A House Can Be an Anchor
Homeownership continues to make sense for many Americans. But for those whose income is limited or who are still building their careers, a house can be an anchor than limits their ability to move to where jobs are.
Richard Florida argues that national economic development and homeownership are negatively related. Factors such as diversity of investment options and urbanization and the unwillingness to go into debt so soon into one’s career all factor in.
Neither about renting or owning but rather both, Sightline Daily’s survey of small houses added either as extensions to existing houses or built on a parcel of an existing lot warms the heart of this former small apartment renter. One couple with two children say they make living in a small house work, but I wonder how they will do that when the kids grow up. It’s still a nice illustration of pent-up supply (the example of property holders who can shave years off their mortgage by renting out part of their lot means both renters and owners can have their cake) and how changes to government policies can both make it easier for people to find what they what while furthering policy goals.
A year old but new to us here at Fuck Yeah Renting!, Emily Badger writes about the anxiety of renting in an economy and culture that prizes homeownership:
What no economist has measured is this: There’s something fundamentally demeaning about being a renter, about having to ask permission to change the showerhead, about having to mentally deduct future losses from deposit checks for each nail hammered into the wall to hang family photos. There’s something degrading about the annual rent increase that comes with this implied taunt to its captive audience: What are you going to do, move out?
Other stories, one about drilling a hole so she could hang her pots and pans and another where an oregano plant disappears from the communal planting area, drive home the point that renting limits the ability of the renter to make the place their own.
The perspectives from the landlords and renters living outside of America are also worth reading.
Benjamin Wagler lists 4 things to consider when deciding to buy or rent:
- It depends on your individual situation
- It depends on where you’re living
- It depends on the difference between rent and buying in your area
- It depends on your lifestyle
Joshi Herrmann has some tips for UK renters wishing to make their first downpayment on a house in London:
- live frugally
- get a second job (or a better first one)
- don’t have kids
- live with your parents
- early inheritance from your parents
Walking Away Is Pretty Priceless
Owned property is difficult to share. You have to absorb the cost your self, with less flexibility about roommate and other arrangements. And with owned property you are stuck there. I could purchase a place in Chicago for what I pay in rent, but it would be half as nice, in a terrible neighborhood, and I would be stuck with it forever. The ability to walk away is pretty priceless at this point.
Commenter norabee responding to What to Consider in Deciding Whether to Rent or Buy by Richard Florida.
(Thanks again, Karen.)
A report on a couple who can probably afford to buy, but are advised to rent.
Young People and Buying vs. Renting
To understand why young people are buying fewer homes, begin by asking yourself: What do you need to buy a home? We’ll start with three basics. You need a mortgage. You need income for the downpayment. And you probably need a spouse. Controlling for income, gender, and education, a married person is 23% more likely to own compared to someone who is not married, and many more couples buy a home as they are preparing to wed.
So writes Derek Thompson in "The End of Ownership: Why Aren’t Young People Buying More Houses?" for Atlantic Cities. Megan McArdle counters with some reasons why young people might be interested in buying.