this post was submitted on 20 Nov 2023
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Homeowners Refuse to Accept the Awkward Truth: They’re Rich - Owners of the multi-million-dollar properties still see themselves as middle class, a warped self-image that has a big impact on renters (thewalrus.ca)
submitted 11 months ago by [email protected] to c/[email protected]
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[–] [email protected] 28 points 11 months ago (1 children)

For anyone who purchased a house in the last 5ish years sure. Much longer than that and they are sitting on a whole lot of equity.

Yes if they sold the house they would have 1/2 - 1 million dollars in cash and be homeless. But that's a lot of dollars better than all the other people who currently also don't own a home and don't have all that cash.

Which is sorta the point the article is trying to make.

[–] [email protected] 18 points 11 months ago (1 children)

Yeah; I agree with that point, but not how they couched it — those people are still middle class.

The real kicker is that all the people who currently don’t own a home and don’t have the cash… are lower class. Despite thinking of themselves as middle class.

[–] [email protected] 4 points 11 months ago (2 children)

I don't agree with that take.

Those house owners likely fall into upper middle class rather than middle class.

Another way to look at it. Depending on who you ask middle class roughly covers household income of about 75k-150k

If one of those home owners sold their home and made 1 million in equity, that money could be expected to make them ~50k a year. For many current home owners that hypothetical raise would push them above the middle-class bracket.

[–] [email protected] 9 points 11 months ago (1 children)

"We're not middle and lower class, we're all working class"

Most home owners, if they cash out their home, and either rent or downsize, will still absolutely need to work to eat, and if they don't they will find themselves homeless before long.

For that small portion that could actually live on the equity from downsizing their housing, yeah, they are upper class, but there are a lot fewer of those than you would think. For a single person, a million in equity (50k a year) might get you by, but not luxuriously and not safely, and most houses are owned by couples though (so cut that in half), and many have dependents.

[–] [email protected] 1 points 11 months ago

(50k a year) might get you by, but not luxuriously and not safely

I am sure it is possible to find a deal on a rental somewhere out in the bush, but in (or near) the city a 2br place will eat up half your monthly allowance.

[–] [email protected] -2 points 11 months ago (1 children)

1 million in equity, that money could be expected to make them ~50k a year

Except that they will need to take the lion share of that and buy a new also-very-epensive home. Certainly wont leave a lot of investment cash.

[–] [email protected] 3 points 11 months ago* (last edited 11 months ago)

Did you not read the earlier comments in this thread? That very point was already addressed.

The point the article is trying to make is that after selling the house, even after mortgage is settled, these homeowners have a lot of cash. Much more than their renter peers who are in the same position (houseless) and trying to find something they can afford.

The point above seems obvious when it's put like that, but it's still hard for people to grasp.

This is why the article argues that people who are in the privileged position of having huge equity in their house need to also consider what that does to their wealth class, even if they themselves don't believe it. A lot of home owners who have had a house for 10-15 years (and even more who paid off their house years ago) have no clue how much harder it has gotten for middle class income people to buy houses.