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Shortly after I bought a house I started dating someone younger, about 32, and despite my older age she couldn't believe I'd done it. She said she called me "**

Shortly after I bought a house I started dating someone younger, about 32, and despite my older age she couldn't believe I'd done it. She said she called me "*** The Homeowner" to her friends. It really brought it home (no pun) to me how far the expectations of younger generations have fallen. Frankly though, I rented for a long time and if the economics of it would have continued to work out for me, I could have done it for life, in principle. That's if I thought I could afford to keep doing it rather than get squeezed with accelerating rent increases and decreases in service that have come to define every aspect of our economy over the last 4 years. But things are in a bad spiral.

ghaff 3y ago
Not that a mortgage paid-off home is free (especially a house--especially older, with land, etc.), but there does come a point for most people when the income coming in goes down, they still need to live someplace, and you have at least some control if you own a place. You still owe taxes and have some maintenance to coder but it's not quite like having a monthly bill that has to be paid no matter what and you're always exposed to a landlord just deciding to sell. There are also non-financial tradeoffs but some degree of stability is probably desirable if there is no reason to think you'll want to pickup and move across the country.
- swatcoder 3y ago
  Now look at real-world data for how many (few) residences are actually owned free and clear. I'm with you that there's a personal strategy of having a paid off house and the sense of security it provides, but people-in-aggregate don't seem to be pursuing that strategy. It seems that what almost all homeowners actually do is take out long mortgages, reset their paydown clocks by refinancing, finance equity back out in second mortgages and liens, etc, never actually reaching the "no monthly bill" stage. So if people are honest about probably being in the same cohort when the time comes for themselves, then there's not so much distinction between paying a landlord forever and paying a bank forever. You may know better about yourself, and people may have other reasons to prefer homeownership, but it doesn't seem to be about security in retirement. At least not in practice.
  - hotpotamus 3y ago
    I feel like I'm the only one who thought, "hey, I'll buy a modest house, pay it off, and then invest some money to hopefully retire one day". But I suppose my neighborhood is also full of those types of people (and some renters these days). Must be why they're so cool/nice.
    - RhysU 3y ago
      This feels backwards. Invest first. Buy the house second.
      - hotpotamus 3y ago
        It's worked for me, but the key word I think was "modest" house.
  - floxy 3y ago
    >Now look at real-world data for how many (few) residences are actually owned free and clear. It looks to be close to 38% in the U.S.? https://financialcomplete.com/how-many-homes-are-paid-off-in-america https://financialcomplete.com/how-many-homes-are-paid-off-in... https://www.forbes.com/sites/brendarichardson/2019/07/26/nearly-40-of-homes-in-the-us-are-free-and-clear-of-a-mortgage/?sh=6f12603c47c2 https://www.forbes.com/sites/brendarichardson/2019/07/26/nea...
    - ghaff 3y ago
      Given that a typical US fixed rate mortgage is 30 year--and I'm assuming most people don't buy until maybe their 30s and don't pay off early--that doesn't see like a particularly low number? Presumably, especially these days, anyone with a fixed rate mortgage from even a few years back is not paying anything down early.
- add-sub-mul-div 3y ago
  You're right, renting would have to remain economically viable throughout my life and retirement in order for me to be okay sticking with it. But I prefer renting otherwise, not being responsible for as many things. As long as my closest neighbors are under control I don't need a single family house and the freedom to customize it.
hotpotamus 3y ago
> accelerating rent increases and decreases in service that have come to define every aspect of our economy over the last 4 years. But things are in a bad spiral. I wonder if this is true? It feels true to me as well, but I keep reading that the actual numbers tell a different story. I believe rents have actually decreased the last few months, for instance. My grim joke is that everything seems to be increasing faster than inflation.
- deleted 3y ago
  [deleted]
poulsbohemian 3y ago
HN loves to rip on Realtors, but what you are describing is a chunk of why we exist. Even in this higher interest rate environment, I've assisted multiple first-time buyers into houses - good houses. I can't speak for all states, but both WA and OR have really great downpayment assistance programs for first-time buyers. It is by no means easy, but if people aren't building a relationship to a lender and an agent, I'm not sure where they are getting real boots-on-the-ground guidance - so is it any wonder they don't believe they can afford a house?
- deleted 3y ago
  [deleted]

ghaff 3y ago

Not that a mortgage paid-off home is free (especially a house--especially older, with land, etc.), but there does come a point for most people when the income coming in goes down, they still need to live someplace, and you have at least some control if you own a place. You still owe taxes and have some maintenance to coder but it's not quite like having a monthly bill that has to be paid no matter what and you're always exposed to a landlord just deciding to sell. There are also non-financial tradeoffs but some degree of stability is probably desirable if there is no reason to think you'll want to pickup and move across the country.

swatcoder 3y ago
Now look at real-world data for how many (few) residences are actually owned free and clear. I'm with you that there's a personal strategy of having a paid off house and the sense of security it provides, but people-in-aggregate don't seem to be pursuing that strategy. It seems that what almost all homeowners actually do is take out long mortgages, reset their paydown clocks by refinancing, finance equity back out in second mortgages and liens, etc, never actually reaching the "no monthly bill" stage. So if people are honest about probably being in the same cohort when the time comes for themselves, then there's not so much distinction between paying a landlord forever and paying a bank forever. You may know better about yourself, and people may have other reasons to prefer homeownership, but it doesn't seem to be about security in retirement. At least not in practice.
- hotpotamus 3y ago
  I feel like I'm the only one who thought, "hey, I'll buy a modest house, pay it off, and then invest some money to hopefully retire one day". But I suppose my neighborhood is also full of those types of people (and some renters these days). Must be why they're so cool/nice.
  - RhysU 3y ago
    This feels backwards. Invest first. Buy the house second.
    - hotpotamus 3y ago
      It's worked for me, but the key word I think was "modest" house.
- floxy 3y ago
  >Now look at real-world data for how many (few) residences are actually owned free and clear. It looks to be close to 38% in the U.S.? https://financialcomplete.com/how-many-homes-are-paid-off-in-america https://financialcomplete.com/how-many-homes-are-paid-off-in... https://www.forbes.com/sites/brendarichardson/2019/07/26/nearly-40-of-homes-in-the-us-are-free-and-clear-of-a-mortgage/?sh=6f12603c47c2 https://www.forbes.com/sites/brendarichardson/2019/07/26/nea...
  - ghaff 3y ago
    Given that a typical US fixed rate mortgage is 30 year--and I'm assuming most people don't buy until maybe their 30s and don't pay off early--that doesn't see like a particularly low number? Presumably, especially these days, anyone with a fixed rate mortgage from even a few years back is not paying anything down early.
add-sub-mul-div 3y ago
You're right, renting would have to remain economically viable throughout my life and retirement in order for me to be okay sticking with it. But I prefer renting otherwise, not being responsible for as many things. As long as my closest neighbors are under control I don't need a single family house and the freedom to customize it.

hotpotamus 3y ago

> accelerating rent increases and decreases in service that have come to define every aspect of our economy over the last 4 years. But things are in a bad spiral. I wonder if this is true? It feels true to me as well, but I keep reading that the actual numbers tell a different story. I believe rents have actually decreased the last few months, for instance. My grim joke is that everything seems to be increasing faster than inflation.

deleted 3y ago
[deleted]

poulsbohemian 3y ago

HN loves to rip on Realtors, but what you are describing is a chunk of why we exist. Even in this higher interest rate environment, I've assisted multiple first-time buyers into houses - good houses. I can't speak for all states, but both WA and OR have really great downpayment assistance programs for first-time buyers. It is by no means easy, but if people aren't building a relationship to a lender and an agent, I'm not sure where they are getting real boots-on-the-ground guidance - so is it any wonder they don't believe they can afford a house?

deleted 3y ago
[deleted]