Why do transplants insist on buying a house instead of renting? (renters, insurance)

[Min-Chi-Cbus]

Yeah, the down payment is sort of a killer right now and if you didn't have the downpayment, the banks SHOULD be raising your interest rates through the moon because you become such a huge risk! To me, this is the reason the housing recovery will continue to stall some, because most people don't have extra lump sums of cash right now and banks already lost big on taking risks on people with little/no up-front equity. Besides, you'd be doing YOURSELF a disfavor by not putting money down up front. What happens if your house value drops by $20K and you are immediately under water and you need to sell? You're f_cked!

[QuantumIguana]

Originally Posted by golfgal

Never said they were slums, you still have to deal with common walls, hallways, neighbors, parking, etc. Sorry, renting just stinks, especially after you have owned your own home.

No, it doesn't stink. You prefer not to rent, that's fine. It doesn't mean renting is bad. There are people who prefer to rent, and they have some decent points.

[knke0204]

Originally Posted by Min-Chi-Cbus

Yeah, the down payment is sort of a killer right now and if you didn't have the downpayment, the banks SHOULD be raising your interest rates through the moon because you become such a huge risk! To me, this is the reason the housing recovery will continue to stall some, because most people don't have extra lump sums of cash right now and banks already lost big on taking risks on people with little/no up-front equity. Besides, you'd be doing YOURSELF a disfavor by not putting money down up front. What happens if your house value drops by $20K and you are immediately under water and you need to sell? You're f_cked!

Exactly. I agree 100%.

I'm a professional in finance and just my rule of thumb is to put at least 15%-20% down.

I had a friend who put down only $500 on a home that has since been forclosed on.

What's the disincentive to NOT walk way when you only have $500 down and a couple years worth of equity?

[Min-Chi-Cbus]

Your credit score is the only incentive. You will have such a hard time building your credit back up if you WILLINGLY walk away from your mortgage (vs. being bankrupt, e.g.).

[knke0204]

Originally Posted by BillWallace

While knke0204 has one perspective, it doesn't really tie in with actual data.

This survey from Trulia came out just last week - News Room - Trulia.com - Press Releases

It shows that the vast majority of Americans view home ownership as part of the American Dream. More amazingly, it shows that 88% of 18-34 year olds aspire to home ownership.

Also, a recent Coldwell Banker survey of first time homebuyers found the following -

§ 67% said the market allowed them to buy a home sooner than expected
§ 50% said they found a home in a more desirable neighborhood than expected
§ 61% were able to get the home at a better price than expected
§ 40% got more space than expected
§ 43% locked in a lower interest rate than expected
Obviously, many first time homebuyers have been pleasantly surprised with their purchases.

Yeah, I'll still take my real-time examples and not listen to some hog-wash of a real estate survey...

67% said they got in faster than expected? Well, of the handful of peers that own a home, the MAJORITY of them took forever to get their mortgage. In fact, I have two ladies at my work that have been working on getting their home since April and June respectively...

50% of said they found a home in a more desirable neighborhood... Well, the market is oversaturated with homes... So it's not that crazy of a stat that half of home buyers bought a home in a more desirable spot... $300,000 homes are now worth $180,000.

61% found a better price? That's pretty obvious, home values are rock bottom, as well as interest rates

40% got more space? Well obviously. My cousin, who is a single male in his early 20s bought a forclosed 5 bedroom home for significantly cheaper than he expected.

43% got lower rates than expected? really? interest rates are at an all time low, this number should be 100%.

I'm not questioning these surveys or the methodology, but they aren't ground-breaking numbers.

I have plenty of friends who rent and own... The ones who own all have nicer homes than you would expect for younger 20s...just because interest rates are low and values are affordable....

The ones who rent, rent because they don't have the astronomical lump sum to drop on a down payment, a stable job to take on the burden of a mortgage, or the credit worthy to even get a store card for $200..

[knke0204]

Home buying right now is such a fallacy.

"It's a great time to do so!"... (fail to mention that you need perfect credit, a large lump sum of a down payment, a stable job) all of which are extremely hard to do.

[Min-Chi-Cbus]

It should be stated: "it's a great time to buy, IF..." instead. BillWallace, aren't you a professional realtor? I appreciate your viewpoint but there may be a little bias, no? Nobody without the right "cocktail" of credentials should be purchasing a home, and if they don't have the right cocktail, realtors shouldn't be encouraging them to buy. The best time to buy is when you are READY to buy, no matter the current prices. I'm sure in 2007 when prices were at all-time highs, realtors were telling people that it was the perfect time to buy then, too.

[uptown_urbanist]

Originally Posted by golfgal

Never said they were slums, you still have to deal with common walls, hallways, neighbors, parking, etc. Sorry, renting just stinks, especially after you have owned your own home.

You're mistaking "renting" for living in a shared space. You can have common walls with an owned condo; you can rent a single family house. Renting or owning doesn't refer to type of residence.

I understand why people prefer to own; I also understand why people prefer to rent. I know plenty of people who did own, now rent (by choice), and they have a greater appreciation than ever for not having to be the one to pick up the repair bills and deal with those sorts of things!

[rcsteiner]

Originally Posted by kuan

Because many companies pay closing costs, moving costs, temporary housing costs, and a signing bonus.

Wow. I wish.

[FamousBlueRaincoat]

Originally Posted by uptown_urbanist

You're mistaking "renting" for living in a shared space. You can have common walls with an owned condo; you can rent a single family house. Renting or owning doesn't refer to type of residence.

I understand why people prefer to own; I also understand why people prefer to rent. I know plenty of people who did own, now rent (by choice), and they have a greater appreciation than ever for not having to be the one to pick up the repair bills and deal with those sorts of things!

Not to mention the abundance of two-family homes in the Twin Cities, in which many people live either above or below their landlord.