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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Amy J who wrote (28147)	3/14/2005 10:06:18 AM
From: GraceZ	Respond to of 306849

At the time she wanted to buy the house she had everything she needed to buy it except the will to take the risk. She was making about 30k a year, more than enough to buy that house at the price we would have sold it to her. This was my point. What some people miss here when they make fun of Americans who only have a house in their old age is that the alternative is nothing. The important part about renting for less than owning is that you have to invest the difference to make renting work out better over 50-60 years and a lot of people lack the will and discipline to do this. For her, buying would have been cheaper right from the start and would have only gotten cheaper as time went on due to the fact that a mortgage payment stays constant (or can fall if rates fall enough to refi) while rents are subject to inflation. For a lot of people what owning a house does is force them to save something, to invest something. They will pay a mortgage for years and eventually it'll get paid off and they will have something they can sell in their old age. Sure they might have done better putting the money into some other investment, but they don't do this. In the absence of a mortgage they will save nothing. This is not true for everyone, but it is certainly true for a lot of Americans considering half the elderly have nothing more than their SS benefit checks to live on when they retire.