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taking a mortgage is less risky, because it removes uncertainty over the future cash outflows for housing. It fixes your house payment and interest payment. re
by slt2021 5y ago
taking a mortgage is less risky, because it removes uncertainty over the future cash outflows for housing. It fixes your house payment and interest payment.
renting is actually more risky, because you are left exposed to interest rate risk, and housing market risk, etc in form of ever increasing rent prices.
in my opinion the proper solution would be increasing property taxes across the board and spending that money locally on schools and other community reinvestments, applying them on market prices and heavily taxing investment properties in single family homes (second and third house, house in title of LLC/S-corp, etc).
also tax heavily houses located in restricted zoning areas, like Palo Alto, CA. If NIMBYs don't want to see new housing in their backyard, they gotta pay up even more on market prices of their homes.
provide tax incentives for YIMBYs
- Teever 5y agoIf Bob taking a mortgage is less risky why are we even having a discussion about Bob's risk?
- SilasX 5y agoBecause the discussion was centered around the decision of whether policymakers should create said risk by reversing previous policies. The risk came from the choice of policy, not from the environment Bob was originally playing in.
- CogitoCogito 5y agoIsn't a change in policy just another factor in overall risk? Why should anyone assume that policy will not change?
- ivalm 5y agoImplied volatility on buying a house is lower than on renting, we are discussing policy changes that cause realized volatility to be different. If you use the government to change the market then you cant claim “free market.”
- koliber 5y agoIn some ways it is less risky, as you describe. In others, owning is more risky. If you take a variable interest rate mortgage, as many people do, there is a risk of increased interest payments. If you buy to live, and something changes in your life that requires you to move, you may be forced to sell in unfavorable market conditions. This is another risk of ownership. The situation is quite involved.