re: The math for buying a home no longer works, per WSJ

(no message)

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First time home buyers should be buying below their income levels.

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The biggest problem is most banks won't give you a mortgage that small because there's not enough profit in a small loan for the lender.

It's easier to get approved for a $200-300k loan vs a $50-150k loan.

The current system does not allow most people to buy below their income

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how does one address this without putting millions of people on trains and sending them to a camp?

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Enforce criminal justice

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Ya boy is a young millennial that owns a house. I’m like a king amongst the proletariat

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How’d you get a house if you spend so much on funkos and avocado toast?

I live in a county and city comprised of mostly upper middle class families with teens and retired people (also a LOT of military families who receive some serious housing stipends). It would be impossible anywhere in that county to buy a lot big enough for a well and septic tank, or one on county utilities, and build a modest home on it....the dirt is too damned expensive. It is too damned expensive in part due to demand but it also is a function of zoning that requires massive lots and restrictive covenants, allowed by zoning, which increase the costs of anything built in the county. About 95% of the development in the county in the last 20 years has consisted of tract house development with 4000 square foot, 5 bedroom 4 bath houses on 1/10th acre lots. A 1/4 acre lot is huge and a 1/2 acre lot looks like an estate. Those houses are selling for around $450K. Most of them have 3-5 people living in them. Those houses are what is required to make building lucrative enough to be worthwhile because of zoning and building codes that have nothing at all to do with owner safety and everything to do with keeping real estate prices as high as possible. There have been some proposals to build smaller houses, even condos and other attached residences...almost all BUT luxury condos have ever been approved. There is a market for smaller, less expensive moderate houses in the US and they can be built...but the margins are not attractive to developers and bankers and they control the market. This county is not unique, almost all of any area in the country close to jobs and services is identical. There is no way a family of 4 needs 4000 square feet of 5 br 4 bath house...but thats what is being built.

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The biggest problem is most banks won't give you a mortgage that small. It's easier to get approved for a $200k loan vs a 100k loan.

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$200k loan is fine. We’re talking about an average monthly income of $78k. They shouldn’t buy a $400k house like the article is suggesting, but a $200-250k is perfect as a starter home

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I live in a county and city comprised of mostly upper middle class families with teens and retired people (also a LOT of military families who receive some serious housing stipends). It would be impossible anywhere in that county to buy a lot big enough for a well and septic tank, or one on county utilities, and build a modest home on it....the dirt is too damned expensive. It is too damned expensive in part due to demand but it also is a function of zoning that requires massive lots and restrictive covenants, allowed by zoning, which increase the costs of anything built in the county. About 95% of the development in the county in the last 20 years has consisted of tract house development with 4000 square foot, 5 bedroom 4 bath houses on 1/10th acre lots. A 1/4 acre lot is huge and a 1/2 acre lot looks like an estate. Those houses are selling for around $450K. Most of them have 3-5 people living in them. Those houses are what is required to make building lucrative enough to be worthwhile because of zoning and building codes that have nothing at all to do with owner safety and everything to do with keeping real estate prices as high as possible. There have been some proposals to build smaller houses, even condos and other attached residences...almost all BUT luxury condos have ever been approved. There is a market for smaller, less expensive moderate houses in the US and they can be built...but the margins are not attractive to developers and bankers and they control the market. This county is not unique, almost all of any area in the country close to jobs and services is identical. There is no way a family of 4 needs 4000 square feet of 5 br 4 bath house...but thats what is being built.

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You type a lot to say nothing

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That is exactly what I did back in 2021. Got the seller to pay the closing costs by adding that to the price of the house, put 3% down, and locked in a 3.2% rate.

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Man, you should have waited a few years and saved up more so you didn’t have to pay pmi.

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It was and still is sound advice

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No it’s not.