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"They are treating their home primarily as an investment because that is what they have been told to do their whole life." It's not some psyop that has duped a

"They are treating their home primarily as an investment because that is what they have been told to do their whole life." It's not some psyop that has duped an entire nation, it's people accurately recognizing that their home is the biggest purchase they will ever make in their life, it's almost completely done with debt, and most don't want to end up underwater.

slg 4y ago
> it's people accurately recognizing that their home is the biggest purchase they will ever make in their life, it's almost completely done with debt, and most don't want to end up underwater. What is those people's second biggest purchase which is also usually done with debt? Does anyone believe that the government should enact policies to ensure that car prices always increase so they would be a better investment? Houses obviously have a longer lifespan than cars, so I'm not suggesting they should necessarily depreciate the same way, but there is also no reason housing should always be appreciating. We have this idea that the price you sell your home for should always be higher than the price you bought it for. There is no reason for us to preserve that idea beyond the fact that people have now internalized that idea and plan their financial lives around it. The longer we allow that to continue, the harder it becomes to change, but the idea itself is not some fundamental requirement of society.
- davidw 4y ago
  The goal should probably be something close to price stability. If prices bounce all around, up and down, people pay more attention than if they were just kind of 'there', and you could buy or sell whenever the need arose in order to move into housing that better suits you at a given point in your life.
  - slg 4y ago
    Exactly. True stability is likely unattainable, but I would love if it was a governmental goal like a steady small positive rate of inflation is a goal. There will be temporary changes like the last year with inflation. But for the prior 30 years there has been a very steady roughly 2-4% rate of inflation. Could you imagine if the federal, state, and local government fully committed to steadying housing costs? It would be amazing. It just seems politically impossible to get to there from here because of the people who would be hurt by that transition.
    - candiodari 4y ago
      The government goal already is 2% inflation per year. That’s why this is happening ...
      - slg 4y ago
        I'm not sure exactly what the "this" is in your comment. The government has largely accomplished their inflation goal as that has been roughly what inflation was for 30+ years, but they aren't all powerful and can fail that goal like they have in the past year. The government could put the same energy to keeping housing costs in pace with inflation. They don't. Instead, the government tries to keep housing costs rising faster than inflation because housing is viewed as an investment. They have been successful in that goal as housing is greatly outpacing inflation.
        candiodari 4y ago
        In order to get inflation up to 2% the extreme measures of the last 15 years which drove up the cost of housing to such extreme heights in the first place were taken. > The government could put the same energy to keeping housing costs in pace with inflation. They don't That's exactly what they did. Not just housing, but also food, cars, ... It's just that housing costs respond a lot better to credit availability than most other things. And yes, generally it's things that are seen as an investment that respond to credit availability. The government has no direct control over any kind of pricing except the price of money. Also known as credit availability. They raise house prices 5% per year, so that when food and fuel refuse to adjust to inflation, it averages out to 2% per year. This caused larger price rises on everything that is seen as an investment (houses, education, cars, ...) than on things that are not.
        slg 4y ago
        >In order to get inflation up to 2% the extreme measures of the last 15 years which drove up the cost of housing to such extreme heights in the first place were taken. Housing costs greatly outpacing inflation is not a recent phenomena of the last 15 years. In fact, home prices increased faster in the prior 15 years than the last 15 years. >The government has no direct control over any kind of pricing except the price of money. I'm not interested in debating the meaning of "direct control", but one rather direct control they have is the federal government could repeal the mortgage interest deduction. That would immediately decrease the financial incentive to buy a home therefore decrease demand and lower prices.
- missedthecue 4y ago
  Resale value is probably one of the number one things car buyers look at when shopping.
  - slg 4y ago
    No one expects that resale value to go up. No one suggests that the government creates programs to prop up that resale value. People understand that owning a car gives them value and they are fine paying the difference between the purchase price and the resale price for that value. Why should homeownership be different? Why should homeownership not just be free but profitable? It makes no sense other than homeowners were told it was true, demand it be true into the future, and they (now joined by institutional investors) are a powerful voting block.
    - yunohn 4y ago
      > No one expects that resale value to go up. Except until you have a chip supply crunch, and used cars are selling higher than their original buying price.
  - throwaway0a5e 4y ago
    Look at what people actually do, not what they say for cheap virtue points online. Reliability is way, way down the wish-list. People don't really consider it until all the other key features they want are very solidly satisfied. And even then the take rate is maybe 50%. For every jerk in a 4Runner or Pilot there's an equal and opposite jerk in a Landrover or Tiguan.
    - gbronner 4y ago
      Cars, especially in the first few years, are extremely reliable. So a less reliable new car is still amazing when compared to a 15 year old beater.
    - missedthecue 4y ago
      The people in Landrovers care less about losing money than the people in Honda Pilots, because they have a lot more of it to spare. I'm not sure they're comparable consumers for this reason.
- deleted 4y ago
  [deleted]
- hgsgm 4y ago
mancerayder 4y ago
Yeah, it's further not psyops because of the simple monetary incentives, namely mortgage tax deduction, and primary home owner capital tax excluding the first 250/500 of profit on a sale. Investment purchases have a few incentives as well. There's an over reliance on 'ideas' in this message thread, and an under reliance on simply trusting people to reason their own self-interest.

slg 4y ago

> it's people accurately recognizing that their home is the biggest purchase they will ever make in their life, it's almost completely done with debt, and most don't want to end up underwater. What is those people's second biggest purchase which is also usually done with debt? Does anyone believe that the government should enact policies to ensure that car prices always increase so they would be a better investment? Houses obviously have a longer lifespan than cars, so I'm not suggesting they should necessarily depreciate the same way, but there is also no reason housing should always be appreciating. We have this idea that the price you sell your home for should always be higher than the price you bought it for. There is no reason for us to preserve that idea beyond the fact that people have now internalized that idea and plan their financial lives around it. The longer we allow that to continue, the harder it becomes to change, but the idea itself is not some fundamental requirement of society.

davidw 4y ago
The goal should probably be something close to price stability. If prices bounce all around, up and down, people pay more attention than if they were just kind of 'there', and you could buy or sell whenever the need arose in order to move into housing that better suits you at a given point in your life.
- slg 4y ago
  Exactly. True stability is likely unattainable, but I would love if it was a governmental goal like a steady small positive rate of inflation is a goal. There will be temporary changes like the last year with inflation. But for the prior 30 years there has been a very steady roughly 2-4% rate of inflation. Could you imagine if the federal, state, and local government fully committed to steadying housing costs? It would be amazing. It just seems politically impossible to get to there from here because of the people who would be hurt by that transition.
  - candiodari 4y ago
    The government goal already is 2% inflation per year. That’s why this is happening ...
    - slg 4y ago
      I'm not sure exactly what the "this" is in your comment. The government has largely accomplished their inflation goal as that has been roughly what inflation was for 30+ years, but they aren't all powerful and can fail that goal like they have in the past year. The government could put the same energy to keeping housing costs in pace with inflation. They don't. Instead, the government tries to keep housing costs rising faster than inflation because housing is viewed as an investment. They have been successful in that goal as housing is greatly outpacing inflation.
      - candiodari 4y ago
        In order to get inflation up to 2% the extreme measures of the last 15 years which drove up the cost of housing to such extreme heights in the first place were taken. > The government could put the same energy to keeping housing costs in pace with inflation. They don't That's exactly what they did. Not just housing, but also food, cars, ... It's just that housing costs respond a lot better to credit availability than most other things. And yes, generally it's things that are seen as an investment that respond to credit availability. The government has no direct control over any kind of pricing except the price of money. Also known as credit availability. They raise house prices 5% per year, so that when food and fuel refuse to adjust to inflation, it averages out to 2% per year. This caused larger price rises on everything that is seen as an investment (houses, education, cars, ...) than on things that are not.
        slg 4y ago
        >In order to get inflation up to 2% the extreme measures of the last 15 years which drove up the cost of housing to such extreme heights in the first place were taken. Housing costs greatly outpacing inflation is not a recent phenomena of the last 15 years. In fact, home prices increased faster in the prior 15 years than the last 15 years. >The government has no direct control over any kind of pricing except the price of money. I'm not interested in debating the meaning of "direct control", but one rather direct control they have is the federal government could repeal the mortgage interest deduction. That would immediately decrease the financial incentive to buy a home therefore decrease demand and lower prices.
missedthecue 4y ago
Resale value is probably one of the number one things car buyers look at when shopping.
- slg 4y ago
  No one expects that resale value to go up. No one suggests that the government creates programs to prop up that resale value. People understand that owning a car gives them value and they are fine paying the difference between the purchase price and the resale price for that value. Why should homeownership be different? Why should homeownership not just be free but profitable? It makes no sense other than homeowners were told it was true, demand it be true into the future, and they (now joined by institutional investors) are a powerful voting block.
  - yunohn 4y ago
    > No one expects that resale value to go up. Except until you have a chip supply crunch, and used cars are selling higher than their original buying price.
- throwaway0a5e 4y ago
  Look at what people actually do, not what they say for cheap virtue points online. Reliability is way, way down the wish-list. People don't really consider it until all the other key features they want are very solidly satisfied. And even then the take rate is maybe 50%. For every jerk in a 4Runner or Pilot there's an equal and opposite jerk in a Landrover or Tiguan.
  - gbronner 4y ago
    Cars, especially in the first few years, are extremely reliable. So a less reliable new car is still amazing when compared to a 15 year old beater.
  - missedthecue 4y ago
    The people in Landrovers care less about losing money than the people in Honda Pilots, because they have a lot more of it to spare. I'm not sure they're comparable consumers for this reason.
deleted 4y ago
[deleted]
hgsgm 4y ago

mancerayder 4y ago

Yeah, it's further not psyops because of the simple monetary incentives, namely mortgage tax deduction, and primary home owner capital tax excluding the first 250/500 of profit on a sale. Investment purchases have a few incentives as well. There's an over reliance on 'ideas' in this message thread, and an under reliance on simply trusting people to reason their own self-interest.