I know I’m supposed to want it to keep going up as a wealth generator or whatever.
But like… I wouldn’t be able to afford the monthly payments if I bought my house right now and it’s scary. Also none of my friends are buying homes, none of them are even renting full places. Just like renting rooms.
So what are your feelings home owners of lemmy?
I hate that we lost sight of what wealth really is and replaced it with the idea of profit. I bought my house to provide myself with financial security, not profit.
My monthly “rent” (mortgage payment) is locked in for the next 25 years and will not go up. At the end of those 25 years when I’m ready to retire, I’ll have housing with only taxes and insurance payments. THAT is wealth. THAT is what home ownership is meant to be. If housing prices fall, it won’t change my life a bit.
That’s why I bought a house instead of renting. One day it will be paid off, and from that on, as long as I keep paying the property tax nobody can kick me out. They can cut my water and electrcity, but the house and the plot remains mine.
Additionally, if overall house prices go up that does mean that your house becomes more valuable. However, it also means all other houses become more expensive.
So in practice, if you want to move in 10-20 years for whatever reason, it essentially means nothing that your house has gone up in value. All that extra money is going to go to another house which has equally gone up in value.
The value of a house going up means you are technically building wealth, but that wealth is entirely tied up in the house itself. Unless you are intending to become homeless it likely will stay tied up in your house forever.
House prices going up is mostly a good thing for investors. Not so much for people who simply want a place to live.
Except that many people live in their homes until they need assisted living. In which case selling the home nets them more money than they put in to pay for those services. Or consider that home prices raise at different rates in different areas so it’s possible to sell in a hot market and retire to a more cheaper area when you no longer benefit from things like proximity great schools as your children are grown.
Man I wish we could get 25 year fixed rate terms in NZ. Longest anyone would quote me is 5.
Meh I don’t care. We bought a couple years ago when rates were super lower but prices were high. Our mortgage is less than rent would be and we’re not going anywhere for a long time. I think of the house as a place to live, not an investment really. Like a car. It serves a purpose and I’ll use it until I can’t anymore.
Yup the people that are mostly disadvantaged by (and cause) a housing crash are the people that treat houses like stocks.
Same boat. Got a 10 year lock in at ~2% interest and now the rates are more then double that.
Going to do everything we can to keep that rate although we doing extra repayments just in case.
Doing extra payments when you have a 2% loan is just throwing money away. Savings accounts rates are minimum 4% right now - put your extra payments there if you’re super risk adverse. If you’re less risk adverse, buy mutual funds that match the market.
We need a housing market crash. My pocket book be damned. We’ll figure it out. The next generation won’t.
Your pocketbook will be fine, unless you’re flipping houses. The only thing affected by the price of your primary residence is your borrowing power.
i bought my house at the top (two years ago) and no regrets. less about it being an investment and more about having a stable place to call my own that gives me safety and not at the whims of a landlord. i’d quite like it if house prices became more affordable for everyone, the counter intuitive thing to say. 🤷♂️ i was supposed to become a nimby and vote conservative but now i’m more left wing than ever.
Pretty much this. I’m quite content with losing some of my net worth if it means other people don’t have to struggle as much to have their own place to live.
I bought at the peak myself to have stable housing while raising kids.
If house prices just stayed flat until wages caught up and then only increased similar to match wage increases (not inflation) that might be a reasonable compromise between the middle class who have a house and don’t. Those who own will still be paying down a mortgage so increasing your equity that way without being decimated if you have to move. Unfortunately at this point, that could take awhile before wages caught up.
I agree with you. I think property is theft; in an ideal world everyone would have the right to shelter and no one would own land privately. And I also think fear of housing insecurity - including the fear of a landlord extorting or evicting you - is the biggest reason America is obsessed with home ownership and I can’t criticize anybody for pursuing it. The only way to have secure housing in the US today is to own your home, and everyone has a right to secure housing.
Houses should have never been an investment.
Burn the entire fucking thing down.
House is an investment even if you build it entirely by yourself from materials harvested and processed by you. You invest a chunk of your time and effort to build something you expect to “pay you back” in the future, eg. keep you dry and warm when it’s cold outside.
Sounds like an asset to me.
Non-home owner of Lemmy here. I want you all to know that my fondest wish to see the housing market completely implode is strictly not personal.
My only chance to buy a house slipped away a few years ago. House prices have gone up by 50% or more in some locations, and interest rates have more than doubled. What was previously affordable is now completely outside my means to pay for each month.
My last hope now is for a 2008 repeat so I might be able to snag something up for what it’s actually worth. I certainly can’t count on the state or the government to take the housing crisis seriously enough to have them actually build more affordable housing for people to buy and drive the asking prices lower.
I feel this so much. My dad was a general contractor in California during the 2008 crash; we lost 6 houses that were either ready to sell, or still being built. So I personally know the kind of pain and suffering that a housing market crash can cause for certain people. At this point though I have to look out for me and my family, currently renting part of a way-to-small condo in an area where you’d need 3 incomes to afford a mortgage on a house big enough for all 4 of us.
So yeah, crash and burn market. Give me a chance to get us out of here.
It was a gigantic mistake to ever allow homes to become investments. That economic value growth is only possible by limiting the availability of homes near popular areas, which is by definition exclusionary meaning some people must be priced out of having a home in a place with good opportunities.
It’s not just unfair, it’s also inherently unstable.
Absolutely 💯
Yes, and it will cost me some money as I’m getting ready to put mine on the market in the coming months.
But I don’t give a shit, the current conditions are unsustainable and I have great empathy for the generations behind me that are excluded from what is a fucking FOUNDATION of getting a stable life going. The shit has to come tumbling down at some point, otherwise our social structure will continue to degrade. The people who will bitch and moan about it are so out of touch they should be ignored anyway. Bring on the crash.
There are too few people like you in the world. I appreciate your attitude.
Where are you located? How much do you think you’ll lose. 30-40%? Or are you willing to lose even more?
I hope whoever buys from you is appreciative and understands your position too.
Colorado. I’m not going to really lose money over what I paid because I’ve owned it for almost 20 years. But it will be way down from the market high here and I think that’s peachy. I’d guess I’ll make 20% less than if I had sold 1-2 years ago. If the market really does crash like 2008 then 30% or more. But Housing prices have got to come down still, a lot. Banning corporations from owning single family residences would help a ton.
I care more about houses being affordable for everyone than I do about turning a profit. Greed is a huge sickness in our world. Hell I don’t think houses should be an investment vehicle in the first place. It’s a place to live not a goddamn wealth generator.
I mean things can get way worse. Look at Canada and Australia. No sign of a crash in either yet, prices just keep climbing. Homeless encampments and the like were alien to us up until recently. The median Aussie household income is ~$65,000. Homes start at about $600,000 and at that price a lot of them are teardowns, you’d be spending at least $200,000 in repairs.
Banks want 20% down.
It is scary, definitely.
I rent a nice house, I’m lucky. I’ve also not had a holiday in over a decade…
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Non-home owner, currently I could live a hundred lives and never own a home. It must crash, and it must become regulated to prevent this from occurring.
Housing as a wealth generator is a bit of a lie. Prices going up only benefit people or corporations who own multiple homes or those who rent out their homes, and the few people downsizing for retirement by selling their 2500+ sq ft for a small apartment somewhere.
For the regular Joe you always need somewhere to live, so it doesn’t matter if your houses is $100k or $1 million, that money is always going to be tied up in the house and not be spendable.
If anything the prices being high is worse for regular home owners because you’re going to be paying thousands more in interest on the mortgage that goes straight to the banks.
I’m not arguing in favor for house prices going up but just wanted to point out how a lot of people use the value of their home. You can pull out money from your house and your interest payments don’t change when the value of your house goes up.
I’ll give the example of my neighbor. They bought their house 10 years ago at about $250k. Interest rates were around 4.5%. We’re in a location that got really hot during the pandemic and the house value jumped to about $700k. At that moment, they had the same payments as 10 years ago. Then interest rates dropped down below 3%. His balance on the original mortgage is probably about $175k and now he refinances the house with a mortgage of $325k, pays off the old loan, and pockets $150k out of the house. But due to the lower interest rates, his payment is the same as it was 10 years ago. He just has $150k in his pocket. Meanwhile, I’m the schmuck who had to buy the identical house at $700k at 5% and pay 3x for the same house.
Don’t forget the increasing property taxes!
This was my thought, next year my escrow increases by $100 because my property is supposedly 50% more valuable? Nope, it’s a wealth stealer, not a generator.
Let’s also not forget that in a high value market you can’t magically sell a more expensive house and acquire a less expensive house of equal value. You have to downsize and the house of lesser value is still overinflated.
If anything the prices being high is worse for regular home owners because you’re going to be paying thousands more in interest on the mortgage that goes
I always wondered why people never seem to think about this side of the equation.
Your interest rate shouldn’t fluctuate with the housing market, unless you have an Adjustable Rate Mortgage. Most people choose a conventional mortgage where you’re paying interest on the value of the loan you received from the lender, not on the value of the property itself. You can voluntarily refinance the house to get a lower monthly payment if the interest rates go down, but if they go up, you’re insulated from the impact except in the fact that you now likely have less mobility because having to pay a 7% interest rate when you are used to paying your 3.5% rate on a same-value house means you can’t just sell and expect the monthly price you pay to remain the same.
Your taxes and insurance, on the other hand, do quickly balloon out of control if your property suddenly spikes up in value.
Let it crash!
Big housing prices only benefit the people owning multiple homes.
Because it doesn’t matter what the housing cost is if you sell your only home, because you will need to buy a new home at the same cost anyway. Since everyone need a house to live.
Not only that, if you have a small starter house you still benefit from a crash. That 400k house will become 250-300k, while your 180k house will just drop to 130-150k.
As a homeowner, there is nothing to be ready for. Nothing has value unless you’re trying to buy or sell it and I’m doing neither in the near/medium future regardless of the price of my home. I bought before prices went stupid so I feel like it is unlikely any crash will do the value to below what I paid.
Homes should not be considered investments.
Your home rising in value doesn’t benefit you, because you still need to live in one if you sold it, and that home has likely also risen in value. Your house doesn’t grow when its value does. It doesn’t sprout an extra bedroom.
If you own multiple homes, then you can view all but one of them as an investment, as you can sell them when the market is good.
If you own one house and have a mortgage on it, then the market going down is bad because you end up with negative equity.
If you own one house with no mortgage, then the market going up is bad because it’s harder to upgrade. I wouldn’t mind my house being only worth £10,000 if it meant that I could buy my dream house for £20,000.
If you own one house with no mortgage, then the market going up is bad because it’s harder to upgrade.
Unless you’re retiring and downgrading. For those with families who grow up and move away, the house can be seen as an investment if they intend to move into a smaller space once they’re just a couple again.
Of course, that’s assuming their kids don’t have to move back home because of astronomical rent prices and a sizeable wealth gap…
You’re not supposed to own a second one… otherwise you will be literally the devil !!! /s
Your HOME is not an investment. Unless you’re planning to sell and live in a cardboard box.
When you buy a house, you’re essentially locking in your housing costs, which can be especially advantageous if you have a fixed-rate mortgage. Rent, on the other hand, can increase over time. My monthly mortgage payment for a house is already several hundreds less than what my friends are paying for their tiny rental apartments. In about 17 years, my house will be paid off, and then I’ll only have maintenance and utility bills remaining, while my friends will still be paying rent, which probably has increased by quite a lot by that time. I don’t need to sell my house to benefit from investing into it.
This exactly. The 2 things that affect my fixed rate mortgage are property tax, and homeowners insurance. Even those don’t affect the payment much in either direction.
Got it. So when I also limit my exposure to cost increases by switching to a cheaper grocery store, I’m “investing” in groceries.
Ridiculous.
No, that’s just being frugal. Not spending money on something is not investing. Grocery example would be buying in bulk; you pay more for something upfront because it’s going to be cheaper on the long run.
