I know I’m supposed to want it to keep going up as a wealth generator or whatever.
But like… I wouldn’t be able to afford the monthly payments if I bought my house right now and it’s scary. Also none of my friends are buying homes, none of them are even renting full places. Just like renting rooms.
So what are your feelings home owners of lemmy?
I hate that we lost sight of what wealth really is and replaced it with the idea of profit. I bought my house to provide myself with financial security, not profit.
My monthly “rent” (mortgage payment) is locked in for the next 25 years and will not go up. At the end of those 25 years when I’m ready to retire, I’ll have housing with only taxes and insurance payments. THAT is wealth. THAT is what home ownership is meant to be. If housing prices fall, it won’t change my life a bit.
That’s why I bought a house instead of renting. One day it will be paid off, and from that on, as long as I keep paying the property tax nobody can kick me out. They can cut my water and electrcity, but the house and the plot remains mine.
Additionally, if overall house prices go up that does mean that your house becomes more valuable.
However, it also means all other houses become more expensive.So in practice, if you want to move in 10-20 years for whatever reason, it essentially means nothing that your house has gone up in value. All that extra money is going to go to another house which has equally gone up in value.
The value of a house going up means you are technically building wealth, but that wealth is entirely tied up in the house itself. Unless you are intending to become homeless it likely will stay tied up in your house forever.
House prices going up is mostly a good thing for investors. Not so much for people who simply want a place to live.
Man I wish we could get 25 year fixed rate terms in NZ. Longest anyone would quote me is 5.
Meh I don’t care. We bought a couple years ago when rates were super lower but prices were high. Our mortgage is less than rent would be and we’re not going anywhere for a long time. I think of the house as a place to live, not an investment really. Like a car. It serves a purpose and I’ll use it until I can’t anymore.
Yup the people that are mostly disadvantaged by (and cause) a housing crash are the people that treat houses like stocks.
Same boat. Got a 10 year lock in at ~2% interest and now the rates are more then double that.
Going to do everything we can to keep that rate although we doing extra repayments just in case.
Doing extra payments when you have a 2% loan is just throwing money away. Savings accounts rates are minimum 4% right now - put your extra payments there if you’re super risk adverse. If you’re less risk adverse, buy mutual funds that match the market.
Saving accounts pay out less then 2% here and we are taxed on the amout that is held in our saving account so it is more beneficial to downplay the mortgage.
Even with the extra payments we are still going to do ETF
You point out the Catch-22 that a lot of people miss on this stuff. They get so fixated on increasing their property values because they want to screw someone over when they finally sell their house…not stopping to think that the same thing is about to happen to them when they go to buy one. Not to mention, higher property values means higher property taxes (in some places, anyway).
Yeah like it’s cool my 200k town home I bought 4 years ago is now selling for 400k (neighbor just sold for that much).
Except that means that the 350k home I was thinking might be a nice upgrade one day, is 700k.
Like I’m way more screwed over now unless I intend to like sell my home then move to the middle of nowhere. All that higher value means is property taxes like you said. But of course renters are the most screwed.
This was actually my thought process when I got divorced. It probably would have been prudent in many ways to downsize to a condo, since it’s just me, however I could afford to buy my ex out of the house and any percent gains will be off a much higher base. I’m hoping that when I do eventually downsize, that my equity will be higher than if I had a paid off condo. In your example, doubling prices gained $200k inequity for the condo owner, vs $350k gain for the house owner (of course it’s more complicated when you factor in the mortgage)
… so yeah, it would suck for the housing market to crash, or stay down
A housing crash is only bad for you if you’re either outright selling, or moving to a less expensive house.
A bad crash can make you owe more than you can get for the house, which can make it impossible for you to move without losing money. If you lose your job or have to relocate involuntarily, property being cheaper elsewhere isn’t much consolation if you are under water on your existing loan.
Yes, so outright selling, or moving to a less expensive house, voluntarily or not.
I have like 15 years left on a 30 year fixed rate. I’d like to move closer to where I work, but I don’t want another 30 year loan and a 15 year would currently be a much higher interest rate, so I’m stuck with my house until it’s close to being paid off. Doesn’t really matter what homes are costing when you have to buy another after selling. Expensive houses only help people who own multiple homes and aren’t replacing what they sell.
We need a housing market crash. My pocket book be damned. We’ll figure it out. The next generation won’t.
Ain’t that the truth.
I live in Orem, a city you probably have never heard of. Population of under 100k, not a rich city by any means. Median individual income of 26k, median household income of 65k.
There are no single family homes for sale under 400k, and all apartment/condos for sale are 300k.
Just picking a random apartment for sale for a little under 300k and doing an estimate of 10% down with current rates is a mortgage of 2.2 k a month on 30 year fixed. So of course whoever buys and rents these out are going to do so at AT LEAST that number.
With JUST taxes taken out of 65k bringing it down to 45k, the mortgage/rent alone would be well over half the median house hold income for these things. But of course there would be HOA, withdrawals for 401k, withdrawals for medical care, etc. Meaning it would probably be closer to 70% of median household net just to pay mortgage on the cheapest apartment for sale.
And of course we can repeat this exercise for just about any city and get the same result. It’s scary.
Howdy neighbor. Things are pretty bad up here in SLC too. I’m just gonna keep renting until it all comes down, or the lake dries up.
Howdy neighbor! Fingers crossed it comes down, I know parts of SLC are becoming a nightmare to rent. So hopefully you have a safe and cheaper place to live.
Fun part about Orem is that all of those houses for 400-600 were built in the 80s and haven’t been updated since then.
So then you start looking at houses in at least Saratoga or Spanish fork. I landed in Springville and I bought 3 years ago before the market got as bad as it did.
Your pocketbook will be fine, unless you’re flipping houses. The only thing affected by the price of your primary residence is your borrowing power.
Non-home owner of Lemmy here. I want you all to know that my fondest wish to see the housing market completely implode is strictly not personal.
My only chance to buy a house slipped away a few years ago. House prices have gone up by 50% or more in some locations, and interest rates have more than doubled. What was previously affordable is now completely outside my means to pay for each month.
My last hope now is for a 2008 repeat so I might be able to snag something up for what it’s actually worth. I certainly can’t count on the state or the government to take the housing crisis seriously enough to have them actually build more affordable housing for people to buy and drive the asking prices lower.
I feel this so much. My dad was a general contractor in California during the 2008 crash; we lost 6 houses that were either ready to sell, or still being built. So I personally know the kind of pain and suffering that a housing market crash can cause for certain people. At this point though I have to look out for me and my family, currently renting part of a way-to-small condo in an area where you’d need 3 incomes to afford a mortgage on a house big enough for all 4 of us.
So yeah, crash and burn market. Give me a chance to get us out of here.
It was a gigantic mistake to ever allow homes to become investments. That economic value growth is only possible by limiting the availability of homes near popular areas, which is by definition exclusionary meaning some people must be priced out of having a home in a place with good opportunities.
It’s not just unfair, it’s also inherently unstable. You’re eventually chasing away many of the workers you’re dependent on, you can’t avoid bubbles and crashes, etc.
Absolutely 💯
i bought my house at the top (two years ago) and no regrets. less about it being an investment and more about having a stable place to call my own that gives me safety and not at the whims of a landlord. i’d quite like it if house prices became more affordable for everyone, the counter intuitive thing to say. 🤷♂️ i was supposed to become a nimby and vote conservative but now i’m more left wing than ever.
Pretty much this. I’m quite content with losing some of my net worth if it means other people don’t have to struggle as much to have their own place to live.
I bought at the peak myself to have stable housing while raising kids.
If house prices just stayed flat until wages caught up and then only increased similar to match wage increases (not inflation) that might be a reasonable compromise between the middle class who have a house and don’t. Those who own will still be paying down a mortgage so increasing your equity that way without being decimated if you have to move. Unfortunately at this point, that could take awhile before wages caught up.
I agree with you. I think property is theft; in an ideal world everyone would have the right to shelter and no one would own land privately. And I also think fear of housing insecurity - including the fear of a landlord extorting or evicting you - is the biggest reason America is obsessed with home ownership and I can’t criticize anybody for pursuing it. The only way to have secure housing in the US today is to own your home, and everyone has a right to secure housing.
Houses should have never been an investment.
Burn the entire fucking thing down.
If I burn my house down then where will I live?
In your new Wells Fargo Lifepod™! 160 sqft of essential living. Conviently stackable. Durable metal construction. Only $3900/mo!
*Doors sold separately.
It’s Wells Fargo, so have they already used your info to buy one in your name without me knowing?
House is an investment even if you build it entirely by yourself from materials harvested and processed by you. You invest a chunk of your time and effort to build something you expect to “pay you back” in the future, eg. keep you dry and warm when it’s cold outside.
Sounds like an asset to me.
Yes, and it will cost me some money as I’m getting ready to put mine on the market in the coming months.
But I don’t give a shit, the current conditions are unsustainable and I have great empathy for the generations behind me that are excluded from what is a fucking FOUNDATION of getting a stable life going. The shit has to come tumbling down at some point, otherwise our social structure will continue to degrade. The people who will removed and moan about it are so out of touch they should be ignored anyway. Bring on the crash.
There are too few people like you in the world. I appreciate your attitude.
Where are you located? How much do you think you’ll lose. 30-40%? Or are you willing to lose even more?
I hope whoever buys from you is appreciative and understands your position too.
Colorado. I’m not going to really lose money over what I paid because I’ve owned it for almost 20 years. But it will be way down from the market high here and I think that’s peachy. I’d guess I’ll make 20% less than if I had sold 1-2 years ago. If the market really does crash like 2008 then 30% or more. But Housing prices have got to come down still, a lot. Banning corporations from owning single family residences would help a ton.
I care more about houses being affordable for everyone than I do about turning a profit. Greed is a huge sickness in our world. Hell I don’t think houses should be an investment vehicle in the first place. It’s a place to live not a goddamn wealth generator.
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This is the right answer.
Look at Europe. For many the closest you get to buying a house is a 99 year lease, and for the majority renting is normal. The main difference is that renters have many more rights so there’s less reason to want to own for yourself.
Rent is also less expensive in much of Europe. You can get a 3 bedroom apartment in Germany for what a studio or single bedroom would cost here.
Out of curiosity who are you leasing from in that situation?
Landholders, many from families who have owned the land for centuries.
Just try to buy a house in any of Europe’s historical capitals. They went through what we are now centuries ago.
I mean things can get way worse. Look at Canada and Australia. No sign of a crash in either yet, prices just keep climbing. Homeless encampments and the like were alien to us up until recently. The median Aussie household income is ~$65,000. Homes start at about $600,000 and at that price a lot of them are teardowns, you’d be spending at least $200,000 in repairs.
Banks want 20% down.
It is scary, definitely.
I rent a nice house, I’m lucky. I’ve also not had a holiday in over a decade…
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Non-home owner, currently I could live a hundred lives and never own a home. It must crash, and it must become regulated to prevent this from occurring.
I have no issues with that. I’m not living here to make a fortune on speculation. I am living here because it is my home, and I leave selling this to our kids once we are dead, hopefully many decades in the future.
Let it crash!
Big housing prices only benefit the people owning multiple homes.
Because it doesn’t matter what the housing cost is if you sell your only home, because you will need to buy a new home at the same cost anyway. Since everyone need a house to live.
Not only that, if you have a small starter house you still benefit from a crash. That 400k house will become 250-300k, while your 180k house will just drop to 130-150k.
As a homeowner, there is nothing to be ready for. Nothing has value unless you’re trying to buy or sell it and I’m doing neither in the near/medium future regardless of the price of my home. I bought before prices went stupid so I feel like it is unlikely any crash will do the value to below what I paid.
