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(CNN)   4 million Americans have been completely priced out of the housing market. Only 4 million?   (cnn.com) divider line
    More: Unlikely, Real estate, Monetary policy, homeownership rates, Hispanic households, Federal Reserve, Housing Studies, home prices, single-family homes  
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1412 clicks; posted to Main » on 23 Jun 2022 at 1:53 AM (2 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2022-06-22 9:38:37 PM  
Yep. Gotta build those luxury homes on the same acreage that 4 smaller homes could be built.
 
2022-06-22 9:43:09 PM  
So inflation has made camper vans even more expensive?

/and I spent so much time picking out a nice spot
//down by the river
 
2022-06-22 10:03:15 PM  
All according to plan.

Look up "REITs"
 
2022-06-22 10:51:00 PM  

fragMasterFlash: So inflation has made camper vans even more expensive?

/and I spent so much time picking out a nice spot
//down by the river


Down by the river? Those lots rent for $1100/month plus utilities, now.
 
2022-06-23 1:00:11 AM  
I could afford to buy. The problem is that I could afford to buy in Arkansas. You'll forgive me if that's a place I don't want to live or raise kids at.
 
2022-06-23 1:55:13 AM  
The other 30M already were.
 
2022-06-23 1:59:14 AM  
I think what struck me was median price of 340k. Wow.
 
2022-06-23 2:08:07 AM  

Straight Outta Wells Branch: I could afford to buy. The problem is that I could afford to buy in Arkansas. You'll forgive me if that's a place I don't want to live or raise kids at.


Same here. Hopefully though as real estate prices climb and climate change forces more people to move into locations like that, they politically and educationally terraform the local societies.
 
2022-06-23 2:11:20 AM  
1/3 of home sales are to investors. There's a lot of your shortage right there.
 
2022-06-23 2:14:09 AM  
4 million additional Americans, subby, over the last year. The actual report is more horrifying.

The annual income needed to buy a home, according to that report, is $107,600 as of April 2022. That's a huge jump from April 2021, where you only needed to make $79,600 a year. Those numbers assume a 3.5% down payment on a 30-year fixed-rate loan with zero points, 0.85% mortgage insurance, 1.15% property taxes, 3% closing costs, and a max 31% debt-to-income ratio. In other words, even if you found a sweetheart mortgage deal and you're a near-perfect buyer, you're screwed unless you're making at least $108K a year.

None of that's going to happen. Closing costs in this area, for example, are often closer to 5% or more. My property taxes are at about 1.23%. The ideal case Harvard quotes in that report couldn't shop here.
 
2022-06-23 2:15:24 AM  
The root cause of the housing crisis? That's right, all these threads about how no one can afford a house.
But what can I do? I love posting.
 
2022-06-23 2:16:57 AM  

edmo: 1/3 of home sales are to investors. There's a lot of your shortage right there.


That's the 600-pound gorilla in the room. Right now, housing surplus is being bought in blocks by investment companies exploiting the market. The new landlords are shell companies, with third-party management companies who've never even seen the properties they allegedly manage, and they're going to just drain income & dilapidate neighborhoods in the process.

Rent-seeking is going to be the death of America - everyone wants to make money from someone else's efforts without doing anything themselves.
 
2022-06-23 2:24:49 AM  
There was a window from about 2004-2007 when anyone with a job could buy a home.   If you missed that, tough luck.
 
2022-06-23 2:31:37 AM  

Stud Gerbil: There was a window from about 2004-2007 when anyone with a job could buy a home.   If you missed that, tough luck.


Luck is for regulated casinos and lotto machines. You have a chance to win with those.

This is just a system that is meant to tell half the country to go fark themselves. No luck involved.
 
2022-06-23 2:33:21 AM  
There should be a rule. If you own four houses, you can't buy a fifth. You have to buy a hotel instead.
 
2022-06-23 2:47:14 AM  

FormlessOne: 4 million additional Americans, subby, over the last year. The actual report is more horrifying.

The annual income needed to buy a home, according to that report, is $107,600 as of April 2022. That's a huge jump from April 2021, where you only needed to make $79,600 a year. Those numbers assume a 3.5% down payment on a 30-year fixed-rate loan with zero points, 0.85% mortgage insurance, 1.15% property taxes, 3% closing costs, and a max 31% debt-to-income ratio. In other words, even if you found a sweetheart mortgage deal and you're a near-perfect buyer, you're screwed unless you're making at least $108K a year.

None of that's going to happen. Closing costs in this area, for example, are often closer to 5% or more. My property taxes are at about 1.23%. The ideal case Harvard quotes in that report couldn't shop here.


The only reason my wife and I were able to buy here in Tacoma was the money in inherited.
 
2022-06-23 2:53:43 AM  

FormlessOne: 4 million additional Americans, subby, over the last year. The actual report is more horrifying.

The annual income needed to buy a home, according to that report, is $107,600 as of April 2022. That's a huge jump from April 2021, where you only needed to make $79,600 a year. Those numbers assume a 3.5% down payment on a 30-year fixed-rate loan with zero points, 0.85% mortgage insurance, 1.15% property taxes, 3% closing costs, and a max 31% debt-to-income ratio. In other words, even if you found a sweetheart mortgage deal and you're a near-perfect buyer, you're screwed unless you're making at least $108K a year.

None of that's going to happen. Closing costs in this area, for example, are often closer to 5% or more. My property taxes are at about 1.23%. The ideal case Harvard quotes in that report couldn't shop here.


ugh, 70 percent of household incomes (not individual) fall under that.

Now the joy of that couple when they bought my home is even more understandable (basically at closing they were gushing about how they never dreamed they would own a house). I had a 105 year old big ole home, but like everything that old it had soooo many nuanced annoyances that I just wanted out from under it.
Like, oh beautiful brick walls... yup, brick that is all, no insulation, hello 65 degree rooms with a 400 dollar a month gas bill in winter.
Or, oh beautiful original windows... yup, watxh that heat dance through them in the summer so you get 400 dollar electric bills (once it hit 88, my AC never turned off to keep the house at 75)
Or surprise knob and tube wiring
Or, oh did you get a new floor, here is a pipe burst for ya. Or, you need to turn off the water, you did not want that valve to actually work  right?
Only 1 full bathroom, other half bath was a 3.5 foot by 5 foot room so you could poop in a closet like environment.
Stairs creak, floor creaks.

I just wanted to be done with it after years and years of headaches, priced it to move, and had 8 offers in 24 hours of listing.

Now I understand why.

Glad they have a home though, they probably have the energy for the headaches.
 
2022-06-23 3:02:44 AM  

FormlessOne: 4 million additional Americans, subby, over the last year. The actual report is more horrifying.

The annual income needed to buy a home, according to that report, is $107,600 as of April 2022. That's a huge jump from April 2021, where you only needed to make $79,600 a year. Those numbers assume a 3.5% down payment on a 30-year fixed-rate loan with zero points, 0.85% mortgage insurance, 1.15% property taxes, 3% closing costs, and a max 31% debt-to-income ratio. In other words, even if you found a sweetheart mortgage deal and you're a near-perfect buyer, you're screwed unless you're making at least $108K a year.

None of that's going to happen. Closing costs in this area, for example, are often closer to 5% or more. My property taxes are at about 1.23%. The ideal case Harvard quotes in that report couldn't shop here.


Thank you.

The part that jumps out at me is 3.5% down... which is only about 14,000? The whole thing looks like a huge amount of leverage, with really low interest rates. I totally understand the situation and how people are priced out. I just don't see sellers or banks being ecstatic about the current state of affairs. The whole thing is out of whack.

If I said that eliminating the mortgage interest deduction on first and second homes would end this bubble immediately, everyone would crucify me, but it would put a huge dent in speculation and exploitation, bring home prices way down, induce people to buy homes for living and not for wealth creation instruments, and it would give the government a lot more in taxes.

I doubt there is a real shortage of homes. There is a shortage of homes that have not been bid to the stratosphere by everyone wanting to shelter their income from taxes. People don't buy houses because they need them. They buy them because they have an income high enough to use the mortgage interest deduction.

Don't worry richies. It will never be cancelled. It has all been baked into the system.
 
2022-06-23 3:11:50 AM  
We should tear down this false God we have made of the economy and consumerism and leave all our stuff behind to go live in the forest worshipping Pan, the Goat God.
 
2022-06-23 3:25:30 AM  
Buying a house? I'm just hoping the landlord at my apartment doesn't evict me for spreading flyers about who to call when our industrial chiller air conditioner doesn't work

Buying a house? Luxury!
 
2022-06-23 3:27:19 AM  
Miami coin is .ooo8 since the corrupt government decided more to steal.
Good way to invest
 
2022-06-23 3:48:17 AM  

Straight Outta Wells Branch: I could afford to buy. The problem is that I could afford to buy in Arkansas. You'll forgive me if that's a place I don't want to live or raise kids at.


Here with you ... our household income is not small by any margin, we are doing well financially but are renting in a big metropolitan city for a very low rate (rent stabilization). If I wanted to buy and actually allowed myself to pay the ridiculous mortgage for a smaller place, that would cost me 2-3x a month *more* than my rent. I could afford a place 2hr away but then what's the point of living in a city. And I'm not moving to OK, AK, and the likes...
 
2022-06-23 4:02:35 AM  

FormlessOne: edmo: 1/3 of home sales are to investors. There's a lot of your shortage right there.

That's the 600-pound gorilla in the room. Right now, housing surplus is being bought in blocks by investment companies exploiting the market. The new landlords are shell companies, with third-party management companies who've never even seen the properties they allegedly manage, and they're going to just drain income & dilapidate neighborhoods in the process.

Rent-seeking is going to be the death of America - everyone wants to make money from someone else's efforts without doing anything themselves.


PSA: rent seeking doesn't mean literally seeking rental income from renters. It refers to economic rent.

Anyway, the investor thing is less an elephant in the room than a red herring: if investors were slurping up housing the way it is suggested here, it would be decreasing the supply of owner occupier homes and increasing the supply of rental homes. Instead, we're seeing the proportion of households that are owner occupied rise on an overall rise, and the rental vacancy rate dropping.

Fark user imageView Full Size


My hypothesis, given the number of small landlords who said "enough is enough" during the eviction moratoria is that they're selling out their rental properties to investors.

That doesn't change the general affordability issues that have arisen in the last few months with the higher interest rates, the main focus of the article. It's brutal out there, and makes people who already own homes more reluctant to sell, whether to upsize (opening a property to a smaller, younger family), downsize, or simply move to better work opportunities. That will be a net drag on our economy.

For the renters, dealing with a faceless corp is going to be qualitatively worse than a landlord with a face and a presence in the community.
 
2022-06-23 4:04:30 AM  
I'm glad I already own a house. I sure couldn't afford my house if I was buying it today.
 
2022-06-23 4:14:05 AM  

Izunbacol: FormlessOne: edmo: 1/3 of home sales are to investors. There's a lot of your shortage right there.

That's the 600-pound gorilla in the room. Right now, housing surplus is being bought in blocks by investment companies exploiting the market. The new landlords are shell companies, with third-party management companies who've never even seen the properties they allegedly manage, and they're going to just drain income & dilapidate neighborhoods in the process.

Rent-seeking is going to be the death of America - everyone wants to make money from someone else's efforts without doing anything themselves.

PSA: rent seeking doesn't mean literally seeking rental income from renters. It refers to economic rent.

Anyway, the investor thing is less an elephant in the room than a red herring: if investors were slurping up housing the way it is suggested here, it would be decreasing the supply of owner occupier homes and increasing the supply of rental homes. Instead, we're seeing the proportion of households that are owner occupied rise on an overall rise, and the rental vacancy rate dropping.

[Fark user image image 425x241]

My hypothesis, given the number of small landlords who said "enough is enough" during the eviction moratoria is that they're selling out their rental properties to investors.

That doesn't change the general affordability issues that have arisen in the last few months with the higher interest rates, the main focus of the article. It's brutal out there, and makes people who already own homes more reluctant to sell, whether to upsize (opening a property to a smaller, younger family), downsize, or simply move to better work opportunities. That will be a net drag on our economy.

For the renters, dealing with a faceless corp is going to be qualitatively worse than a landlord with a face and a presence in the community.


Landlords are horrible people or become one after they become a landlord.

I rented from 3 landlords in the past 5 years and all 3 stole my security deposit in their own evil unique ways.

People should not need to rent.
 
2022-06-23 4:20:57 AM  
I have 90k in the bank right now and I'm priced out of the market due to all of the explanations given above. If I choose to rent, I'll soon hit the tipping point there as well where my debt-to-income will effectively drain my savings.
 
2022-06-23 4:21:12 AM  

anti-riaa: Straight Outta Wells Branch: I could afford to buy. The problem is that I could afford to buy in Arkansas. You'll forgive me if that's a place I don't want to live or raise kids at.

Here with you ... our household income is not small by any margin, we are doing well financially but are renting in a big metropolitan city for a very low rate (rent stabilization). If I wanted to buy and actually allowed myself to pay the ridiculous mortgage for a smaller place, that would cost me 2-3x a month *more* than my rent. I could afford a place 2hr away but then what's the point of living in a city. And I'm not moving to OK, AK, and the likes...


Please don't equate rent and mortgage.

You pay rent and its spent. You pay mortgage and you'll get it back when you sell the house.

Rent stabilization changes the equation but you're still missing out on building wealth.
 
2022-06-23 4:34:55 AM  
We are sitting on both a housing and a rental bubble.  They keep pushing rents up, but there are only so many low wage workers who can fit in a small one bedroom apartment, and a lot of rental companies are about to price themselves out of the market.

What is going to push it over the edge is when Republicans start cutting back housing assistance, which already has a long waiting list, and big rental firms suddenly find themselves with large apartment complexes, full of crap apartments, that no one will rent.
 
2022-06-23 5:05:55 AM  

TorpedoOrca: Buying a house? I'm just hoping the landlord at my apartment doesn't evict me for spreading flyers about who to call when our industrial chiller air conditioner doesn't work

Buying a house? Luxury!


I am terrified to see what my rent increase is going to be this year. 
Last year the percentage increase from the previous year was the highest it had ever been over the 20 years I've been here.
I'm bracing at the likelihood that this year's will be worse.
Trying to figure out what I can cut from the budget.
 
2022-06-23 5:11:53 AM  
Blame the Clintons.
Their affordable housing act and their deregulation and getting rid of gov. oversight on many many things set the stage for today.
 
2022-06-23 5:16:44 AM  

winedrinkingman: We are sitting on both a housing and a rental bubble.  They keep pushing rents up, but there are only so many low wage workers who can fit in a small one bedroom apartment, and a lot of rental companies are about to price themselves out of the market.

What is going to push it over the edge is when Republicans start cutting back housing assistance, which already has a long waiting list, and big rental firms suddenly find themselves with large apartment complexes, full of crap apartments, that no one will rent.


Over the last few weeks I have overheard at least two conversations where people are saying they simply cannot find any place to rent around here.
I'm in an old college town but over the last couple years they have been building apartment complexes like it's an olympic sport. Signs have been up "Pre-leasing for" fill-in-the-blank season for several years. The university has also been building a whole bunch of bright and shiny new dormitories, so I can't imagine that all the new apartment complexes are for a glut of students (I don't think the enrolment is up anyway?).

So I don't know who is building all these apartments. But I can tell that they all look pretty swanky and I have a hard time understanding who will afford all these places that are being scooped up before the shovel has even hit the red clay.
 
2022-06-23 5:19:41 AM  

mr0x: anti-riaa: Straight Outta Wells Branch: I could afford to buy. The problem is that I could afford to buy in Arkansas. You'll forgive me if that's a place I don't want to live or raise kids at.

Here with you ... our household income is not small by any margin, we are doing well financially but are renting in a big metropolitan city for a very low rate (rent stabilization). If I wanted to buy and actually allowed myself to pay the ridiculous mortgage for a smaller place, that would cost me 2-3x a month *more* than my rent. I could afford a place 2hr away but then what's the point of living in a city. And I'm not moving to OK, AK, and the likes...

Please don't equate rent and mortgage.

You pay rent and its spent. You pay mortgage and you'll get it back when you sell the house.

Rent stabilization changes the equation but you're still missing out on building wealth.


Yeah I don't think so. If you had a choice of living in a 2 bedroom in a big metropolitan city, great neighborhood with great public school for my son, for 1600 a month rent vs buying at these inflated prices -  a comparable 2 bedroom place would run me 800-900k in my neighborhood, after 100k down I'd pay 5500 a month. Then I get to do my own maintenance when things break.
Then, because it's a bubble this apartment was 400k 5-10 years ago so it could sure build "wealth" and I flip it for  1M in 5 years or it will be 600k and I will be underwater.
The reality is it's not worth for me to "build wealth" at these costs.
I understand everyone will have a different point of view.
I have a friend in San Francisco, got a job at google, making 550k a year. He cannot afford to buy a house with any reasonable driving distance.
 
2022-06-23 6:20:27 AM  

RolandTGunner: All according to plan.

Look up "REITs"


Fark user imageView Full Size


I went to my favorite bar last night, and the bartender said he had to move. His landlord is going to renovate and sell the house to investors.

The empty split level former trap house across from me ( that had a gaping hole in its roof for a couple months from a tree fall )  is worth $21 million, according to Zillow, because it's part of a $21m investment bundle. I run my remote control car through it's yard and say rude things.
 
2022-06-23 6:49:53 AM  
How was this not the Boobies?

Rent: Last Week Tonight with John Oliver (HBO)
Youtube L4qmDnYli2E


Anyway...  I only watched about half of that before I got too angry to continue.

How is price gauging like this even legal?  I guess if you needed yet another example of how capitalism is farked, here you go.
 
2022-06-23 7:12:14 AM  
We have special circumstances but a couple years ago we put our adult son on our mortgage, and he pays half of that instead of rent and will be part owner of a fully paid off house in a few years. It's not just about housing. It raised his credit score. Builds a safety net. Helps us to afford retirement (another thing getting out of reach for millions). He is one of only a few people he knows that can tick the homeowner box.
It's not just the cost of the house but the maintenance that is out of reach. There are millions of older people living in homes that are literally falling apart around them because they cannot afford upkeep,

We need to rethink a lot of things about 'the American dream'. Living in millions of small households verses shared housing is one of them.
 
2022-06-23 7:14:59 AM  

Izunbacol: FormlessOne: edmo: 1/3 of home sales are to investors. There's a lot of your shortage right there.

That's the 600-pound gorilla in the room. Right now, housing surplus is being bought in blocks by investment companies exploiting the market. The new landlords are shell companies, with third-party management companies who've never even seen the properties they allegedly manage, and they're going to just drain income & dilapidate neighborhoods in the process.

Rent-seeking is going to be the death of America - everyone wants to make money from someone else's efforts without doing anything themselves.

PSA: rent seeking doesn't mean literally seeking rental income from renters. It refers to economic rent.

Anyway, the investor thing is less an elephant in the room than a red herring: if investors were slurping up housing the way it is suggested here, it would be decreasing the supply of owner occupier homes and increasing the supply of rental homes. Instead, we're seeing the proportion of households that are owner occupied rise on an overall rise, and the rental vacancy rate dropping.

[Fark user image image 425x241]

My hypothesis, given the number of small landlords who said "enough is enough" during the eviction moratoria is that they're selling out their rental properties to investors.

That doesn't change the general affordability issues that have arisen in the last few months with the higher interest rates, the main focus of the article. It's brutal out there, and makes people who already own homes more reluctant to sell, whether to upsize (opening a property to a smaller, younger family), downsize, or simply move to better work opportunities. That will be a net drag on our economy.

For the renters, dealing with a faceless corp is going to be qualitatively worse than a landlord with a face and a presence in the community.


Isn't there also the Airbnb phenomenon where these properties can be rented for a week for the same price that a normal rental unit can be rented for a month?  With no or low worry about squatters or bad renters etc for the landlord and a plethora of cleaning and setup services which means the owner barely had to do anything make money.
 
2022-06-23 7:20:39 AM  
It's like when they say there's some single-digit percentage of unemployment, but the actual number they're giving you is the percentage on unemployment benefits. If they expired, you were threatened and forced out of a job but technically quit, you never applied for benefits, or you've been unemployed so long that they expired? Yep, none of those count.

So yeah, 4 million NEW Americans got added to the pile. Torches and pitchforks, however, remain QUITE affordable, something the rich would do well to remember.
 
2022-06-23 7:21:21 AM  

dtbcr: I'm glad I already own a house. I sure couldn't afford my house if I was buying it today.


Same here.
Bought my home for 200k it's now up to 300k. Sure I can sell it to make some extra money, but where the hell would I go to buy something affordable when every other house has gone way up?

My mom lives out in the sticks. Little 2 bed house, maybe 1000 soft. Bought 6 years ago for 120k it's up north of 300 now. It's about mile just to her mailbox.

What is going to happen when an entire generation of people realize that none of them can buy a house?

I'm foreseeing a lot of generational houses where the kids never move out and wait for the parents to die so they can have their own place.  And no one ever moves because they're is no place they can afford to go.
 
2022-06-23 7:26:00 AM  
There is no way I could buy a house right now. Prices here are insane, example- my house has almost doubled in value since I bought it in 2011. There is no way in the world it should be worth that much, but here we are.
 
2022-06-23 7:33:37 AM  
This must be how the Boomers felt in the 90s.

Tons of equity in our current home but zero chance of negotiating a new one based in scaling prices and high interest rates.
 
2022-06-23 7:36:36 AM  
i.kym-cdn.comView Full Size
 
2022-06-23 7:40:32 AM  
Give landlords and rental agencies a generous tax incentive if they are willing to commit to lowering their rents.
 
2022-06-23 7:45:27 AM  
Stop whining. Housing markets are cyclical. Stop using the height of a market to state you will never own property. Wait, build a deposit, profit from the next dip.
 
2022-06-23 7:52:58 AM  

LiberalConservative: Stop whining. Housing markets are cyclical. Stop using the height of a market to state you will never own property. Wait, build a deposit, profit from the next dip.


That's really only true if supply has kept up with demand, which it hasn't for the past 20 years.

Lack of stock, investors buying houses to rent, and the stupid laws after the mortgage crisis in the '00's  means the market hasn't been cycling.

/who the hell has 20% to put down on a house!?!
 
2022-06-23 8:02:32 AM  

BooksontheBrain: LiberalConservative: Stop whining. Housing markets are cyclical. Stop using the height of a market to state you will never own property. Wait, build a deposit, profit from the next dip.

That's really only true if supply has kept up with demand, which it hasn't for the past 20 years.

Lack of stock, investors buying houses to rent, and the stupid laws after the mortgage crisis in the '00's  means the market hasn't been cycling.

/who the hell has 20% to put down on a house!?!


My wife and I bought our place in 2002 and we are only a few years from being paid off. It was slightly unaffordable then, but we were poor. It's value now has more than tripled as of an appraisal done two years ago. We got very lucky to buy an acre in an undeveloped area that was tastefully built up around us (and not turned into plans of McMansions.)

At the time of our purchase, first time homeowners didn't need anywhere near that amount of down payment (if any at all...I can't remember details anymore.) Large down payments were generally reserved for homeowners that were upgrading or buying a second home, in which case, 20% isn't unreasonable if you actually built equity when you were a first-time buyer.

Did this change in the last two decades?
 
2022-06-23 8:09:52 AM  

Straight Outta Wells Branch: I could afford to buy. The problem is that I could afford to buy in Arkansas. You'll forgive me if that's a place I don't want to live or raise kids at.

This

is the problem with housing.

Housing prices area reflection of how desirable the area and house are. There are tons of cheap housing options available, but everyone wants to fight over the same tiny areas.

And even in those areas, nobody actually wants it to be cheap. Housing prices are tightly correlated with a ton of stuff. The part of town with the cheapest housing will have the highest crime rate, and the worst schools, and greater likelihood of a neighbor playing music at 2am on a Thursday morning.

People in the desirable places want to keep it desirable to protect both their quality of life and their financial situation. They don't support rezoning/building cheap housing options in their area.

Housing will never be affordable because we define housing as 'the nice places I want to live, not the affordable places I can live'.
 
2022-06-23 8:36:42 AM  

StanleyPuff: BooksontheBrain: LiberalConservative: Stop whining. Housing markets are cyclical. Stop using the height of a market to state you will never own property. Wait, build a deposit, profit from the next dip.

That's really only true if supply has kept up with demand, which it hasn't for the past 20 years.

Lack of stock, investors buying houses to rent, and the stupid laws after the mortgage crisis in the '00's  means the market hasn't been cycling.

/who the hell has 20% to put down on a house!?!

My wife and I bought our place in 2002 and we are only a few years from being paid off. It was slightly unaffordable then, but we were poor. It's value now has more than tripled as of an appraisal done two years ago. We got very lucky to buy an acre in an undeveloped area that was tastefully built up around us (and not turned into plans of McMansions.)

At the time of our purchase, first time homeowners didn't need anywhere near that amount of down payment (if any at all...I can't remember details anymore.) Large down payments were generally reserved for homeowners that were upgrading or buying a second home, in which case, 20% isn't unreasonable if you actually built equity when you were a first-time buyer.

Did this change in the last two decades?


At less than 20% down ,with median price at 340k , pmi alone is going to be anywhere from 250 to almost 400 a month depending on your credit and DTI.    And if* the market is actually cooling off and prices plateau , then you aren't getting value rising equity reappraisal out of pmi in 2 years, you're paying it for 4 to 7 years.  With inflation outpacing income/CoL that's a huge chunk of household income that could be disposable, but isn't.


I'd suggest you go on redfin or zillow, and actually use the mortgage/price calculator tool on some scenarios. You might be shocked what monthly payments get crapped out.


We just recently moved (Dec 2020) , and everyone said we were crazy to buy then without renting for a year and exploring the areacan't. In person. (We did about 50 virtual webex walk through and 3 in person, our buying agent was a saint).  Just the increase in property taxes and mortgage interest rate alone  would have priced us out of buying today (about 900 a month). I mean, we could afford it, but the lender formula says we couldnt/cant.
 
2022-06-23 8:42:46 AM  
The biggest issue nobody is talking about is over the next 5 to 20 years when  insurers basically refuse to insure 30 to 50% of homes for being in geographic hot zones for climate change.  Will the feds step in with something like their flood insurance packages?
 
2022-06-23 8:44:00 AM  

StanleyPuff: BooksontheBrain: LiberalConservative: Stop whining. Housing markets are cyclical. Stop using the height of a market to state you will never own property. Wait, build a deposit, profit from the next dip.

That's really only true if supply has kept up with demand, which it hasn't for the past 20 years.

Lack of stock, investors buying houses to rent, and the stupid laws after the mortgage crisis in the '00's  means the market hasn't been cycling.

/who the hell has 20% to put down on a house!?!

My wife and I bought our place in 2002 and we are only a few years from being paid off. It was slightly unaffordable then, but we were poor. It's value now has more than tripled as of an appraisal done two years ago. We got very lucky to buy an acre in an undeveloped area that was tastefully built up around us (and not turned into plans of McMansions.)

At the time of our purchase, first time homeowners didn't need anywhere near that amount of down payment (if any at all...I can't remember details anymore.) Large down payments were generally reserved for homeowners that were upgrading or buying a second home, in which case, 20% isn't unreasonable if you actually built equity when you were a first-time buyer.

Did this change in the last two decades?


At least where I live (MA) you need 20% down or you have to pay an extra fee with your mortgage payment that will bring you to 20% ownership in 5 years.

The last place I looked at was $770K for a 800 square foot 1 bedroom. So with 10 down, the 20% payment gets added to the monthly mortgage plus the condo fee. (Most units in the city are corporate owned so you can't get rid of the condo assoc even if there are only 3 condos in the unit.)
Those fees makes the place unaffordable.
 
2022-06-23 8:46:50 AM  

Izunbacol: PSA: rent seeking doesn't mean literally seeking rental income from renters. It refers to economic rent.


Yep - I could be wrong, but, the behavior we've seen does fall under the economic definition of "rent-seeking":

an economic concept that occurs when an entity seeks to gain added wealth without any reciprocal contribution of productivity
 
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