re: Homebuyers are now spending 40% of their gross income on mortgage and interest costs

It’s crazy. Watching my buyers getting 7% mortgages is tough. It’s becoming the new normal and people are just rolling with it. Prices in my market have dropped about 10% but that nowhere near to make up the spread of what buyers are paying monthly. And we still don’t have enough inventory for demand. Likewise rent prices are out of control here as well.

I'm sorry but I'd be a nervous wreck if I had 40%+ of gross income in a mortgage. I'd rather live in a van by the river if I had to.

You're talking about things that should have been built 10 years ago and would take 10 years to build if they started tomorrow.

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You can buy a house in Louisiana for 150k that’s 1.4 million in the Bay Area.

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Where at, Bunkie?

I read the average price in the Nola area is $350k. Hell, there are DR Horton communities on the northshore advertising homes “from the $275s”. DR freakin Horton.

My wife and I bought a house for $145k back in 08 in west Tangipahoa. It’s what we could afford. The surrounding area started to decline rapidly post 16 flood. We sold it in 2020 for $500 more than I paid for it. The Facebook HOA page posted constantly about issues they were having with car breakins, people busting gates in back yards, almost nightly. The lady that bought our house sold it for $240k a year after she bought it. Jesus. This was a starter home. Single car garage. Three bedroom. 1100 sf. In a not great area.

So just move, right? Where exactly? Even further away while gas is $3+ a gallon? Maybe rent then. Where? Have you checked rental prices lately? I’m sure every couple trying to make their own way can afford $1500-$2000/month in rent. And let’s not forget that most people’s homeowners insurance has increased, fuel and groceries are double, car insurance went up about $100/m. Etc.

I know everyone on the OT has a 900 credit score and paid cash for their Mercedes because they didn’t want points on their black Amex and all, but sometimes you people can be so out of touch with reality it’s really frustrating.

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We are at 10% of gross without taxes and insurance. 14% if you factor that in.

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I’m at 5% including insurance and taxes. But I just sold and used my equity for a large DP on a smaller home. I’m still pissed that I have a $500 note but I’ll get over it.

Am I misunderstanding or is the first graph NOT consistent with the thread title? That 40% figure is wayyy more than just mortgage and interest costs. It’s all household debt. For instance, credit card monthly charges, even if paid off monthly and on time, count toward this 40%.

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Where at, Bunkie?

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I think 150k is possible lots of places in Louisiana but you will be an hour from any areas with jobs.

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In 2008 nobody wanted to buy the foreclosures. Now due to lack of inventory and prices. 1st time buyers, people wanting to upsize, investors, and flippers are ready and waiting to buy those foreclosures if there is a downturn.

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I get it, we went through a 4 month housing search purely because of the lack of inventory on the market. We are technically around 14% of gross, but we are throwing serious money at our mortgage every month because we saw that amortization table. Be aggressive and pay 160k of interest over 12 years or be an idiot and pay up to 750k of interest. Seems pretty cut and dry.

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.