[whimsicalism]

America doesn't need more urban sprawl and the stigma against renting is ridiculous.

> Rent payments go down a black hole. Mortgage payments at least result in an actual asset, and eventually end.

Generally making rent payments and investing the money you would have spent on the house in the stock market will get you further ahead in terms of ownership stake than just making payments on a mortgage. The only reason this is not true is due to massive, massive government subsidies of owners at the expense of renters (ie. Fannie Mae/Freddie Mac acting as lenders of last resort for nonsense mortgages that no private bank would have ever granted without this support).

[t-writescode]

> Generally making rent payments and investing the money you would have spent on the house in the stock market will get you further ahead in terms of ownership stake than just making payments on a mortgage.

This cannot be accurate.

1: rentals are often as much or more expensive than a mortgage (the problem is the down payment)

2: rental prices *constantly* go up, despite nothing changing in the house or apartment you're living in. Mortgages stay flat (in the US), so raises, etc, aren't eaten up by a cost of housing that exceeds the local inflation rate.

[whimsicalism]

> 1: rentals are often as much or more expensive than a mortgage (the problem is the down payment)

Not now, no.

You have to compare the money you would spent on the down payment (and excess from mortgage) to the returns you would get from investing that money directly.

And as I said, the only reason mortgages are so cheap is due to the massive, massive amount of government subsidy in favor of owners - if owners were remotely exposed to the true cost of borrowing, it would not even be particularly close.

[pandaman]

Do you realize the stocks had such a rally also due to the massive, massive amount of government subsidy? The same "untrue" cost of borrowing drove them up just like all other assets, including the real estate.

[HumblyTossed]

> America doesn't need more urban sprawl and the stigma against renting is ridiculous.

Not that there isn't a stigma against renting, but, does one really want to be renting during retirement when most people's income is fixed? And yes, there are ongoing costs to ownership, but you can possibly plan for those better. You can't really plan for your land lord to raise rent by 50% because the media tells him the market is hot and he can do that.

[whimsicalism]

Yes, there are downsides of the flexibility that renting provides.

So if you feel a need to buy a home, you should be able to do it. But the government should not be propping up unsustainable markets at considerable risk to the rest of us to let you do so - if you can afford a home and get a bank to lend you the money and assume the risk, you should be able to. But I am not sacrificing my ability to afford quality housing to give you government-guaranteed mortgages, it's a massive moral hazard.

If you need the fixed-income security, pay for it.

[supertrope]

It depends. While mortgages lock in a monthly payment you must first save up a down payment. The same cash flow directed into the stock market would also build "equity." If one does not move within seven years buying housing is better.

[whimsicalism]

> buying housing is better.

Not sure if that is true with current rates - and also is due to government policy propping up cheap money to homebuyers.

As I've said, no bank in their right mind would give out the mortgages they are right now if they didn't know they could turn around and sell it straight to Fannie & Freddie

[supertrope]

Indeed. Without Fannie Mae and Freddie Mac (government sponsored enterprises) there would not be a 30 year mortgage. Mortgages would probably adjust the rate every five years.

[jncfhnb]

Nonsense claim.

A mortgage is an extremely leveraged investment at preferable rates. Your statement is extremely sensitive to the change in home prices (generally rising), the change in stock prices, and interest rates.

My home has been making an unrealized 11% per year (disgusting) on a much larger pool of money than I actually had to invest. The economics of renting and investing the leftovers are deeply unfavorable.

[TimPC]

The problem with this argument is that getting a mortgage locks in your housing payments. If you look at the growth in rents over 25 years you don’t come out ahead investing. In year 25 of my mortgage I’m paying the same amount as in year one but in many markets in the US rent has gone up 4.7%/year and that means rent is 315% of what it used to be. When rent goes from $2000/month to $6300/month and your mortgage was $4000/month you aren’t coming out ahead by taking $2300/month out of savings each month to pay rent.

[guestbest]

If preference against renting is cultural, what cultures celebrate renting over ownership?

[medvezhenok]

Renting is much more common in Europe and renters have significantly more rights. This is because much more wealth in Europe is generational (although we are quickly moving in that direction in the U.S. as well).

Some European countries have things like the imputed rent tax (basically taxing homeowners as if they were renting their own home). This goes a long way towards balancing the scales between homeowners & renters.

[whimsicalism]

My personal culture that I adhere to.

That said, I mentioned stigma, I didn't say anything about culture - and I'm not sure why it is at all relevant to my point.

[rabbits_2002]

>Generally making rent payments and investing the money you would have spent on the house

What money? Renting isn’t cheaper than owning. You will almost definitely make more money on remodeling a home than buying stocks.