Comment by Swizec 2 days ago
> there is a chance you’re spending more than 1/3 of your income on housing. People with higher rates and people who are renting, spend a lot more than 1/3 of their income on housing.
We live in San Francisco and pay rent at about 15% of combined gross income. I think people really underestimate the value of renting.
1. Are you under rent control?
2. What is your income and what is your rent?
While I appreciate the anecdotal data point, it’s easy to conflate personal situations to “this is what everyone else can do”. I say this because for a good 5 years I lived with my spouse in a $2k single bedroom apartment in San Francisco that was under rent control when both of us were raking in tech money. It’s doable, but not something that you can extend to everyone in the country.
Good question. We make tech money and rent a 3bed. No more rent control than SF defaults, we’ve only been here 2 years.
The shocking part is that we pay 5k in rent, but mortgage on the same place would be closer to 9k. Plus the commitment part (annual lease vs 30 year debt)
Very important to do your own math on these things and not just follow common wisdom.
> you are well within the top decile of income for the US
Yes and still can’t [responsibly] afford to buy in my locale :)
The situation is truly fucked and it’s about time Americans admit that housing cannot be both an expectation and an investment. Either everyone gets to own a house or it can be an investment. You can’t have both.
IMO housing is a consumption expense but people hate it when I bring that up at dinner.
Yeah I think $5k/month at 15% of your income means you’re making more than $400k/year as household. (Even more if you’re counting it on net income)
The strong household income is the only reason why you’re able to limit how much you spend on housing, which unfortunately is not something most people are able to do, even if they’re renting. I get that renting is cheaper than buying at the moment with the interest rates, but it’s not cheap overall.
The abstract math can work out well but the practical reality is that every landlord exists on the slightly-shitty-to-living-slime end of the human continuum. Even if your municipality has "strong" renter protections it is so draining and stressful dealing with them and their weird invasive bullshit and petty malfeasance for decade after decade.
From a livestyle perspective renting sometimes makes sense. Financially almost never does. There are of course edge cases like very expensive urban areas where there’s no possibility to buy because there are no units on the market and commuting is not possible. But if you work remotely, or suburbs are nearby then owning a place is likely a much better choice than renting particularly if you take advantage of subsidies like state/federal assistance for first time buyers and tax abatements in opportunity zones.