Some of the citations are spurious (Los Angeles having the highest density requires a special interpretation of "density") but it's a thought provoking read.
Chicken/egg problem, maybe. With no large capital investment in your life, with no capital appreciation, you care less about stability. You have less of a stake in your continued presence in a community. Not saying a house is an essential for every Good American but the fact that in any revolution you care to list it's the land owners vs everyone else? I mean, that's not a coincidence.
I have wanted a house for as long as I can remember. For many reasons. Because I can do what I want with it, fill it with whatever I want, invite whoever I want over for dinner, and on and on and on. To me a house is status, it's independence, but most importantly, it's control. It's worth the trade off of having to worry about maintenance and such. Each year I get older though and each year the world looks a little weirder and a little less familiar. Jobs and economy, politics and social discourse, technology. 15 years is a long time and in my eyes too long of a time to be in debt to someone. When I don't know what I'm going to look like five, ten, or fifteen years from now, and I certainly don't know what the world is going to look like five, ten, or fifteen years from now, the prospect of a mortgage seems riskier and riskier. Rising home prices don't help, because the higher the price I have to pay for a house, the greater risk I'll take if I take out a loan. 15 years is 120 months. It's 5475 days. It's 131,400 hours. Those months, those days, those hours are all filled with countless moments where your life can change in a way you've never expected. A debt like a home loan is a pretty big risk.
I remember being told that thirty year loans are designed for short term flexibility, because you're able to make smaller payments, thereby giving you more financial breathing room each month. Even though they're "thirty years" you're not supposed to hold them on for that long, they should still be payed off after fifteen years. Is that not true?
That's not true. Everyone gets a 30-year mortgage because that's the pricing model. Everyone sells or refinances because nobody lives in a house for 30 years. When they sell, they take their equity and use it for a downpayment on another 30-year mortgage. You keep doing this until the kids are whelped and you're ready to retire and then you sell the place and use your equity to live off of in a small downsized place in Tucson or Ft. Lauderdale or some shit. Or at least, that's what you're supposed to do. Now, you buy a place and have your brother or a roommate move in. And then you hope you can sell it when you need to move to another city for work. Then you need better schools so you move somewhere else but you can't carry two mortgages so you're renting your place at a loss and hoping you can find somewhere soon but now your parents are sick so they have to sell their place and move in with you and now you're all renting and it's pretty fucked up. but. In the ideal world that the lenders and real estate agents want you to believe in, no you would not pay off a mortgage in 15 years. You'd start a new one. To them, you'd ideally have started three.
Most people don't think about mortgages. Most people also don't hold them simultaneously. Carry one, sell house, pay off, get another. My wife's parents bought a house in '77. They still live in it. My wife bought a house in '00. We still live in it. We didn't for nine years but boy howdy lemme tell ya: I'd much rather have a 2011 mortgage on a 2000 purchase than a 2018 mortgage on a 2018 purchase.
Those same people are the ones who pick a cat loan based on the monthly payment and not their total cost. I'm still a bit miffed that my last car salesman used the "what monthly payment do we need to make this work" line on me.Most people don't think about mortgages.
https://www.edmunds.com/about/press/auto-loan-lengths-reach-all-time-high-according-to-new-edmunds-analysis.html The average auto loan length reached an all-time high of 69.3 months in June — up 6.8 percent from five years ago.
(June being June 2017)
I was tempted to go all “ well, actually...” on this, but I think the questions raised are much more interesting to discuss than the answer proposed. Can the trend of an increasingly unequal, speculative and unreachable housing market be reversed, and how? Can (and should) we give everyone the home they want in the city they want it in? I don’t have a good answer, although it will surprise nobody that I tend to favor dense urban transit/bike-friendly/walkable places. Personally, I feel blessed to be able to rent in the city I wanted to live in. The housing market here is not as awful LA, but some places are getting there with a market dominated by rich and older people. I know more than a few people who spend over half their dual income on rent and utilities and have no wiggle room to save up for a down payment. Housing was the issue during the recent local elections; the good places have become unaffordable for most while the mediocre places are now priced at what the good places were. I’m more and more convinced that this apparently untenable situation will have to break soon, but markets are always unreasonable for a much longer time than they should, so I can just as easily see this going on for much longer. I sure hope not though...
Europeans are used to homeownership because the serf system was destroyed by WWI, then the entrepreneurial class was destroyed by WWII, then the confiscation of Jewish wealth and the injection of the Marshall Plan created a short-term middle class the likes of which Europe had never seen before and will never see again. Americans are used to homeownership because America was frontier prior to WWI, then a massive hub of industrialization through WWII, and then the benefactor of global dominance and a colossal military-industrial complex to oppose the Soviet Union. This created a short-term middle class the likes of which America had never seen before and will never see again. If Americans want homeownership, we need viable livelihood to be possible in the rural areas where housing isn't competitive. If Europeans want homeownership, they need... Shit, I dunno. To move to Spain, I guess. California, Oregon and Washington are geographically and demographically similar to the UK... but economically, OR and WA aren't even needed for the UK to be overshadowed. It's easy enough to say "move to North Dakota" when you don't even really need to change your car tabs. It's quite another when there are five languages between you and opportunity.
I think the reality is that people have to be more ready to live outside the "top 5" cities. I'm from Toronto, and at the current level of housing inflation in my city, will likely never be able to purchase a home. But just outside, their are other communities (Hamilton, Markham, other former small towns) that are seeing a massive influx of younger people looking to start families. 25 years ago they used to be quite small and undeveloped, yet over the last few decades have started on an accelerated path so becoming cities. So while this housing bubble (and yes, despite what the boomers say, I'm very convinced it is) is creating problems within the most dense urban areas, there are numerous opportunities if you're willing to live outside.
We still let them vote so they're not quite serfs yet. The way the GOP is going, give it 5 years--they'll fix that problem. (Full disclosure I know several Republicans who sincerely think that only land owners should be allowed to vote, because "all renters are on welfare." These people are members of my family whom I no longer discuss politics with.)
I had someone tell me they thought only land owners should be able to vote. I think they justified it as "land owners have more at stake" or something. This was back during the Bush administration.