3 ms·

I see this sort of thing crop up when people talk about 'home owners' as well. It's like the classification isn't narrow enough to be relevant. I want to know t

by all2 3y ago

I see this sort of thing crop up when people talk about 'home owners' as well. It's like the classification isn't narrow enough to be relevant. I want to know the percent of people living in homes who don't have a mortgage. Ah, here we go, according to Forbes [0], only 23% of home "owners" don't have a mortgage, as in they actually own their homes. This is among the lowest rate of actual ownership in the first world. Conclusion from the Forbes article: It seems U.S. policy maximizes mortgage-ownership, not home-ownership. [0] https://www.forbes.com/sites/johnwake/2023/03/31/us-has-3rd-lowest-percentage-of-households-that-own-their-homes-without-mortgages/?sh=5fe2b18b3124 https://www.forbes.com/sites/johnwake/2023/03/31/us-has-3rd-...

kelnos 3y ago
> This is among the lowest rate of actual ownership in the first world. I don't know if this is as big a problem as it sounds. I could pay off my mortgage next week if I wanted to, but "renting" money from a bank for 2.6% while getting 5.4% on short-term Treasury bills seems a lot more financially responsible than paying down a mortgage just because it feels good to be debt-free. Certainly not everyone can do this, and there are lots of people (especially those who are buying now) with interest rates that are higher than what they can safely and predictably make to offset that cost. But just saying "X% of American homeowners carry a mortgage" doesn't tell the whole story.
- ghaff 3y ago
  I paid off a mortgage a number of years back and the numbers probably marginally made sense. The debt-free thing probably pushed it over the edge. But if I had a ten year old mortgage today? No way would I be paying it down today.
ghaff 3y ago
As the article notes--and I would have strongly suspected--the US also has long mortgage terms. With 30 year fixed mortgages being the norm, that means that someone in their early thirties who gets a mortgage probably won't pay it off until basically retirement age. (Leaving aside refinancing/moving and getting a new mortgage, early payoffs, etc. But very few people are probably either refinancing or paying off early at the moment.)
Ferret7446 3y ago
Devil's advocate: "actual ownership" is overrated in the same way that banks having a 100% reserve ratio is overrated. Mortgages form a low risk/return investment (in theory anyway) which frees capital for medium risk/return investments, especially for young people who can benefit from the higher long term returns. Once they get old, they can transition their investments to low risk, such as mortgages as part of various investment funds. This makes capital more liquid and generally improves the efficiency of the economy (in theory anyway, if you ignore bad actors doing subprime mortgages/etc)

by all2 3y ago

kelnos 3y ago

> This is among the lowest rate of actual ownership in the first world. I don't know if this is as big a problem as it sounds. I could pay off my mortgage next week if I wanted to, but "renting" money from a bank for 2.6% while getting 5.4% on short-term Treasury bills seems a lot more financially responsible than paying down a mortgage just because it feels good to be debt-free. Certainly not everyone can do this, and there are lots of people (especially those who are buying now) with interest rates that are higher than what they can safely and predictably make to offset that cost. But just saying "X% of American homeowners carry a mortgage" doesn't tell the whole story.

ghaff 3y ago
I paid off a mortgage a number of years back and the numbers probably marginally made sense. The debt-free thing probably pushed it over the edge. But if I had a ten year old mortgage today? No way would I be paying it down today.

ghaff 3y ago

As the article notes--and I would have strongly suspected--the US also has long mortgage terms. With 30 year fixed mortgages being the norm, that means that someone in their early thirties who gets a mortgage probably won't pay it off until basically retirement age. (Leaving aside refinancing/moving and getting a new mortgage, early payoffs, etc. But very few people are probably either refinancing or paying off early at the moment.)

Ferret7446 3y ago

Devil's advocate: "actual ownership" is overrated in the same way that banks having a 100% reserve ratio is overrated. Mortgages form a low risk/return investment (in theory anyway) which frees capital for medium risk/return investments, especially for young people who can benefit from the higher long term returns. Once they get old, they can transition their investments to low risk, such as mortgages as part of various investment funds. This makes capital more liquid and generally improves the efficiency of the economy (in theory anyway, if you ignore bad actors doing subprime mortgages/etc)