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re: Can someone help me explain how people are affording a house in today's market?
Posted on 4/3/23 at 2:58 pm to Epic Cajun
Posted on 4/3/23 at 2:58 pm to Epic Cajun
quote:
Well, for starters you don't have to put down 20%. People are terrified of PMI, "it's throwing away money".
I used the down payment to get the monthly mortgage lower. 3.5% down (which I think is the lowest FHA will allow) gets you a $4000/month mortgage. That's with some lenient taxes and insurance numbers thrown in (based on Georgia entered into the mortgage calculator).
You think the average American household can handle that monthly payment?
Something has to give. Retirement, insurance, college savings - something down the line is going to blow up because people are drowning in mortgage debt. If not, then people have WAY more money that I've been led to believe.
3
Posted on 4/3/23 at 2:59 pm to Oilfieldbiology
Just b.c you make a cash offer doesn't mean you actually have to pay in cash just have to show that you could which can be a combo of cash / 401k / etc. Once offer accepted you can go traditional loan.
In general these numbers regarding house prices and average income doesn't tell the whole story. large population of people don't make big income bringing down avg household income but they aren't in the market to buy a house. apartments have no problem renting. So it leaves households making $150k+ to buy the average home priced at $450k. You have lot of people out there that are dual income no kids so swinging $3k a month isn't that hard.
In general these numbers regarding house prices and average income doesn't tell the whole story. large population of people don't make big income bringing down avg household income but they aren't in the market to buy a house. apartments have no problem renting. So it leaves households making $150k+ to buy the average home priced at $450k. You have lot of people out there that are dual income no kids so swinging $3k a month isn't that hard.
This post was edited on 4/3/23 at 3:00 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 3:04 pm to StringedInstruments
quote:
You think the average American household can handle that monthly payment?
No, I definitely don't think that but I was just commenting on that because I know more than one couple who were saving to have 20% down over these past few years only to miss an absolute gem of a time to purchase a house and I feel for them as they are going to have to settle for a much less desirable home or pay a shite ton more for one when it comes time to make a purchase.
I do think the number comparisons are a bit off, as you are comparing the average home purchase price with the average household income, when there are some people who never really had any aspirations to purchase a home (even in a non-inflated market). For example, a service worker in Manhattan isn't in the market to buy a home and likely will never be. But, on the other hand I don't know how to narrow down the average income of a potential buyer of a home, vs the average price of a home.
This post was edited on 4/3/23 at 3:16 pm
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 3:08 pm to BilbeauTBaggins
quote:
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.
The only reason you can say "no dedication to a massive note every month" is because the FHA has weaponized COVID to prevent landlords from kicking you out on your arse if you avoid paying that "note".
Posted on 4/3/23 at 3:09 pm to SonOfSlickWillie
quote:
What amazes me is how many people are putting in cash offers on houses.
Yep, and many of them aren’t modest homes. I’ve seen some cash purchases around $700k and it wasn’t investors buying them. These were young families. I doubt I’ll ever have anywhere close to $700k in liquidity.
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 3:14 pm to Robin Masters
quote:
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
Except these homes are now going for massive amounts too. I toured a house that obviously had foundation damage, and some moron paid 480k for it.
Posted on 4/3/23 at 3:14 pm to ks_nola
quote:
So it leaves households making $150k+ to buy the average home priced at $450k. You have lot of people out there that are dual income no kids so swinging $3k a month isn't that hard.
Yeah, this is what I was getting at in my last post.
If you're bringing home 9k per month, and paying 3.2k for your mortgage, let's say another 2k for other bills, and 2k for living expenses you still have ~1.8k left to go towards retirement/savings. This is obviously just an example but it seems like it could work
Posted on 4/3/23 at 3:15 pm to Shexter
quote:
the monthly payments were $2,044 for 30 years and $1,904 for 40 years.
Holy shite
Posted on 4/3/23 at 3:16 pm to Epic Cajun
Even less than 9k a month is attainable for a 3k mortgage especially if the couple with no kids are debt free and have no car payments.
Posted on 4/3/23 at 3:17 pm to Jon A thon
quote:
Yeah, landlords just love giving a deal to renters and aren't making a profit by being the owner of the home
Well no shite. I don't think a lot of single individuals are just going to rent by themselves. They usually go in with another person (friend or family). It's doable with more than one person.
If a SINGLE person is buying a home that's less than 1,000 sq feet, it's waste of money.
quote:
the general cost of ownership is being passed onto the renter
Again, this would be on rental properties that aren't commercial apartment complexes.
Apartment complexes will make a shite ton of money because they are able to cookie cut every room/floor and buy everything in bulk quantities.
quote:
Otherwise no one would invest in rental properties.
Single family homes that flip into a rental property are usually flipped homes that still take calculated shortcuts into making homes livable for someone else.
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 3:17 pm to ks_nola
quote:
Just b.c you make a cash offer doesn't mean you actually have to pay in cash just have to show that you could which can be a combo of cash / 401k / etc. Once offer accepted you can go traditional loan.
When we were buying a house, we were able to make cash offers and closing in 21 days because we were already guaranteed the loan amount through pre-approvals.
Posted on 4/3/23 at 3:18 pm to StringedInstruments
quote:
Something has to give. Retirement, insurance, college savings - something down the line is going to blow up because people are drowning in mortgage debt. If not, then people have WAY more money that I've been led to believe.
They should make a movie about this.........
Posted on 4/3/23 at 3:19 pm to Evil Little Thing
Sounds like many "homeowners" are just going to become lifelong renters... only from banks this time.
Posted on 4/3/23 at 3:28 pm to SonOfSlickWillie
quote:
What amazes me is how many people are putting in cash offers on houses.
I'm seeing people sell their houses in California or New York for $1,000,000+ and then buy twice as much house for $750,000 in Georgia.
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
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