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Started By
Message
Can someone help me explain how people are affording a house in today's market?
Posted on 4/3/23 at 2:39 pm
Posted on 4/3/23 at 2:39 pm
Some general numbers right now:
Average home price for sales in the US (Q4 2022) was ~$535k. Median was $467k.
Interest rates are hovering around 7%.
20% down on a $535k house is $107k.
The average household income is $70k. Only 34% of Americans make north of $100k+. Only 5.7% of households make $200k+.
The average American has $6400 in savings if between the ages of 35 and 55. $3600 between 21 and 35.
The monthly payment on a $535k WITH 20% down would be $3200/month (with estimated insurance and taxes).
How is this sustainable at all?
A family making $150k/year will have approximately $9000/month in take home pay after taxes. This doesn't include health insurance or retirement contributions or other necessities that may be taken out (dental, vision, etc). Factor in daycare, car payments and insurance, emergency savings, etc, there's a lot that will be taken out of that $9000.
$3200/month for a house. And as taxes go up and home values go up, that number goes up.
I just don't get it. My wife and I make $140k combined/year, and we have a $1200 mortgage for a 2200 square foot house. I can't imagine being on the market right now, and I feel like we make decent money.
Average home price for sales in the US (Q4 2022) was ~$535k. Median was $467k.
Interest rates are hovering around 7%.
20% down on a $535k house is $107k.
The average household income is $70k. Only 34% of Americans make north of $100k+. Only 5.7% of households make $200k+.
The average American has $6400 in savings if between the ages of 35 and 55. $3600 between 21 and 35.
The monthly payment on a $535k WITH 20% down would be $3200/month (with estimated insurance and taxes).
How is this sustainable at all?
A family making $150k/year will have approximately $9000/month in take home pay after taxes. This doesn't include health insurance or retirement contributions or other necessities that may be taken out (dental, vision, etc). Factor in daycare, car payments and insurance, emergency savings, etc, there's a lot that will be taken out of that $9000.
$3200/month for a house. And as taxes go up and home values go up, that number goes up.
I just don't get it. My wife and I make $140k combined/year, and we have a $1200 mortgage for a 2200 square foot house. I can't imagine being on the market right now, and I feel like we make decent money.
70
Posted on 4/3/23 at 2:41 pm to StringedInstruments
Couple buys house for 400k, the bank knows that inflation is going to shoot that value up to 600k over the next couple of years. Then the bank can give them a HELOC to work against to pay the original note.
Posted on 4/3/23 at 2:42 pm to StringedInstruments
quote:
Only 5.7% of households make $200k+
That can't be right
Edit: I thought the number was higher, I guess not
This post was edited on 4/3/23 at 3:56 pm
Posted on 4/3/23 at 2:42 pm to StringedInstruments
What amazes me is how many people are putting in cash offers on houses.
Posted on 4/3/23 at 2:42 pm to StringedInstruments
It’s called generational wealth
Posted on 4/3/23 at 2:42 pm to StringedInstruments
USDA loans, FHA loans, rolling closing costs into the home price...
Posted on 4/3/23 at 2:45 pm to StringedInstruments
Renting is cheaper and has less hassle than being a homeowner. If something breaks, you call the landlord/apartment complex and it gets fixed/replaced.) No dedication to a massive note every month. This is a massive incentive compared to owning a home, where you would have to provide major upkeep just to see an even return on investment.
Posted on 4/3/23 at 2:45 pm to StringedInstruments
You’ll own nothing and like it.
Posted on 4/3/23 at 2:53 pm to StringedInstruments
quote:
20% down on a $535k house is $107k.
Well, for starters you don't have to put down 20%. People are terrified of PMI, "it's throwing away money". Well, if you stayed out of the market for a house these few years because you were saving up 80k for a down payment on a 400k house, congrats you now have an interest rate that is double of what you could've had and the 400k house you were looking at is now 500k. All because you didn't want to pay <$100/mo in PMI.
Posted on 4/3/23 at 2:54 pm to StringedInstruments
When I was a kid my single mom couldn’t afford anything close to her work so she bought a hundred year old house and 20 acres out in the country about 45 min from the city for $22k (in 1985). We worked for 5 years fixing it up and sold it for $160k.
We did the same thing a little closer and she sold t for $400k. She’s now worth over 2 million.
Everyone thinks they deserve the best without needing to sacrifice
We did the same thing a little closer and she sold t for $400k. She’s now worth over 2 million.
Everyone thinks they deserve the best without needing to sacrifice
This post was edited on 4/3/23 at 2:55 pm
Posted on 4/3/23 at 2:54 pm to StringedInstruments
40 year mortgages are on the way
quote:
PORT ST. LUCIE, Fla. — This week the Federal Housing Administration gave the OK to 40-year mortgages. It's a move designed to try and make it easier for first-time home buyers.
"If it helps people get into a house, it's a good thing," Sonsire Gonzalez, a real estate agent in Port St Lucie, said.
The idea is to reduce monthly mortgage payments, which have been rising as mortgage rates go up.
Redfin.com reports over the last year, the average mortgage payment has risen 30% to a record $2,563 a month.
"Forty-year mortgage stretches out that payment over a longer period of time, so it makes for a lower payment, which is what a lot of buyers need right now," Gonzalez said.
Bankrate.com recently compared 30- and 40-year mortgages and found on a $312,000 loan at 6.85% interest, the monthly payments were $2,044 for 30 years and $1,904 for 40 years.
quote:
The extra 10 years also added more interest, close to $170,000 more, but in the short term, experts said it can make a difference, especially since many homeowners hardly stay in one house for 30 or 40 years.
This post was edited on 4/3/23 at 2:57 pm
Posted on 4/3/23 at 2:59 pm to StringedInstruments
It only gets worse the longer you wait to buy.
Posted on 4/3/23 at 3:07 pm to StringedInstruments
i honestly dont know.
i am just glad i got into the homeowner side of the equation when i did. still late to the game comparatively but the value of my house ha gone up drastically since.
my wife and I combined income puts us in "upper" class but i sure as shite dont feel like it.
i am just glad i got into the homeowner side of the equation when i did. still late to the game comparatively but the value of my house ha gone up drastically since.
my wife and I combined income puts us in "upper" class but i sure as shite dont feel like it.
Posted on 4/3/23 at 3:10 pm to StringedInstruments
They are going severely house poor. I'm trying to get a house in Charlotte, and we are being competitive, but constantly coming in second. I've done the math and know around what % of Charlotte and NC makes more than we do, and it's not very much.
Posted on 4/3/23 at 3:17 pm to StringedInstruments
quote:
The monthly payment on a $535k WITH 20% down would be $3200/month (with estimated insurance and taxes).
Weirdly enough, the higher rates haven’t seem to cut down prices very much yet. There is just no inventory.
Posted on 4/3/23 at 3:30 pm to StringedInstruments
quote:We are in and around that same amount. I would love to move right now because we have outgrown our home 3 years ago but the housing market is just dumb right now in BR.
My wife and I make $140k combined/year,
Posted on 4/3/23 at 3:33 pm to StringedInstruments
Worry about you. Makes life very easy
Posted on 4/3/23 at 3:38 pm to StringedInstruments
Posted on 4/3/23 at 3:39 pm to StringedInstruments
Houses here is Little Rock have been popping up between 750,000 to 1.2 and are selling in a week. It's baffling to me. I can't put my finger on it. In my gut something feels off though.
Posted on 4/3/23 at 3:55 pm to StringedInstruments
I live in a small house and don't have a lot of shite to fill it with.
I think I would trade my $600 mortgage for yours if it meant I got the extra 1k sf as well. It's nice not having a big note but sometimes the house gets cramped.
quote:
I just don't get it. My wife and I make $140k combined/year, and we have a $1200 mortgage for a 2200 square foot house. I can't imagine being on the market right now, and I feel like we make decent money.
I think I would trade my $600 mortgage for yours if it meant I got the extra 1k sf as well. It's nice not having a big note but sometimes the house gets cramped.
This post was edited on 4/3/23 at 3:57 pm
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