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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 10:03 am to stout
Posted on 7/22/23 at 10:03 am to stout
This may be a dumb question, but doesn’t a debt to income ratio take all debt payments into account? Not just mortgage?
40% is still very high for gross, but it makes more sense if it’s total debt (cars, loans, CCs, house).
40% is still very high for gross, but it makes more sense if it’s total debt (cars, loans, CCs, house).
1
Posted on 7/22/23 at 10:03 am to stout
When this bubble burst at the same time China invades Taiwan and shreds the supply chain it’s going to get rough for many Americans.
Posted on 7/22/23 at 10:04 am to stout
Posted on 7/22/23 at 10:04 am to stout
quote:
I have another doozy about the car market dying. A lot of the same indicators we saw in the run-up to 2007-08 are there
It’s not 2007-08. In fact, it’s nothing like it and any parallels are coincidental or forced.
Look, I’ll give you the car market. It’s heading towards a collapse in propped by huge debt loads taken on by everyday consumers and a primitive automotive business that just isn’t economical to its stakeholders. The center of gravity is consumer debt. Fortunately (or unfortunately for doomers), unemployment rates are just far too low and the value of the dollar is higher than what it was pre-Covid.
I say that to say, I’m pretty sure you’ve been wish-casting a housing collapse since Covid but there are very little signs of that happening. Sure, you’ll see some slight declines in some markets but right now nothing significant is pointing to us seeing pre-Covid home prices (a collapse).
Posted on 7/22/23 at 10:05 am to Deuces
quote:
Leave high-cost of living areas.
And leave disaster prone high insurance areas
Posted on 7/22/23 at 10:07 am to jbgleason
quote:People have been waiting on this for 13 years……Prices just keep going up
2. Rent something and wait for a potential crash? How long could that be? If there is a crash, what kind of advantage will cash give me? Is waiting going to be worth it?
Posted on 7/22/23 at 10:07 am to cgrand
quote:
this is temporary but most people can’t see past their own nose. Interest rates have been so low for so long that a healthy lending environment is alien to the lifestyle most think is “normal”. Debt is not “normal”.
smart people will come in and tell you that “using other people’s money” is the only way to go, because they’ve lived through a generation or more of free money.
Pay as you go, live simply, finance as little as possible and strive for self sufficiency is the way it used to be and for me at least, the key to happiness
My mortgage is long gone not because I’m wealthy but because I didn’t owe very much in the first place
Very true about the interest rate piece. My generation (born in the 80's) doesn't know anything except cheap money as an adult and it has shaped our financial decisions.
That being said, you have to adjust with the times.
quote:
Pay as you go, live simply, finance as little as possible
If you did this over the last decade+ then you wasted the most generous lending environment in history and a prime time to acquire assets.
Those times seem to be coming to an end and people will have to adjust accordingly.
This post was edited on 7/22/23 at 10:09 am
Posted on 7/22/23 at 10:09 am to Motownsix
quote:
If you’re not making out really well right now, you’re doing something seriously wrong.
Who said I wasn't making out really well right now?
Posted on 7/22/23 at 10:13 am to stout
Let it fail.
Posted on 7/22/23 at 10:15 am to Boss
quote:
We are at 2.75%. No way I would sell.
We got in at 3% before the market absolutely blew up. We might sell in a decade or so for something that isn’t two stories for obvious reasons but we have enough room to build on and may opt to do that instead.
Posted on 7/22/23 at 10:15 am to lsupride87
quote:
People have been waiting on this for 13 years……Prices just keep going up
They do go down sometimes though. This was exactly the sentiment in 2005-2007. We bought a house we knew we'd only be in for 7 years but why not? Prices just go up. We sold that house for less than we paid for it 8 years later.
I'm not saying market conditions are the same now, but a medium sized recession (which is inevitable at some point) would probably lead to a lot of foreclosures. Americans are in debt up to their eyeballs.
Posted on 7/22/23 at 10:17 am to fallguy_1978
I'd live in a trailer or yurt if I had to pay 40% of my income to a mortgage.
Posted on 7/22/23 at 10:17 am to stout
I’m seeing a frick ton of HELOCs funding…
Posted on 7/22/23 at 10:17 am to Raging Tiger
quote:
I think it has to do with people not wanting to make their towns desirable. Aka… not caring about local politics, moving to the area more covenant, and sometimes not taking pride. Its easier to move than to fix the issues
We have that problem in my hometown SHV. My parents still live there
This post was edited on 8/2/23 at 11:27 am
Posted on 7/22/23 at 10:18 am to wutangfinancial
quote:
I’m seeing a frick ton of HELOCs funding…
People paying off credit cards and car loans to consolidate?
This post was edited on 7/22/23 at 10:24 am
Posted on 7/22/23 at 10:18 am to RogerTheShrubber
quote:
I'd live in a trailer or yurt if I had to pay 40% of my income to a mortgage.
Me too. That's house poor.
Posted on 7/22/23 at 10:22 am to stout
quote:
Yes that is the other issue but in smaller markets rental rates are dropping. It will spread soon as people take on roommates or move back in with family. Also, a lot of Airbnb houses will convert back to regular rentals causing surplus inventory in the rental market too.
They’re building more apartments here in Louisville. With many starting at $2000 a month or better. In areas that I have no idea how they’re going to sustain that cost.
They’re going to have to come down to be sustainable but I’ve said that for awhile now. If we moved back into our old apartment, rent would be almost $400 more a month than our current mortgage.
Posted on 7/22/23 at 10:23 am to BluegrassBelle
I think student loan payments starting back will have some measurable impact on the US economy.
Posted on 7/22/23 at 10:23 am to stout
Looks like I’ll be doing 26% of take home soon 
Posted on 7/22/23 at 10:23 am to Evil Little Thing
quote:
This may be a dumb question, but doesn’t a debt to income ratio take all debt payments into account? Not just mortgage?
Correct
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