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Will this trend trickle down into 20-somethings not starting families as well? It's hard to have kids without owning a house (condo/town home) or car...
That's funny...back before the GI Bill and the post-war boom years when a lot of people were boosted into the middle class and could suddenly afford modest houses, people rented, and raised their kids in rentals. Sounds like Americans have become spoiled.
I agree with the poster who said houses aren't always a good investment. Taxes, insurance and maintenance can strain the budget in times when jobs are uncertain. The only way buying a house is a good investment (assuming a stable housing market, which we can't assume right now), is to get a house that has some kind of rental space: a basement, a garage that can be converted to a studio, something like that. Then you get some free equity in the deal. But you still have to cover taxes, insurance, and maintenance.
Cars aren't an "investment" at all, they're an expense. Great, reliable cars can be had for $2000, thanks to the Japanese auto industry. The best solution is to live somewhere, where public transportation is good.
That's funny...back before the GI Bill and the post-war boom years when a lot of people were boosted into the middle class and could suddenly afford modest houses, people rented, and raised their kids in rentals. Sounds like Americans have become spoiled.
I agree with the poster who said houses aren't always a good investment. Taxes, insurance and maintenance can strain the budget in times when jobs are uncertain. The only way buying a house is a good investment (assuming a stable housing market, which we can't assume right now), is to get a house that has some kind of rental space: a basement, a garage that can be converted to a studio, something like that. Then you get some free equity in the deal. But you still have to cover taxes, insurance, and maintenance.
Cars aren't an "investment" at all, they're an expense. Great, reliable cars can be had for $2000, thanks to the Japanese auto industry. The best solution is to live somewhere, where public transportation is good.
Hmmm, rentals in my area cost close to what most peoples mortgages cost and I would not want to live anywhere near where public transportation is readily available-some of the highest crime rates in the country.
What's to think about? You have no indication of your location other than your member name. So what big city do you live in that has all those single family homes? It's irrelevant to this discussion as most 20 somethings wouldn't likely want to buy one anyway.
I own a brand new car, but I dont own my own home yet. Even if I could afford it in cash, I still probably wouldn't purchase right now. I think the housing market is going to slide down farther. Not to mention that if I did buy I am stuck in the same city basically. I want to keep my options open. Also, having roommates who help pay your bills is a huge plus.
Because we've figured out that cars and houses are terrible investments.
On the car front, cars aren't worth more than probably $5000. Anything over that is a waste, IMO. I bought my car for like $4000 back in 2004 (it is a 1994 model). I haven't paid a single penny on it since, aside from filling it up with gas and doing normal maintenance and repairs that any car (new or old) would need. I also laugh at people who whine about their $300/month car payments on their $20,000+ vehicles. Those were terrible investments when they could have paid a fraction of the cost for an equally reliable vehicle - shouldn't have bought such an overpriced item!
Housing too. Houses are not worth 6-figure pricetags. They just aren't. You can find decent living accommodations just about anywhere for under $700 a month, yet the average mortgage is around $1200. If you were going to spend $100k on buying a house (which is a lowball estimate, isn't it?) you would have to live there for at least 12 years to make it a better investment than simply renting at $700/month for the same timespan. Once you get up to $200k houses, you have to live there for at least 24 years to "break even" compared to renting, and $300k is 36 years! And for what? To be stuck in one spot the whole time? What happens if you need or want to move? Then you can't just terminate your lease and move out, you're stuck.
Houses and cars are awful investments. Young people like myself have figured it out, and we're staying away from them. Instead, I rent a place for $680 a month, I pay $0 for my car, and I travel internationally every year (2010 - Gabon and South Africa; 2011 - Panama and Costa Rica; 2012 - Finland and Estonia...). I wouldn't be able to do that if I were paying something like $1500/month for my house/vehicle instead.
While I agree that it's hard to make a case for owning expensive cars, and that it is far from clear that home ownership is advantageous, you are making the error of assuming that the math for renting versus owning which you present for your city in Michigan is valid in other places. In some other places, rents are much higher than what you cite but home prices are not higher in the same degree. That means that renting versus home ownership is very close to a wash in those places, even if it is not where you live. All real estate is local.
Will this trend trickle down into 20-somethings not starting families as well? It's hard to have kids without owning a house (condo/town home) or car...
There's no difference, as far as raising kids, between renting and owning.
As far as cars, that depends on where you are. For most of the country yes, realistically people are going to need a car. But if the parents live somewhere where they don't need a car before having a child, then they're not likely to need one after, either.
That said, the average age of having children has been rising. Not sure if the rise parallels the home/car statistics. I'm sure there's an economic factor there as well (kids are expensive, especially costs associated with childcare), as well as all the other things such as people waiting longer to get married, etc. I had a child in my late 20s, but the majority of my friends were in their 30s before they had their first child. I think that's fairly typical for my peer group.
There's no difference, as far as raising kids, between renting and owning.
As far as cars, that depends on where you are. For most of the country yes, realistically people are going to need a car. But if the parents live somewhere where they don't need a car before having a child, then they're not likely to need one after, either.
People don't need cars. I have walked, biked, or used a high mpg motorcycle for the last few years to get around in your typical urban sprawl area. When the reality of peak cheap oil sets in, people will have to give up their cars in favor of the things I have been doing.
People don't need cars. I have walked, biked, or used a high mpg motorcycle for the last few years to get around in your typical urban sprawl area. When the reality of peak cheap oil sets in, people will have to give up their cars in favor of the things I have been doing.
You realize of course that many, if not most, people don't live in an urban area or even suburban areas where what you do is feasible.
If you ride your bike to work now and your work site moves to a different location what is your plan?
Will this trend trickle down into 20-somethings not starting families as well? It's hard to have kids without owning a house (condo/town home) or car...
Funny, somehow my Boomer parents did it. They did not own two cars until I was 12 and my brother was 10, and they did not buy a house until I was 14 and my brother was 12.
My grandparents only had one car until they were in their 50s, my dad and uncle grew up in a one car household. My dad's parents did not buy a house until my father was 16. Somehow they survived.
You do not have to have a house to raise children, and you do not need two cars to raise children either.
I have a coworker with two boys...somehow she and her boyfriend survive with one car and they rent and live in a complex. And one of their kids is medically fragile.
Quote:
Originally Posted by Ruth4Truth
That's funny...back before the GI Bill and the post-war boom years when a lot of people were boosted into the middle class and could suddenly afford modest houses, people rented, and raised their kids in rentals. Sounds like Americans have become spoiled.
I agree with the poster who said houses aren't always a good investment. Taxes, insurance and maintenance can strain the budget in times when jobs are uncertain. The only way buying a house is a good investment (assuming a stable housing market, which we can't assume right now), is to get a house that has some kind of rental space: a basement, a garage that can be converted to a studio, something like that. Then you get some free equity in the deal. But you still have to cover taxes, insurance, and maintenance.
Cars aren't an "investment" at all, they're an expense. Great, reliable cars can be had for $2000, thanks to the Japanese auto industry. The best solution is to live somewhere, where public transportation is good.
I agree. A house is merely a place to live. It might be an investment long term, but who knows. I know my parents have put a ton of money into their home, and they are not as deep underwater as many others I know who bought homes more recently. Regardless of whether one has kids...I see a house as an anchor. It is more difficult to move if the neighborhood goes to pot (which happened to my uncle) or the local economy dies out (which happened to another uncle) at that point you are stuck with the house, and at that point it is an anchor, and one worse than student loans or credit cards.
As for cars....they are even more of a sinkhole. Even a new one needs maintenance, and new ones cost an arm and a leg, and lose 15% of their value right off the lot.
You realize of course that many, if not most, people don't live in an urban area or even suburban areas where what you do is feasible.
If you ride your bike to work now and your work site moves to a different location what is your plan?
Most people live in urban and suburban areas, so it isn't really a problem. From the CIA Factbook - urban population: 82% of total population (2010)
Bike to it.
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