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Old 02-16-2014, 07:19 AM
 
95 posts, read 218,272 times
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I'm curious to know the where the origins of America's obsession with owning houses comes from (you know, the American dream: big house, fancy cars, etc.). I do not see the appeal of being a slave to a bank for 30 years. I see people with mortgages claim that they own their homes, but they don't own the house (the bank technically does). Let's see what happens when they miss 2 mortgage payments. They no longer own the house anymore. I would not be surprised if the American dream was manufactured by big banks and the automobile industry.

Then there's the group of people who see housing as a great investment, where the property value always goes up. Based on the historical data, it's simply not true. Property values just keep pace with inflation. There are just people out there who should NOT have gotten themselves into a mortgage (e.g., beyond their budget, unstable job, etc.).

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Old 02-16-2014, 07:23 AM
 
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Lots of people own their home outright, without having a mortgage. However, this usually occurs later in life as you gain equity over time/have more money saved so you can payoff the home.

For example, in Florida, half the home sales are 100% cash deals(no mortgage). Much of the reason is that Florida has lots of retirees. They had homes in other states and over time, paid off those homes. When they sell that home in the other state, they turn around and purchase a retirement home in Florida and pay cash.

One important factor in owning versus renting is that a landlord can tell a renter that their lease won't be renewed and they have 30 or 60 days to move, even if the renter doesn't want to move. Regardless of their health or life status, the renter would have to find a new rental in 30 or 60 days, pack, move, possibly change schools for their children. If they have pets maybe they have to get rid of them because they are unable to find a new rental that accepts pets.
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Old 02-16-2014, 07:31 AM
 
Location: North Beach, MD on the Chesapeake
35,871 posts, read 46,031,168 times
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Where did it originate, maybe in our heritage of European immigrants who, likely as not, were unable to own property in the Old Country.

Owning property is one of the best, most accessible, ways to facilitate inter-generational wealth transfer. Which helps to increase the wealth/net worth of succeeding generations.

If you spend 30 years paying rent you have a pile of rent receipts for those years. If you pay a mortgage for 30 years you have a tangible asset at the end of that time, most likely worth more, even adjusted for inflation, than you paid. Not to mention the tax benefits of property ownership.
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Old 02-16-2014, 07:33 AM
 
4,750 posts, read 3,724,421 times
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It's the American dream. Or shall I say, it was the American Dream...




ETA:
If you're rent is $1,200 and that's what you pay every month for the next 40 years. That's $14,400 or $576,000. You'll still be paying rent when you retire. That's crazy! Plus some people enjoy gardening and other stuff like that. Some people are very handy and like to build stuff.
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Old 02-16-2014, 08:01 AM
 
Location: Wisconsin
7,214 posts, read 8,360,355 times
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Quote:
Originally Posted by sware2cod View Post
Lots of people own their home outright, without having a mortgage. However, this usually occurs later in life as you gain equity over time/have more money saved so you can payoff the home.
I think the stat is that around 30% of home owners in the US own their homes outright. So it's a significant number, but not a majority.

I don't really know anyone who is "OBSESSED" with home ownership...for most, it's more of a matter or practicality, and understanding the value of accruing equity.
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Old 02-16-2014, 08:20 AM
 
Location: Massachusetts
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It is a milestone like marrying or having a family that represents maturing into adulthood for many people.
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Old 02-16-2014, 08:23 AM
 
Location: Northglenn, CO
521 posts, read 760,034 times
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Because when you've rented your entire adult life, you realize you're giving your cash to some management company instead of putting it back into your own pocket by paying the mortgage.

The American dream for my wife and I is to stop pissing our cash away every month.
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Old 02-16-2014, 08:36 AM
 
Location: TOB
47 posts, read 84,069 times
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Got tired of funding someone else'e mortgage/retirement. Would rather pay into my own. Ditto on all responses above.
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Old 02-16-2014, 08:55 AM
 
4,567 posts, read 9,095,870 times
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Quote:
Originally Posted by KosmoKramer View Post
I I do not see the appeal of being a slave to a bank for 30 years.
You gotta live somewhere. I dont see the appeal of being a slave to a landlord for 30 years and still owning $0 in assets. At least after you bought the home, you can sell it for hundreds of thousands. If you rented for that same time period you own nothing. $0.

Also, as a renter your paying market prices. Lets say you rented 10 years ago for $400 month and now that same rent today is $1500 month. If you had a mortgage, you would still be paying $400 month, its fixed, never changes.
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Old 02-16-2014, 09:26 AM
 
Location: The analog world
17,086 posts, read 10,860,002 times
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Quote:
Originally Posted by North Beach Person View Post
Where did it originate, maybe in our heritage of European immigrants who, likely as not, were unable to own property in the Old Country.

Generally agree.

Owning property is one of the best, most accessible, ways to facilitate inter-generational wealth transfer.

Generally agree.

If you spend 30 years paying rent you have a pile of rent receipts for those years. If you pay a mortgage for 30 years you have a tangible asset at the end of that time, most likely worth more, even adjusted for inflation, than you paid.

Worth more, probably, but that doesn't mean a profit is to be had.

My home was built in 1978 and sold to the original owners for about $70k when interest was running about 15%. Can you imagine? When I bought it almost exactly 30 years later, I paid just under $300k. Even if the original owners had refinanced for lower interest rates, I have my doubts that they profited from the sale once thirty years of principle, insurance, taxes, interest, and annual maintenance were considered.

Not to mention the tax benefits of property ownership.

There is no tax benefit to homeownership. The tax benefit is in deducting mortgage interest, which diminishes as you pay down the mortgage principle.
Comments above.
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