And to top it off......when I sold it,I pocketed ALL the money and paid not ONE CENT in federal taxes since being single and the house was under 250k. All the property tax was a deduction along with interest on the loan. Home ownership,especially if one does some or all the maintenance yourself is a no brainer..
BUSINESS
The Trouble With Homeownership
It's good for the community but not the wisest investment.
Published Oct 11, 2008
From the magazine issue dated Oct 20, 2008
Member Comments
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Posted By: mylilelar @ 11/13/2008 5:20:43 PM
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Posted By: mylilelar @ 11/13/2008 5:01:11 PM
You'll NEVER convince me that owning a home is not a good investment. I recently sold my home in Oregon with a average year to year gain of 5.7% for 17 years. In that area>>>>>$9600 would have been spent on yearly rent for that home. My mtg. payment was NEVER more than $333. Now how is that again that paying rent is NOT throwing money away? INSANE!! In all>>>>my home gained 275% in those 17 years. This,in just a small rural community mainly in agriculture.
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Posted By: Nowforthetruth @ 10/23/2008 7:41:19 PM
Obama in this video, addressing his work with ACORN litigation relating to the community reinvestment act and the failure of Freddie Mac and Fannie Mae, as they relate to the current real estate and financial crisis, states that, and I quote:
"Subprime lending started out as a good idea, helping Americans buy homes who previously could not afford to. Financial institutions created new financial instruments that could securitize these loans, slice them into finer and finer risk categories, and spread them out among investors and around the country, as well as around the world. In theory, this should have allowed mortgage lending to be less risky, and more diversified."
He further states:
"The original idea was a good one, which was, lets see if we can distribute risk more broadly, and make it easier to provide loans to people who otherwise might not be able to get one."
Listen for yourself. You cannot dispute the mans on words recorded live:
http://www.youtube.com/watch?v=Lr1M1T2Y314&feature=related
Obama in this second video is campaigning at a convention of Acorn and I believe two other "Community Activist" organizations. Ask if he will be their ally if he becomes President, Obama says, quote:
"Yes, but let me say that before I even get inaugurated, during the transition we are going to be calling all of you in to help us shape the agenda. We're going to be having meetings all across the country with community organizations so that you have input into the agenda for the next presidency of the United States of America."
See and hear it for yourself. Obama promised that Acorn and other groups like it will setting his agenda if elected:
http://www.youtube.com/watch?v=8vJcVgJhNaU
See also: http://www.newsweek.com/id/164972
Stating that Gramm-Leach-Bliley Act wasn't what caused the meltdown, and noting that "economists on both sides of the political spectrum have suggested that the act has probably made the crisis less severe than it might otherwise have been."
See also:
http://boards.msn.com/MSNBCboards/thread.aspx?threadid=808692&boardsparam=Page%3d2
Below is a link to C-SPAN video clips of the Congressional hearings at roughly the time McCains attempt at S.190. to fix Fannie and Freddie. See for yourself who said what.
http://www.youtube.com/watch?v=_MGT_cSi7Rs
See also
http://www.newsweek.com/id/164732 from this web site. (oops!) stating that Freddie Mac was spending tax payer money to target Republicans in 2005 who were trying to regulate Fannie and Freddies fraud. Democrats were not targeted, as the were all in the tank with Fannie and Freddie to kill the regulations. Hear that, the article admits that Republicans were trying to regulate Freddie and Fannie, and Democrats were trying to stop it from happening as a means to facilitate the Community Reinvestment Act. -
Posted By: herdp@msn.com @ 10/23/2008 11:41:33 AM
The real crux of the meltdown we are seeing today is not homeownership, it is the fact that there is a war going on and the Bush administration in cohorting with Alan Greenspan did not use the economic tool available to them to regulate economic conditions and that would have been to raise interest rates back in 2003-2004 to stem the rapid rise borrowing liquidity.
Back then the pundits complained that Americans were living of borrowed money, credit cards, and not saving for their future. Bush to give the illusion of a robust and growing economy in cohort with Greenspan reduced rates. Borrow, Borrow, Borrow everyone to run the economy into overdrive, bringing bottom feeders and opportunist into the market, laxing on regulation and general common sense, lending to every Tom, Dick and Harry.
At that point 2003-2004 interest rates needed to go up, that would have slowed down the housing market, curbed excessive credit card and home equity debt, would have driven the god damn dollar up, making gas cheaper and Americans would have never seen the day of the $4 gas at a pump, that further cut back on spending, drove up prices for every single commodity resulting in the recession we face now and the massive going out of business, unemployment and foreclosures we are seeing now.
The repercussions we are seeing today, is based on the reckless actions of the Govt. to fail to act, fail to practice good fiscal policy, fail to protect Americans, fail to put Americans first before the rest of the world and its foreign activities, putting american lives in danger by stripping us of our wealth and sending it over seas. At the end of each day, all these policitians care about is politics, most are lawyers in the govt, I wonder how many actually have economic degrees or have ever run a business that qualifies them to run a country?
What planet are you living on? -
Posted By: herdp@msn.com @ 10/23/2008 11:41:06 AM
Continued- comment 2 of 2
The real crux of the meltdown we are seeing today is not homeownership, it is the fact that there is a war going on and the Bush administration in cohorting with Alan Greenspan did not use the economic tool available to them to regulate economic conditions and that would have been to raise interest rates back in 2003-2004 to stem the rapid rise borrowing liquidity.
Back then the pundits complained that Americans were living of borrowed money, credit cards, and not saving for their future. Bush to give the illusion of a robust and growing economy in cohort with Greenspan reduced rates. Borrow, Borrow, Borrow everyone to run the economy into overdrive, bringing bottom feeders and opportunist into the market, laxing on regulation and general common sense, lending to every Tom, Dick and Harry.
At that point 2003-2004 interest rates needed to go up, that would have slowed down the housing market, curbed excessive credit card and home equity debt, would have driven the god damn dollar up, making gas cheaper and Americans would have never seen the day of the $4 gas at a pump, that further cut back on spending, drove up prices for every single commodity resulting in the recession we face now and the massive going out of business, unemployment and foreclosures we are seeing now.
The repercussions we are seeing today, is based on the reckless actions of the Govt. to fail to act, fail to practice good fiscal policy, fail to protect Americans, fail to put Americans first before the rest of the world and its foreign activities, putting american lives in danger by stripping us of our wealth and sending it over seas. At the end of each day, all these policitians care about is politics, most are lawyers in the govt, I wonder how many actually have economic degrees or have ever run a business that qualifies them to run a country?
What planet are you living on? -
Posted By: herdp@msn.com @ 10/23/2008 11:39:42 AM
Give tenants more rights? Take a look at rent stabilization and rent control laws in NYC, where it could take up to a year to evict 1 tenant for non-payment, where tenants know the rules are in their favor and illegally rent out rooms in their units, illegally padlock rooms for illegal renters and cashing out upward of $2K while the landlord gets a mere $650 and still has to provide heat and hot water and even after a year of an eviction process for lease violations that cost the owner some $50K in lawyers, at the opportune moment of eviction, the tenant can still go to court and simply say "I have cured the violation"= case over and the very next day start the illegal activities again.
Secondly move away from home ownership that gives you the right to itemize on your tax return, wouldn't this be a somewhat adverse consequence? Take away the ability to deduct interest payments and taxes, thereby increasing the tax liability to the govt? Wow the govt. would probably recoup the entire national deficit if we all became renters, wouldn't it? And if we were all renters, wouldn't that drive prices of rent up, since we are all scrambling for apartments, making renting more expensive than buying?
Throwing money down the drain is investing in stocks that are highly risky, where your return is always subject to market condition and company performance. You are asking me to remove my home that is a relatively safe investment that has shown stabilized appreciation in every decade to instead throw it at the wind and hope that I get paid a dividend?
Comment 1 or 2 (due to limited spacing) -
Posted By: Tomco @ 10/23/2008 11:10:50 AM
Wow and they printed this!
I live in California and have rented and owned. Speaking from that experience I can assure you in my case renting would have been a very foolish move. Sure if you totally change the tax system as it is today maybe there might be a thread of truth in this otherwise very naive commentary. My mortgage is $800 a month on a 1700 sq. ft. house I bought 20 years ago. Rents are $2000 for this size house in my neighborhood. The tax write off each each year alone makes it a worthy investment.
This housing crisis was caused by irresponsible loans and both the banks and the "innocent" buyers are to blame.
I have a friend who has come up with a plan that can turn this mess around if you are interested go here http://david-boone-h-corp.blogspot.com/ and read it. If you agree pass it on to people you think can get it going. If you disagree please post your comments on the blog. -
Posted By: jlafoe @ 10/21/2008 6:04:16 PM
The guy is an idiot. In what universe is it smarter to rent a home for $800 a month that you can buy for $500 a month with current mortgage rates. Where I live the equivalent mortgage is more like $400 a month. With the tax benefits and the fact that most first time homebuyers don't have enough money to invest and "pay rent off of the income" it is just a ludicrous proposition. Ownng a house also tends to alow you to pay lower interest on other loans. Most folks build equity in a home they own using the same money they would be using to pay rent which builds no equity. I'm sure for the rich there is something to say for not buying, but they can do it either way. Shiller is a moron living in a dream world.
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Posted By: cani77 @ 10/18/2008 8:22:16 PM
THE GREAT BUSH DEPRESSION
I follow an economist named Bob Proctor. He has called the top and bottom of every market crash since the 70s correctly.
He perfectly predicted the current meltdown and the picture he paints about what will happen next
is terrifying.He thinks it will be worse then the great depression.
The banks in the U.S. are going under one after the other. Countrywide ,Bear Stearns, Lehman Brothers and Merrill Lynch , Fanny and Freddy Mae ,AIG
The government took them over because they are bankrupt. Even with the goverment nationalizing hundreds of billions of dollars in debt the stock market is crashing
the credit markets are frozen and all of us may suffer beyond anything seen in generations
McCain just like Bush " doesn't understand the economy".
That not just my opinion its his own words. Not only does he not understand how to fix it but he does not understand how its been broken.
It is no surprise that he doesn't. The people that make up these securities use quantum mathematical models very few people understand.
Bush and McCain both can take the credit for this mess since they helped deregulate the laws that were protecting us.
Bush's economic advisor Phil Graham wrote the deregulation bill that allowed banks to take huge risks with all of our future.
Now, Phil Graham is the head of McCain's economic policy.He is also McCain's choice for the next secretary of the treasury.
No one in this country can afford for that to happen. The last time Bush met with his economic advisors was in March. He was the last to know somthing was wrong. Phil Graham had the guts to say that we are in a mental recession after he helped create the worst economy meltdown in our lifetime. Check out this link to the truth http://my.barackobama.com/keatingvideo
It will take the best and brightest minds in the world to get us out of this nightmare. As bad as Bush has done, McCain would be
even more destructive because things are in much worse shape. The next president will not inherit a budget surplus like Bush did but a crashing economy and a 11,600,000,000,000 (trillion) dollars deficit. Most of it Bush created and it will take decades to pay it back.
If you do what you have always done then you will get what you have always got.
When it comes to policy Bush and McCain are the same 90 percent of the time.
So why are the polls even close then ?
Mccains team just said they no longer want to talk about the economy.Instead they would like to spend time talking about obama
which means running the biggest smear campaign in history.
They think they can just tell you lies and you wont be smart enough to see through it
Let's teach him we are smarter than that
Stand up and hold them accountable
Bush isn't on the ballot this year but his policies are
Elect Obama Biden 2008
Check out this video of sarah palins interview and ask your self if she understands what she is talking about.
http://www.youtube.com/watch?v=r36Xc0GG4iQ -
Posted By: cani77 @ 10/18/2008 8:22:05 PM
THE GREAT BUSH DEPRESSION
I follow an economist named Bob Proctor. He has called the top and bottom of every market crash since the 70s correctly.
He perfectly predicted the current meltdown and the picture he paints about what will happen next
is terrifying.He thinks it will be worse then the great depression.
The banks in the U.S. are going under one after the other. Countrywide ,Bear Stearns, Lehman Brothers and Merrill Lynch , Fanny and Freddy Mae ,AIG
The government took them over because they are bankrupt. Even with the goverment nationalizing hundreds of billions of dollars in debt the stock market is crashing
the credit markets are frozen and all of us may suffer beyond anything seen in generations
McCain just like Bush " doesn't understand the economy".
That not just my opinion its his own words. Not only does he not understand how to fix it but he does not understand how its been broken.
It is no surprise that he doesn't. The people that make up these securities use quantum mathematical models very few people understand.
Bush and McCain both can take the credit for this mess since they helped deregulate the laws that were protecting us.
Bush's economic advisor Phil Graham wrote the deregulation bill that allowed banks to take huge risks with all of our future.
Now, Phil Graham is the head of McCain's economic policy.He is also McCain's choice for the next secretary of the treasury.
No one in this country can afford for that to happen. The last time Bush met with his economic advisors was in March. He was the last to know somthing was wrong. Phil Graham had the guts to say that we are in a mental recession after he helped create the worst economy meltdown in our lifetime. Check out this link to the truth http://my.barackobama.com/keatingvideo
It will take the best and brightest minds in the world to get us out of this nightmare. As bad as Bush has done, McCain would be
even more destructive because things are in much worse shape. The next president will not inherit a budget surplus like Bush did but a crashing economy and a 11,600,000,000,000 (trillion) dollars deficit. Most of it Bush created and it will take decades to pay it back.
If you do what you have always done then you will get what you have always got.
When it comes to policy Bush and McCain are the same 90 percent of the time.
So why are the polls even close then ?
Mccains team just said they no longer want to talk about the economy.Instead they would like to spend time talking about obama
which means running the biggest smear campaign in history.
They think they can just tell you lies and you wont be smart enough to see through it
Let's teach him we are smarter than that
Stand up and hold them accountable
Bush isn't on the ballot this year but his policies are
Elect Obama Biden 2008
Check out this video of sarah palins interview and ask your self if she understands what she is talking about.
http://www.youtube.com/watch?v=r36Xc0GG4iQ -
Posted By: cani77 @ 10/18/2008 8:21:54 PM
THE GREAT BUSH DEPRESSION
I follow an economist named Bob Proctor. He has called the top and bottom of every market crash since the 70s correctly.
He perfectly predicted the current meltdown and the picture he paints about what will happen next
is terrifying.He thinks it will be worse then the great depression.
The banks in the U.S. are going under one after the other. Countrywide ,Bear Stearns, Lehman Brothers and Merrill Lynch , Fanny and Freddy Mae ,AIG
The government took them over because they are bankrupt. Even with the goverment nationalizing hundreds of billions of dollars in debt the stock market is crashing
the credit markets are frozen and all of us may suffer beyond anything seen in generations
McCain just like Bush " doesn't understand the economy".
That not just my opinion its his own words. Not only does he not understand how to fix it but he does not understand how its been broken.
It is no surprise that he doesn't. The people that make up these securities use quantum mathematical models very few people understand.
Bush and McCain both can take the credit for this mess since they helped deregulate the laws that were protecting us.
Bush's economic advisor Phil Graham wrote the deregulation bill that allowed banks to take huge risks with all of our future.
Now, Phil Graham is the head of McCain's economic policy.He is also McCain's choice for the next secretary of the treasury.
No one in this country can afford for that to happen. The last time Bush met with his economic advisors was in March. He was the last to know somthing was wrong. Phil Graham had the guts to say that we are in a mental recession after he helped create the worst economy meltdown in our lifetime. Check out this link to the truth http://my.barackobama.com/keatingvideo
It will take the best and brightest minds in the world to get us out of this nightmare. As bad as Bush has done, McCain would be
even more destructive because things are in much worse shape. The next president will not inherit a budget surplus like Bush did but a crashing economy and a 11,600,000,000,000 (trillion) dollars deficit. Most of it Bush created and it will take decades to pay it back.
If you do what you have always done then you will get what you have always got.
When it comes to policy Bush and McCain are the same 90 percent of the time.
So why are the polls even close then ?
Mccains team just said they no longer want to talk about the economy.Instead they would like to spend time talking about obama
which means running the biggest smear campaign in history.
They think they can just tell you lies and you wont be smart enough to see through it
Let's teach him we are smarter than that
Stand up and hold them accountable
Bush isn't on the ballot this year but his policies are
Elect Obama Biden 2008
Check out this video of sarah palins interview and ask your self if she understands what she is talking about.
http://www.youtube.com/watch?v=r36Xc0GG4iQ -
Posted By: glensarahs @ 10/17/2008 7:23:26 AM
This is ignorance. There are people that have lived in the same place renting for say, 30 years that can no longer afford the rent due to the increase that take place during the years in the rent amount. To mow a lawn costs virtually nothing compared to hiring out and gives a person something healthy to do with themselves. I think this man is preaching an untruth. Home ownership is cheaper in the long run than renting. Of course, everything has its exceptions.
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Posted By: Braes @ 10/17/2008 2:51:07 PM
The author is an economist. That makes him an expert on false assumptions to make an unrelated point.
He is trying to use the market-assumption that all property should reside in the hands of a priveliged class. His statement that rent is cheaper is a falsehood of historic proportions. His statement that the market will give better returns and dividends is also not borne out. It is a false comparison to begin with. He then tries to add mantenance costs to an economy of scale argument, which is complete crap.
Property ownership is the right to exercise an option. No property, no options. Serfdom.
This idiot also says we may need to remove tax incentives on home ownership. Really.
Do you have any more schemes to debase the middle class for your paymasters at Yale?
Please just go back to your bunker and take the pill.
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Posted By: NoDebtForMe @ 10/15/2008 1:51:41 PM
Floridave you are funny. Homeowners are better Americans. What a joke. Many people who bought in the last few years put nothing down and now are upside down on their mortgage. 16% nationwide are upside down. They own NOTHING. They are in debt. They have less money than a homeless person. At least he has no debt and some goodies in his basket. The home debtor has negative equity. Moody's estimates that in 1 year 30% will be upside down. They rent money from the bank who lent it to them at a very high interest rates. They are slaves. Some are illegal aliens.
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Posted By: chrismarshva @ 10/14/2008 7:14:57 PM
"We need to structure the rules of the game in such a way that we don't get injured while playing it."
Spot on! Also that in a game the players are equal to each other at the beginning. However that is not the case given life chances in one's family of origin, is it? Life chances and wealth are inherited from one generation to the next.
Nevertheless, it's your house, it's your mortgage, it's your problem, you fix it, you pay it, or you lose it.
I like my apartment. I am more able to relocate. Even internationally if we can't clean up our economic and political act. -
Posted By: Dermar55 @ 10/14/2008 6:40:29 PM
I couldn't agree with you more.
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Posted By: dmchattie @ 10/14/2008 12:42:33 PM
I have tremendous respect for Prof. Shiller, having read is excellent work: Irrational Exuberance. It is therefore with tremendous dismay that I see him perpetuating the myth that home owners are better citizens and better people than renters. This myth, the 'ideology of property', has been thoroughly bebunked and discredited despite the fantastic leap that Glaeser and Sacerdote have made based on voting in local elections and knowing the name of the head of the local school system.
I am in fact a better citizen as a renter because I pay full income tax, contributing to the public purse, and I do not receive a hand-out from the federal government like all mortgage-holding home-owners.
PLEASE, PLEASE, PLEASE stop congratulating home-owners on being superior citizens when it is their financial irresponsibility that has created the massive, massive social and economic problem facing the entire planet today.
UGH!
Donald McHattie-
Posted By: glensarahs @ 10/17/2008 7:26:28 AM
Landlords own your home and get tax breaks for it.
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Posted By: Floridave @ 10/15/2008 10:18:26 AM
Of course homeowners are better Americans.. when you own property you own part of America. Why do you think that only landowners were allowed to vote in the good old days?
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