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Probably the majority at what they think the house should cost. Probably very few at what the monthly payment for a market rate mortgage + downpayment actually

Probably the majority at what they think the house should cost. Probably very few at what the monthly payment for a market rate mortgage + downpayment actually costs, based on the recent run-up in home values and interest rates over the past 3-4 years. E.g. would you prefer to rent the same house at $2000 month, or own at $4000/mo? It might not be this bad in Atlanta but in many areas the rent/buy ratio is that bad now.

bombcar 3y ago
You'd have to correct for so many things - and it's actually quite hard to get down to the reality. Obviously almost all renters would take a "free and clear" ownership of the same house they're currently renting; that's a six figure freebee. And many owners will not fully exhibit "buyer's remorse" just because the cost of ownership is so high. And no home-owner loves facing down the $10-50k repairs that a house can need now and then.
- ghaff 3y ago
  Yeah. I live in an old house on a little bit of property. It's paid-off but it's still probably something close to $2K/month between property taxes, insurance, utilities/oil, and more or less steady state maintenance--some of which could probably be deferred but...
  - bombcar 3y ago
    It's totally worth the exercise (it's not terribly hard) to "rent to yourself" on paper, just to get a feel for everything involved. And like you see, it is much more than you'd expect at first, because so many things only "pop up" every 10/20/30 years. A $20k roof replacement done every 30 years is $60 a month or so, and how many of those kind of things are hiding in a house? Hint: the depreciation tables from the IRS are not a gift ...
    - ghaff 3y ago
      I used to (half-)joke that had I known how much work and money my house was going to be, I'd probably just have gone with a newer condo. I agree with the points upthread that a lot of people like the idea of home ownership but don't appreciate all the ongoing costs--including the amortized costs of unexpected things. (I just paid $1K to get a big tree that came down dealt with which fortunately didn't cause any actual damage.
      - skyyler 3y ago
        I do appreciate that your fantasy alternative to house ownership is owning a condo and not renting an apartment. The difference is single family unit vs shared walls, not owning vs renting. In ideal situations, I think almost everyone would prefer owning over renting.
        ghaff 3y ago
        >In ideal situations, I think almost everyone would prefer owning over renting. I don't think that's true at all especially for people earlier in life/career. Even had I had more money in a brokerage account, I'm pretty sure I wouldn't have made a home purchase (whether single family house or condo) before I did. And I don't think that's all that unusual for people 10 years out of school or so. Yes, I was at a point when I could afford it but I was also mentally ready to put down some more roots.
        skyyler 3y ago
        I just think the difficulty of selling is a bit over-stated when talking about reasons people rent. I really do believe the large majority of people renting are doing so because they can't afford to buy.
skyyler 3y ago
>88% of Americans would rather own a home than rent. Specifically, 76% of renters would rather own a home, but only 2% of homeowners would rather rent. https://www.lendingtree.com/home/mortgage/homeownership-renting-survey/ https://www.lendingtree.com/home/mortgage/homeownership-rent... Pretty clear to me.
- sgerenser 3y ago
  That’s a completely dumb statistic since it doesn’t talk about the cost. Of course someone would rather have something rather than nothing, if the something cost nothing. In reality, if the “something” cost $1 Million and only saved you $2500/mo, is it actually preferred?
  - skyyler 3y ago
    "Cost" Paying rent instead of a mortgage is a cost. If the rent is bringing in less money than the upkeep costs of the property, why is the landlord renting it out? There's an entire segment of the market that is priced out of buying. That doesn't mean they want to rent.

bombcar 3y ago

You'd have to correct for so many things - and it's actually quite hard to get down to the reality. Obviously almost all renters would take a "free and clear" ownership of the same house they're currently renting; that's a six figure freebee. And many owners will not fully exhibit "buyer's remorse" just because the cost of ownership is so high. And no home-owner loves facing down the $10-50k repairs that a house can need now and then.

ghaff 3y ago
Yeah. I live in an old house on a little bit of property. It's paid-off but it's still probably something close to $2K/month between property taxes, insurance, utilities/oil, and more or less steady state maintenance--some of which could probably be deferred but...
- bombcar 3y ago
  It's totally worth the exercise (it's not terribly hard) to "rent to yourself" on paper, just to get a feel for everything involved. And like you see, it is much more than you'd expect at first, because so many things only "pop up" every 10/20/30 years. A $20k roof replacement done every 30 years is $60 a month or so, and how many of those kind of things are hiding in a house? Hint: the depreciation tables from the IRS are not a gift ...
  - ghaff 3y ago
    I used to (half-)joke that had I known how much work and money my house was going to be, I'd probably just have gone with a newer condo. I agree with the points upthread that a lot of people like the idea of home ownership but don't appreciate all the ongoing costs--including the amortized costs of unexpected things. (I just paid $1K to get a big tree that came down dealt with which fortunately didn't cause any actual damage.
    - skyyler 3y ago
      I do appreciate that your fantasy alternative to house ownership is owning a condo and not renting an apartment. The difference is single family unit vs shared walls, not owning vs renting. In ideal situations, I think almost everyone would prefer owning over renting.
      - ghaff 3y ago
        >In ideal situations, I think almost everyone would prefer owning over renting. I don't think that's true at all especially for people earlier in life/career. Even had I had more money in a brokerage account, I'm pretty sure I wouldn't have made a home purchase (whether single family house or condo) before I did. And I don't think that's all that unusual for people 10 years out of school or so. Yes, I was at a point when I could afford it but I was also mentally ready to put down some more roots.
        skyyler 3y ago
        I just think the difficulty of selling is a bit over-stated when talking about reasons people rent. I really do believe the large majority of people renting are doing so because they can't afford to buy.

skyyler 3y ago

>88% of Americans would rather own a home than rent. Specifically, 76% of renters would rather own a home, but only 2% of homeowners would rather rent. https://www.lendingtree.com/home/mortgage/homeownership-renting-survey/ https://www.lendingtree.com/home/mortgage/homeownership-rent... Pretty clear to me.

sgerenser 3y ago
That’s a completely dumb statistic since it doesn’t talk about the cost. Of course someone would rather have something rather than nothing, if the something cost nothing. In reality, if the “something” cost $1 Million and only saved you $2500/mo, is it actually preferred?
- skyyler 3y ago
  "Cost" Paying rent instead of a mortgage is a cost. If the rent is bringing in less money than the upkeep costs of the property, why is the landlord renting it out? There's an entire segment of the market that is priced out of buying. That doesn't mean they want to rent.