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> whether anyone should profit from owning it. Uh... existing homeowners are the ones making bank hand over fist thanks to the housing shortage: https://orego

by davidw 4y ago

> whether anyone should profit from owning it. Uh... existing homeowners are the ones making bank hand over fist thanks to the housing shortage: https://oregoneconomicanalysis.com/2021/03/16/who-benefits-from-the-housing-market-graph-of-the-week/ https://oregoneconomicanalysis.com/2021/03/16/who-benefits-f...

paulryanrogers 4y ago
Only if they're buying and selling non-primary residences. Otherwise they'll have to buy in the same crazy market, wiping out much of their gains.
- davidw 4y ago
  It's a bit apples to oranges, sure, but you're still sitting on a pile of money and bearing few of the direct costs of it in places like OR or CA with screwy property taxes. You can borrow against it or sell and go elsewhere, which is a lot better place to be in than someone wishing to purchase and seeing the value of a home go up more than they make in a year.
- jehb 4y ago
  The gains are not wiped out, they're just not liquid. We bought our first house about seven years ago and are about to sell it. The house appreciated almost 75% over that span of time. We bought a new house in the same price range. I'm just transferring the appreciation of the the first house to the second house. But since it's a higher real dollar amount, I was able to put a much higher percentage down on the new house and get a better total cost of the loan as a result. I still have all of the gains I made, even if they're locked in equity in the house, and was able to leverage them for additional value in reduced interest paid. Because I had more equity from the first house, it also made it easier for me to outbid other bidders, because I didn't have the same debt-to-income constraints they did. Even if the gains aren't liquid, homeowners gain at the expense of non-homeowners.
- comte7092 4y ago
  You don’t have to sell your house to pull equity out of it.
  - paulryanrogers 4y ago
    Is that really a gain though? You'd be paying back at a higher rate today.
    - comte7092 4y ago
      It’s money you can access if you need it. It’s a capitalized loan, so no matter what, it’s a better deal than you’d get if you were pulling the money from a credit card as an example. Need to pay for your child’s tuition? Start a business? Unexpected major expenses? You have a relatively cheap line of credit compared to every other option on the market. That’s still wealth no matter how you slice it. And, not even that long ago, that was wealth people could access for almost nothing, who knows what the interest rate environment will be in 5 years.

by davidw 4y ago

paulryanrogers 4y ago

Only if they're buying and selling non-primary residences. Otherwise they'll have to buy in the same crazy market, wiping out much of their gains.

davidw 4y ago
It's a bit apples to oranges, sure, but you're still sitting on a pile of money and bearing few of the direct costs of it in places like OR or CA with screwy property taxes. You can borrow against it or sell and go elsewhere, which is a lot better place to be in than someone wishing to purchase and seeing the value of a home go up more than they make in a year.
jehb 4y ago
The gains are not wiped out, they're just not liquid. We bought our first house about seven years ago and are about to sell it. The house appreciated almost 75% over that span of time. We bought a new house in the same price range. I'm just transferring the appreciation of the the first house to the second house. But since it's a higher real dollar amount, I was able to put a much higher percentage down on the new house and get a better total cost of the loan as a result. I still have all of the gains I made, even if they're locked in equity in the house, and was able to leverage them for additional value in reduced interest paid. Because I had more equity from the first house, it also made it easier for me to outbid other bidders, because I didn't have the same debt-to-income constraints they did. Even if the gains aren't liquid, homeowners gain at the expense of non-homeowners.
comte7092 4y ago
You don’t have to sell your house to pull equity out of it.
- paulryanrogers 4y ago
  Is that really a gain though? You'd be paying back at a higher rate today.
  - comte7092 4y ago
    It’s money you can access if you need it. It’s a capitalized loan, so no matter what, it’s a better deal than you’d get if you were pulling the money from a credit card as an example. Need to pay for your child’s tuition? Start a business? Unexpected major expenses? You have a relatively cheap line of credit compared to every other option on the market. That’s still wealth no matter how you slice it. And, not even that long ago, that was wealth people could access for almost nothing, who knows what the interest rate environment will be in 5 years.