Debt is a result of borrowing money to buy a house, not renting.
But by owning a home you're at least building equity. And in most cases you're paying less on a mortgage that you would an apartment that's similar in size. So that's more money in your pocket for paying down other debts. That's the same effect as building wealth and decreasing debt.
And buying a house doesn't automatically help someone "own and build wealth". It has to be the right house, in the right area, at the right time.
Yes it does. You're focusing on the rare exceptions, and ignoring the general rule.
The market is designed to signal which houses are the right houses in the right area at the right time by adjusting house prices.
"Right" by whose definition?
If the government is interfering with the market by not allowing prices to float to reflect this reality, or there is interference to take away the price signals to buyers by making it easier to buy a house, then it increases the likelihood that someone will make a bad decision.
The government isn't "interfering with the market," except in the sense that it is trying to give some folks a break for getting screwed during the housing collapse, mostly due to no fault of their own. It was that perfect market that was left to run amok on its own that got us in this mess to begin with.
And the way it is structured now, it is the tax payers who will end up paying the price for these bad decisions.
You're leaping to illicit conclusions while basing an argument on unproved assumptions. You still haven't pointed to any "bad decisions," nor have to explained how the taxpayer will foot the bill. You just assert that the government's attempt to help people live the American dream, will lead to "bad decisions" that will cost you tax money. Well, how?
Say what you will about cash buyers or "speculators", at least they won't come knocking at my door if they made a bad choice.
It isn't about them making a bad choice. It is about them overrunning the market, buying up houses from underneath hard working folks who would rather live in them. By buying up two, three and four houses with no intention of living in them, they're effectively creating a housing bubble and driving up prices. And when they make bad financial decisions that lead them to bankruptcy, they don't default on just one home, but rather all three or four of them.
Ultimately, if the government fosters policies that artificially increase house prices, then home borrowers aren't necessarily "owning" or "building wealth".
The government's intent isn't to "artificially increase" prices. That's just a natural side effect by making mortgages easier to obtain. And what the hell is a home borrower? Do you mean the vast majority of American "home owners" who actually pay a mortgage? I can assure you that if you are paying a mortgage, you want your home values to increase. Because if you buy a home for say, $200k with a $30k down payment (to avoid paying PMI), you're going to finance the other $170k and still have $30k of wealth (equity) that grows with every mortgage payment. But if development in the area causes your home value to jump to say $300k, then that's like watching your equity jump $100k as well.
So in what scenario is this bad for homeowners?
While real estate can be an investment, for many people they end up being a poor store of wealth (with appreciation approximating inflation) and a consumption good.
You don't seem to understand how real estate investment can turn people into millionaires rather quickly. It isn't a matter of buying homes and sitting around hoping they triple in value before retirement. Real estate speculators love to buy homes that are dirt cheap, usually because the homeowner is going bankrupt and is forced to sell well below market value. They literally feed off of the hardships of others, taking advantage of the situation. But that's capitalism, so I know you're all for it. So what they do is they then turn around and "flip" it for a profit. Just an example, the house across the street from us was sold for a ridiculously low price of $109k (built 2003, 2800 sq ft). I walked over one day and spoke with the man who bought it. He had a pick up truck and some Mexicans installing a granite counter top. I asked him how he got it so cheap, and he said that's his business. He literally owns about two dozen homes in the Atlanta area. He said that he already had a buyer lined up who wanted to pay $180k. He had to put in about $20k in renovations, but ultimately he will be making a $50k profit for very little work. Now if you could make $50,000 in a couple of weeks, would you do it? Can you not see how this could turn some folks into millionaires in a relatively short period of time?
But if you're talking about the expectation that your home will increase in value, well traditionally that has also been the case. You seem to be fixated on the housing collapse and treating it as the norm. There is a reason why real estate investment was considered a no brainer for decades. The general rule was that their values always went up. But as I said, the unbridled capitalism and entrepreneurial greed is what got us into this mess. The poorer folks who have trouble getting loans were the ones who were punished the most. And since you're so focused on your precious tax dollars, it was their taxes as well that bailed out the banks. So I have no problem seeing taxpayer money bail out other taxpayers instead. It is amazing what gets a Republican upset the most; helping those in need. Because helping the wealthy is justified so long as it is an undisturbed market doing all the work, picking the winners and losers. Right?
