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A comment on Renting in America Has Never Been This Expensive. Parent comment

Re:Renting in America Has Never Been This Expensive by bradleyjg on Thursday August 13, 2015 @12:23PM (#10055330)
>> What are the underlying reasons for the disparity between rental and home ownership costs?

Massive implicit and explicit government distortions in favor of home ownership. Starting with the type of mortgage available in the US and virtually nowhere else (i.e. 30 year fixed rate, no prepayment penalty, 10-20% down, and in some states no recourse -- all at less than 100 bps over the risk free rates), continuing with an even more comprehensive version of the infamous Greenspan put for equities, and big tax incentives.

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Re:Renting in America Has Never Been This Expensive by happyfriend on Thursday August 13, 2015 @12:53PM (#10055546)
>Massive implicit and explicit government distortions in favor of home ownership. Starting with the type of mortgage available in the US and virtually nowhere else

Which ones? The horrible interest-only ones, or the horrible variable interest with balloon payment ones, or the horrible fixed 5% interest ones?

Now look at Japan. I can get a home there with a 1-2% fixed mortgage rate and that comes with a 5% discount at the local mall/grocery (Aeon). I could actually make the 1% back just on my food spending.

http://www.bloomberg.com/news/articles/2015-01-07/record-low...

4% may not sound like much, but it is huge over the course of a 30 year loan.

100,000=>115,000@30yr,1% 100,000=>193,000@30yr,5%

What a rip off... Nearly double the principal, just in interest. Mortgages here seem like legalized financial slavery to me.

I rent here in the USA. I haven't seen great changes in my rent in the past few of years. This story seems very suspicious to me. Is it an advertisement paid by the mortgage industry?

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Re:Renting in America Has Never Been This Expensive by vonmoltke on Thursday August 13, 2015 @01:15PM (#10055716)
That is because the Japanese currency has been moribund for about 15 years. There have been many periods where you could actually make a profit by lending someone money at 0%. A 1% interest rate in the US would not even keep up with inflation; the lender would lose money on every loan.
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