javanix wrote: post #182
awakeasleep wrote: post #154

Earlier quoted context omitted.

Property taxes should basically kill the dream of "and don't pay a fucking thing to anyone" for anyone that lives in the US. Especially city dwellers. I was surprised to see tax for properties I could technically afford cost more per year than I had been paying in rent.

Well, in some areas, but it really depends on the market - the property taxes on my home in a University city of 200,000 are 1/3 of what I was paying in rent - with the interest on my mortgage the amount of "lost" money comes out to roughly the same amount for now. As long as property taxes do not outstrip my interest rate, that ratio should stay in my favor going forward.

My yearly property tax is barely a bit more than half of what people pay for one month's rent for a similar place.

Tax being 1/3rd of rent indicates rather low rents or rather high tax.

Re: The Rise of Renting in the U.S

#194

Post by mathattack »

phkahler wrote: post #114
mathattack wrote: post #96

Earlier quoted context omitted.

The flip side though is low rates make it easier to afford the home payments too. Your mortgage payments on a 30yr loan at 4% on a 300K house are approximately the same as 8% on a 200K house. (Not strictly proportional due to principal payments) One other thing to consider - it's real rates than matter, not nominal rates. 4% interest rate in a no-inflation environment is the same as 8% with 4% inflation.

>> The flip side though is low rates make it easier to afford the home payments too. Nope. When first time buyers go to the bank to get approved for a loan it goes like this: 1) Look at your income and expenses 2) Figure out what monthly payment you can afford 3) Work backward from #2 and the interest rate to determine how much you can borrow. From there every player (agents, sellers, bank) all want you to spend the…

I think you're missing my point... If rates go up, it doesn't help me that much as a buyer, because I can afford less house.

Re: The Rise of Renting in the U.S

#195

Post by ahh »

toomuchtodo wrote: post #140
hueving wrote: post #138

Earlier quoted context omitted.

Right, you have a high paying job so it's easy for you to sit on a perch well above the median and tell people how simple it is.

It's simple the same way exercise is simple: knowing what to do is easy, having willpower to do it is hard. Being financially independent can be done on a median wage, full stop. https://www.reddit.com/r/financialindependence http://www.mrmoneymustache.com/ "Is that all too fluffy and philosophical? OK, fine. Here’s how to cut your life costs in half. Start by getting rid of your Debt Emergency if you have one. Live…

This works once you have a (supportive) partner. It requires living in nice rural communities where you will never, ever meet a new person, though, so if you start it single you'll stay that way forever.

So I'm in a major metropolitan center, burning cash at a way higher rate, so I can hopefully find a wife. If I'm very, very lucky, that wife will want to move with me to rural Colorado.

Sadly, this insane plan is about the best I can imagine.

Re: The Rise of Renting in the U.S

#196

Post by Grishnakh »

heywiseguy wrote: post #75
irishcoffee wrote: post #57

Earlier quoted context omitted.

I read this counter-point a lot. Its never clear to me how you invest the mortgage payment and also pay rent to live somewhere. Am I missing something? Sincere question.

people who say this are talking about markets where the spread between renting and the finance cost of a similar bought property are huge. San Francisco, New York, LA... Let's say you're a couple years out of school and you work at Snapchat. Somehow you have a lot of money saved up and you can buy a little house near your office in Venice. A small house in Venice runs about $2m. So let's say you borrow 1.8m to pay fo…

Renting is cheaper than buying? That really doesn't make sense, and I don't think that's the case in most markets. In California, it might because of the funny way they do property taxes there, where new buyers get stuck with huge property tax bills but long-time owners are grandfathered at far lower rates, so the landlords are likely people who've owned the house for ages. Other states just aren't like this.

Re: The Rise of Renting in the U.S

#197

Post by toomuchtodo »

ahh wrote: post #195
toomuchtodo wrote: post #140

Earlier quoted context omitted.

It's simple the same way exercise is simple: knowing what to do is easy, having willpower to do it is hard. Being financially independent can be done on a median wage, full stop. https://www.reddit.com/r/financialindependence http://www.mrmoneymustache.com/ "Is that all too fluffy and philosophical? OK, fine. Here’s how to cut your life costs in half. Start by getting rid of your Debt Emergency if you have one. Live…

This works once you have a (supportive) partner. It requires living in nice rural communities where you will never, ever meet a new person, though, so if you start it single you'll stay that way forever. So I'm in a major metropolitan center, burning cash at a way higher rate, so I can hopefully find a wife. If I'm very, very lucky, that wife will want to move with me to rural Colorado. Sadly, this insane plan is abo…

Have you tried online dating? I know that sounds silly, but it might help optimize your search for a partner who shares your interests.

> It requires living in nice rural communities where you will never, ever meet a new person, though, so if you start it single you'll stay that way forever.

I live 15 minutes from the beach in the Tampa area. Low cost of living area.

Re: The Rise of Renting in the U.S

#198

Post by Grishnakh »

themagician wrote: post #41
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 the US we like to sell people on the idea of "ownership", when the reality is that the bank retains all the real value. Only a fraction of so-called "homeowners" actually own more than 50% of their home. Most homeowners just rent from the bank. Many will rent from the bank for life. The way homeownership is sold in the US is nothing more than a way to get people to give up hundreds of thousands of dollars…

The problem with your analysis is that you're forgetting that renters have no control over the amount they pay in rent. You can only control your rent price for the first year; after that the landlord is able to jack up your price almost any amount they want (subject to local laws), and you can either pay the jacked-up rent or move out (which is expensive) and find a new place.

When you buy a house (err, rent from a bank), your monthly "rent" is now fixed for the next 30 years, and will never go up (unless your property tax goes up, this is subject to local laws). Your principle and interest are fixed for that whole time, so your mortgage payment is stable.

That's the big advantage with buying.

Re: The Rise of Renting in the U.S

#199

Post by JackFr »

turar wrote: post #156
JackFr wrote: post #142

Earlier quoted context omitted.

> On top of that, it also depends where you think the interests rates will be in 10-20 years from now. If you believe that they will be higher than they are currently, then that's even more reason to keep that loan locked in for 30 years instead of paying it off sooner. That makes no sense. You'll be better off paying a lower interest rate than you would be not having a loan in a high rate environment?

Remember, the loan is locked in. Everything around you may be a high rate environment, but your loan is still 3.5% when regular bank savings account would be paying, say 7%. So, if you bought shares of an Emerging Markets ETF [1] with the money that you would have otherwise paid for accelerated mortgage payments. Today these shares are paying you around 3.5% in dividends alone. Fast forward ten years to a high rate e…

Point taken about the high rate environment -- I'm not sure where I thought that other money would go. But it's still not obvious that you would be better off under your plan.

You're financing two assets, you home and your portfolio with some mixture of debt and equity. Without making assumptions about the expected return of the housing market, the return on your portfolio, the variance of those returns and the horizon, its not clear that you'd still be better off.

You say take advantage of the cheap (tax-favored too) leverage -- I'd be concerned medium term variance in returns. That ETF you pointed to is down over the past 10 years and underperformed the market -- and it looks like it missed a few dividend payments during the crisis.

https://www.google.com/finance?chdnp=0&chdd=0&chds=0&chdv=1&...

> That's why no other country on Earth that I know of has 30-year fixed mortgages. They are essentially a government subsidy to homeowners via Fannie/Freddie.

Re: The Rise of Renting in the U.S

#200

Post by lawpoop »

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…

Where do you park your van, and how often do you shower?

Also, do you worry about your van being broken in to while you're not there?

Post reply on HN