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> and not even the illusion that they will ever afford a home This may or may not be true within some circles, but it is absolutely not true for American socie

by Kamq 4y ago

> and not even the illusion that they will ever afford a home This may or may not be true within some circles, but it is absolutely not true for American society as a whole. The majority (~2/3) of households own their home. Source: https://tradingeconomics.com/united-states/home-ownership-rate https://tradingeconomics.com/united-states/home-ownership-ra... Warning: Bad graph callout. The graph there is not 0 based for its Y-axis, and the fluxuations look a lot bigger than they actually are, but I haven't found any with better graphs.

lotsofpulp 4y ago
Wouldn’t home ownership by age and changes in home ownership by age be needed information to come to a conclusion?
- AnimalMuppet 4y ago
  If the claim is "not under the illusion that they will ever afford a home", no.
time_to_smile 4y ago
> The graph there is not 0 based for its Y-axis Where did this 0 based graph fallacy originate? There is nothing magical about 0, and in many graphs it doesn't make sense to show at all. Do you criticize atmospheric CO2 plots because they don't start at 0 CO2 which hasn't been the case for billions of years? Do you think you should plot human body temperature reading with 0 in which the human body is more than frozen? Should BRK-A stock movements always be plotted from 0? The limits of a chart should be scaled to the meaningful realistic values, and it's okay to have the bottom and top of the chart be some epsilon smaller/lager than the highest magnitude observed extremes. This has the nice visual property of conveying "near the top or bottom means it's more extreme". Home ownership has never realistically been close to 0, showing zero to hide the fluctuations is not "more honest", it's less so. Most meaningful data cannot be visualized and understood correctly if you assume that all charts should have zero.
- Kamq 4y ago
  My pointing it out is because the graph looks like it swings wildly up and down, but in reality home ownership rates aren't doubling/halving, they're swinging by 1-2 percent or so.
eat 4y ago
I'm a renter for the foreseeable future, and I don't know anything at all about home ownership and all of the nuances so maybe I'm off base here... but surely this number includes people with mortgages that haven't yet been fully paid off? If this is the case, then to me this data simply illustrates that up to 2/3 of American households were able to obtain bank loans. Perhaps I'm being too cynical, but recent history has shown us that being able to obtain credit doesn't necessarily mean you can afford the underlying thing.
- chasd00 4y ago
  mortgages in the US are 30 year loans so it stands to reason that most homeowners are still paying their mortgage. The thing is that home values "typically" go up so you can always sell for more than you bought so, yeah, you're in debt but it's secured by an appreciating asset. Further, assuming a couple of other things, inflation makes your mortgage payment effectively less and less as time goes on meanwhile your home is worth more and more.
- Kamq 4y ago
  > but surely this number includes people with mortgages that haven't yet been fully paid off? It definitely does, but most people don't lose their homes. Even in 2008. Actually the swing from the absolute high of 2005 to the low of 2016 is only ~6% of the population owning their homes (never goes below 60%). Longer term graph: https://fred.stlouisfed.org/series/RHORUSQ156N https://fred.stlouisfed.org/series/RHORUSQ156N Now, might some people have to downsize? Absolutely. Some people are absolutely living beyond their means. That being said, mortgages are pretty safe. If you get one, there's a real good chance you will end up owning your home at some point. The problem with mortgages in 2007/2008 were that people were taking higher risks and trying to chop up the numbers in a semi-fraudulent way (and in several cases, blatantly fraudulent).

by Kamq 4y ago

lotsofpulp 4y ago

Wouldn’t home ownership by age and changes in home ownership by age be needed information to come to a conclusion?

AnimalMuppet 4y ago
If the claim is "not under the illusion that they will ever afford a home", no.

time_to_smile 4y ago

> The graph there is not 0 based for its Y-axis Where did this 0 based graph fallacy originate? There is nothing magical about 0, and in many graphs it doesn't make sense to show at all. Do you criticize atmospheric CO2 plots because they don't start at 0 CO2 which hasn't been the case for billions of years? Do you think you should plot human body temperature reading with 0 in which the human body is more than frozen? Should BRK-A stock movements always be plotted from 0? The limits of a chart should be scaled to the meaningful realistic values, and it's okay to have the bottom and top of the chart be some epsilon smaller/lager than the highest magnitude observed extremes. This has the nice visual property of conveying "near the top or bottom means it's more extreme". Home ownership has never realistically been close to 0, showing zero to hide the fluctuations is not "more honest", it's less so. Most meaningful data cannot be visualized and understood correctly if you assume that all charts should have zero.

Kamq 4y ago
My pointing it out is because the graph looks like it swings wildly up and down, but in reality home ownership rates aren't doubling/halving, they're swinging by 1-2 percent or so.

eat 4y ago

I'm a renter for the foreseeable future, and I don't know anything at all about home ownership and all of the nuances so maybe I'm off base here... but surely this number includes people with mortgages that haven't yet been fully paid off? If this is the case, then to me this data simply illustrates that up to 2/3 of American households were able to obtain bank loans. Perhaps I'm being too cynical, but recent history has shown us that being able to obtain credit doesn't necessarily mean you can afford the underlying thing.

chasd00 4y ago
mortgages in the US are 30 year loans so it stands to reason that most homeowners are still paying their mortgage. The thing is that home values "typically" go up so you can always sell for more than you bought so, yeah, you're in debt but it's secured by an appreciating asset. Further, assuming a couple of other things, inflation makes your mortgage payment effectively less and less as time goes on meanwhile your home is worth more and more.
Kamq 4y ago
> but surely this number includes people with mortgages that haven't yet been fully paid off? It definitely does, but most people don't lose their homes. Even in 2008. Actually the swing from the absolute high of 2005 to the low of 2016 is only ~6% of the population owning their homes (never goes below 60%). Longer term graph: https://fred.stlouisfed.org/series/RHORUSQ156N https://fred.stlouisfed.org/series/RHORUSQ156N Now, might some people have to downsize? Absolutely. Some people are absolutely living beyond their means. That being said, mortgages are pretty safe. If you get one, there's a real good chance you will end up owning your home at some point. The problem with mortgages in 2007/2008 were that people were taking higher risks and trying to chop up the numbers in a semi-fraudulent way (and in several cases, blatantly fraudulent).