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.
Total housing cost as a percent of your income is a difficult issue for most renters, because renter incomes are generally much lower than homeowner incomes (median renter income in 2010 was almost exactly half median homeowner income) and renting is usually substantially more expensive per square foot than is owning. (I pay $4/sf/month to rent a room, most homeowners pay well under $2 to own.)
Only to a degree. I think you're speaking more about yourself than renters as a whole. If you can't afford your own place, then you live with others. If your income is too low even for that, then you need to get a better income. If you can't or won't do that, then like mathjak says, there's not much hope for you, economically speaking. If that's the case, it seems you'd be happier if you focused your life on something else besides turning nearly every CD thread you post on into complaining about your predicament.
I have no marketable job skills, as well as transportation issues (no car or license) and time constraints (numerous medical appointments make daytime work scheduling difficult). I had paper routes from age 12, I worked in a deli, I shoveled snow and mowed lawns, I had $4,000 by the time I graduated high school in the early 70s. (Then I blew it all on college. )
Not everyone can get a high-paying job; millions of college graduates are underemployed. I've taken the best jobs I could get; the most I have earned in a year is $17K ($8.50 per hour full time). I work for a small group of convenience stores and at any given time about 20 percent of our employees (most at minimum wage, a few within 25 cents per hour of minimum wage) have college degrees. Did they choose low paying fields?
He's conflating renters with low income. I don't believe the majority of renters are low income. I do believe the majority of renters/Americans buy into the home ownership Big Con. My own income is upper quartile. I could 'buy' a house if I wanted, but renting frees up much more income to build wealth. It's that choices thing...
Quote:
Originally Posted by freemkt
What remainders? Renters as a group have only HALF the median income of homeowners, while spending on housing twice as great a proportion of income as homeowners. Half of all low income renters spend at least half their income on shelter; these renters certainly don't have any remainder to invest.
Mod cut: Quoted post deleted.
Quote:
Originally Posted by mysticaltyger
Only to a degree. I think you're speaking more about yourself than renters as a whole. If you can't afford your own place, then you live with others. If your income is too low even for that, then you need to get a better income. If you can't or won't do that, then like mathjak says, there's not much hope for you, economically speaking. If that's the case, it seems you'd be happier if you focused your life on something else besides turning nearly every CD thread you post on into complaining about your predicament.
I got a liberal arts degree with law school as a target then couldn't afford to go to law school. Since I'm not a people person, I did not pursue the limited number of jobs available to liberal arts majors such as in retailing and insurance so there were few options left for me from which to choose.
I did think I was clever in getting a minor and undergrad assistantship in comp sci but I found that employers were not interested in a CS minor as long as CS majors were available; I was able to get only one IT interview through the college placement office. The then-emerging PC made my mainframe skills increasingly obsolete.
Credit= debt, and the credit extensions in the early days of America were certainly a factor in the growth of the US economy, it wasn't necessarily personal consumer debt but the institutional kind that allowed the fantastic expansion of trade. Later, the advent of "charge" cards encouraged the individual and the actual "credit card" the one that carried your debt with a small monthly service fee and minimum payment on balance was introduced. Credit & Debt was an idea born from the realization within the capital class that credit/debt could be substituted for any real raise in workers pay, giving the worker a false sense of his financial standing, a problem that exists up to this day.
Materialism was debt's predecessor, and it was greatly encouraged after the war in the late forties. Looking at the various magazines of that day one can see an inundation of ads that wooed the housewives into thinking they needed every gadget that ever was, and of course the men were being told to buy cars. On another note, post war America bragged about it's prosperity when compared to the Soviet Union, the reason for the west's greater buying power over that of a Russian wasn't necessarily the wages, it was the extension of credit, something those in the USSR and most of Europe didn't have.
The prosperity following WWII was due in great part to the fact that the US was nearly the only industrialized nation left with the capacity to produce and the rest of the world needed everything we could produce to rebuild themselves.
Following the great depression, people were very hesitant to trust banks, or to take on debt as the great depression taught the lessons of owing money and debt default. A large segment of the population lost their family farms due to default.
The WWII generation grew up during the great depression and were very conservative financially. The same however cannot be said for their children the boomers. The WWII generation amassed the greatest amount of wealth, and created the most prosperous economy ever, just to have the majority of it squandered by their children who indulged themselves in lifestyles supported by credit and over inflated egos.
He's conflating renters with low income. I don't believe the majority of renters are low income. I do believe the majority of renters/Americans buy into the home ownership Big Con. My own income is upper quartile. I could 'buy' a house if I wanted, but renting frees up much more income to build wealth. It's that choices thing...
Not all renters are low income but the MEDIAN income of renters is HALF that of homeowners, and a majority of renters are in the BOTTOM TWO income quintiles. The choice is often predicated on location and life stage, many high-income people would rather rent in Manhattan than own a home on Long Island but if they were transferred to Denver they would buy a home.
I live less than 15 minutes by subway from where I work. To responsibly afford a house at my income, I'd be looking at at least a 50-minute commute each way. Three major supermarkets and my gym are within 3 easy walking blocks, as are numerous restaurants, pubs, a great library, parks, green space, etc.. Whole Foods/Trader Joes? A 15-minute walk. I don't need a car. I'm investing almost all my take-home, minus emergency fund. And I probably have too much cash in that, actually. Have at your money pit, friend. Home ownership=boat. Neither creates wealth. There are valid reasons for buying a home. Building wealth isn't one of them.
In 1999, was your mortgage interest plus taxes, maintenance, repair, time, and insurance already less than the market rent on a similar place? What was your down payment?
Any large payments early on reduce the financial advantage once you consider the opportunity cost.
My home payment was similar price (tiny bit higher) than rent. I told my real-estate agent originally that I was looking to rent a small apartment but after a few weeks, she said if I was willing to live in a smaller home that required some TLC I wouldn't be much more than renting. As such, she started showing me towns she would like to be in. She was a friend of a friend and understood my situation (herself a single mother in a tight situation). I live along the rail line direct to NYC penn which contributes to the rise of property in my town.
No down payment... What little I had at the time was spent on closing costs and getting started. I was only out of college for 6 months but had been working part-time my way through. I was a first time home buyer and took advantages of some offerings from the bank. I was paying 8% on a 30 year and did have to pay PMI. No major repairs early on.. I was broke.. living paycheck to paycheck (also supporting my fiance back in TX) but my hope was that working an entry level job could only mean a higher salary later on. I did most of what I can do on my own (including repairing the garage roof over the summer that had wood rot). No large payments were made until at least 5 years into the mortgage. I needed to recover from job loss/long term unemployment, wife relocated up (no more payments to the apartment in TX), and she started working. By then, we had refinanced the home to get rid of the PMI and negotiate a lower rate. We did the whole refinance thing again to a 3%/15 year fixed... we are 5 years into it.
Last edited by usayit; 11-30-2014 at 07:15 AM..
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.
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.
)
