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re: Homebuyers are now spending 40% of their gross income on mortgage and interest costs
Posted on 7/22/23 at 7:27 pm to BluegrassBelle
Posted on 7/22/23 at 7:27 pm to BluegrassBelle
quote:
In areas that I have no idea how they’re going to sustain that cost.
Who says they have to make sense. The tenants are likely only paying a small portion of the $2000/mo.
The Federal gov (HUD,etc.) is pushing affordable housing so hard that they’ll keep building apartments until their perceived demand is met.
0
Posted on 7/22/23 at 7:27 pm to TitleistProV1X
quote:
Why don’t they have strict DTI ratio limits and strict 20% down payment limits? Seems like this would make things as secure as needed.
Because buying a home would be unattainable for the majority of the population and home values would decline, and neither of those are politically popular.
Posted on 7/22/23 at 7:50 pm to stout
Not Moi.
Posted on 7/22/23 at 7:55 pm to stout
Housing prices will tank here very soon in my opinion. People can't afford these houses. Here's the thing about people saying they don't want to sell bc they got low interest rates and they're now high:
Buyers - high prices, high interest rates (2 negatives, 0 positives)
Sellers - high prices, high interest rates (1 positive, 1 negative)
This means that buyers have less incentive than sellers. And those who have less incentive in a market, prices will usually go to benefit them.
For those that are under 35 and have been on dating apps, it's extremely similar to that. The person that stands to benefit the least or cares the least holds the power, and it's almost always the woman because they have 100 other guys asking them out where as the guys have 0. In addition the apps users are 85-90% male and 10-15% female, so the odds are really bad for average guys. Just sheer numbers, a female has an advantage on there.
Buyers - high prices, high interest rates (2 negatives, 0 positives)
Sellers - high prices, high interest rates (1 positive, 1 negative)
This means that buyers have less incentive than sellers. And those who have less incentive in a market, prices will usually go to benefit them.
For those that are under 35 and have been on dating apps, it's extremely similar to that. The person that stands to benefit the least or cares the least holds the power, and it's almost always the woman because they have 100 other guys asking them out where as the guys have 0. In addition the apps users are 85-90% male and 10-15% female, so the odds are really bad for average guys. Just sheer numbers, a female has an advantage on there.
This post was edited on 7/22/23 at 8:05 pm
Posted on 7/22/23 at 8:06 pm to bamabenny
quote:
Rough math says we’re at ~16-17% on a 3.25 30-year Bought in early 2022 before mortgages went nuts, guess we’re never moving even though I’m kinda ho-hum on this house. Could be worse I guess, if we didn’t buy this one we would have been in trouble.
I’m in the exact same situation. 15%, 3.25% mortgage .I also remember people telling me in January of 2022 it was a terrible time to buy. Glad I didn’t listen to them.
I put down 3 percent as a way to sneak past a starter home and into a solid second home of 2200sqft. Couple in our mid 20s. Now we won’t out grow this house down the line when we have a couple kids.
Posted on 7/22/23 at 8:20 pm to Saunson69
quote:
Buyers - high prices, high interest rates (2 negatives, 0 positives) Sellers - high prices, high interest rates (1 positive, 1 negative) This means that buyers have less incentive than sellers. And those who have less incentive in a market, prices will usually go to benefit them.
This ignores the fact that most sellers have to buy as well.
Posted on 7/22/23 at 8:43 pm to Crowknowsbest
quote:
This ignores the fact that most sellers have to buy as well.
It doesn't matter. Holding onto their current investment, or selling then buying a similar level house is the same (besides transaction fees). Mortgage transfers keep same interest rates. Here's an illustrative:
If I buy a $10 football, and next year it's worth $20, and I decide to trade it for another $20 football. It's all the same continuous upswing. It's all good because you're just trading one house for another. There's no value loss.
For first time buyers, no one wants to get in at a really high market with really high interest rates. That's your entry point.
No one wants to buy a stock at it's highest level as an entry point. People want lowest. If you already own a stock and you think another stock is equally as good, there's no disservice to just trade one for another (besides transaction fees).
There is a much stronger avoidance from first time buyers wanting to enter at such high prices and interest rates than there is for someone with a current house to trade for another house of similar value. So much so just from people I know that I think it'd be impossible for housing prices to not tank, especially if interest rates stay high, that will really push away first time buyers.
This post was edited on 7/22/23 at 8:51 pm
Posted on 7/22/23 at 9:31 pm to Saunson69
quote:
Mortgage transfers keep same interest rates.
Relatively few mortgages are transferable. You can’t just take your rate with you forever.
Posted on 7/22/23 at 9:37 pm to ShoeBang
quote:
Tell that to the realtors who leave me messages by phone and letters in my mailbox stating they can get me 100k over what I paid in 2018 for my 2400 sq ft house in Prairieville
I’ve got beach front property in Arizona to sell you then.
Posted on 7/22/23 at 9:41 pm to Saunson69
quote:
For those that are under 35 and have been on dating apps, it's extremely similar to that. The person that stands to benefit the least or cares the least holds the power, and it's almost always the woman because they have 100 other guys asking them out where as the guys have 0. In addition the apps users are 85-90% male and 10-15% female, so the odds are really bad for average guys. Just sheer numbers, a female has an advantage on there.
Thread hijack...interesting video on the apps released 9 days ago.
YouTube - Why Men Get So Few Matches On Dating Apps
/hijack
Posted on 7/22/23 at 9:54 pm to stout
My 28 percent of a reasonably upper middle class income feels high (that's principal, interest and escrow) and seems at the edge of affordability.
This post was edited on 7/22/23 at 9:55 pm
Posted on 7/22/23 at 10:28 pm to SirWinston
quote:
My lender was creative af - she was amazing
So... Fraud?
Posted on 7/22/23 at 10:37 pm to stout
I guess I am fortunate in that ours is about 12%
Posted on 7/22/23 at 11:45 pm to stout
A homebuyer’s DTI of 40% does not mean said homebuyer is spending 40% of his/her gross income on mortgage and interest. So, I don’t know where this person on Twitter got their lines crossed. Otherwise, some good info. The increasing DTI of homebuyers nationally indicates an increase in borrowing. Banks generally won’t lend to anyone with a DTI greater than 45%.
Posted on 7/22/23 at 11:54 pm to Ace Midnight
quote:
My 28 percent of a reasonably upper middle class income feels high (that's principal, interest and escrow) and seems at the edge of affordability.
It seems at the edge of affordability because it is. 28% of gross income is the number that starts to make most lenders squirm.
This post was edited on 7/22/23 at 11:56 pm
Posted on 7/23/23 at 12:16 am to TitleistProV1X
quote:
Why don’t they have strict DTI ratio limits and strict 20% down payment limits? Seems like this would make things as secure as needed.
Most banks do have strict DTI requirements…especially after 2008. This person on twitter equated 40% DTI ratios with homebuyers paying 40% of gross income on mortgage. That just isn’t true.
Posted on 7/23/23 at 12:18 am to hondapa26
quote:
t seems at the edge of affordability because it is. 28% of gross income is the number that starts to make most lenders squirm.
23% here including escrow.
mortgage is only debt though so we feel quite comfortable.
Posted on 7/23/23 at 1:03 am to Saunson69
quote:
There is a much stronger avoidance from first time buyers wanting to enter at such high prices and interest rates than there is for someone with a current house to trade for another house of similar value. So much so just from people I know that I think it'd be impossible for housing prices to not tank, especially if interest rates stay high, that will really push away first time buyers.
This is my exact position. I was a homeowner for 14 years but sold in 2016. I'm getting to place in life where I need to own a home. Terrible time to be in that position.
Posted on 7/23/23 at 6:23 am to hondapa26
quote:
It seems at the edge of affordability because it is. 28% of gross income is the number that starts to make most lenders squirm.
We had a couple lenders offer close to 40%. No one squirms at 28% in my experience.
It also depends on income. If your household income is $200k plus, you should still have enough left over at 28% for expenses, some savings, etc. If HHI is closer to $100k, 28% is very tight.
This post was edited on 7/23/23 at 6:25 am
Posted on 7/23/23 at 7:40 am to Crowknowsbest
quote:
If HHI is closer to $100k, 28% is very tight.
Agreed.
quote:
If your household income is $200k plus
That’s a $4600/mo mortgage on $200k. That sounds fricking terrible.
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