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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?

#71

Post by bluGill »

louthy wrote: post #21
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 "…

> Number cannot always go up. Yeah, I thought that when I was young too. The housing market can keep going up for much longer than you can hold out. Then, if there ever is a correction, it probably won't drop lower than this point right now. My advice to any young'un thinking they can wait out the market: you can't, buy whatever you can afford as soon as you can and watch inflation reduce that painful monthly outgoin…

> My advice to any young'un thinking they can wait out the market: you can't, buy whatever you can afford as soon as you can and watch inflation reduce that painful monthly outgoing to something more manageable over time.

I don't think that is quite right. Buy whatever you can afford as soon as life puts you in a position where you can reasonably expect to live in the same place for at least 7 years. You will never perfectly know your future, but predicting 7 years generally isn't too hard, and if you are wrong it is probably close enough to 7 years that you are okay.

My first house I had to sell after 10 years (I got a job in a new city) and I lost money on the sale despite the 10 years, but that is an outlier. Most people will see enough value appreciation in less years as to not be out too much if they have to move. 7 is just a good compromise for most people.

Don't forget when buying a house that you have to pay for maintenance. Make sure you can afford this somehow. If you have friends/family that can help with that work that can save a ton of money over if you have to hire someone.

Re: Why Do Fewer Renters Expect to Move?

#72

Post by gedy »

jmyeet wrote: post #52

So I'm Gen-X. Statistically speaking, I have more yesterdays than tomorrows. I can't even begin to describe how much of a dystopian hellscape the world has become and is becoming. Many my age describe the 1990s as the last good decade. I lived in a 2 bedroom apartment in the 1990s for $200/month 3 miles from the city center. All my other expenses were less than another $200/month. The median house price was less than…

While I'm not glossing over real problems we have today (I'm also Gen-X), the 90s were not that great, you were just young and unencumbered. Healthcare was cheaper and more friendly, but not better for serious issues. There was such little information available about... everything? TV, Newspapers, and word of mouth, were about it. I'm surprised I made it where I am today with the random walk most of us took in life back then.

Re: Why Do Fewer Renters Expect to Move?

#73

Post by mindcandy »

Maybe my feed is biased. But, I’ve been seeing good arguments lately that “The rent is too damned high!” is largely a problem created by voters. And, I don’t know how we’re going to fix that.

Ex: https://youtu.be/yoT76zITRx8 TLDR: 60% of both left and right wing voters like rent control. 98% of economists oppose it. Even liberal lefty economists. Even though they support price controls elsewhere like utility monopolies. Rent control feels good in the short term, but is detrimental to the vast majority in the long term in a large variety of ways.

The actual solution, to the surprise of no one, is to increase supply.

Unfortunately, there was a paper I don’t have a link to showing that not just old NIMBY homeowners, but largely everyone consistently vote against measures that increase supply. It’s part of a larger effect where people measurably bias their voting against policies that sound like they will benefit rich people. Very similar policies in similar areas will get different votes depending on how the wording makes it clear the rich will benefit.

Well guess who almost always benefits immediately from real estate construction? So… we keep voting to prevent construction and then complaining that the rent keeps going up.

Re: Why Do Fewer Renters Expect to Move?

#74

Post by cosmic_cheese »

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.

No constant anxiety that you’re going to be serially priced out of your own home or that the landlord is going to decide they’re giving the apartment to their nephew or something is worth quite a lot.

I’m not against renting but the rate at which prices are rising in many areas is unbelievable and the inherent instability it brings frankly sucks. It makes renewal time every year needlessly stressful.

If prices were more stable over long periods and one could more easily secure assurance that the owner isn’t going to rugpull them so one could only move every decade or so at most frequent that’d be easier to deal with.

Re: Why Do Fewer Renters Expect to Move?

#75

Post by bluGill »

kaydub wrote: post #61
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.

Generally people are indexing the numbers always go up to inflation. Which should be different, but so far numbers still go up anyway.

Re: Why Do Fewer Renters Expect to Move?

#76

Post by petcat »

hylaride wrote: post #68
fatnoah wrote: post #47

Earlier quoted context omitted.

> 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.

Unless you are willing to enter into some kind of a special arrangement, closing costs are almost always negotiated and usually paid by the seller.

Re: Why Do Fewer Renters Expect to Move?

#77

Post by tamimio »

This is just the surface of the issue, housing market problem is far deeper, and even home “owners” aren’t actually owning with their perpetual property taxes, which is unlike rent, uncontrolled. To solve housing for everyone, the solution is simple, it’s not building new units, that’s temporary, it’s not more regulations on whatever, that doesn’t solve the root cause, you need to solve that root cause and that is houses are considered an investment, not a shelter, and investments are always expected to go up, obviously it will reach a point that having a few walls of plywood is like owning a merchandise, it doesn’t take a genius to find this. So the steps to solve the toot cause as follows:

- making housing as a depreciated asset, like a car, TV, whatever, it’s NOT an investment. Go invest and start a business that actually contributes to the economy instead of leeching on other’s wealth.

- ban interest rates on mortgages, so banks aren’t incentivized to pour fake numbers into accounts and deducting fake numbers from other accounts as debt all while enjoying the sweet real money from interest. Once that is ban, they won’t give loans based on speculated prices, ending the daisy chain of using another house to get a bigger loan to buy a bigger house based on fake speculated market value.

- relax the permits and regulations on owning and building houses, which is a big topic on its own.

Among many other points that goes after the root cause, not some duct tape solution, housing is a shelter not an investment, look up any human needs diagram and you will find shelter is at the bottom of it, you can’t be creative or do great things when you are not settling in a house, you can’t think about making a business and contribute to economy if you are paying most of your income to landlord who take that to pay a mortgage so the bank can take the interest. Things now seem calm but most the new generation don’t own a house or ever thinking of owning a one, these soon will be the majority of voting and decision making, and it will be a brutal reaction on boomers and the overall selfish system that do anything to make their lives more miserable.

Re: Why Do Fewer Renters Expect to Move?

#78

Post by bluGill »

rootsudo wrote: post #22
mono442 wrote: post #9

Earlier quoted context omitted.

Even if the house is worth less, the morgage is eventually paid off. Rent has to be paid forever. I can't even imagine renting when I'm retired and have less money.

I can, rent in cheap cost of living location. Why pay 600k+ usd to purchase in m-hcol when instead can live abroad during retirement and pay 1k/month and use the remaining for better living or health care or whatnot?

I can sell my house when I'm retired if I choose to do that.

I can only save so much money in retirement plans. A house (in the US - other countries have different rules!) is my next best retirement investment because I can live there rent-free after I retire, or I can sell it for more cash.

If you are not maxing out your retirement accounts then the house may be a worse investment than adding more to your retirement accounts.

Re: Why Do Fewer Renters Expect to Move?

#79

Post by petcat »

cosmic_cheese wrote: post #74
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.

No constant anxiety that you’re going to be serially priced out of your own home or that the landlord is going to decide they’re giving the apartment to their nephew or something is worth quite a lot. I’m not against renting but the rate at which prices are rising in many areas is unbelievable and the inherent instability it brings frankly sucks. It makes renewal time every year needlessly stressful. If prices were m…

There is virtually no security in renting outside of whatever landlord-tenant laws your municipality will offer you. The landlord can simply say that they're not going to renew your lease at the end of the year because the neighbors don't like your barking dog. And you have no recourse.

Re: Why Do Fewer Renters Expect to Move?

#80

Post by Ekaros »

kaydub wrote: post #61
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.

Not all numbers. Some numbers have certainly gone down. Your home might be one of them. So might really bad stock pick too.
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