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Home values are also highly illiquid. For most people, they can’t just sell off their homes if they need money, because they still need a place to live, which

Home values are also highly illiquid. For most people, they can’t just sell off their homes if they need money, because they still need a place to live, which means they are buying another house at a similar elevated rate. What that leads to is borrowing money against your house if you want to generate some liquidity out of your house. In addition, most people don’t actually own their homes outright, and have significant mortgages. A loss of a job, or an unexpected expense, which makes paying back those loans difficult can risk your entire home ownership. And that’s not even considering a scenario where house prices fall. Fundamentally, housing is THE most illiquid asset for most Americans. What a lot of Americans have done is traded flexibility today for a potential payoff many years later. At a time with high uncertainty where the flexibility is probably gonna be extremely valuable.

tharne 4y ago
This is incorrect. Houses can be sold and folks can move in with family. Or, you can rent out the house, often at a profit. I know several people who have done this. Furthermore, in most places in the U.S. a mortgage payment is cheaper than the rent on a similar dwelling. I originally had no plans to buy a house, but I did the math and my mortgage is about 25-35% less that what I would pay for an equivalent rental. Even factoring in maintenance costs, that's still a huge win. And that's not even getting into the tax benefits. In the case of a job loss or financial disaster, you can sell the house, or if you can't you can just go on living there, often for years while the bank meanders its way through the foreclosure process. So you may lose some principal in the end, but you'll have had several years of free housing to make up for it. There are plenty of reasons not to own a house - maintenance is a pain and time consuming, yard work sucks, etc., but financially, owning a house is a no brainer in most U.S. geographies.
- theandrewbailey 4y ago
  In America, moving back with family is usually seen as admitting defeat or failure. > And that's not even getting into the tax benefits. If you own a house, you pay property taxes. That's not a benefit! If you're referring to the federal income tax mortgage deduction, you get about $1 back on taxes for every $3 paid on mortgage interest. If I had $3, I'd rather pay $1 of taxes and keep the rest, instead of paying it all to a bank and getting $1 back.
  - tharne 4y ago
    > If you own a house, you pay property taxes. That's not a benefit! I've got news for you. If you rent, you still pay property taxes, it just happens to be bundled with your rent. Saying you don't pay property taxes because you rent is like saying you don't pay gas tax because it's included in the price posted at the gas station.
- deleted 4y ago
  [deleted]

tharne 4y ago

This is incorrect. Houses can be sold and folks can move in with family. Or, you can rent out the house, often at a profit. I know several people who have done this. Furthermore, in most places in the U.S. a mortgage payment is cheaper than the rent on a similar dwelling. I originally had no plans to buy a house, but I did the math and my mortgage is about 25-35% less that what I would pay for an equivalent rental. Even factoring in maintenance costs, that's still a huge win. And that's not even getting into the tax benefits. In the case of a job loss or financial disaster, you can sell the house, or if you can't you can just go on living there, often for years while the bank meanders its way through the foreclosure process. So you may lose some principal in the end, but you'll have had several years of free housing to make up for it. There are plenty of reasons not to own a house - maintenance is a pain and time consuming, yard work sucks, etc., but financially, owning a house is a no brainer in most U.S. geographies.

theandrewbailey 4y ago
In America, moving back with family is usually seen as admitting defeat or failure. > And that's not even getting into the tax benefits. If you own a house, you pay property taxes. That's not a benefit! If you're referring to the federal income tax mortgage deduction, you get about $1 back on taxes for every $3 paid on mortgage interest. If I had $3, I'd rather pay $1 of taxes and keep the rest, instead of paying it all to a bank and getting $1 back.
- tharne 4y ago
  > If you own a house, you pay property taxes. That's not a benefit! I've got news for you. If you rent, you still pay property taxes, it just happens to be bundled with your rent. Saying you don't pay property taxes because you rent is like saying you don't pay gas tax because it's included in the price posted at the gas station.
deleted 4y ago
[deleted]