Comment by jonhohle
11 hours ago
But they didn’t do nothing. They put up capital for a resource. Generally more capital than anything else until late in career.
11 hours ago
But they didn’t do nothing. They put up capital for a resource. Generally more capital than anything else until late in career.
And arguably, they already extracted the value of that house by having a place to live without having paid for it up front. They didn’t even put up the capital in most cases. In the US they will have been granted a loan that is backstopped, and therefore subsidized by the government. Don’t forget the mortgage interest deduction, that’s a massive homeowner subsidy.
So someone else put up the capital, the government made that capital cheap, and societal demand with artificial scarcity (in most places) pushed up the asset value.
I’m not saying it’s a bad thing, but let’s not pretend that making capital gains on a house in the US is anything like any other available investment.
They maintained the home and paid taxes on it. Have you ever had a failed septic system? A major water leak? A new roof? There's this whole anger around home ownership you get these days, oftentimes by people who have no experience in the matter.
Yes, mortgages are subsidized by our interest tax deduction system. That part is true. It doesn't turn home ownership into something with no risk, and it certainly doesn't turn it into this subsidized investment. It's a liability, not an investment.
I have replaced my septic. Repaired a roof. Dealt with flooding. I own a home. I have plenty of experience with homeownership. I recognize that maintenance exists and have never said otherwise. You have made assumptions about me to load up an ad hominem attack against a straw man argument. Nothing I said was angry at homeowners. Just pointing out that making 500k on a home isn’t the result of savvy financial moves exclusively, and more a foreseeable outcome of government policy at all levels.
I’m not saying that homeownership is a slam dunk. If you go back and reread, what I’m pushing back on is that the mere act of purchasing and holding a house counts as doing something worthy of a return.
My point is that homeownership, in the US especially, is so heavily favored as an investment vehicle that you perhaps should not act as if you inherently deserve the gains for having “done something”.
As you say: it’s a liability, not an investment (although, I would say it’s entirely possible to be both, and trillions of dollars of smart money agrees)). But it is a liability that has limited downside because of government policy. Because of this, it actually makes a pretty good investment as well. We would do well to recognize where those gains come from (artificially low mortgage rates, and often artificially high scarcity).
> It's a liability, not an investment.
No it's not.
Just unbelievable gaslighting from the landed class, continuously.
Ohhh no, woe is you, bought a $500k house on 3%, literally lived inside it, but had to repair the septic :(
Many inherited the real estate. Or bought it for a fattened steer.
They did not create the resource (the land), nor did the person they bought it from.