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Why Do Fewer Renters Expect to Move?

libertystreeteconomics.newyorkfed.org

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Re: Why Do Fewer Renters Expect to Move?

#61

Post by kaydub »

bobson381 wrote: post #4

30 year mortgage is founded partly on the idea that your house will be worth more in the future when you sell it. That you can lock in a lower price now. Number cannot always go up. We are at the top of the carbon pulse. Financialization has taken us far from the material baseline of the rock we are flying through space on. Debt will only get us so far. For this and many other reasons, why would you believe a house "…

> Numbers cannot always go up

Isn't that how our monetary system works though? Inflation means the numbers WILL always go up.

Re: Why Do Fewer Renters Expect to Move?

#62

Post by hylaride »

petcat wrote: post #10
bobson381 wrote: post #4

30 year mortgage is founded partly on the idea that your house will be worth more in the future when you sell it. That you can lock in a lower price now. Number cannot always go up. We are at the top of the carbon pulse. Financialization has taken us far from the material baseline of the rock we are flying through space on. Debt will only get us so far. For this and many other reasons, why would you believe a house "…

You're falling for the trap of just thinking of buying a house as an investment . Buying a house can be an investment, but it's also buying a place to live. Even if the home's value merely keeps pace with inflation over 30 years, you've converted a largely fixed housing payment into ownership rather than paying ever-increasing rent indefinitely.

Home ownership comes with costs, too. There's maintenance, taxes, etc.

It can also be a prison, as many people who locked in at low interest rates are learning. If they move, a lot of them will have to reset their mortgage rates and end up paying a lot more. This has trapped people into housing that is substandard for their living situations (growing families, moving for career opportunities, etc).

Renting can be perfectly fine for society, though the explicit tax benefits in the USA usually tilt in favour of home ownership. But a lot of very wealthy countries are majority renters, including Switzerland (where the home ownership rate is in the 30-40% range). This gives the Swiss a huge leg up on lifestyle flexibility and the majority of their wealth isn't tied up in a single asset.

I'm not trying to shit on owning a place, but ideally there should be nothing wrong with renting (assuming a competitive market where rental units can be built and aren't zoned out due to restrictions, etc).

Re: Why Do Fewer Renters Expect to Move?

#64

Post by willmadden »

the_sleaze_ wrote: post #36
cma256 wrote: post #28

Earlier quoted context omitted.

This is false. Can you cite a source for the idea that the 30-year mortgage was "founded" on the idea of appreciation? The thirty year mortgage was introduced to reduce the housing appreciation requirement the old balloon loan system relied on.

I agree. The mortgage was to allow people to eventually OWN THE PROPERTY, not a leveraged investment. It's an interesting development that some (most?) regular people have forgotten that there is a 3rd option, not just rent or loan. You can actually OWN the thing and pay only property tax on it.

You don't really own it because of the property tax. Unless you live in Malta or a handful of other countries you are effectively renting from the state.

Re: Why Do Fewer Renters Expect to Move?

#65

Post by gwbas1c »

Moving is a pain in the ass, especially in today's world where we just have a lot of stuff.

I moved a lot in my 20s, and really grew to hate moving. One year I moved into a place that I hated (because I could just move again) and when I moved out of that place into a place that I loved, I really grew to hate moving.

Re: Why Do Fewer Renters Expect to Move?

#67

Post by rogerrogerr »

jasonjayr wrote: post #55
rogerrogerr wrote: post #33

Earlier quoted context omitted.

Why can't you hang a picture on the wall? Fixing holes in drywall is super trivial, a good life skill to learn.

Yes; but matching the paint color? and matching it to the wear of sun/fade of the surrounding area? That's not nearly as straightforward.

[dead]

Re: Why Do Fewer Renters Expect to Move?

#68

Post by hylaride »

fatnoah wrote: post #47
petcat wrote: post #10

Earlier quoted context omitted.

You're falling for the trap of just thinking of buying a house as an investment . Buying a house can be an investment, but it's also buying a place to live. Even if the home's value merely keeps pace with inflation over 30 years, you've converted a largely fixed housing payment into ownership rather than paying ever-increasing rent indefinitely.

> Buying a house can be an investment, but it's also buying a place to live. I'm a strong proponent of both owning and renting, and each has tradeoffs vs. the other. I've moved between renting and home ownership a couple times, and I appreciate the customizability of ownership along with the very real financial advantages. On the other side, I've also enjoyed "freedom" of renting, where I didn't have to spend any add…

> That also means if they sold it right now at that $20k "loss" then they effectively paid $333/month plus upkeep to live somewhere for 5 years!

This also ignores the costs in buying/selling, including agent fees, lawyers, etc. You should probably only buy if you plan on living in a single place for at least a decade.

Re: Why Do Fewer Renters Expect to Move?

#69

Post by francisofascii »

jameshart wrote: post #27
129487 wrote: post #8

Because you cannot pay market prices if you leave your rent controlled apartment. Once you are out, you never get one again. Apparently that is beyond the high and mighty Federal Reserve employees who wrote this speculation. The housing market needs to be socialized.

A vanishingly small portion of the US rental market is rent controlled - fractions of one percent. In New York City there are only about 25,000 units that are actually rent controlled - tenants who have lived continuously since July 1, 1971 in a building built before 1947. Rent stabilization - caps on how much landlords are permitted to increase rent - are also not that widespread. Washington DC is unusual in having…

All true, but there is evidence that rent increases for existing tenants lag behind market increases.

Re: Why Do Fewer Renters Expect to Move?

#70

Post by Decabytes »

danvoell wrote: post #35

I feel like US is too heavily weighted on incumbant "rent seeking" through law and policy. We were just in Tokyo and Seoul, the average costs of rents in New York City: ~$3,900 – $4,200 vs Tokyo: ~$1,200 – $1,350 and vs Seoul: ~$950 – $1,100. Renters will move if there are affordable newer options in cities instead of treating boomer asset holding rent seekers as a privileged class.

It is very common in Japan to have to pay key money when moving in, which is typically 1-2 months of rent. This isn’t like a security deposit as it is non refundable and is basically a “thank you for letting me live here”

Also if you are actually getting paid in Yen then the gap narrows between NY and Tokyo. Then there is the fact that your home could be destroyed in a massive earthquake but everyone has a different price for that risk

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