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?!
I always think, how can they be average if they own a whole house?!
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.
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.
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.
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.
* 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.
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.
For example, UK, Belgium, France it's normal to buy a house. Or at least want to buy a house.
and in the bigger cities people do rent or have absurd commutes.