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Alright, these situations are sad, and sometimes unavoidable due to what is essentially "bad luck". I can't imagine being caught in the vicious cycle. But I do

Alright, these situations are sad, and sometimes unavoidable due to what is essentially "bad luck". I can't imagine being caught in the vicious cycle. But I do take issue with: >The housing crash and its chilling effect on mortgage lending have hit the poor the hardest...Homeowners are being replacing by renters, as the American dream of owning your own property is becoming increasingly a luxury for the rich and upper middle class. Why should "the poor" have access to mortgages? Lending to poor people (NINJA loans, predatory loans) was a root cause of the housing collapse. Do people really think giving the poor mortgages is any kind of solution? It's a pretty common refrain on HackerNews that the "banksters" and (mostly, in reality) shady mortgage brokers took advantage of people by providing them with loans they couldn't afford. But, other times, this is seen as a good idea?

exelius 10y ago
> Alright, these situations are sad, and sometimes unavoidable due to what is essentially "bad luck". I can't imagine being caught in the vicious cycle. Social and societal safety nets are supposed to help with "bad luck". We all have bad luck from time to time, but imagine if all your close friends and relatives had died... you'd be in a really hard spot. > Why should "the poor" have access to mortgages? Lending to poor people (NINJA loans, predatory loans) was a root cause of the housing collapse. Do people really think giving the poor mortgages is any kind of solution? The issue is that there is a limited supply of affordable rental properties in many markets. This means that people who do have the money / credit to get loans can charge a huge renter's premium: there is a large segment of the market that simply doesn't have the option of getting a mortgage if the rent is too high. > It's a pretty common refrain on HackerNews that the "banksters" and (mostly, in reality) shady mortgage brokers took advantage of people by providing them with loans they couldn't afford. But, other times, this is seen as a good idea? Because they often pushed people towards larger loans than they could afford. Someone who can afford a $300k house was being pushed toward a $500k house with a ballooning payment. I'm all for poor people being able to buy homes they can afford. We'll ignore the fact that land value is correlated with location and the implications of that; but yes: home ownership should be in reach of every income level.
xemdetia 10y ago
I believe part of what the author was trying to lead to is that the housing crash/current situation has more people electing to rent then buy homes, so the demand for renting is down. I don't think she was arguing to bring back the shitty loans for the poor, just that more people are renting.
jernfrost 10y ago
They mention upper middle class. Should not the middle class have access to home ownership. Other than that I agree that across the western world there is an unhealthy obsession with homeownership. I live in Norway and I am just waiting for housing market to come crashing down. I am a homeowner but I really don't want to be one. It is just that the economic incentives created by the tax system makes it stupid to rent. It shouldn't be like that because it causes an over-investment in property and runaway prices. Countries like Germany which has not been so overly focused on home ownership has much healthier housing prices. If feel like Russian roulette. You got to figure out that right time to pull out and go renting before everything comes crashing down. But if you pull out too early you pay a heavy premium and getting into the housing market will be so much more difficult in the future with even higher prices. Makes you wonder about the whole free market pricing. Back in my parents day the whole housing market was socialist. Government set the prices. As any socialist system, it caused a lot of waiting lines to get housing, but man it was so much cheaper. Despite making way more money than my parents did, they could afford a much bigger house than I can today. The free market seems very poor at stopping asset bubbles. I think we need a new way of handling assets in the market.
- cloudjacker 10y ago
  Without over leveraging Norways housing market can continue its appreciation for decades more.
rkangel 10y ago
Maybe she's alluding to the fact that if buying a house was more affordable, but the time she was 60 she might have owned her own home, so at the very least she would have had a roof over her head when she ran out of money.

exelius 10y ago

> Alright, these situations are sad, and sometimes unavoidable due to what is essentially "bad luck". I can't imagine being caught in the vicious cycle. Social and societal safety nets are supposed to help with "bad luck". We all have bad luck from time to time, but imagine if all your close friends and relatives had died... you'd be in a really hard spot. > Why should "the poor" have access to mortgages? Lending to poor people (NINJA loans, predatory loans) was a root cause of the housing collapse. Do people really think giving the poor mortgages is any kind of solution? The issue is that there is a limited supply of affordable rental properties in many markets. This means that people who do have the money / credit to get loans can charge a huge renter's premium: there is a large segment of the market that simply doesn't have the option of getting a mortgage if the rent is too high. > It's a pretty common refrain on HackerNews that the "banksters" and (mostly, in reality) shady mortgage brokers took advantage of people by providing them with loans they couldn't afford. But, other times, this is seen as a good idea? Because they often pushed people towards larger loans than they could afford. Someone who can afford a $300k house was being pushed toward a $500k house with a ballooning payment. I'm all for poor people being able to buy homes they can afford. We'll ignore the fact that land value is correlated with location and the implications of that; but yes: home ownership should be in reach of every income level.

xemdetia 10y ago

I believe part of what the author was trying to lead to is that the housing crash/current situation has more people electing to rent then buy homes, so the demand for renting is down. I don't think she was arguing to bring back the shitty loans for the poor, just that more people are renting.

jernfrost 10y ago

They mention upper middle class. Should not the middle class have access to home ownership. Other than that I agree that across the western world there is an unhealthy obsession with homeownership. I live in Norway and I am just waiting for housing market to come crashing down. I am a homeowner but I really don't want to be one. It is just that the economic incentives created by the tax system makes it stupid to rent. It shouldn't be like that because it causes an over-investment in property and runaway prices. Countries like Germany which has not been so overly focused on home ownership has much healthier housing prices. If feel like Russian roulette. You got to figure out that right time to pull out and go renting before everything comes crashing down. But if you pull out too early you pay a heavy premium and getting into the housing market will be so much more difficult in the future with even higher prices. Makes you wonder about the whole free market pricing. Back in my parents day the whole housing market was socialist. Government set the prices. As any socialist system, it caused a lot of waiting lines to get housing, but man it was so much cheaper. Despite making way more money than my parents did, they could afford a much bigger house than I can today. The free market seems very poor at stopping asset bubbles. I think we need a new way of handling assets in the market.

cloudjacker 10y ago
Without over leveraging Norways housing market can continue its appreciation for decades more.

rkangel 10y ago

Maybe she's alluding to the fact that if buying a house was more affordable, but the time she was 60 she might have owned her own home, so at the very least she would have had a roof over her head when she ran out of money.