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About 37% of homeowners own their homes free and clear. The other 63% have mortgages that require regular monthly payments. The mortgage payments are in additio

About 37% of homeowners own their homes free and clear. The other 63% have mortgages that require regular monthly payments. The mortgage payments are in addition to regular payments of property taxes. The result is that the burden of debt and property taxes motivates young adults to work hard and progress economically. This, along with the continual stream of purchases for the home, is the mainspring of the American economy.

hylaride 7y ago
Switzerland has a home ownership rate that’s half the US and does fine. One of the main benefits of this is that the Swiss have more of their wealth in liquid assets and are highly mobile as a nation of renters, so they can easily move to where the jobs are. In fact, Switzerland will tax your home on the potential income you could get from it, further encouraging renting. I’m not advocating this, but home ownership is not anywhere near a prerequisite for affluence.
- hajile 7y ago
  The good old "rent from the rich" idea. Land/housing ownership is what has historically been one of the biggest differences between lord and commoner.
  - hylaride 7y ago
    Funny, when I was there I didn’t notice that Switzerland is still run as a feudal lordship, but in hindsight the screams from the building labeled ‘Debtor’s prison” should have been a clue. In all seriousness, what are you implying? That buying houses built by the rich and then being tied to it in a downturn or loss of employment is superior? The period you’re hilariously referring to died out when the Lords could no longer afford to maintain their land as their incomes dried up and their workers moved on.
  - cylon13 7y ago
    You're creating a false dichotomy here. Not all home owners are "rich" and not all renters are "poor". Property owners are just running a different business than you. You can easily be a renter that's wealthier than the person you happen to be renting living space from.
    - threatofrain 7y ago
      But how about as a population rather than individuals? Is there a general or random relationship between owning and renting?
- chii 7y ago
  And because renting being a must for any investment property, the price is rent drops, making it cheap to rent! But then you lose some agency like being able to modify the rented home.
neilwilson 7y ago
How is a mortgage payment different from a rent payment. In one you rent the money to spend on bricks, in the other you rent the bricks directly. The only difference occurs if asset/land prices rise - which is nothing more than a transfer from the have nots to the haves and should be dissuaded by policy. In any functional economy houses would depreciate as they age - just like cars. And you lease depreciating assets.
- defertoreptar 7y ago
  It's harder to walk away from a mortgage than a rental home. It's more work to sell a house. Since the mortgage-payer owns the house, has made improvements on the house, has an emotional investment in the house, there are strong biases such as sunk cost that make the buyer much more reluctant to get out from under it.
- hajile 7y ago
  If someone is smart, they make a small mortgage on a small house and pay it off in 10-15 years minimizing their interest overhead. Knowing you don't have to come up with hundreds or thousands of dollars every month in order to live is an amazing feeling. You can then set aside that same money every month and upgrade to a better house. Unfortunately, most people decide they can't wait and take out 30-year mortgages that wind up costing them almost twice the value of the house. With proper maintenance, a house can last with continuous use for a hundred years. With average use, you would be hard-pressed to have a car for more than 15 years before the cost to maintain greatly outstrips the cost to replace.
  - cookingrobot 7y ago
    Buying small is the wrong financial decision in a rising real estate market. By taking a giant mortgage and buying more that you could otherwise afford you’re essentially investing on margin. And interest rates are even lower than they seem if you take tax deductions into account. If you buy at the right time & place and property value increase a lot (which has been true in a lot of places the last decade), you get the gains. And as a bonus you get to live in a nicer house that whole time (unlike investing that money elsewhere).
deogeo 7y ago
> The result is that the burden of debt and property taxes motivates young adults to work hard and progress economically. Then we should double the interest rates on that debt and raise taxes on the poor, to motivate them even more, and get even more economic progress! But leave the taxes on the rich low, since they've already economically progressed enough, and have done their part for the American economy.

hylaride 7y ago

Switzerland has a home ownership rate that’s half the US and does fine. One of the main benefits of this is that the Swiss have more of their wealth in liquid assets and are highly mobile as a nation of renters, so they can easily move to where the jobs are. In fact, Switzerland will tax your home on the potential income you could get from it, further encouraging renting. I’m not advocating this, but home ownership is not anywhere near a prerequisite for affluence.

hajile 7y ago
The good old "rent from the rich" idea. Land/housing ownership is what has historically been one of the biggest differences between lord and commoner.
- hylaride 7y ago
  Funny, when I was there I didn’t notice that Switzerland is still run as a feudal lordship, but in hindsight the screams from the building labeled ‘Debtor’s prison” should have been a clue. In all seriousness, what are you implying? That buying houses built by the rich and then being tied to it in a downturn or loss of employment is superior? The period you’re hilariously referring to died out when the Lords could no longer afford to maintain their land as their incomes dried up and their workers moved on.
- cylon13 7y ago
  You're creating a false dichotomy here. Not all home owners are "rich" and not all renters are "poor". Property owners are just running a different business than you. You can easily be a renter that's wealthier than the person you happen to be renting living space from.
  - threatofrain 7y ago
    But how about as a population rather than individuals? Is there a general or random relationship between owning and renting?
chii 7y ago
And because renting being a must for any investment property, the price is rent drops, making it cheap to rent! But then you lose some agency like being able to modify the rented home.

neilwilson 7y ago

How is a mortgage payment different from a rent payment. In one you rent the money to spend on bricks, in the other you rent the bricks directly. The only difference occurs if asset/land prices rise - which is nothing more than a transfer from the have nots to the haves and should be dissuaded by policy. In any functional economy houses would depreciate as they age - just like cars. And you lease depreciating assets.

defertoreptar 7y ago
It's harder to walk away from a mortgage than a rental home. It's more work to sell a house. Since the mortgage-payer owns the house, has made improvements on the house, has an emotional investment in the house, there are strong biases such as sunk cost that make the buyer much more reluctant to get out from under it.
hajile 7y ago
If someone is smart, they make a small mortgage on a small house and pay it off in 10-15 years minimizing their interest overhead. Knowing you don't have to come up with hundreds or thousands of dollars every month in order to live is an amazing feeling. You can then set aside that same money every month and upgrade to a better house. Unfortunately, most people decide they can't wait and take out 30-year mortgages that wind up costing them almost twice the value of the house. With proper maintenance, a house can last with continuous use for a hundred years. With average use, you would be hard-pressed to have a car for more than 15 years before the cost to maintain greatly outstrips the cost to replace.
- cookingrobot 7y ago
  Buying small is the wrong financial decision in a rising real estate market. By taking a giant mortgage and buying more that you could otherwise afford you’re essentially investing on margin. And interest rates are even lower than they seem if you take tax deductions into account. If you buy at the right time & place and property value increase a lot (which has been true in a lot of places the last decade), you get the gains. And as a bonus you get to live in a nicer house that whole time (unlike investing that money elsewhere).

deogeo 7y ago

> The result is that the burden of debt and property taxes motivates young adults to work hard and progress economically. Then we should double the interest rates on that debt and raise taxes on the poor, to motivate them even more, and get even more economic progress! But leave the taxes on the rich low, since they've already economically progressed enough, and have done their part for the American economy.