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longhaired freaky person asked:
I really feel for people who were taken in by the homeownership sales pitch. Who wouldn’t want to own their own home and feel sure it was going to appreciate.
I really feel for people who were taken in by the homeownership sales pitch. Who wouldn’t want to own their own home and feel sure it was going to appreciate.
But the reality is, for the majority of working class Americans, they always be renters, and they need rent control to keep their housing costs in line.
Tags: Housing Costs, Mortgage Foreclosures, Rent Control
May 29th, 2007 |
May 31st, 2007 at 8:27 pm
No, these are not related.
June 2nd, 2007 at 11:27 am
Makes me glad I got the hell out of that country before it bankrupt me!!!!!!!
June 4th, 2007 at 6:17 pm
No. Socialist control over the market ruins the market. Remember when the Government tried to control gas prices? People just need to not be stupid with their money. Sorry to sound harsh, but that is the truth.
June 6th, 2007 at 7:39 am
Rent control is a horrible idea. It artificially keeps the rent of long term renters low so that the rents for new renters are artificially inflated. What about the guy who owns the building? His taxes and expenses go up every year, he should be allowed to occasionally increase the rent to cover some of these expenses.
June 9th, 2007 at 3:32 pm
I don’t understand the link
June 10th, 2007 at 8:51 pm
Actually rent control has been a disaster. Cities like SF LA NY and Boston all had rent control policies and all it did was create a surge in rent and real estate prices. Basically rent control was one of the reasons people went into home ownership.
June 11th, 2007 at 7:48 am
It makes me wish people wouldn’t buy houses they can’t afford, driving up the real estate market superficially…
June 14th, 2007 at 6:19 am
70% of Americans now own what they are living in.
Most of the balance are either living with someone who does own the domicile, are too young or make too much money to qualify for rent control.
The premise of the question is based on erroneous information.
June 15th, 2007 at 3:19 pm
Nope. It makes me glad that my husband and I used financial responsibility when choosing a house and only bought as much house as we could afford and were smart enough to get a fixed rate mortgage.
June 18th, 2007 at 2:51 pm
It makes me grateful to have found a home loan with a fixed-rate mortgage within the past few months, and to have stopped paying rent.
I was paying nearly $1200 a month for a one-bedroom apartment in a suburb.
That’s asinine.
I feel for those who have gotten suckered into the adjustable-rate mortgages.
June 18th, 2007 at 8:39 pm
I own my own condo now. Amazing what you can do when you put your head to the grind stone and use common sense. BTW,I was brought up in a working class family.
June 19th, 2007 at 11:47 pm
Owning a home and renting a home is two different things.
June 21st, 2007 at 7:30 pm
70% of people do not own their own home.. the banks own them. Ask any homeowner who owns their house.
June 24th, 2007 at 9:52 am
Longhair, over 69% of American households own their homes. This is up 10% in 30 years.
And the market has given back only the gains made since 2004-5, and in many markets the prices are stable or still increasing, just at a slower rate, and it is taking longer to sell a home.
And it doesn’t matter if the value appreciates a great deal. It’s a leveraged investment. If you buy a house for $500K with a $400K mortgage you pay $100K down. Over time you build equity - and someday you own the place and the payments END, unlike rent payments.
Now, if you borrow at a temporary, low short-term rate, to enable you to make payments on a larger house than you could afford at a fixed, higher rate, then when those short-term rates rise, you’re squeezed - but you make that decision, you take that risk.
The reason the savings rate is zero or negative is only that mortgage principal payments do not count as savings even though you ARE building your balance sheet. If you include those payments both now and historically, “savings” rate is actually way up.
And this is a leveraged investment that should only be made once - once you’ve built up equity I think you’re much better off selling high and then renting and staying liquid.
This is what I have done. “Sold” - well, got divorced, in 2005 and am being bought out of the house based on the appraised value in 2005, with a deemed appreciation of 6% not taxed on the portion of my equity that I have yet to receive, since my name’s still on the deed and the mortgage (otherwise she’d have to refinance).
My plan is to wait for the market volatility to level off, keep the house money I have to date on the sidelines, invest what I can save in the market, become a better value investor, and then invest the house money.
And saying “the bank owns the home” is silly - it’s a leveraged investment - it’s like saying the mortgage bondholders own the power plant. Funny it doesn’t say that on NStar’s 10-K….
Besides - rent control would not make you happy - - it sounds like you want a larger stock of rentable units and price ceilings cause shortages.
June 24th, 2007 at 7:47 pm
Wow…you made a valiant effort and came up very short.
Home ownership is great, but you have to go into it educated enough to know that a 7/1 loan is not a fixed rate, and that an interest only loan is a bad idea. You have to actually read your baloon rider, and you have to look at the caps on your ARM rider. You have to understand that a 1 yr lookback is preferable to a 1 month and that if you get a 1yr ARM DSI baloon loan with a 1 month look back it if virtually impossible to ever pay off your loan. You also have to understand that the amount of money needed in your escrow (for insurance and taxes) will increase every year. Then know that if you screw up at all you can get huge fees, most of which accrue interest as well. Also add in that many compaines have been doing 100% mortgages, or just 80/20’s where you arent having to put anything down. As soon as you buy your house you’re already upside down on it since youve had to finance all the closing costs and housing values have been artificially inflated in most areas. This is a recipe for bankruptcy and foreclosure (which costs tons of money for the finance company also, so its a terrible idea) rather than being a recipe for home ownership.
The reason theyve been doing it is because the companies know they can set you up with a loan you cant pay back, then sell it to another company. That way the second company is the one who ends up losing all the money.
Rent control is not the answer, that just screws over the property owners and makes it preferable to have slums instead of keeping your buildings up.
The proper answer is enough education so that people dont get screwed on their mortgages. Then change the laws so that 5/1 and 7/1 loans can no longer be refered to as ‘fixed rates’ and people need to start reading their riders. When the lenders lie and the people dont understand the terminology-we’re screwed.
June 25th, 2007 at 7:31 pm
Actually, foreclosure rates are up, because many homeowners got an adjustable rate mortgage(ARM), the interest rate varies, so if the interest rate rises your monthly mortgage goes up. People with a fixed mortgage are less likely to go into foreclosure. On a separate note, a mortgage and rent control are completely unrelated.
The second part of the problem is that many Americans like to live above their means, thanks to easy credit and a constant bombardment of advertisements telling us to buy crap we don’t need or can afford, but would be cool to have.