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re: Major social unrest is coming
Posted on 4/26/22 at 9:46 am to YumYum Sauce
Posted on 4/26/22 at 9:46 am to YumYum Sauce
quote:
The fact that a 20 something thinks they deserve a 400k house is laughable
My wife and I bought our first house when we were 30-31 5 years ago and it was $275k. It's a 3 story townhouse, it's now going for $425k today. Back in 2017, that was definitely out our price range, today, the interest rates are even higher than they were back then.
Right now is just an absolutely terrible time to buy a home between the housing prices skyrocketing and interest rates doing the same. Average 30 year mortgage with average points paid was about 5.2% last week according to freddie mac.
We got our townhouse for 4.25% back in 2017 at $275k, at 5.2% and at $425k now, the picture is quite different. With no down payment for simplicity sake, our original mortgage was $1,353/mo ($275k @ 4.25%). If someone wanted to buy our same townhouse today, it would be $2,334/mo ($425k @ 5.2%). Literally almost $1k more a month in a span of 5 years is nuts. that's a 72% increase in mortgage cost for the same place over a 5 year span.
This housing bubble is definitely different from 2007's, but the market has got to correct itself soon. Even with the lack of supply, as even more people will be hunkering down now on their low rate mortgages from the past few years as rates rise to 6 maybe 7%....the rise in rates has to have an affect on what homes are being sold for soon enough. We are sitting at 2.375% off a refi in 2020 and dont plan on doing anything any time soon
If we were in the same situation now as we were 5 years ago, we simply wouldnt be buying right now, the market is just awful in that respect.
This post was edited on 4/26/22 at 9:50 am
Posted on 4/26/22 at 10:03 am to thunderbird1100
quote:
We got our townhouse for 4.25% back in 2017 at $275k, at 5.2% and at $425k now, the picture is quite different. With no down payment for simplicity sake, our original mortgage was $1,353/mo ($275k @ 4.25%). If someone wanted to buy our same townhouse today, it would be $2,334/mo ($425k @ 5.2%). Literally almost $1k more a month in a span of 5 years is nuts. that's a 72% increase in mortgage cost for the same place over a 5 year span.
This right here is a perfect example of why "saving money for 5 years after you get out of college" is not the reason millenials can't afford houses. I'm assuming those payments you listed don't include taxes & insurance. So the actual cost of buying the townhouse would be even higher. It's nuts right now and it's not because millenials don't want to own things.
Posted on 4/26/22 at 12:08 pm to thunderbird1100
quote:
Back in 2017, that was definitely out our price range, today, the interest rates are even higher than they were back then.
That is the problem most people have and what lead to the 2008 crash. People buying houses above their price range.
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