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Comment by reaperducer | Hacker News Reader

The problem is that the people putting together these scenarios almost exclusively live on the coasts, where $270k/year can be average more often.

But just watch a TV show like House Hunters, and see how many people in America are struggling to buy a house that costs about the same as what people on the coasts spend on a fancy new car. There's your "average" person. There was one episode a few years ago where a guy in Atlanta had a budget of $46,000. Yes, just $46k for a condo. It was small, but it was home.

It should also be of no surprise that the politicians view $270k as an "average" family. They're all completely out of touch. Remember back in the early 90's when Bill Clinton said that anyone making $200k/year was technically a millionaire, because there's no reason they couldn't save a million dollars in five years. Red or blue, they're both clueless.

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> $270k/year can be average more often.

Aside from th fact that "average more often" doesnt make sense (do you mean more common?), its still not excusable because the data is so easily available. The county with the highest median household income isnt even half that (Loudoun County, VA at $115k), and Santa Clara county, home of most of "Silicon Valley" and a place many Americans would probably think as a home of a lot of high income families is 14th on the list at ~$91k/year [0]. A slightly older, longer list doesnt even put San Francisco in the top 100 counties.

[0] https://en.wikipedia.org/wiki/List_of_highest-income_countie...

Maybe the problem is that HN is full of people who make decently into the low 6 figures and spend large amounts of their time with others who make similar amounts.

How often have you heard some young single person complaining about how hard life will be in SF with only 130k salary?

I don't think that's even true for most of the coasts. I live in San Diego, which is I think the third biggest coastal city in the US, and the average household income here for a family of four is about $200k less than that.

How come so many people buy houses in the US, while most of us Germans rent? Even people considered of average income talk about their "condos" all the time.

I always think, how can they be average if they own a whole house?!

It's a combination of factors. First off, culturally, it's just one of those "things you do" if you're pursuing the American Dream. Many people believe that owning your own home is one of the major milestones to living successfully.

Secondly, for most people in the US who own homes, their home is their only source of equity or savings. Very few jobs in the US offer any type of pension, and many people don't have enough left over at the end of the month to put away in an independent retirement savings or investment account.

Politicians have encouraged home buying over the years, and there is a cultural ideal of home ownership (which goes hand-in-hand with owning and driving a car). This was a factor in the 2007-2008 financial crisis; banks had been encouraged to give loans to people with less income, in order to encourage more home ownership among the working class.

In the United States, paying your mortgage, taxes and insurance is often about the same price as paying rent (this varies with where you live of course). When you choose to put your money towards buying a house a portion of the money you pay each month goes towards paying off the principle of the loan, so you are "building equity". After 15 or 30 years you pay off the loan, then you only need to pay taxes, and insurance if you want. It makes retirement much easier if you own your own home. And in emergencies you can borrow money against your home or sell it to raise a lot of money.

You also have to pay for upkeep of your house, but an offset to that is that real estate can often increase in value over time. And the best thing is, it's your house. Pride of ownership is a real thing, it's nice to be able to do what you want, have a garden (if you have any land which many houses do), paint it how you want, add an addition, upgrade the kitchen or bathroom.

People who do not make a lot of money, but have a steady income and good credit can get a mortgage for a house they can afford, with just 10-20% down payment. But the poorest or those who do not have good credit must still rent, and even that is hard because many landlords check credit histories and want a big deposit up front.

>it's nice to be able to do what you want, have a garden (if you have any land which many houses do), paint it how you want, add an addition, upgrade the kitchen or bathroom.

Let's toss in a YMMV on this since sometimes home ownership in the US is also coupled with very restrictive HOAs.

Overall, that's a great description of why home ownership in the US can be beneficial once you've reached a certain income or rental price point that it makes sense.

A succint description.

I'd add that some people also have a hard time raising the 10-20% capital for downpayment even while they can afford the monthly mortgage payments, and so they are stuck in the renter's cycle.

They usually have a mortgage. (And tax incentives might help to increase home ownership)

US tax law heavily favors owning instead of renting. Mortgage interest can be deducted from your income before you pay taxes, so early on in the loan when your payment is mostly interest you are effectively getting a ~30% discount on your mortgage payment.

Also important is that capital gains on your primary residence are (for typical homes) tax-free.

This was the only self-interested part of the new tax bill that I could get on board with. I think at one point it was going to get rid of the mortgage interest deduction entirely (now it keeps it below $750k, I think).

As a renter in LA, who never plans on being able to afford a house here, I was personally ok with them twisting the knife a little on folks that get a double break in not only the mortgage interest deduction rate but also get to keep their property tax low due to Prop 13. Whereas I pay ever increasing rent plus, to help fund public transit, we end up paying more in sales tax.

How come so many Germans rent? The US doesn't seem the odd one out here.

For example, UK, Belgium, France it's normal to buy a house. Or at least want to buy a house.

The US has about 4 times the population of germany in 27 times the area (22 times if you count contiguous). There is a lot of space for houses.

and in the bigger cities people do rent or have absurd commutes.

Depending on where you live:

* It's cheaper to buy than rent in many places.

* Unless you're in an HOA you can do more with your land, such as farm it, put a pool in, etc. Shared spaces aren't common in many places.

* Pets can often make renting impossible, especially dogs.

* Americans like physical privacy more than many Europeans. (Online privacy is a whole separate issue).

* Most rentals don't have much land, some people really like having more land.

* Rentals tend to be in places that are less affluent and offer less amenities.

* School systems are often based off property taxes so places with more home ownership tend to have more money for schools.

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