[patio11]

This comment would be better if you dialed down the invective a few notches. As it is I think your passion gets in the way of seeing reality as it actually is:

home ownership remains an unattainable pipe dream for most people

This is objectively untrue for any sensible definition of "most": 67.4% of inhabited housing units in the US are inhabited by the owner.

Is home ownership going down? No, by any sensible measurement, it is increasing, across all races and most income groups. For folks who are often the have-nots in the US economy, home ownership increased rapidly (did people think "sub prime mortgages" existed solely to inflate bank revenue numbers? The flip side of that coin is giving loans to people who would historically have been classified as too risky for a mortgage gives houses to people who historically would have been too risky to qualify for a mortgage.)

http://en.wikipedia.org/wiki/Homeownership_in_the_United_Sta...

An addition underappreciated side-effect of financial engineering in the last twenty years is that, even post-bubble, down payments have gone from "your life savings" (which, at 20%, they really were) to "optional for many people and often and achievable in 3~5 years of dedicated work" (norms are in flux now, but there are a lot of banks which will take 5% as sufficient skin in the game for a prospective owner with decent credit).

I have no significant disagreement with you regarding the value add by Realtors and the 6% commission structure, although that is not inviolate, particularly in the current climate. (5% of something beats 6% of nothing every day of the week.)

[tptacek]

Did people think "sub prime mortgages" existed solely to inflate bank revenue numbers?

Yes. Read _All The Devils Are Here_ for an excellent exposition about how the subprime market was first invented as a vehicle to get private banks out from under the thumb of Fannie Mae, then turned into a vehicle for boiler room speculation, and then fed back to Fannie Mae. The interests of homeowners were not a primary feature of the development of the subprime market; in fact, one open secret of the phenomenon was how few of those loans actually went to first mortgages on owner-occupied sole residences.

[defen]

> This is objectively untrue for any sensible definition of "most": 67.4% of inhabited housing units in the US are inhabited by the owner.

Are you sure that 67.4% of inhabited housing units in the US are actually inhabited by the owner? If I take out a 30 year loan on a house and then move in, the bank still owns that property. I would expect the number to be significantly lower than 67.4% when you factor in rentals + people living in homes with refinancing or otherwise not-fully-paid-off mortgages. But I don't actually know what the number is or where to find it.

[tptacek]

The bank does not own your mortgaged house. They have a claim on it when it comes time to liquidate. It's easy to see that the homeowner "owns" the house: they can rent it to anyone else at any rate, raising rates as the market changes; the bank is stuck with the terms of the 30 year mortgage.

[defen]

Good point. But there does seem to me (never owned a home) that there is a qualitative difference between someone who owns their home in the clear, and someone who is using their home as collateral for a loan, which I thought the original poster was getting at. I might be way off though.

[tptacek]

Sure there is: one homeowner has a couple hundred thousand dollars of secured debt, and the other doesn't. In neither case is there any practical difference vis a vis the house itself. The homeowner who "owns his home free and clear" can still lose the house owing to any other major debt; there are even states where you are likely to lose your house in a conventional bankruptcy.

[T-hawk]

> It's easy to see that the homeowner "owns" the house:

More to the point, the homeowner is the one exposed to appreciation or depreciation on the open market. The bank has a fixed dollar value worth.

[rmc]

home ownership remains an unattainable pipe dream for most people

This is objectively untrue for any sensible definition of "most": 67.4% of inhabited housing units in the US are inhabited by the owner.

Pedantically, "Most homes are occupied by their owner" is not the same as "Most people own their home"

[shawnee_]

As it is I think your passion gets in the way of seeing reality as it actually is

This is my soapbox issue, yes. But there's no invective here, just a bit of "why!?" b/c I hoped to see a YC company in this industry on the side of the little guys/gals, not the 500 pound gorillas.