re: Could you afford to buy your own house if you had to buy it today?

The house i'm in over 3,000 sq ft . In a few years when all the kids have moved out there will be no need to have a house and a yard that's this big. You do make a good point though with people not really wanting to move especially now with rates high and all. My property taxes have doubled in the time ive been in the house so i'm expecting it to keep going up every year in the house. My plans are to sell this place and buy a home, all cash, out in the country that is much smaller and cheaper hopefully when housing markets have cooled.

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The more I watch the market, the more I think this is the new normal. Not that these prices will continue to go up at the rate they have the last 2 years, but these prices, +/- a few percentage points, is the new baseline.

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Everyone was saying this in 2007, FYI.

We bought our house in 2017 for $275k with 5% down at 4.25% on a 30 year.

Monthly mortgage payment was $1,285 (just mortgage), our PMI was like $80/mo on top of that, sp $1,365 in total with PMI (again, no tax/ins).

We refinanced $248,000 to a 15 year at 2.375% end of 2020. New payment is $1,639 (just mortgage). No PMI anymore. We had option of 2.85% on 30 year which would have been $1,026 a month as well.

Today, zillow says house is worth $438,400. Assuming we put same 5% down, which is way more than we put down on the $275k, we'd be mortgaging $416,480 @ 5.7% 30 year (using freddie mac website for rates) and payment would be $2,417 a month without PMI, tack on another $100 at least for PMI probably bringing us up to about $2,550 a month. On a 15 year at 4.83% the payments would be $3,257 a month without PMI

Could we afford it - yeah, would we do it, hell no.

Once you throw in PMI, HOA, taxes and insurance on the $3,257 a month mortgage, we'd be talking $4k a month easy. Or on the 30 year in excess of $3k.

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My house fell in the 700k to 800k range when I closed on it in November of 2020.

The note is 6% to 7% of my household monthly gross income.

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Congrats?

I could afford it, but I doubt I would buy it. If I'm going to spend that much more money on a house, I won't have the same compromises that I had when I bought my house.

We settled for smaller bathrooms, for a larger family area and yard. Based on other sales in my immediate neighborhood, my house is ~60% more expensive. Then when you factor in doubling my interest rate; no way I could justify spending that much and not getting everything I want

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What's next for you all?

Is this your forever home?

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We bought more than I thought we would ever buy in August of 21. Had a bunch of cash on hand and rates were low so we did the deal, kept note where it was at prior house.

I imagine I stay in Alex till my last breath and it should be in this house.

We liked the house, but we had come from a spec type home that was cheaply built. This thing is a tank. Custom built and built well with just about every aspect of it overbuilt. So happy we did it.

And, no, I would not buy it at 6% interest.

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and will adjust if inflation starts affecting us.

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It is affecting the hell out of us. I havent been price aware in some time, but the last few months I have changed my grocery shopping habits quite a bit.

Sure I could afford it… However no more private school etc for the kids lol. So in reality, no the house today at today’s rates would be 4 figures higher than we pay now and that would just be a no-go. Would blow the budget up.

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“Smart”

The next time someone says that the reason young adults can’t afford to buy houses is because they spend too much on coffee and avocados, I’m going to point to this thread

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The youngest millennials were 23yrs-old in 2019. The average millennial was 30yrs-old in 2019. The average home was $375K. Loan rates were historically low. Many chose to not buy.

Whether, in that market, the decision not to buy was d/t avocados and Starbucks, or desire to take vacay selfies with the buds off the Amalfi Coast, or sugarplum fairies and nosedust .... macht nichts.

It's always something though ... the houses were either too small, or not in the right location, or the only way to afford a downpayment would be to go with a used car instead of a hot new ride, etc., etc., etc.

In fact, loan rates for the last 10yrs were obscenely low. But that was juxtaposed with youthful desire to not get "locked-down" with a house payment. Get married, buy a house, pool savings, have a kid .... nah what a drag.

Anyone with a brain realized historically low home loan rates would be inflationary in the housing sector. Given any reasonable purchase choice, renting in that situation was ill-conceived.

Three years later in 2022, homes average $507K. A 10% downpayment on those $375K homes in 2019, would rate a 350% ROI over the timespan.

Thankfully, it sounds like you bought. Hopefully, that will work out nicely for you.