Hacker News Reader

Comment by haywirez | Hacker News Reader

There are mitigating strategies that we can use to our advantage. Rejecting car & home ownership culture, enforcing various frugal lifestyle patterns (cook and eat home, body weight exercise), cheap travel (couchsurfing/airbnb), geoarbitraging income can do wonders on a personal level. There are several changes on the horizon that could cause interesting ripples soon - for example, what happens when mobile solar power, electric transport, better batteries and global internet coverage enables entirely new kinds of productive lifestyles outside of expensive cities?

View on HN

While interesting I cant see these things having a huge effect on the global macro economy, the crushing weight of globalization and mechanism will march on, while the technocrats might avoid it, the vast majority of the working class are in trouble.

Home ownership is a great asset if you're using the home yourself. On the other hand a car is a actually a liability that depreciates over time requiring inspections in regular intervals, compulsory car insurance and a parking lot at both the departure location and the destination.

A home is no different from a car in that it also depreciates, things break, needs to be maintained, repaired, etc.

The only real difference is that in major populated areas, the land it sits on tends to be rare and valuable, which allows its value to keep up with or even exceed the rate of inflation.

There is a difference though in that you may or may not--depending upon where you live--be able to reasonably manage without owning a car. You're likely to have to pay for other transportation as a result but it will probably be less.

On the other hand, you have to live somewhere and, absent having access to somewhere you can live for free, you're going to have to pay for housing one way or another.

The land it is built on may well go up in value, due to improvements in infrastructure - say a new railway line.

Also that in most places, mortgage payments + taxes are cheaper than rent for the same property, plus you are building equity. The only real difficulty is scraping up enough cash in hand to pay the down payment - which is where the massive increases in house prices really hose you. 20% of 100k is not unreasonable to save up over a few years on a median salary. 20% of 500k or 1M is completely out of the reach of people outside the top income brackets.

The biggest advantage of home ownership is the tax break. You can leverage capital 4:1 (with a 20% down payment) and your capital gains will be tax-free up to $250,000 per person.

The second biggest advantage is that you can fix your housing costs. Good luck finding a rental that will have the same monthly payment for 30 years, but it's not hard to get a 30-year fixed rate mortgage.

You would be hard pressed to find rentals that have the same monthly payment even for 2 years, let alone 30.

I remember distinctly in 2008-2009, even as the housing prices were crashing, our rent went up by $90/month (outpacing inflation by 7%), and that's when we made the decision to buy a house (the $8000 first time homeowner credit/subsidy helped also)

It's very hard for me to envision a future I want to save for where I'm not the owner of a house - of my own space. That said, I imagine subscription car usage will be a shift that happens over a generation or two...

Reply on news.ycombinator.com