4 ms·

When you live in a stable society and have gotten a free education and a nice job, it makes sense to get a loan to buy a place to live and start paying a mortga

When you live in a stable society and have gotten a free education and a nice job, it makes sense to get a loan to buy a place to live and start paying a mortgage instead of debt. Contrast with a society where the average education might be lower, less people having a stable job in a slow labor market, and if you lose your job there is no safety net. Hard to get a loan, so end up renting for longer, and in turn have a lower average debt. Debt can be a proxy for a well working society, as you have the means to invest in your future, not just putting out short term fires.

dmos62 4y ago
That's what the article said. Mortgage debt can be a proxy for privilege, while consumer debt can be a proxy for need.
ajsnigrutin 4y ago
Also, most europeans tend to settle down, and not move across the continent every few years, so buying instead of renting makes even more sense, since you'll be staying in that house probably for the rest of your life.
- Hamuko 4y ago
  Where the hell are people "moving across the continent every few years"?
  - labster 4y ago
    The US and Canada.
  - djbusby 4y ago
    USA. Eg: Seattle has lots of out-of-state migrants, as does SFBay, Boston and NY.
    - Hamuko 4y ago
      What's the source for that? Doesn't sound right when I've seen claims such as "nearly 72% of Americans live in or close to the city where they grew up" [1] and "the typical adult lives only 18 miles from his or her mother" [2]. [1] https://www.prnewswire.com/news-releases/what-percentage-of-americans-currently-live-in-the-town-or-city-where-they-grew-up-300952249.html https://www.prnewswire.com/news-releases/what-percentage-of-... [2] https://www.nytimes.com/interactive/2015/12/24/upshot/24up-family.html https://www.nytimes.com/interactive/2015/12/24/upshot/24up-f...
      - chucksmash 4y ago
        The irony of having this discussion on a site run by people who pay potential founders to move across the continent for a couple of months.
        mardifoufs 4y ago
        Where's the irony? Do you think HN is a good representation of the US population as a whole?
        chucksmash 4y ago
        Assuming you are posting in good faith, the irony to me is that this whole discussion is even happening, stemming from the post: > Where the hell are people "moving across the continent every few years"? Because the answer is right here, on this very website. They are asking us* to prove our existence. Perhaps it'd be more correct to call it incongruity. Perhaps also more correct to have replied directly to the "Where the hell...?" comment as opposed to this one. I hope this isn't a segue into an "Alanis Morrissette isn't ironic" internet conversation. * - some of us
        mardifoufs 4y ago
        Yeah sorry I was asking in good faith, though I see how my comment could come off as snarky. But I understand what you mean now :)
  - deleted 4y ago
    [deleted]
  - ajsnigrutin 4y ago
    https://www.census.gov/topics/population/migration/guidance/calculating-migration-expectancy.html https://www.census.gov/topics/population/migration/guidance/... This is geoblocked in slovenia, but the google summary says: > Using 2007 ACS data, it is estimated that a person in the United States can expect to move 11.7 times in their lifetime If we neglect the student ages for those without student housing or living nearby, most people here move from their parents to their own place, maybe again if they're renting, and then to a "better place" if they can afford one later on. 11.7 times is way above what most people here do. 80 years of life, 11.7 movings, 6.8 years between moving. Realistically more often than that during younger years, since I'd guess retired people move less often.
    - nonethewiser 4y ago
      You didn’t address the “across the continent every few years” part. Moving frequently on average in no way indicates they are moving across the country every few years.
      - ajsnigrutin 4y ago
        Even if they don't move half a continent away, they'd still need to buy a house, furnish it, fix a bunch of stuff, then live in it for <7 years, fix it up again (atleast cosmetically), sell it, buy a new one, all the hassle of moving and new furniture because not all of the old stuff fits, new fixes of stuff that was just cosmetically fixed, and in <7 years again.
    - wil421 4y ago
      I’ve probably moved 12 times including when I was a student and none of the times were out of state.
nonethewiser 4y ago
> and start paying a mortgage instead of debt. But a mortgage is debt … ? I’m not sure this accounts for it. Paying a mortgage “instead” implies it’s merely a replacement. But in reality the debt is 2-4x higher than other OECD countries. This stat makes it sound rather unsustainable: >Four in 10 mortgage borrowers in Sweden are not paying off their debt, and those that are repaying the principal do so at a rate that would on average take nearly a century. https://www.cnbc.com/amp/2014/08/24/swedish-household-debt-soars-as-poll-nears.html https://www.cnbc.com/amp/2014/08/24/swedish-household-debt-s...
- DavidVoid 4y ago
  > Four in 10 mortgage borrowers in Sweden are not paying off their debt, I believe this is no longer true. Since 2016 there is an amorteringskrav (amortization requirement) on housing loans. All new housing loans with a loan-to-value ratio of 70% or higher must pay off at least 2% of the loan per year, and if you're below 70% then you must pay off at least 1% per year until you're below 50%. You must also pay an additional 1% per year if you've borrowed more than 4.5 times your yearly salary (excluding taxes). When you buy a house/apartment it's most common to have an initial loan-to-value ratio of 85% (since you're only allowed to get a housing loan for up to 85% of the property's value).
- matsemann 4y ago
  Ops, I meant rent, not debt. Too late to edit now.
mfer 4y ago
> When you live in a stable society and have gotten a free education and a nice job The education isn't free. It's covered by taxes so you, and everyone else, pays for it for a long time. There's quite an expense to have the instructors, buildings, etc. I'm glad you think the people who haul away garbage, are plumbers, are electricians, etc have nice jobs. Those jobs exist and people do them in those stable societies. > paying a mortgage instead of debt A mortgage is a form of debt. > Contrast with a society where the average education might be lower, less people having a stable job in a slow labor market, and if you lose your job there is no safety net. This is where things get weirdly complicated. Where I live there are safety nets. The state has said that only about 10% of what's available is used. Where there are safety nets many people don't try to use them. I know people who complained about a lack of safety nets and didn't take advantage of the ones available to them. > Hard to get a loan, so end up renting for longer, and in turn have a lower average debt. It's far more complex than that. For example, businesses are buying homes up for far more than asking price and what most people can pay. So they can turn around and rent them. This is all driving up the asking price for homes. > Debt can be a proxy for a well working society, as you have the means to invest in your future, not just putting out short term fires. This really depends on where debt is. In the US a lot of debt is to fuel consumerism. Or, to have more things now. A lot of the parts of society drive people to this. It's become cultural.
- tester756 4y ago
  >The education isn't free. That's just directly vs indirectly, isn't it?
- anon4242 4y ago
  > The education isn't free. It's covered by taxes so you, and everyone else, pays for it for a long time. Hopefully it leads to higher income jobs which leads to more taxes paid by the (now) student in the future, leading to more money that can be spent on educating even more people...
sacnoradhq 4y ago
In the absence of credit, if everyone had to pay with everything in cash, almost no one would have a home or car. It's stability of ability to service debt that matters, not the debt itself. High debt / income ratio at the micro level is bad, of course.
- yakubin 4y ago
  People can’t pay in cash due to other people paying with debt, which artificially inflates prices.
sohtym 4y ago
> Contrast with a society where the average education might be lower, less people having a stable job in a slow labor market, and if you lose your job there is no safety net. Educational attainment in the Nordic countries isn't actually that good. It might have been at one point. These days I think it sometimes looks good because some statistics count having any experience at higher levels, which having cost-free education facilitates. If you instead look at actual degrees the Nordic countries are average among OECD countries. Bachelor's degrees OECD Average 18% Iceland 21% Denmark 20% Norway 20% Sweden 18% Finland 20% Countries above 21% in OECD: Australia, Belgium, Canada, Colombia, Greece, Ireland, Israel, Japan, Korea, Lithuania, Netherlands, New Zealand, Switzerland, United Kingdom, United States. Source: https://www.oecd-ilibrary.org/sites/b35a14e5-en/1/3/2/1/index.html?itemId=/content/publication/b35a14e5-en&_csp_=9689b83a12cab1f95b32a46f4225d1a5&itemIGO=oecd&itemContentType=book#tablegrp-d1e4015 https://www.oecd-ilibrary.org/sites/b35a14e5-en/1/3/2/1/inde...
- jltsiren 4y ago
  You should look at the statistics more carefully. Educational attainment means the highest degree – those with a master's degree are not included in the numbers for bachelor's degrees. Nordic countries traditionally had a system where master's (or equivalent) was the primary undergraduate degree in proper universities (or equivalent).
  - deleted 4y ago
    [deleted]
  - sohtym 4y ago
    I've added the Bachelor's, Master's and Doctoral degrees. Out of 38 countries that puts Iceland and Finland in 9th and 10th. And Denmark, Sweden and Norway at 16th, 17th and 19th. So primarily Finland redeems itself. (Iceland maybe not so relevant as it is tiny). The rest are still slightly above the middle. Considering these are among wealthy countries it maybe isn't bad. But for being smaller countries with decent resource and high taxes that are also deindustrializing I wouldn't say it is great.

dmos62 4y ago

That's what the article said. Mortgage debt can be a proxy for privilege, while consumer debt can be a proxy for need.

ajsnigrutin 4y ago

Also, most europeans tend to settle down, and not move across the continent every few years, so buying instead of renting makes even more sense, since you'll be staying in that house probably for the rest of your life.

Hamuko 4y ago
Where the hell are people "moving across the continent every few years"?
- labster 4y ago
  The US and Canada.
- djbusby 4y ago
  USA. Eg: Seattle has lots of out-of-state migrants, as does SFBay, Boston and NY.
  - Hamuko 4y ago
    What's the source for that? Doesn't sound right when I've seen claims such as "nearly 72% of Americans live in or close to the city where they grew up" [1] and "the typical adult lives only 18 miles from his or her mother" [2]. [1] https://www.prnewswire.com/news-releases/what-percentage-of-americans-currently-live-in-the-town-or-city-where-they-grew-up-300952249.html https://www.prnewswire.com/news-releases/what-percentage-of-... [2] https://www.nytimes.com/interactive/2015/12/24/upshot/24up-family.html https://www.nytimes.com/interactive/2015/12/24/upshot/24up-f...
    - chucksmash 4y ago
      The irony of having this discussion on a site run by people who pay potential founders to move across the continent for a couple of months.
      - mardifoufs 4y ago
        Where's the irony? Do you think HN is a good representation of the US population as a whole?
        chucksmash 4y ago
        Assuming you are posting in good faith, the irony to me is that this whole discussion is even happening, stemming from the post: > Where the hell are people "moving across the continent every few years"? Because the answer is right here, on this very website. They are asking us* to prove our existence. Perhaps it'd be more correct to call it incongruity. Perhaps also more correct to have replied directly to the "Where the hell...?" comment as opposed to this one. I hope this isn't a segue into an "Alanis Morrissette isn't ironic" internet conversation. * - some of us
        mardifoufs 4y ago
        Yeah sorry I was asking in good faith, though I see how my comment could come off as snarky. But I understand what you mean now :)
- deleted 4y ago
  [deleted]
- ajsnigrutin 4y ago
  https://www.census.gov/topics/population/migration/guidance/calculating-migration-expectancy.html https://www.census.gov/topics/population/migration/guidance/... This is geoblocked in slovenia, but the google summary says: > Using 2007 ACS data, it is estimated that a person in the United States can expect to move 11.7 times in their lifetime If we neglect the student ages for those without student housing or living nearby, most people here move from their parents to their own place, maybe again if they're renting, and then to a "better place" if they can afford one later on. 11.7 times is way above what most people here do. 80 years of life, 11.7 movings, 6.8 years between moving. Realistically more often than that during younger years, since I'd guess retired people move less often.
  - nonethewiser 4y ago
    You didn’t address the “across the continent every few years” part. Moving frequently on average in no way indicates they are moving across the country every few years.
    - ajsnigrutin 4y ago
      Even if they don't move half a continent away, they'd still need to buy a house, furnish it, fix a bunch of stuff, then live in it for <7 years, fix it up again (atleast cosmetically), sell it, buy a new one, all the hassle of moving and new furniture because not all of the old stuff fits, new fixes of stuff that was just cosmetically fixed, and in <7 years again.
  - wil421 4y ago
    I’ve probably moved 12 times including when I was a student and none of the times were out of state.

nonethewiser 4y ago

> and start paying a mortgage instead of debt. But a mortgage is debt … ? I’m not sure this accounts for it. Paying a mortgage “instead” implies it’s merely a replacement. But in reality the debt is 2-4x higher than other OECD countries. This stat makes it sound rather unsustainable: >Four in 10 mortgage borrowers in Sweden are not paying off their debt, and those that are repaying the principal do so at a rate that would on average take nearly a century. https://www.cnbc.com/amp/2014/08/24/swedish-household-debt-soars-as-poll-nears.html https://www.cnbc.com/amp/2014/08/24/swedish-household-debt-s...

DavidVoid 4y ago
> Four in 10 mortgage borrowers in Sweden are not paying off their debt, I believe this is no longer true. Since 2016 there is an amorteringskrav (amortization requirement) on housing loans. All new housing loans with a loan-to-value ratio of 70% or higher must pay off at least 2% of the loan per year, and if you're below 70% then you must pay off at least 1% per year until you're below 50%. You must also pay an additional 1% per year if you've borrowed more than 4.5 times your yearly salary (excluding taxes). When you buy a house/apartment it's most common to have an initial loan-to-value ratio of 85% (since you're only allowed to get a housing loan for up to 85% of the property's value).
matsemann 4y ago
Ops, I meant rent, not debt. Too late to edit now.

mfer 4y ago

> When you live in a stable society and have gotten a free education and a nice job The education isn't free. It's covered by taxes so you, and everyone else, pays for it for a long time. There's quite an expense to have the instructors, buildings, etc. I'm glad you think the people who haul away garbage, are plumbers, are electricians, etc have nice jobs. Those jobs exist and people do them in those stable societies. > paying a mortgage instead of debt A mortgage is a form of debt. > Contrast with a society where the average education might be lower, less people having a stable job in a slow labor market, and if you lose your job there is no safety net. This is where things get weirdly complicated. Where I live there are safety nets. The state has said that only about 10% of what's available is used. Where there are safety nets many people don't try to use them. I know people who complained about a lack of safety nets and didn't take advantage of the ones available to them. > Hard to get a loan, so end up renting for longer, and in turn have a lower average debt. It's far more complex than that. For example, businesses are buying homes up for far more than asking price and what most people can pay. So they can turn around and rent them. This is all driving up the asking price for homes. > Debt can be a proxy for a well working society, as you have the means to invest in your future, not just putting out short term fires. This really depends on where debt is. In the US a lot of debt is to fuel consumerism. Or, to have more things now. A lot of the parts of society drive people to this. It's become cultural.

tester756 4y ago
>The education isn't free. That's just directly vs indirectly, isn't it?
anon4242 4y ago
> The education isn't free. It's covered by taxes so you, and everyone else, pays for it for a long time. Hopefully it leads to higher income jobs which leads to more taxes paid by the (now) student in the future, leading to more money that can be spent on educating even more people...

sacnoradhq 4y ago

In the absence of credit, if everyone had to pay with everything in cash, almost no one would have a home or car. It's stability of ability to service debt that matters, not the debt itself. High debt / income ratio at the micro level is bad, of course.

yakubin 4y ago
People can’t pay in cash due to other people paying with debt, which artificially inflates prices.

sohtym 4y ago

> Contrast with a society where the average education might be lower, less people having a stable job in a slow labor market, and if you lose your job there is no safety net. Educational attainment in the Nordic countries isn't actually that good. It might have been at one point. These days I think it sometimes looks good because some statistics count having any experience at higher levels, which having cost-free education facilitates. If you instead look at actual degrees the Nordic countries are average among OECD countries. Bachelor's degrees OECD Average 18% Iceland 21% Denmark 20% Norway 20% Sweden 18% Finland 20% Countries above 21% in OECD: Australia, Belgium, Canada, Colombia, Greece, Ireland, Israel, Japan, Korea, Lithuania, Netherlands, New Zealand, Switzerland, United Kingdom, United States. Source: https://www.oecd-ilibrary.org/sites/b35a14e5-en/1/3/2/1/index.html?itemId=/content/publication/b35a14e5-en&_csp_=9689b83a12cab1f95b32a46f4225d1a5&itemIGO=oecd&itemContentType=book#tablegrp-d1e4015 https://www.oecd-ilibrary.org/sites/b35a14e5-en/1/3/2/1/inde...

jltsiren 4y ago
You should look at the statistics more carefully. Educational attainment means the highest degree – those with a master's degree are not included in the numbers for bachelor's degrees. Nordic countries traditionally had a system where master's (or equivalent) was the primary undergraduate degree in proper universities (or equivalent).
- deleted 4y ago
  [deleted]
- sohtym 4y ago
  I've added the Bachelor's, Master's and Doctoral degrees. Out of 38 countries that puts Iceland and Finland in 9th and 10th. And Denmark, Sweden and Norway at 16th, 17th and 19th. So primarily Finland redeems itself. (Iceland maybe not so relevant as it is tiny). The rest are still slightly above the middle. Considering these are among wealthy countries it maybe isn't bad. But for being smaller countries with decent resource and high taxes that are also deindustrializing I wouldn't say it is great.