Two numbers that show how badly America’s middle class is hurting

[Exterous]

How can anyone not want the freedom and security of owning a home?

Not everyone wants the freedom of being tied to an illiquid asset. Clearly they don't understand how liberating the freedom of being required to pay mortgage payments for the next 15 to 30 years is!

Many see housing as restricting their freedom - particularly of movement\re-location.

Or perhaps they like the security of knowing that they never have to worry about paying for major repairs. No worries about how much the roof replacement is going to eat into their savings. This grants a greater freedom of finances afforded by knowing what housing costs are going to be for the term of the contract and the security that by and large those won't change

 

[BoberFett]

Don't forget the freedom to be stuck in a home that you're underwater on because the economy tanked.

 

[smackababy]

Two numbers that show how badly America’s middle class is hurting:

1) The number of threads where the OP is dmcowen674

2) The number of posts by dmcowen674 with the words "middle" and "class".

The only people that are hurting are those that read these threads.

 

[zanejohnson]

i have more work than i can do right now...

 

[OILFIELDTRASH]

i have more work than i can do right now...

You meant more than you can smoke right?

 

[Victorian Gray]

Explain to me how someone could not want a home?

That is unless those same people are living with mom and dad and do not want the responsibility of a house note.

There is no feeling in the world like having a paid for home. It creates a sense of freedom. Even if you can not afford food, power is cut off,,,,, whatever happens, you still have a place to call your own, and a place to sleep.

How can anyone not want the freedom and security of owning a home?

Never owned a house. Never wanted to. Never missed owning one. I'm 63 and I promise, I'm not living with mom and dad.

Gee, who'd a thunk? Different people are different.

 

[s0me0nesmind1]

Being tied to property is freedom?

I've owned several homes. I'm renting a townhome now and it's fantastic.

And LOL at always having someplace to sleep. If you can't even afford to pay for electricity, then you sure as hell aren't going to be in the property for very long with the county banging on the door wondering where their property taxes are.

Oh, and of course it takes 30+ years of being tied to a mortgage for most people to own a home outright. Yeah, so much freedom.

For toolbags like yourself that feel you need a mortgage that ACTUALLY does take you 30 years to pay off....

We are currently on schedule to pay off our mortgage at 7 years.


It's not about owning a home and much more about not tossing money into a garbage can month after month. You know you can live in an apartment, live like you are in an apartment - yet own the property over time? My wife takes a look back at her parents who jumped apartments for 30 years thinking of the number of homes they could have owned.... paying $1400-1800 rent month after month after month after month. There are apartments that offer ownership - condo's that have ownership, townhomes, etc..

 

[dmcowen674]

If you are the "working poor" here's some advice from somebody you think is rich: Get off your ass an improve your life. 53,000 posts of time wasted on the internet instead of doing something about your situation. Whine some more Dave while you suck on the Govt. teat.

Very strange post. Perhaps you missed the part "working poor". I work my ass off and do not get a penny off the Govt tit.

 

[Matt1970]

$1200/month in rent or $1000/month to own the same house, does it make sense to rent?

 

[TerryMathews]

$1200/month in rent or $1000/month to own the same house, does it make sense to rent?

Assuming your $1000 is TCO, its a no brainer if you want to keep it.

I'm willing to wager its not TCO. Is it P&I? PITI?

 

[Matt1970]

Assuming your $1000 is TCO, its a no brainer if you want to keep it.

I'm willing to wager its not TCO. Is it P&I? PITI?

That's your basic mortgage including taxes on a 100K house so that is basically everything. Around here that house would typically rent for around $1200/month. After 30 years of a mortgage you have a $100K house to show for it. After 30 years of renting you have absolutely nothing. It's beyond a no-brainer. Not only that, after 30 years you will still need to keep shelling out that $1200/month.

 

[TerryMathews]

That's your basic mortgage including taxes on a 100K house so that is basically everything. Around here that house would typically rent for around $1200/month. After 30 years of a mortgage you have a $100K house to show for it. After 30 years of renting you have absolutely nothing. It's beyond a no-brainer. Not only that, after 30 years you will still need to keep shelling out that $1200/month.

That's not a no brainer.

#1-are any utilities included in the rent? Typically rent includes something
#2-youre not accounting for any PM in the purchase scenario. Over a 30 year term, you're going to be in to 3 water heaters, 4 washers and dryers, a fridge, and a roof (on average). That would be optimistic, as any homeowner will tell you. Other things go wrong.
#3-you said taxes, so I'm assuming no insurance? Tack on at least another $50/month for homeowners.

I'm all for home ownership, but many people don't take into account TCO and end up losing everything when something catastrophic happens.

 

[Zaap]

Over a 30 year term, you're going to be in to 3 water heaters, 4 washers and dryers, a fridge, and a roof (on average). That would be optimistic, as any homeowner will tell you. Other things go wrong.

Small price to pay for 30 years worth of equity. (along with all the usual pitfalls of home ownership) Unless you bought on swampland or the middle of a desert that's gonna add up nicely.

While home ownership isn't for everyone, and renting can have its advantages, personally I'll take owning any day of the week.

It's been my experience many people who've gone underwater were in some way unrealistic to begin with. ("Sure thing! 700k for this 1br/1bth cracker box in the hood is an excellent idea!") A lot of people were caught up (and still are) in the whole stupid "flip it" craze where just slapping on some paint and a new kitchen to sell for $100k profit until the median price of any house was past mere mortal levels of affordability. There always was and always will be a bottom drop out effect to that, and the biggest suckers will get stuck holding the bag.

But again, unless you bought on swampland in a crack hood, I don't really see "losing everything." Even after the idiotic flippers crash the market and people who fell for it go "underwater" once sanity returns most properties will return to a fair market value. (All the smart people will of course buy during the low points of this cycle but I'm talking the average buyer.)

Several people I know who were screaming like banshees a few years ago at being upside down have since kicked back and enjoyed a huge resale profit, or have themselves a nice income property.

 

[Exterous]

$1200/month in rent or $1000/month to own the same house, does it make sense to rent?

This is a very restrictive example. I doubt that is the only house up for rent in an area so why are you restricted to a single option? Perhaps you would rent the one a subdivision over thats $950/month? Or rent a condo instead for $700/month?

Your example may work in some areas but there are also plenty of places in the country where your example fails because there are acceptable rental options that are much cheaper than a house

Small price to pay for 30 years worth of equity. (along with all the usual pitfalls of home ownership) Unless you bought on swampland or the middle of a desert that's gonna add up nicely.

Nicely compared to what? Maybe doing nothing but if you want to talk about investments, equity and returns the average Real Estate holding doesn't do that well. Yale professor Robert Shiller puts it at about 0.2% since the 1890s in inflation adjusted numbers. So you could say that a person is forced to save for a small gain with a mortgage but there are far better options that average quite a bit more than 0.2%

 

[IndyColtsFan]

It's not a failure for the rich elite especially those in here.

There are very few "rich elites" that frequent AT.

I make about 70% more today than I did in 2009, but that's because I took a chance and changed jobs last year and went into consulting. It may not last forever but it was worth the risk and I am hardly a rich elite.

You really should do something about your jealousy problem.

 

[IndyColtsFan]

A rhetorical question that everyone already knows the answer to. No. Dave's barely sentient enough to look both ways before crossing the street.

:biggrin:

 

[Texashiker]

Never owned a house. Never wanted to. Never missed owning one. I'm 63 and I promise, I'm not living with mom and dad.

Gee, who'd a thunk? Different people are different.

I just could not imagine retiring and having to pay rent every month.

 

[TerryMathews]

Small price to pay for 30 years worth of equity. (along with all the usual pitfalls of home ownership) Unless you bought on swampland or the middle of a desert that's gonna add up nicely.

While home ownership isn't for everyone, and renting can have its advantages, personally I'll take owning any day of the week.

It's been my experience many people who've gone underwater were in some way unrealistic to begin with. ("Sure thing! 700k for this 1br/1bth cracker box in the hood is an excellent idea!") A lot of people were caught up (and still are) in the whole stupid "flip it" craze where just slapping on some paint and a new kitchen to sell for $100k profit until the median price of any house was past mere mortal levels of affordability. There always was and always will be a bottom drop out effect to that, and the biggest suckers will get stuck holding the bag.

But again, unless you bought on swampland in a crack hood, I don't really see "losing everything." Even after the idiotic flippers crash the market and people who fell for it go "underwater" once sanity returns most properties will return to a fair market value. (All the smart people will of course buy during the low points of this cycle but I'm talking the average buyer.)

Several people I know who were screaming like banshees a few years ago at being upside down have since kicked back and enjoyed a huge resale profit, or have themselves a nice income property.

Your post seems to operate under the notion I am leaning towards renting, even though I explicitly stated I was not.

The example is unrealistic. There would be a larger spread in those two figures.

 

[blake0812]

I just could not imagine retiring and having to pay rent every month.

Hell I can't imagine a 63 old guy on forums

 

[s0me0nesmind1]

That's not a no brainer.

#1-are any utilities included in the rent? Typically rent includes something
#2-youre not accounting for any PM in the purchase scenario. Over a 30 year term, you're going to be in to 3 water heaters, 4 washers and dryers, a fridge, and a roof (on average). That would be optimistic, as any homeowner will tell you. Other things go wrong.
#3-you said taxes, so I'm assuming no insurance? Tack on at least another $50/month for homeowners.

I'm all for home ownership, but many people don't take into account TCO and end up losing everything when something catastrophic happens.

1. WRONG. Rent typically includes Cable TV. WEEEE Congraats on your BASIC cable. Want HBO? Sucks to be you, you will need to pay for advanced. That aside, Rent doesn't typically include electricity - which is going to be your main cost in a house or apartment. Gas/Water will depend on your apartment, but both are small bills compared to electricity.

2. Maintenance? Yes, that is a different subject altogether. At the same time, this is under an assumption they aren't the appliances you supplied to begin with. If your apartment doesn't have a washer/dryer, guess what? You have to take your clothes somewhere to get it done. Hate the washer/dryer/fridge your apartment has? Sucks balls right? Tough tits, it's your apartments. Enjoy having your clothes smell like a wet dick every time they come out.

3. Insurance? what do you think is included in your monthly rent payment you silly nit wit? Nice try.

 

[TerryMathews]

1. WRONG. Rent typically includes Cable TV. WEEEE Congraats on your BASIC cable. Want HBO? Sucks to be you, you will need to pay for advanced. That aside, Rent doesn't typically include electricity - which is going to be your main cost in a house or apartment. Gas/Water will depend on your apartment, but both are small bills compared to electricity.

2. Maintenance? Yes, that is a different subject altogether. At the same time, this is under an assumption they aren't the appliances you supplied to begin with. If your apartment doesn't have a washer/dryer, guess what? You have to take your clothes somewhere to get it done. Hate the washer/dryer/fridge your apartment has? Sucks balls right? Tough tits, it's your apartments. Enjoy having your clothes smell like a wet dick every time they come out.

3. Insurance? what do you think is included in your monthly rent payment you silly nit wit? Nice try.

Wow, what are you 12?

Newsflash: if you're financing you are required to maintain homeowners insurance (and potentially flood) which is a non-inconsequential amount and far higher than renters insurance.

Depending on the belongings, renters is typically $100-$200/yr compared with $800+ on homeowners.

 

[Zaap]

Nicely compared to what? Maybe doing nothing but if you want to talk about investments, equity and returns the average Real Estate holding doesn't do that well. Yale professor Robert Shiller puts it at about 0.2% since the 1890s in inflation adjusted numbers. So you could say that a person is forced to save for a small gain with a mortgage but there are far better options that average quite a bit more than 0.2%

Well of course there are better investments, but we were talking renting vs. owning, not owning vs. other investments.

If most renters are investing as much in diversified, well managed investments as the average homeowner has equity in a property they keep for 30 years- then more power to them.

 

[Zaap]

Your post seems to operate under the notion I am leaning towards renting, even though I explicitly stated I was not.

I dont really give a rat what you're leaning towards. Has squat to do with jack.

The example is unrealistic. There would be a larger spread in those two figures.

What example? What figures? Sounds like you don't understand a word of my post. No biggie.

 

[Zaap]

1. WRONG. Rent typically includes Cable TV.

That must be something new. (Or something people have to offer in less than ideal rental areas.) In my renting days I never saw anything that includes Cable TV. And as a landlord... the F if I'm paying for anyone's cable or any other non-essential utilities.

 

[Anubis]

That's not a no brainer.

#1-are any utilities included in the rent? Typically rent includes something
#2-youre not accounting for any PM in the purchase scenario. Over a 30 year term, you're going to be in to 3 water heaters, 4 washers and dryers, a fridge, and a roof (on average). That would be optimistic, as any homeowner will tell you. Other things go wrong.
#3-you said taxes, so I'm assuming no insurance? Tack on at least another $50/month for homeowners.

I'm all for home ownership, but many people don't take into account TCO and end up losing everything when something catastrophic happens.

1) no rent most often includes nothing, really nice places may include water or electric, but that's not common or a given. you will be adding in for Heat and water, which will be gas/elec
2) this is mostly true but depends on what's in your house. you can get more years out of good washers and dryers and not all houses have a hot water heater (direct fire units last a lot longer)
3) correct here as well, homeowners is not super cheap and neither is flood insurance if you have to get that. also property tax can be very expensive depending on where you live