this post was submitted on 20 Nov 2024
367 points (97.9% liked)

News

23649 readers
3229 users here now

Welcome to the News community!

Rules:

1. Be civil


Attack the argument, not the person. No racism/sexism/bigotry. Good faith argumentation only. This includes accusing another user of being a bot or paid actor. Trolling is uncivil and is grounds for removal and/or a community ban. Do not respond to rule-breaking content; report it and move on.


2. All posts should contain a source (url) that is as reliable and unbiased as possible and must only contain one link.


Obvious right or left wing sources will be removed at the mods discretion. We have an actively updated blocklist, which you can see here: https://lemmy.world/post/2246130 if you feel like any website is missing, contact the mods. Supporting links can be added in comments or posted seperately but not to the post body.


3. No bots, spam or self-promotion.


Only approved bots, which follow the guidelines for bots set by the instance, are allowed.


4. Post titles should be the same as the article used as source.


Posts which titles don’t match the source won’t be removed, but the autoMod will notify you, and if your title misrepresents the original article, the post will be deleted. If the site changed their headline, the bot might still contact you, just ignore it, we won’t delete your post.


5. Only recent news is allowed.


Posts must be news from the most recent 30 days.


6. All posts must be news articles.


No opinion pieces, Listicles, editorials or celebrity gossip is allowed. All posts will be judged on a case-by-case basis.


7. No duplicate posts.


If a source you used was already posted by someone else, the autoMod will leave a message. Please remove your post if the autoMod is correct. If the post that matches your post is very old, we refer you to rule 5.


8. Misinformation is prohibited.


Misinformation / propaganda is strictly prohibited. Any comment or post containing or linking to misinformation will be removed. If you feel that your post has been removed in error, credible sources must be provided.


9. No link shorteners.


The auto mod will contact you if a link shortener is detected, please delete your post if they are right.


10. Don't copy entire article in your post body


For copyright reasons, you are not allowed to copy an entire article into your post body. This is an instance wide rule, that is strictly enforced in this community.

founded 2 years ago
MODERATORS
top 50 comments
sorted by: hot top controversial new old
[–] Dorkyd68@lemmy.world 78 points 1 month ago* (last edited 1 month ago) (2 children)

As a homeowner what weighs me down most is insurance, by a large margin. It keeps increasing while the coverage decreases. It's a huge racket in my opinion

[–] dual_sport_dork@lemmy.world 50 points 1 month ago

Racket.

A racquet is what you hit your insurance adjuster with when you're tired of his racket.

[–] credo@lemmy.world 8 points 1 month ago (1 children)
[–] Dorkyd68@lemmy.world 6 points 1 month ago (4 children)

Oklahoma 🙃rates go up each year due to tornados, at least that's what they say. Even though i live in a heavily populated area that'll never get hit.

I had to put a new roof on cause of softball sized hail caused by the infamous may 2013 storm that damn near leveled Moore Oklahoma. But other than that, no storm damage ever

[–] Glimpythegoblin@lemm.ee 16 points 1 month ago (3 children)

Even though i live in a heavily populated area that'll never get hit.

I don't think tornadoes care.

load more comments (3 replies)
load more comments (3 replies)
[–] partial_accumen@lemmy.world 57 points 1 month ago (4 children)

On paper, owning a home is almost always more expensive than renting — about 14% more, on average, after factoring in expenses like insurance, taxes, and upkeep.

I'd be interested in seeing how they arrived at the 14% number.

When I bought my first home a couple of decades ago I moved out of my 1 bedroom apartment which I was paying a monthly rent of $700/month into a small starter home with a mortgage of $1000/month. 20 years later that exact same apartment rents for $1350/month. All of the years I lived there my house payment never rose higher than the $1000/month mortgage payment while the rent on the apartment apparently continued to increase year over year. Meanwhile I ended up selling the starter home for $110,000 than my purchase prices nearly 20 years ago.

So is their 14% number just calculated on the first month of each (renting vs buying)?

[–] Sundial@lemm.ee 31 points 1 month ago (8 children)

Once you factor in things it mentions like insurance, taxes, upkeep along with others like a down payment then it's very easy to see where the 14% numbers comes from. Frankly, I'm surprised it's only 14%. There's a lot of additional and hidden costs with home ownership.

[–] empireOfLove2@lemmy.dbzer0.com 45 points 1 month ago* (last edited 1 month ago) (8 children)

The difference is those "costs" are going towards buying equity that you then get to keep. Maintaining a house is expensive but it is an asset that maintains value. This article really doesn't seem to understand that which shows a very basic misunderstanding of the wealth math that goes into home ownership.

Renting may be cheaper month to month but you're literally pouring that money down a black hole never to be seen in your hands again.

Granted, building equity doesn't matter when you're already have no cash paycheck-to-paycheck for either.

[–] pearsaltchocolatebar@discuss.online 20 points 1 month ago (7 children)

No, not all of them. Insurance, property tax, and maintenance do not go to equity.

[–] qjkxbmwvz@startrek.website 13 points 1 month ago (2 children)

Not to mention mortgage interest.

load more comments (2 replies)
load more comments (6 replies)
[–] Sundial@lemm.ee 11 points 1 month ago

This is more of a case where the article doesn't take the time to explain the nuance. Everyone knows home ownership increases equity. Which is why it costs more.

load more comments (6 replies)
load more comments (6 replies)
[–] grysbok@lemmy.sdf.org 10 points 1 month ago* (last edited 1 month ago)

For me, I'm in a condo that we bought with a 15-year mortgage during the pandemic. My mortgage (including escrow/taxes and insurance) plus HOA fees is about $2100/month. My old apartment (including monthly pet fee) was more than that when I lived there. It's currently listed for $2500/month (big complex, not necessarily my unit).

I promise all y'all I'm not spending $400/month on homeowner-specific costs. And, I could reduce my monthly cost by moving to a 30-year mortgage instead of a 15-year mortgage.

Edit: looked up my old apartment again. Holy shit, it's listed for $2750, which doesn't include a pet fee.

load more comments (2 replies)
[–] westyvw@lemm.ee 42 points 1 month ago* (last edited 1 month ago) (6 children)

I am confused, my thought process went like this:

So it's more expensive to own then rent?

Unless you own it and rent it out to others?

Nobody would be a landlord if a dwelling cost more to maintain then to rent out.

So something doesn't add up.

[–] Not_mikey 27 points 1 month ago

Most landlords bought the place earlier when home prices and mortgage rates were lower, or they just own the place outright and don't make any mortgage payments.

This article is about choosing whether to buy at current rates or rent at current rates. If you bought a place 10 years ago for half the price it's worth now and a 2% interest rate then you're probably going to be paying less then renting

[–] Pacattack57@lemmy.world 8 points 1 month ago

I believe they are taking into account the cost to purchase these days since interest rates are higher, ergo high mortgage payments.

As someone else mentioned most landlords have locked in rates at this point. Not many new landlords.

[–] Takumidesh@lemmy.world 6 points 1 month ago* (last edited 1 month ago) (4 children)

When you mortgage a home as an investment property, you are leveraging your money 5-1 (on a 20% down payment)

If rent covers 90% of the mortgage, you still make an absolutely huge profit amortized over the loan.

If you consider the tax incentives (interest write off, depreciation, capital gains deferment, pass through deduction) the gap in the rent can be covered.

Consider paying 50k down on a 250k house, the. Paying an additional 15 percent over the life of the loan (around 40k) to cover for gaps in rent.

Over the life of the loan you turned 90 grand into 250 grand (and a house is an appreciating asset, so it will likely be worth more than 250 by the end of it all)

Deduct depreciation (value of the home minus land value over 27.5 years) and carry over losses can even make up for the gap of rent you pay entirely over time.

load more comments (4 replies)
[–] LengAwaits@lemmy.world 6 points 1 month ago* (last edited 1 month ago)

I agree, and came in here to say the same thing. I think the data is being skewed by the fact that many (not all, of course) rental properties are subdivided into multiple units (or built that way in the first place). People commenting about how it's considering modern costs, well, they must not have read the first two sentences of the article:

On paper, owning a home is almost always more expensive than renting — about 14% more, on average, after factoring in expenses like insurance, taxes, and upkeep.

But the difference has grown much more extreme in recent years as just about all homeownership costs have ballooned.

The only way you can arrive at that 14% number is if you're averaging in multi-unit apartment buildings. Very few, if any, landlords are out there subsidizing their non-family tenants by charging less than the normal costs of ownership. If most landlords are losing money year over year, well... at that point just sell the property.

load more comments (2 replies)
[–] TropicalDingdong@lemmy.world 28 points 1 month ago (12 children)

Cost of materials and demand for contractors. Even if you DIY it, everything is 3x as expensive as it was before covid. The price of lumber never really went back to where it was before covid. Its clearly price gouging.

[–] tal@lemmy.today 10 points 1 month ago* (last edited 1 month ago) (2 children)

The price of lumber never really went back to where it was before covid.

https://tradingeconomics.com/commodity/lumber

The price in at the start of 2020 was ~$377.55 per thousand board feet.

https://www.bls.gov/data/inflation_calculator.htm

$377.55 in January 2020 is $460.34 in July 2024 dollars.

The price of lumber in July 2024 was $423.27.

So it's gotten back down to and fallen below pre-COVID-19 prices in real terms.

It does look like the price has risen from July 2024 to November 2024, so it's presently higher, but it has not stayed above pre-COVID prices since the end of COVID-19.

load more comments (2 replies)
load more comments (11 replies)
[–] Free_Opinions@feddit.uk 19 points 1 month ago (2 children)

Highly dependent on where one lives I guess. My friend just rented a new apartment and his rent is over double what my mortage payments are. That's also money he is never getting back where as in my case my house is paid in about 15 years after which I own the damn thing and the monthly mortage payment drops off entirely. Excluding mortage, the montly cost of owning my house is 275€ which includes water and electricity.

[–] teawrecks@sopuli.xyz 9 points 1 month ago (2 children)

Excluding mortage, the montly cost of owning my house is 275€ which includes water and electricity.

That's also excluding regular maintenance or emergency repairs that a landlord would be (often reluctantly) responsible for. It is also possible to do big, expensive, necessary renovations on a house and have it hardly affect the value at all.

[–] trashgirlfriend@lemmy.world 13 points 1 month ago (4 children)

It is also possible to do big, expensive, necessary renovations on a house and have it hardly affect the value at all.

Isn't this kind of irrelevant unless you're a house flipper? If you own a house and make renovations to it, it is because you find some practical value in it.

load more comments (4 replies)
load more comments (1 replies)
[–] Raiderkev@lemmy.world 7 points 1 month ago (2 children)

It's not about what your mortgage payment is. Interest rates are significantly higher now. See how much the same house costs at the current price and interest rates. Most likely it's significantly higher now as both rates and prices have increased.

load more comments (2 replies)
[–] callouscomic@lemm.ee 18 points 1 month ago (4 children)

This ignores the difference after 5-10 years. Rent keeps going up.

[–] bitflag@lemmy.world 8 points 1 month ago (10 children)

Maintenance cost and property taxes too though.

load more comments (10 replies)
load more comments (3 replies)
[–] eran_morad@lemmy.world 17 points 1 month ago

We livin in a new gilded age, bruh.

[–] rollerbang@lemmy.world 16 points 1 month ago (4 children)

I might still not understand but... Landlords have to pay insurance as well. Why would they be the exception. They have all the same costs and also want to make a profit. How can rent be cheaper then?

[–] Badeendje@lemmy.world 13 points 1 month ago (1 children)

Because if you buy a house, it's just you and the bank, so you need to cover the banks risk for you as an individual, meaning higher interest rates. Larger purchases, or a group of houses are covered by different loan types, flexible rates at for example international rated plus half a point.. and that is mich cheaper. The rate might fluctuate.. but if the government strongarms the fed to keep the loans practically free, companies borrow for free plus half a point. And that is a lot of difference.

[–] frezik@midwest.social 8 points 1 month ago

Also, the landlord is dropping that money into an asset that often appreciates in value. As long as they otherwise have cashflow to cover it, they can afford to "lose" money each month and make a big payday when they sell it.

[–] exasperation@lemm.ee 7 points 1 month ago (2 children)

Two things: first, landlords aren't entitled to a profit, and second, landlord input costs might be completely different from an owner resident.

On the first point, if the landlord's costs are $2000/month, and the market rent for that unit is $1900/month, the landlord would rather lose $100/month on a lease than lose $2000/month on a vacant property.

On the second, it might be that the landlord bought the place when it was much cheaper, or has a much lower interest rate than what is available today. So if the landlord's costs are $2000/month for a property that would now cost $4000/month at today's purchase prices and interest rates, but can rent for $3000/month at a profit to himself.

Similarly, some volume landlords can spread certain costs around and not pay nearly as much as an owner resident. It might cost $1200 to hire a plumber to do a 6-hour job, but it also might cost $150 to simply have a plumber on the payroll to do that job, if you've got enough steady work that it's cheaper to have him around.

load more comments (2 replies)
load more comments (2 replies)
[–] brianary@startrek.website 12 points 1 month ago (4 children)

Do they mean "buying" instead of "owning"?

load more comments (4 replies)
[–] Today@lemmy.world 9 points 1 month ago (2 children)

By February, I will have put $100k into a house in stuff that's nearly invisible - replace fence, repair leaking pool equipment, stabilize foundation, repair plumbing, and replace exterior 'wood' that was really watelogged mdf. My mom paid $220k 11 years ago. I've inherited it - and the $130k mortgage balance. My son is helping me by living there and covering the mortgage payment and I'm pulling money out of retirement to make repairs. It would likely take another $100k to update the 1980s kitchen, bathrooms, electrical, and 20 yr old hvac. Oh yeah, plus $10k/yr in taxes and insurance! Anyone want to buy a house?

[–] dual_sport_dork@lemmy.world 12 points 1 month ago (1 children)

repair leaking pool equipment

You have a pool. You are already head and shoulders above most people, including people who are also mortgaging a property.

[–] Today@lemmy.world 6 points 1 month ago

It's green and has been unusable for most of this year. It's essentially a pond.

But you're building equity! /s

[–] FuryMaker@lemmy.world 8 points 1 month ago (9 children)

Yeah, but, after X years you own your house.

After X years of renting, you got nothing.

load more comments (9 replies)
load more comments
view more: next ›