I have NO REGRETS for buying my home. I have 35 acres that I can run around naked on. :eek: However, I bought under what we could afford. Because of that, we could afford to remodel several years later and still be within our means. My mortgage payment is less than half of what these two bozos were paying. What were they thinking??? Maybe toughing it out for a few years and selling and making a small fortune? Probably. I found home (and property) ownership as a path to freedom. I can go outside at any time and enjoy so many things that city living could not offer me.
I won't be judgemental, I'll just toss in my 2c. Bought house in 05 - mortgage was about 30% of gross pay - I was otherwise debt free. 4 years later, work took a shit, I chose to remodel the house before moving in - planned to stay in home for 10 years - end result is this: I spent 150K in the last 4 years between all the interest, remodeling, insurance etc. I want to sell my house now, and the realtor just offered to sell for 30K less than I bought the thing for - and I still owe more than the house will sell for, add fees and make that 50K. So basically I lost about 20K a year owning a home if you factor in tax savings and rent expenses had I rented... The bank will end up with the property in their lap if it doesn't sell by the spring, screw credit - if you don't have the cash, don't buy it. Simple.
Homeownership = a long-term investment with tax advantages and with great potential for long-term capital gains. Of course, if one overleverages one's capital by putting too little down or buying too large a house, then it is difficult to BE a long-term homeowner. And the capital gains for even a long-term homeowner are maximized when one buys at a good price. Buying in a real estate bubble--kind of hard to buy at a good price. Homeownership is not the problem. Rather, it is with the homeowner.
Exactly never buy a house you can't afford and don't fall for that crap about govt making housing affordable all it does is make it easier for banks to make money. FHA should only apply to loans that fall into the national medium price. For instance raising it in California because of high costs only makes it easier for that scum bag realtor to sell it to you at a price that's not realistic. There is only one loan that should be no money down and that is a VA loan. If you serve this country you deserve a break, the rest of the people that want the same thing you better enlist to get that right because there is no entitlements.
From a site, Free By 50 which uses Shiller's housing data. Home price appreciation 1890 to 2007 3.44% 1900 to 2007 4.22% 1920 to 2007 4.03% 1948 to 2007 4.87% Or roughly splitting up before WWII and after: 1890 to 1939 0.75% 1940 to 2007 5.45% Or the past 100 years, 1907 to 2007 : 3.78% If you break it down into decade chunks we get: 1890's 0.53% 1900's 1.40% 1910's 3.30% 1920's -0.70% 1930's -0.45% 1940's 8.16% 1950's 2.67% 1960's 2.57% 1970's 8.12% 1980's 5.86% 1990's 2.84% 2000+ 9.27% -------------- So you live in an asset that appreciates 4-5% in the modern era, and if its in an area that's not dependent on manufacturing, that's even better. This doesn't appear to be slavery to me.
long term home estimated appreciation is similar to inflation after factoring in the maintenance costs and taxation. if financed, any eventual benefit would be consumed entirely by cost of money, brining the whole equation to negative sum. hence, one would be better off investing in the dow jones and living in a rented place. mainstream media will do whatever it takes to perpetuate the myth of home ownership, as a solid and safe investment, because the banks behind the idea derive a big portion of their revenues from this line of business.
Inflation by decade: It appears the consumable (house) holds up very well to inflation. The part of the housing equation that some forget/ignore is the utility aspect of it. Who the hell wants to live in a cardboard box (apartment)? Hell, I'd rather own a second house and rent it out than plowing it into the stock market.
Not for me. I bought my home in 1999 and it is paid off. No mortgage or rent. Just the taxes and insurance, water and electricity. I did a 15 year loan and added extra to the principal.
Guess that was a mistake. Assuming that you bought house for 400K and it is paid-off now. Aren't you exposed to inflation deflation problem? If bank owns 70% of my house and I owe 280K to bank. FED prints money, dollar goes down, my home is still 400K but dollar has lost it's buying power. But hey, I got only 30% hit and bank took 70% hit, didn't they? Guess paying-off something which was at below 5% rate and was also giving you tax benefit wasn't a good idea if you do the math. But it feels good to be mortage free.
Housing not likely to "appreciate" as before.... certainly not in real terms. And houses might become a big liability... escalating property taxes being a source of revenue for deficit running governments...