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You don't know enough people obviously.. Why do you think a 30 year mortgage tracks closest to an intermediate term treasury and not the 30 year bond?.. Just for that reason. Mortgages rarley go more than 7 years without people moving or refinancing starting over from year 1 again.
I think people who have lived in a rental all of their lives are just used to going without things like dishwasher...washer/dryer..outdoor space...privacy etc so they don't miss what they never had. I have plenty of native New York friends and the thought of home ownership is almost outside of their frame of reference.
What I have noticed is that it's the people who were born outside of the 5 boroughs who are the ones most likely to want to own a home.
To be fair Mathjack, your concerns apply most to condos/co-ops, and single family homes. The expenses in taxes, interest, insurance, plus maintenance/repairs are significant over the term of ownership versus just paying rent. In that case, I wholly agree with you that, in most cases, just renting and investing elsewhere (like the stockmarket) will prove far more profitable minus all the headaches, hassles, and committment of homeownership.
However, when you consider multifamily dwellings, you should note that a savy investor/buyer can purchase a 3 family home, and have 90% of expenses covered by rental income, including taxes, insurance, insurance, and day-to-day repairs. And when you add in the benefits of deducting mortgage interest, etc, you do better owning vs renting in this city, but you still have to deal with day-to-day issues and the large upfront costs.
I have 3 tenants, and 100% of my 15 year mortgage is covered + expenses, so I live free and put an extra $500 towards paying it off sooner (12 years). I just purchased another 2 family property where 100% of the 30 year mortgage is covered + expenses, and I will be applying the extra rental income towards shortening the term to less than 15 years.
In these examples, owning is far better than renting, and when they are paid off, I will have excellent cash flow, for life + owning the assets outright. I am buying one more 2 or 3 family home in the next 12 months, and with the 3 properties paid within 15 years or less, that is all the cash flow I need for the rest of my life. And it's almost all entirely paid for by rental income!!
Question> How do you like Texas, your honest opinion vs NY?
Mr. T, I'll always show NYC (especially the BX) love, as that's where I was born and raised. NYC is a great city! However, at this stage of the game (my 30s) the lifestyle I have down here (Austin area) in comparison is better, IMHO. I make less, but pay no state or local income taxes, so I get to keep more of my paycheck. COL for the most part is lower. Schools are good for my kids...I get to raise my kids in a suburban environment with all of the trappings (large house, big yard, etc.) and not have to be wealthy. Would I have moved down here if my husband wasn't from here? Probably not. But I'm glad that I did. We get A LOT of NE transplants ... a LOT.
Texas isn't for everyone, no doubt. The elephant in the room being political ideology, of course. I guess that's the cool thing about austin, you can be a conservative or a liberal and still feel comfortable...though it is by no means uber-left like portland.
I agree with nightcrawler in disagreeing about the 5-7 year average span of time living in a house...and I know a lot of people. People stay longer. The logic is that nobody will deny how truly awful finding a new place and moving into it is. It is bad for the soul AND bad for the pocketbook to keep amassing loan origination fees, realtor fees, moving fees, furnishing fees.
I could of cared less at the time...I used to live there once upon a time but that's not why I moved there in the first place. I moved to build a career and experience a city like no other. But when it comes time to have children then that's a different story.
I agree with nightcrawler in disagreeing about the 5-7 year average span of time living in a house...and I know a lot of people. People stay longer. The logic is that nobody will deny how truly awful finding a new place and moving into it is. It is bad for the soul AND bad for the pocketbook to keep amassing loan origination fees, realtor fees, moving fees, furnishing fees.
The census bureau also agrees.
you didn't look to see what that chart is actually showing.
you are only looking at single family homes and nothing else. no condo's ,no co-ops.
most folks are either paying the bankers or paying the landlord most of the time. in fact less than 1/3 of homeowners even own a home that is paid off
here is a more complete chart showing alot less years for owners who stay put once condo's are included.
Last edited by mathjak107; 03-07-2013 at 04:57 PM..
as to why the average is around 5-7 years overall the article explains the reasons. . in fact the national average is most folks move 11x in their lifetime. but that is not just homeowners.
There is no specific relationship between Treasuries of any term and fixed mortgage rates. Given enough data points, a relationship could be established as a 30-year fixed rate mortgage rarely lasts longer than about 10 years before being paid off or refinanced.
belive it or not most of us would have benefited more from adjustable rate mortgages than any other just because of the above.
I am cool with renting here, we are not planning staying any longer than 5-7 years and if I do any buying in NYC it would be for investment purposes only.
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