re: Can someone help me explain how people are affording a house in today's market?

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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.

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I am subscribed to a YT channel about a guy who "teaches you on frugality" and the topic was renting vs buying. A poster wrote same comment as yours.

In summary I responded that you could literally die of old age paying rent with increasing inflation cost added every 2 or 3 years or so (my front door neighbor had to move out b/c her monthly rent increased by $600 a month in one shot).

On the other hand, most people will pay off their homes by age 68-70. You will potentially have $650K average at your disposal if deciding to downgrade. Now tell me what is the better option.

And no, rent is not cheaper than buying. I am paying $1800 mortgage including escrow for the same townhouse model that a neighbor next to me is paying $3,400 a month for rent. It's crazy.

Curious where you are getting that info. The link below states 3rd Qtr 2022 median home price nationally to be $370K

Bankrate.com median home prices Texas/Nationally


Regardless, a ~55 year old who bought a house in the $100K (avg home price in 1995 was $133K) range 30 years ago making $35K a year could pay off their mortgage in 10-15 years and walk away with $150K. Buy a $200K house and do the same thing 10 years later and walk away with $300K. In the meantime, their salary went from mid $30's to mid $150's. And that is just your average college graduate. You could plug a 35 yr old into the middle of that cycle and while not do as well, would certainly have been able to ride the home equity wave.

Obviously the problem today is, using the 300% of annual salary metric, there are not a lot of $210K houses on the market that appeal to people. Well, in 1995, my $100K didn't appeal much to me either, but its what I could afford. And while we had two cars, we had one note and the other car was a piece of shite that. I am not saying its easy, but its not impossible for the average family to get into an average home.

We built a house in 2015 and sold it in 2022.

Build price vs sale price after owning for 7 years = 200k difference

tax advantages of ownership ain’t what it used to be, good way to accumulate wealth if you’re smart about it

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tax advantages of ownership ain’t what it used to be, good way to accumulate wealth if you’re smart about it

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Since the tax changes I've just been better off using the standard deduction.

I can't see myself ever renting again though unless just for a short period of time while we are house hunting or building or something like that.

Your thought process is a little off. I have been a loan officer in Baton Rouge for 17yrs. Less than 10% of my clients put down 20%. pMI is cheaper now than ever. Most clients use the equity from the sale of their existing home as the down payment on the new home. First time buyers are getting gifts for down payment from parents in about 50% of the loans I see. Those who don’t are using 100% financing to secure the home. The biggest help is we use the gross pay to qualify and not the net. Conventional loans have a top debt to income ratio of 50% and FHA goes to 55% . I call it house poor. It’s a wild market but it’s been this way for 10yrs. People treat houses like cars and want a new one every 5-7 years and it keep the industry flowing.

Loser in terms of losing a lot of money and I am not looking at all your posts. We all rented at some point. I don't think someone is a loser as a whole, just a bad way to spend money as a rule of practice long term. It is foolish in my opinion.

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Mortgage rates aren't tied to the federal reserve rate.

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Obviously not directly, but when those rates go down, mortgage rates will follow due to that and other factors.

Bought my 1876sq ft 1960's ranch home in 2012 for $145,000 in Dallas. It had been remodeled before we bought it too, so it was move in ready. Now just a little over 10 yrs later, it's worth about $450k judging by recent comps in my neighborhood.

We're lucky that we bought when we did, but the property taxes are killing us here.

Our mortgage in 2012 was $850/month. It's now $1268/month, which is still reasonable, but it keeps going up every year at a much higher rate than our salaries due to property taxes and the crazy insurance rates increasing our escrow. The actual principal owed on my home is a little over $500 every month

I used to think we could sell, and put that extra $300k into our retirement accounts, but where the heck are we going to find another decent home(even a really small one) nowadays for $150k?

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I don’t understand how these apartment complexes fill up.

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I live in the largest concentration of military in the world. Rental and housing prices are outrageous here.