With single family homes roughly tied with inflation, also consider not paying rent to that equation. As also said; it’s forced savings. You get to the end of the line with substantial equity.
Why do rents go up in the first place? Why don’t owners have to pay those costs if they have no one to pass them on to?
That’s exactly my point. That’s a lot of what the value is and we can just duplicate that by saving on our own with a bit of discipline.
“basically” is doing a lot of work there. Yes your mortgage is fixed, but taxes, maintenance, and insurance will rise with inflation and if you don’t have a tenant to pass those costs on to, then you, the owner will be on the hook.
I’m not saying that there aren’t benefits to ownership. It’s great. I like it. I just don’t think the differential between owning and renting is quite as big as advertised. Hence, my position that owning is overrated.
I expect more flaming for this boiling take. Carry on.
You really think CW is lamenting his inability to rent because he is missing out on a forced savings plan?
You’re obviously right on the merits, we are basically arguing about psychology.
Almost all people would rather have a paid off million dollar house than a million dollars in VTSAX even though that’s pretty obviously silly.
Supply and demand, rising housing prices. Owners don’t have to pay higher costs because their mortgage payment is fixed. The portion they do have to pay (like higher maintenance/upkeep) is only a very small percentage of the overall cost to own. Plus they benefit from rising housing prices.
I still think people downplaying the fact that you actually can be loaned a massive amount of capital to buy a home and pretty much no normal early career people have access to that much capital in any other setting so it’s irrelevant if something returns better than it
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Arguing with you about this is like arguing with a Christian about religion. They just keep trying to use the bible as a source, and if allowed will claim it’s the only source with any legitimacy. The issue here is what the stats you keep pointing at are actually measuring.
I’m going to need you to go do some actual research into the criticisms of the mainstream economic stats (there are many many very valid criticisms out there from the kind of academic sources you respect) before continuing this conversation. This is one of those situations where the economic machine can be fully jammed and on fire but still be outputting clean happy diagnostics. That’s because the diagnostic system is busted too. This isn’t a coincidence as overreliance on those economic stats is how you ended up making the choices that broke the machine.
You want this to be simple but it’s not. You want economics to be right but it’s in just about the worst place of any academic discipline I know at all well. There’s a full blown crisis in the discipline about this stuff and it’s all very controversial.
You’re literally arguing with a worldview that’s 20 years out of date. At least. In the real world economists have had massively too much influence on economic policy over the last few decades and have been a major contributing factor in helping the oligarchs launder wild inequality into a good thing. And now we’re well past diminishing returns on every stat to the point where making GDP go up or the stock market go up barely registers with anyone who isn’t in the top 10% of the population by income… and even there the participation in the upside goes up exponentially as you climb the pyramid.
Separating that out takes more work than switching from mean to median income lol. That’s literally just step 1 of 311.
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When my then-GF and I bought our place in 2009, the government just straight up gave us $8000.
Hell yeah, we took it. But I do feel bad because that opportunity ain’t happening again anytime soon.
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After taxes it won’t be enough.
Not anymore for most people. The way they rewrote the Tax code in 2017 makes it not make sense to itemize to get this capped deduction unless you’re already itemizing because you own a business or whatever.
Lol yeah true, but still a good down payment after taxes.
You can bring some actual citations or data any time, but lecturing me as some sort of faith based argument when I got all the data and you got…. I’m not sure tbh, is farcical.
Btw those shitty mainstream economists managed to control inflation without causing a recession while hitting real wage growth with the uncertainty of a major European war and pandemic. Put some respect on their names please
Which benefits…you.
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I get why you don’t want to address any of the points a few of us have made, it’s a lot easier to beat the drum of the economic indicators. This is a great example of EXACTLY why the economic indicators were manipulated over time. So rich people could tell everyone else to look at the official indicators and fuck off with their complaining.
Really up to you how much you care about any of that.
But yeah if Biden runs on telling people who are getting the shit end of the deal that the deal is awesome, that’s going to be a risky strategy.
There’s a short coherent explanation of why GDP is garbage by a nobel prize winner.
I haven’t read this one fully but the skim seems about right: https://fee.org/articles/is-the-unemployment-rate-a-deceptive-statistic/ That’s on unemployment. Labor force participation rate is a better stat in that it tells you something you could actually use to do useful analysis, although it has its own flaws with how it interacts with different demographics.
The issue with CPI is that the basket has the cost of housing/food underweight in a significant way because the basket, while descriptive of the whole population, is wildly inaccurate for any particular consumer most especially on things that can crowd out other kinds of spending. Rent, food, fuel, healthcare and in the long run education are all spending of this type. Where this gets the most problematic is in the large differences between the finances of renters and home owners (one groups housing spend is fixed the others very much is not), as well as between different groups divided by earnings. There’s lots of academic journal stuff on this but it’s not especially light reading and not the easiest to search on the internet.
That’s 3 major econometrics that are pretty close to worthless at this point for making any assumptions at all about
You’re also straw manning me in that you’re suggesting I think the fed has done a bad job (Jerome Powell is a lawyer not an economist by the way. The economists have mostly been sure he was going to crash the economy this entire time) in managing this. I do not. I think it was a very difficult hand and they lost the absolute minimum. I also don’t think the lived experience for the median family was at all pleasant and Biden crowing about his victory over inflation (that happened at the expense of their standard of living while corporate profits set new all time records) is a good idea.
It’s not that I think Biden has done a bad job. If anything I think what he and fed have done is kinda brilliant. They forced the end of the cheap money era without totally crashing the economy and Biden has enough fiscal lined up for the next few years to hopefully pull us out before things get so bad they impact upper middle class people+ and actually show in the stats.
But again that isn’t a reason to get up and tell everyone how great things are. That just isn’t how it went for them. Nobody likes hearing that their personal experience and the personal experience of everyone they know isn’t real but some extremely flawed ebitda level stats is real. That doesn’t do anything but make you seem totally out of touch.
The stakes here are high and the possible outcomes included a full blown depression that crashed the global economy for a decade+ and made any action on climate change actually impossible. Nobody ever gets any credit for fading a complete disaster but we missed this particular iceberg by a matter of a few hundred inches. It could have been much much much worse. And at this point I do think we narrowly missed it with some maybe minor damage.
When you actually want to know what’s going on with the bottom 80-90% you have to start looking at things like what the typical normie job pays vs what it costs to pay for things like food, childcare, rent, healthcare, and energy/fuel. What you’re looking to find is how much income they have above what it costs to pay for the bare basics. You also want to look at how many people are homeless nationwide, how many people are using food banks nationwide, and how many people are receiving what levels of government benefits. None of this is an exact science because surprise surprise the data collection on this stuff is pretty weak. It can also vary wildly from one locality to the next and the more you try to aggregate the more risk you run of washing out an actually useful insight because the holes in the strainer were too large.
Bottom line though is that you should be VERY skeptical of any claims economists make about the whole economy. That doesn’t exist except in the imaginations of economists. This is a nation of 330 million people living in 50 different states. It’s a landmass a mere 400k square miles smaller than a very generous definition of Europe. On any given day there are going to be places that are booming and busting sometimes for the same reason. There comes a point where you’ve zoomed so far out you can’t see a single useful thing from that viewpoint. Talking about the whole US economy is a long distance past that point.
The reason why economists don’t like to get into the details is because reality is a goddamn mess and doesn’t produce nice clean math that they can use to get published in an academic journal.
Very bluntly we don’t know enough about micro to even begin to theorize about the macro and I have real doubts about how useful macro even can be. If macro as theorized by academia worked Jpow would have absolutely just obliterated the global capital markets.
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If I were crafting his message, it would be something like… “We avoided complete economic disaster after the pandemic, but that doesn’t mean everything is great for everyone. Unemployment is low, inflation has come back down, and we’re proud of that… but we once again asked the middle class to bear the brunt of the impact, not the wealthy. In fact, the wealthy did better than ever. We need to take these next four years and rebuild the prospects of the middle class. That’s why I’m proposing…”
- Largest first time home buyer tax credit ever
- Middle class tax cuts completely paid for by increased taxes on the wealthy
- Increased childcare tax credits
- More student loan forgiveness
- Increased ACA subsidies/public option
- etc
The bottom half of the country needs a New Deal level bill, or the American Dream is going to die for most of them over the next 15 years.
Needs to also propose straight up fucking the rich. It’s time. Not just higher marginal rates that they don’t pay anyway, make an example of the Sacklers or whatever other ghoulish billionaires poll horribly. This isn’t hard.
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I don’t understand why well-educated people would waste their time arguing with BS.
He snap-blocked me because I wouldn’t label the Israeli invasion as a war crime, and thinks that reading us his resume is supposed to overwhelm us into accepting whatever nonsense he spews.