4 ms·
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
by 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 agoI 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 agoThis feels backwards. Invest first. Buy the house second.
- hotpotamus 3y agoIt'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 agoGiven 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.