204
High Rates and Prices Leave Many Stuck in a Starter Home
(www.nytimes.com)
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 03 Jun 2024
204 points (95.9% liked)
News
23267 readers
2998 users here now
Welcome to the News community!
Rules:
1. Be civil
Attack the argument, not the person. No racism/sexism/bigotry. Good faith argumentation only. This includes accusing another user of being a bot or paid actor. Trolling is uncivil and is grounds for removal and/or a community ban. Do not respond to rule-breaking content; report it and move on.
2. All posts should contain a source (url) that is as reliable and unbiased as possible and must only contain one link.
Obvious right or left wing sources will be removed at the mods discretion. We have an actively updated blocklist, which you can see here: https://lemmy.world/post/2246130 if you feel like any website is missing, contact the mods. Supporting links can be added in comments or posted seperately but not to the post body.
3. No bots, spam or self-promotion.
Only approved bots, which follow the guidelines for bots set by the instance, are allowed.
4. Post titles should be the same as the article used as source.
Posts which titles don’t match the source won’t be removed, but the autoMod will notify you, and if your title misrepresents the original article, the post will be deleted. If the site changed their headline, the bot might still contact you, just ignore it, we won’t delete your post.
5. Only recent news is allowed.
Posts must be news from the most recent 30 days.
6. All posts must be news articles.
No opinion pieces, Listicles, editorials or celebrity gossip is allowed. All posts will be judged on a case-by-case basis.
7. No duplicate posts.
If a source you used was already posted by someone else, the autoMod will leave a message. Please remove your post if the autoMod is correct. If the post that matches your post is very old, we refer you to rule 5.
8. Misinformation is prohibited.
Misinformation / propaganda is strictly prohibited. Any comment or post containing or linking to misinformation will be removed. If you feel that your post has been removed in error, credible sources must be provided.
9. No link shorteners.
The auto mod will contact you if a link shortener is detected, please delete your post if they are right.
10. Don't copy entire article in your post body
For copyright reasons, you are not allowed to copy an entire article into your post body. This is an instance wide rule, that is strictly enforced in this community.
founded 1 year ago
MODERATORS
Maybe we shouldn't have kept interest rates at near zero for decades, especially when the economy was doing well. Maybe that would have eased the transition a bit.
Maybe we shouldn't give tax Advantages to predatory corporate landlords.
There's certainly a lot that can still be done, interest rates are just one lever.
Incentives to buy ONE home, but far less of them to get a second (and none, or start making big penalties for 3+)
Or just prohibit corporate ownership of single family homes and townhouses. Let them build condos in walkable cities and leave the farmland alone.
This is such an obvious solution that I’m surprised there isn’t wider discussion on laws pushing this.
Corporate real estate investors own a lot of politicians, and there is no organization or superpac that looks out for literally everyone who isn't rich. We don't have a seat at the table.
first_time.jpg
Progressive residential property tax rates. The first home, low tax. Second home, a bit higher. Third home, a bigger bit higher and so on until somewhere around the 8th or 10th one the annual rate hits 100% and keeps going.
Maybe we just shouldn’t let corporations own residential property and limit individuals to say 5-10 homes. That way we don’t have 4 corps owning all the homes and rich people can still have vacation homes in half a dozen states
Maybe we should maybe
Interest rates aren't causing this problem.
Low interest helps buyers compete against cash offers from investors and corpos.
When rates are high, it incentivizes that type of buyer because it's costing people who would live there more.
Now, traditional wisdom says higher interest encourages lending because banks like money. But times have changed, they get better returns on student loans, credit cards, or rent after they buy up homes.
There's just better investment opportunities for lenders, and instead of cracking down on the other ways they make money to make lending more attractive, were trying to pay them more to want to do mortgages.
Which is not sustainable.
nobody complete against cash investors. cash wins the vast majority of the time, even given a slightly lower offer, because it's a cleaner transaction for the seller.
Have you ever looked at an amortized loan with 8% interest? You pay more 3x the value of the house on a 30-year mortgage.
But think of the economy. 😡
If housing is a single point of failure for the economy, the economy has already failed.
Inflation was low. Raising interest rates when inflation is low is a recipe for persistent deflation like Japan has.
Oh no not the nightmare that is Japan, I want more GDP so the rich get richer.
Almost all countries with lower levels of inequality and decent income have inflation. Deflation actually works against the poor because they are the ones needing to borrow to make any large purchase and the banks can only set rates so low. The solution to wealth inequality is absolutely NOT deflation.
It's not a solution to wealth inequality, but doesn't drastically worsen inequality (Cantillon effect) like the dollar has since the Nixon Shock. We have 100% been played for fools.
Inflation works against the poor because that interest rate is added to the real rates offered to the poor - borrowers, not lenders, pay the price.
And what do you think happens when there is deflation, especially if it is negative by several percent? The real rate people pay is up significantly even if the nominal rate is 0%.
Nothing happens. We don't take out as many loans we can't afford, we don't make a bunch of subprime loans with other people's savings, and our time preferences aren't shortened.
I agree that real rates are high, so I'm not sure what you're getting at with that.