6 ms·

Your use of the term "obsession" implies a degree of irrationality. Many people, myself included, would contend that the desire to own your own home is eminentl

Your use of the term "obsession" implies a degree of irrationality. Many people, myself included, would contend that the desire to own your own home is eminently sensible.

astura 9y ago
Jeez, nobody said the desire to own your home was irrational, by definition. You can have a rational desire to own a home or you can have an irrational obsession. Irrational obsession would include things like when you prioritize homeownership over financial security and other basic necessities like healthcare or food. For example I know someone who gave up health insurance to buy house - and she readily admits this.
- GarvielLoken 9y ago
  You don't have to pay for health insurance in Sweden.
  - astura 9y ago
    Of course, it was merely an example of an unhealthy obsession I've personally seen. There are many more. Another would be neglecting to save anything for retirement because you believe your home is your retirement fund.
  - ptaipale 9y ago
    Or more accurately, you cannot avoid paying for it (as it is collected in employment taxes). The employer has to pay 4,35 % as sjukförsäkringsavgift, as well as other payroll taxes that total 31,42 % of nominal salary (2017). https://sv.wikipedia.org/wiki/Arbetsgivaravgifter_i_Sverige https://sv.wikipedia.org/wiki/Arbetsgivaravgifter_i_Sverige
    - woah 9y ago
      Is that in addition to income tax?
      - ptaipale 9y ago
        Yes but that's "paid by the employer" which means that it's on top of nominal salary, but obviously included in the total tax burden. Employer pays $6000 per month, nominal salary is $4565, and employee's income tax 35 % => employee gets $3000.
- Supernaut 9y ago
  Correct, nobody said that the desire to own your home was axiomatically irrational. I didn't claim that anyone did. What I took issue with was the statement that the Irish populace have an obsessive (i.e. irrational) focus on property ownership. We do prefer to own our own homes, but that preference is not evidence of a national personality disorder.
- pacala 9y ago
  A broader definition of financial security _includes_ home ownership. The other options are homelessness and renting. The first one is silly, the second is just paying the landlord mortgage while being exposed to financial risk over the long term.
  - JumpCrisscross 9y ago
    > the second is just paying the landlord mortgage while being exposed to financial risk over the long term Homeownership, for most, is a leveraged play on a politically-sensitive asset. Consider two companies. One goes all in—-with borrowed money—-on a deal that does well if the cards fall right but results in default if e.g. property taxes or zoning laws change. The other has higher fixed costs but diversifies its investments. It’s apparent which one is riskier.
  - astura 9y ago
    This has been repeated ad nauseum but if it were correct all businesses would always strive to buy their real estate as soon as they could afford it and since many (including my employer, who brings in a billion dollars a year) are content renting long term, that's obviously not the case. If you buy once you factor in taxes, insurance, upgrades, maintenance, repairs, commission, closing costs, opportunity costs compared to other investments, interest, PMI, etc., assuming you were in a good financial position to buy in the first place so you don't default, you probably will come out ahead compared to renting if you live in your house for more than 5 or so years. But! That's only if the cards fall just right. So if the neighborhood is still desirable, tax policy/political landscape doesn't change, your neighbors keep up with their maintenance, your HoA doesn't go into bankruptcy, a major employer doesn't leave town, tastes in housing doesn't change, the housing market doesn't crash, too many of your neighbors don't foreclose, nearby amenities don't leave, a major highway isn't built through your neighborhood, interest rates haven't soared, political housing incentives/programs haven't gone away, too many black people don't move in(1), etc., etc. You're taking on a very large risk if your buying vs renting, sure it has the ability to work in your favor (extreme example - buying in San Francisco in the 90s) or not in your favor (extreme example - buying in Detroit in the 50s). I've seen people lose out terribly financially buying a house, and not just in 2008 recession, my parents house was bought in 1995 and hasn't even kept up with inflation. That doesn't mean it was the wrong choice for them to buy though, houses are really good at providing shelter. You also have to have the ability and wherewithal to take care of a house - and tons of people don't. I'm a homeowner, I'm not against home ownership. (1) I'm not trying to be racist, but white flight does exist.

Your use of the term "obsession" implies a degree of irrationality. Many people, myself included, would contend that the desire to own your own home is eminently sensible.

astura 9y ago

Jeez, nobody said the desire to own your home was irrational, by definition. You can have a rational desire to own a home or you can have an irrational obsession. Irrational obsession would include things like when you prioritize homeownership over financial security and other basic necessities like healthcare or food. For example I know someone who gave up health insurance to buy house - and she readily admits this.

GarvielLoken 9y ago
You don't have to pay for health insurance in Sweden.
- astura 9y ago
  Of course, it was merely an example of an unhealthy obsession I've personally seen. There are many more. Another would be neglecting to save anything for retirement because you believe your home is your retirement fund.
- ptaipale 9y ago
  Or more accurately, you cannot avoid paying for it (as it is collected in employment taxes). The employer has to pay 4,35 % as sjukförsäkringsavgift, as well as other payroll taxes that total 31,42 % of nominal salary (2017). https://sv.wikipedia.org/wiki/Arbetsgivaravgifter_i_Sverige https://sv.wikipedia.org/wiki/Arbetsgivaravgifter_i_Sverige
  - woah 9y ago
    Is that in addition to income tax?
    - ptaipale 9y ago
      Yes but that's "paid by the employer" which means that it's on top of nominal salary, but obviously included in the total tax burden. Employer pays $6000 per month, nominal salary is $4565, and employee's income tax 35 % => employee gets $3000.
Supernaut 9y ago
Correct, nobody said that the desire to own your home was axiomatically irrational. I didn't claim that anyone did. What I took issue with was the statement that the Irish populace have an obsessive (i.e. irrational) focus on property ownership. We do prefer to own our own homes, but that preference is not evidence of a national personality disorder.
pacala 9y ago
A broader definition of financial security _includes_ home ownership. The other options are homelessness and renting. The first one is silly, the second is just paying the landlord mortgage while being exposed to financial risk over the long term.
- JumpCrisscross 9y ago
  > the second is just paying the landlord mortgage while being exposed to financial risk over the long term Homeownership, for most, is a leveraged play on a politically-sensitive asset. Consider two companies. One goes all in—-with borrowed money—-on a deal that does well if the cards fall right but results in default if e.g. property taxes or zoning laws change. The other has higher fixed costs but diversifies its investments. It’s apparent which one is riskier.
- astura 9y ago
  This has been repeated ad nauseum but if it were correct all businesses would always strive to buy their real estate as soon as they could afford it and since many (including my employer, who brings in a billion dollars a year) are content renting long term, that's obviously not the case. If you buy once you factor in taxes, insurance, upgrades, maintenance, repairs, commission, closing costs, opportunity costs compared to other investments, interest, PMI, etc., assuming you were in a good financial position to buy in the first place so you don't default, you probably will come out ahead compared to renting if you live in your house for more than 5 or so years. But! That's only if the cards fall just right. So if the neighborhood is still desirable, tax policy/political landscape doesn't change, your neighbors keep up with their maintenance, your HoA doesn't go into bankruptcy, a major employer doesn't leave town, tastes in housing doesn't change, the housing market doesn't crash, too many of your neighbors don't foreclose, nearby amenities don't leave, a major highway isn't built through your neighborhood, interest rates haven't soared, political housing incentives/programs haven't gone away, too many black people don't move in(1), etc., etc. You're taking on a very large risk if your buying vs renting, sure it has the ability to work in your favor (extreme example - buying in San Francisco in the 90s) or not in your favor (extreme example - buying in Detroit in the 50s). I've seen people lose out terribly financially buying a house, and not just in 2008 recession, my parents house was bought in 1995 and hasn't even kept up with inflation. That doesn't mean it was the wrong choice for them to buy though, houses are really good at providing shelter. You also have to have the ability and wherewithal to take care of a house - and tons of people don't. I'm a homeowner, I'm not against home ownership. (1) I'm not trying to be racist, but white flight does exist.