Climate Crisis, Biosphere & Societal Collapse

There's a lot of problems with housing, but...

Amie, 44, a self-employed writer from rural Maine, purchased her $260,000 home in 2020, securing a 30-year fixed mortgage at an attractive 3.5% interest rate.

Signing up for a mortgage you won't pay off till you're 74 is definitely a choice...

Especially when self employed as a writer.

Back in the day people were able to get a decent job and a mortgage before they were 20, a 30 year mortgage gave them time to "coast" and amass wealth that last decade before retirement.

Nowadays to get a good job, you need college.

So your early years are paying that back, not a mortgage. And by the time you can replace student loans with a mortgage, you can't pay it off before retirement.

And retirement isn't just a "nest egg" and the company pension like it used to. There's almost no pensions anywhere, and to be ready for retirement you need decades of contributions into a 401k and you have to pray the market cooperates for the short stretch you plan on using it.

Just all over the board, shit is fucked for a multitude of reasons.

Even if you do everything 100% right. You could just be fucked by things outside your control and there's zero safety nets.

The real shame is that we need another housing crash. Only this time, we bail out the homeowners so they can pay down the difference between the value and the mortgage owed. That would have kept the banks whole and let people keep their homes, and it would have brought loan rates and property values back to earth.

Good article. Really gives you an insight.

“I worry,” he said, “that owning a home gives me less flexibility if there’s an emergency, or a financial crisis.”

Especially that paragraph resonates with me. I don't know what the economic future will look like, but i'm worried. If i buy a house today, i have to pay a mortgage for maybe 20 years. But who says that in 20 years, there will still be (well-paying) jobs? I can't take that insecurity.

I knew since college 20 years ago that I would never afford a house. Where I was houses was $300,000 (20 years later and they are $1,000,000). So during this time I found a way out of that greedy broken system.

Few months ago we bought land. The land was less than just paying for 1 years rent where we were from. So now my “rent” is the yearly property tax $150 per year. Very affordable.

We were living in a small car for a while. Twin bed, battery with solar, and a small 12v fridge. It worked good for us. Plenty of people live in cars (lookup cheapRVliving on YouTube)

Currently live in an RV we paid $3,000 for. Just had a 2,500 gallon water tank delivered, used a 20% off coupon to get that. Always looking for deals.

In the next few years we are going to build our house using dirt and rocks (hyperadobe) that we have on our land. It’s a lot of labor but it’s super cheap.

Homeowners who had assumed their properties would become valuable assets and provide security described their homes as “money pits” and “financial burdens”, and said they felt stuck in homes they could barely or no longer afford, with insurance, taxes, utilities and maintenance now often costing more than people’s mortgages.

Bubble. And it will get worse with climate change: https://www.nature.com/articles/s43247-023-01173-x

There's a term that's going to get popular: "uninsurable".

“I bought this house 19 years ago for $220,000,” she said. “If I’m lucky, I can sell it for $300,000.” Local house prices, she said, had not gone up by very much in all this time, in part because local property taxes were prohibitively expensive.

Classic hypocrisy. Complaining about how much houses costs when you want to buy, and then complaining about how little houses costs when you want to sell.

For me the problem of home ownership is also a different one:

A proverb says "you build the first house for your enemy, the second for your friend, and the third for yourself". Which means, if you're young and inexperienced and building your first house, you're gonna fall into all the pitfalls and gonna make all the mistakes that rookies make. But when you have more experience with something (when you have built multiple houses), then you know the right way and then you build better quality.

To me it is clear that communal housing, provided by the city or community, has the potential to be significantly better than individual home building, because it can take advantage of scaling effects (economies of scale are cheaper) and also it can amass experience and make wiser decisions. So i prefer that.

I am personally in the extremely lucky position to live in Vienna, where we have good communal homes. The city builds 200 apartments at a time, then rents them out to the citizens. The rents are cheap, as these are typically non-profit projects, and the quality is good. Good city planning is a thing.

“I’ve come to view home ownership and healthcare as destabilizing forces in my life,” said Bernie, a 45-year-old network engineer from Minneapolis. To finance owning his and his wife’s $300,000 home and saving for the future, the couple was foregoing medical and dental treatment of any kind and cutting back on expenses everywhere, he said, despite a pre-tax household income of more than $250,000.

I have no idea where in Minneapolis this person is but this is nothing like my own experience in the metro area.

My wife and I bought our home in 2021, for about the same price as he's describing and with an income far less than theirs, and we're expending less than 30% on our mortgage payment (including our insurance premiums and taxes). Maybe they bought theirs at the interest rate peak in 2020, whereas we bought ours when the interest rates bottomed out, but I can quite confidently say that our home is not the main burden on our finances.

What is killing us is raising food and healthcare costs, as well as our student loans. Our energy utility announced last year that they would be implementing surge pricing that could almost double our energy costs, and since the utility administers the state solar incentive program themselves, they quoted us a PV system cost almost twice what you can find on the open market (they use your average monthly energy bill to determine how much you can afford to pay for the system, which ought to be criminal). We're getting fucked up down and sideways, but our mortgage payment is probably the most stable expense we have.

There are a lot of reasons things are shit and financially precarious, but owning my home has been a rare bright spot in our otherwise gloomy financial picture. If we were still renting, not only would we be in the same strained situation as we are now, but we'd be constantly anxious about our rent skyrocketing, too.

Home ownership isn't all sunshine and rainbows, but the alternative of renting is often just as expensive - on top of being at the whims of landlords. They've been publishing articles for a decade now trying to convince people that home ownership is overrated and renting is the way of the future, and I really wish I could trust them to report on it transparently.