Plethora of inconsistent thought, so I'll reply (in red)
Home Ownership Matters
Recently there have been some in the media and academia questioning the value of homeownership. They ask if perhaps we would be better off as a nation of renters. This couldn’t be more wrong. Homeownership provides a litany of benefits for our nation, our community and for individual homeowners.
From the national perspective the 67 percent of American households that are homeowners pay 80 to 90 percent of individual federal income taxes which support programs that benefit all Americans. Research shows that for every home purchased $60,000 is pumped into the economy for furniture, home improvements and related items. Housing accounts for 15 percent of our gross domestic product.
GDP ... really?
Ongoing promotion of a consumer economy, without reference to source of products.
Does this help American production?
For our community, homeownership is critically important. In late 2010 the National Association of REALTORS® and Harris Interactive surveyed 1,880 homeowners and 1,115 renters about their community and quality of life. Though no causal relationship could be established, there is a strong correlation between owning a home and community satisfaction, quality of life, community connection, civic engagement and volunteerism.
"no causal relationship" ... then state correlation
Data please. What about urban areas where there are many long term renters.
Homeowners are often the glue that holds a community together. They do not move as often, vote and volunteer more, and bring stability to neighborhoods which helps reduce crime and support upkeep. Homeowners report enjoying a better quality of life, are happier and healthier, and feel a greater sense of control over their lives.
do not move-but now talent is tied down - double edged sword
According to a recent white paper by the National Association of REALTORS® titled “The Social Benefits of Homeownership” owner’s children tend to do better in school and stay in school longer.
unbiased source!
For the individual, besides the quality of life and health benefits, there are significant financial benefits of home ownership as well. Data from the Federal Reserve show a very real and extreme disparity in wealth between owners and renters. In 2007, the median net worth of home-owning families was $234,200 compared with $5,100 for renting families. The disparity has existed for many years and will continue to exist despite a decline in home values. Why is this?
health?
disparity of wealth - no chicken and egg reasoning here!
A homeowner’s equity in a home links a piece of their financial portfolio to the long-term growth of the economy. As our economy improves, homeowners will benefit. Real estate has greatly outperformed the stock market over the past 10 years despite declining values. With real estate you get to live in and enjoy your investment daily.
what benchmarks?
housing bubble followed the stock market bubble of the late 90's
now housing prices down the last 5 years about 30% while S&P is about flat since 2000 (not including dividends), my conclusion - total BS
No provision for transaction costs, realtors, closing costs, finance costs.
The portion of the mortgage payment that goes to principal repayment is not a cost of home ownership, it is forced monthly savings. As a forced monthly savings it is disciplined and largely painless.
forced monthly savings - if your property increases in value and we aren't even talking liquidity, which doesn't exist in today's market.
compare to constant dollar investments - invest the same amount in equities every month, if the prices are high, you buy less, if prices are low, you buy more shares.
Home ownership costs are generally stable while rents rise on the average of 3 percent a year. Renters are paying the landlord’s mortgage and homeowners pay themselves. Homeowners can also deduct mortgage interest and property taxes from their federal income tax. No wonder homeowners’ net worth is so much higher.
ownership costs - let's talk property taxes ...
will grant that there is a tax policy bias towards home ownership
if one does a bit of research, you would find that the genesis of tax law came about during the Great Depression, with an eye to both stability of the workforce for employers and assistance to this same population who otherwise had become more migrant
simply - to try to head off social unrest
today, you can have ossification of the work force where they cannot move to where there are better jobs if they are tied to failing property, having placed too much of their investment in an illiquid asset.
if one does a bit of research, you would find that the genesis of tax law came about during the Great Depression, with an eye to both stability of the workforce for employers and assistance to this same population who otherwise had become more migrant
simply - to try to head off social unrest
today, you can have ossification of the work force where they cannot move to where there are better jobs if they are tied to failing property, having placed too much of their investment in an illiquid asset.
Here in Greater Lansing the opportunity for home ownership is better than it’s been in decades. Due to declines in average selling prices over the past four years and low mortgage rates we haven’t seen in 50 years, affordability here is remarkable. The average household income in Lansing would qualify for the conventional purchase of the median-priced home in most communities and low down payment FHA loans put houses in reach that would not have been possible for buyers just a few years ago. In fact, for first-time buyers, investors and move-up buyers it is hard to imagine a better time to buy.
opportunity for home ownership is better = prices are down
Improvements in the local economy including insurance company and auto-related hiring, declining unemployment and increased construction spending coupled with recovering IRAs and investment portfolios will contribute to a rise in confidence which will lead to rising home prices and sales volume. Anyone who has considered buying and qualifies for a mortgage should seriously consider participating in the American Dream now and begin to enjoy the many benefits of home ownership. Additionally, the national and local governments should do everything possible to support home ownership because it really does matter.
we are in the mess with home prices, in large part because of a national obsession, both parties, for increased home ownership - getting people who cannot handle home ownership into homes.
the market is suffering the hangover from a bubble of Brobdingnagian proportions
nationally, almost a quarter of all homeowners are "under water" (owe more than their homes are worth)
further comment :
US Housing Crisis Officially As Bad As Great Depression - CNBC
It's official: The housing crisis that began in 2006 and has recently entered a double dip is now worse than the Great Depression.
US Housing Crisis Officially As Bad As Great Depression - CNBC
It's official: The housing crisis that began in 2006 and has recently entered a double dip is now worse than the Great Depression.
Prices have fallen some 33 percent since the market began its collapse, greater than the 31 percent fall that began in the late 1920s and culminated in the early 1930s, according to Case-Shiller data.
and
"Yet other factors are constraining the market.
After the fallout from the subprime debacle, in which millions lost their homes when they defaulted on loans they could not afford, banks changed underwriting standards.
More than four in every five mortgages now require a down payment of 20 percent, and credit history standards have tightened. At the same time, foreclosures continue at a brisk pace, pushing more supply onto the market and pressuring prices downward."
| Debbie Barnett is the president and owner of Tomie Raines, Inc. The company was founded in 1977 and Barnett has owned the company since 2002. She began her real estate career and was an award-winning agent with two other local firms before joining Tomie Raines, Inc. in 1995. Barnett also owns TRI Title Agency and Tomie Raines Home Warranty Company. |
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