U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 06-28-2018, 06:43 AM
 
Location: New Yawk
8,662 posts, read 4,815,992 times
Reputation: 14034

Advertisements

Quote:
Originally Posted by freemkt View Post
How does the socioeconomic status (SES) of homeowners differ from that of renters of the same age, race, and income?
SES is not solely defined by income; it also encompasses wealth, education level and occupational prestige. Take two semi-fictitious families (okay, one of them is us) with the same age, same income, and same number children, for example:

Family A: One spouse (white, high school grad) works a steady blue collar job, while the other (white, GED) works off the books to keep their reported income low enough to qualify for various entitlements (subsidized child care, Medicaid, free breakfast and lunch at school, heating assistance). They have one new car and one older car and live in an adequately-sized apartment. Homeownership is not a possibility for various reasons, so they use their disposable income for annual trips to Disney World, expensive birthday parties, nice phones, multiple activities for the kids (gymnastics, karate, football). Saving for tomorrow is not realistic because it would cut into their eligibility for entitlements and tax credits.

Family B: both parents (one white, one white-Hispanic) went to college and work white collar public sector jobs, with pensions and comprehensive health benefits, making the same as Family A, drive one old car, and live in a smaller apartment so they can save money toward the down payment to buy a home in the next year or so. The kids’ needs are all taken care of, but because they are saving for a home, there isn’t much room in the budget for extracurriculars or vacations. They live frugally enough to put most of one of their incomes (after taxes and childcare expenses) in savings each month, and will be able to allow room in the budget for extras once they buy their home. They will be able to help their children pay for post-secondary education, provide a room for elderly parents, if needed, as well as fund a comfortable retirement for themselves.

Two families. Same income. Different SES.

Last edited by Ginge McFantaPants; 06-28-2018 at 06:55 AM..
Reply With Quote Quick reply to this message

 
Old 06-28-2018, 07:12 AM
 
Location: Wonderland
41,241 posts, read 32,898,809 times
Reputation: 57486
Quote:
Originally Posted by freemkt View Post
Things I learned from National Homeownership Month:

Children of homeowners are 25% more likely to graduate from high school than children of renters of the same age, race, and income.

Children of homeowners are 116% more likely to graduate from college than children of renters of the same afe, race, and income.

Children of homeowners have 9% better math scores and 7% better reading scores than children of renters of the same age, race, and income.

And the average homeowner's net worth is 35 times the net worth of the average renter. (I think they meant median rather than average, but don't know that for sure.)
Well, it's not the house that creates this phenomenon. It's an atmosphere that fosters goal setting and reaching, and fiscal responsibility. Families with those beliefs and practices tend to raise kids with similar values.
Reply With Quote Quick reply to this message
 
Old 06-28-2018, 07:14 AM
 
Location: Wonderland
41,241 posts, read 32,898,809 times
Reputation: 57486
Quote:
Originally Posted by freemkt View Post
Did you actually read the post? Children of homeowners do better than children of renters OF THE SAME AGE, RACE, AND INCOME.
Just because people have the same income (or race or age for that matter) doesn't mean they have the same values...or credit scores.
Reply With Quote Quick reply to this message
 
Old 06-28-2018, 07:15 AM
 
Location: Wonderland
41,241 posts, read 32,898,809 times
Reputation: 57486
Quote:
Originally Posted by freemkt View Post
National Homeownership Month is saying PRECISELY that owning a home is what enables your kids to do better than the kids of the schlub who rents - because they are comparing the children of owners with the children of renters of the SAME AGE, RACE, AND INCOME.
NO.

It's not owning a home that makes the difference - it's embracing values that allow one to own a home (among other goals) that breeds success in general.
Reply With Quote Quick reply to this message
 
Old 06-28-2018, 07:44 AM
 
4,396 posts, read 5,312,676 times
Reputation: 4423
I think one of the biggest problems is the American mindset in general of "give me what I want now!" If you want to be wealthier than you are, you need to make some sacrifices. About 5 years ago, I was living in a townhouse I bought with cash. I could have been living in a million dollar house if I wanted, but why would I do that? Just to keep up with the Joneses? Honestly the stress of having those larger payments, and then of having less money invested (except in my house), would NOT have been worth the temporary satisfaction of a fancier house. Sure, my townhouse was meager, and it wasn't anything much to look at, definitely it had its flaws, but every day I felt so much better thinking wow my entire cost of housing is like $450/month which includes HOA dues and property taxes. That's a great feeling and allowed me to build more wealth, while the rest of my money was then invested in things that since that 5 years have passed are now worth a lot more money.

Renting is the same thing when it comes to some people -- I'm not saying most or all. There are people who rent a nice downtown loft at $2,000/month because it's a beautiful place, it's close to a bunch of fun things like bars and restaurants, and it's "trendy." They can afford to rent that place, based on their income, but they're not getting any wealthier at all each month. Let's call that Person A.

Person B, exactly the same income, decides to tough it out. Sure, his friends may think his situation sucks, and his general quality of life for a few years isn't that great, but Person B rents a two bedroom apartment with a buddy out in the suburbs for $1,200/month, and they split it two ways so he's paying $600/month for his portion. He stays in this situation for about 5 years, after which point he has saved an additional $84,000! He now decides it's time to enjoy life a little bit more, not go crazy, but time to own and enjoy the benefits of home ownership. He plops down $70,000 to buy a $350,000 house. Meanwhile, Person A is still renting, enjoying his trendy lifestyle, spending even more of his money at the bars and fancy restaurants; "they're just so close and good!"

Fast forward ten years, Person A is still sitting there, renting, not partying as much, he's a bit older now, thinking maybe it's about time to get his own place. Gee, sure is too bad it's borderline impossible to afford houses now days! How is anyone supposed to have the money?! What a rigged society!

Meanwhile, Person B's house has appreciated to about $500,000, he's continued to live frugally, and made one extra mortgage payment per year on his house. He's got somewhere around $300,000 in equity or whatever it is in his home now. Person A has no equity in any home, nor any real savings.

This all happened because Person A was tempted by what he COULD afford, at the time, while Person B was focused on what he could afford in the future. Be Person B, not Person A.
Reply With Quote Quick reply to this message
 
Old 06-28-2018, 08:54 AM
 
5,612 posts, read 4,180,293 times
Reputation: 12361
Quote:
Originally Posted by freemkt View Post
I have everything I need to make $100K a year except adequate space.
Wait. Your excuse has been “impaired” internet access. Now it’s lack of space. Did you give up your $200+ rental space? If not, surely you could bring a few nudey mags home at a time to list on EBay. They don’t take up much space. Time to realize that windfall from EBay sales you keep claiming will happen. Then you’ll have the funds to buy a house. Right???
Reply With Quote Quick reply to this message
 
Old 06-28-2018, 09:49 AM
 
Location: East Coast of the United States
15,706 posts, read 18,290,599 times
Reputation: 11237
Quote:
Originally Posted by freemkt View Post
I have everything I need to make $100K a year except adequate space.
Do you live in the Bay area? $100k a year is probably not going to be enough money to buy a home unless you have a significant down payment saved up.

Look at low-end properties, foreclosures, fixer-uppers.
Reply With Quote Quick reply to this message
 
Old 06-28-2018, 11:00 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
4,139 posts, read 3,428,609 times
Reputation: 5703
Quote:
Originally Posted by freemkt View Post
Please expand on that. If what you say is correct, shouldn't we place a high priority on getting more families into home ownership?
Sure, but you can lead a horse to water but can't make him drink. Some people don't own homes because maybe they don't get the newest cars or iPhones if they buy. Even if in the long run they will get more money. I have houses I paid 40k for and tenants pay 1200 a month on. They certainly could afford lower house payments. They could also choose to live in a smaller place and pay 750 in rent and save the difference. Doesn't make sense to me, but that's the way it is.
Reply With Quote Quick reply to this message
 
Old 06-28-2018, 11:03 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
4,139 posts, read 3,428,609 times
Reputation: 5703
Quote:
Originally Posted by BigCityDreamer View Post
Do you live in the Bay area? $100k a year is probably not going to be enough money to buy a home unless you have a significant down payment saved up.

Look at low-end properties, foreclosures, fixer-uppers.
Op doesn't live in a high col area. Just chooses to be a victim. Posters here are familiar with his mo.
Reply With Quote Quick reply to this message
 
Old 06-28-2018, 11:08 AM
 
17 posts, read 10,377 times
Reputation: 58
We have always been renters, except one very large home while our kids were in middle/high school. Our rent was always less than the mortgage on the house but the house was amazing: each kid with his/her own bed/bath (=privacy), huge backyard, backed to a wooded greenspace (serene place to bring up kids), large enough for big family gatherings/overnight guests (kids loved the constant presence of family/friends) and... here's a big one... grade-A excellent schools! Also, hubby has a degree and white collar job and I have always been able to stay home and only work when I wanted and when it was conducive to the family's needs/demands.

So, yeah, we could have saved more staying in the small rental home, but we wouldn't trade our decision for anything. We sold that home when our youngest graduated high school and moved to Colorado where our kids have attended college, taken up hiking/rock climbing, and they are now making their own way and are very happy -- we live in a 2k sf townhome with mountain views and 2 of the three still live with us while finishing school.

I agree with those who say it's about the lifestyle you create in your home and not as much about whether you rent or buy. Honestly, our kids had no idea 1) how much we paid in rent/mortgage, and 2) whether we owned our home or not (especially when they were younger).

Personally, for us anyway, we have no desire to own again. Renting works for us and we can save more and not have to take savings to make a downpayment that we may never get back out of the house.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top