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re: The Medium income Amercan Family now earns 1/2 the income needed to buy the avg home.
Posted on 3/13/25 at 11:48 am to thunderbird1100
Posted on 3/13/25 at 11:48 am to thunderbird1100
quote:Didn't say it was smart to allocate that much to payment. Didn't say it was wise to buy a 800K home. Pointing out that in a rural setting you can buy MUCH more house. On realtor dot com, in my area there is currently a 1991 built 1500 sq ft on 1.5 acres with no garage for 165,000...
Hint - any financial guru out there would laugh at that ratio, by the way, especially without any other housing costs oyu have to pay on top of the mortgage. That's a "you're very house poor" ratio there
1
Posted on 3/13/25 at 11:49 am to GeauxBurrow312
quote:
The current market is such that only the top ~20-25% of households can afford to own a home
If that’s true, that’s obviously unsustainable. Do you think homes will get too expensive for anyone to purchase?
Posted on 3/13/25 at 11:49 am to DrrTiger
quote:
Just like you boomers
Swing and a miss.
Posted on 3/13/25 at 11:50 am to the808bass
Ah yeah sorry you are right. I meant the latter. My bad. Dealing with daycare crud and I am sleep deprived. 
This post was edited on 3/13/25 at 11:54 am
Posted on 3/13/25 at 11:50 am to GeauxBurrow312
quote:In my experience it is most always due to their personal choices. All of the problems in my life are caused by that SOB looking back at me in the mirror.
If someone is whining about their personal circumstance,
What would the solution be? Force people to sell their homes at lower prices?
They are only fricked if they choose to be. Move somewhere else and change careers if necessary.
Posted on 3/13/25 at 11:51 am to RollTide4547
quote:
If you've ever bought a house, you know that the mortgage company looks at gross income.
I know they do. I think this is a mistake and it leads to mortgage lenders approving people for way more house than they can actually afford.
Posted on 3/13/25 at 11:53 am to VADawg
quote:Should be on the individual to know what they can afford.
way more house than they can actually afford.
Posted on 3/13/25 at 11:55 am to the808bass
Top 25% household income is about 145-150k pre-tax
Bear in mind, a significant portion of people who make income in that range live in places where the COL is significantly higher. If you make $150k in New York or LA you are not buying a home.
Homes are already at a point where people are not buying as much: Purchase v Refinance index
Bear in mind, a significant portion of people who make income in that range live in places where the COL is significantly higher. If you make $150k in New York or LA you are not buying a home.
Homes are already at a point where people are not buying as much: Purchase v Refinance index
This post was edited on 3/13/25 at 11:56 am
Posted on 3/13/25 at 11:56 am to GeauxBurrow312
quote:Nor is the perception healthy, even if reality is different.
Its not healthy for society if 70% of the population is financially fricked
quote:
How Gen Z outpaces past generations in the homeownership race
by Micah Washington
Sep 5 2024
Gen Z has taken the lead in the homeownership race.
In 2023, the homeownership rate for adult Gen Zers, or those between 19 and 26 years old, was higher than the homeownership rate for millennials and Gen X when they were 24, according to Redfin, a real estate company.
The race is close, though. About 27.8% of 24-year-old Gen Zers are homeowners compared to 24.5% of millennials when they were the same age. Gen X had a lower rate at 23.5%, Redfin reports.
“I’m so happy with buying a home,” said 24-year-old homeowner Dominic Verrichia, who bought his home in Ventnor City, New Jersey, in October 2020, when the 30-year fixed mortgage rate was 2.83%, according to Freddie Mac.
“I didn’t know if I was making the right call [buying a home],” said Verrichia. “I didn’t know if it was going to turn me upside down.”
Gen Z makes up only 3% of homebuyers, the National Association of Realtors reported. This generation is entering homeownership with the lowest income and is unlikely to be married or have children under 18 in their household.
In 2023, almost three-quarters of Gen Zers said they plan to buy a home within six years, even though the market is tough for buyers, according to Rocket Mortgage, a mortgage lender company.Loading Twitter/X Embed...LINK
If tweet fails to load, click here.
Posted on 3/13/25 at 11:57 am to NC_Tigah
Your seriously referencing someone who purchased 5 years ago with a sub 3% mortgage to make a point about home ownership today?
Posted on 3/13/25 at 11:58 am to NC_Tigah
quote:
Tell it to GenZ .... just stating actual facts.
This means absolutely nothing without context. For example:
1. Housing has only become extremely unaffordable the last few years. If someone bought back in 2020-2021 and 2022 to some extent, they bought way before things got bad.
2. Buying a house and being able to AFFORD the house are 2 very different things. Point being, 2 people could own the same exact house but 1 can AFFORD it much better than the other. Case in point my very own house once again:
- Mortgage payment on my very house if you bought it in 2020 @ $300k with 5% down ($15k) and 3% rate = $1,860/mo (using what I paid for insurance/taxes then with PMI added in)
- Mortgage payment on my house if you bought it last year @ $450k with 5% down ($22.5k) and 6.75% rate = $3,646/mo
That's just under 100% more expensive....just so maybe you can understand the insanity involved in that. Gen Z is not making 100%, 50% or even 25% more (inflation adjusted) at the same age as the generations before them.
This post was edited on 3/13/25 at 12:04 pm
Posted on 3/13/25 at 12:02 pm to RollTide4547
quote:
Should be on the individual to know what they can afford.
I agree. I think mortgage lenders need some skin in this game too, though. Reckless mortgage lending has gotten this country in trouble before and will do it again.
If a mortgage lender approves a couple making $120K pretax to finance $680K at 6.5% as was stated in your original scenario, the lender should be tarred and feathered before losing any licensing they have. There is a very high likelihood that loan ends up underwater.
Posted on 3/13/25 at 12:02 pm to NC_Tigah
Form your very own article you posted:
Someone who bought BEFORE things got bad. In fact this was written 7 months ago and references 2023 data (of people who bought then and BEFORE then). Again, home affordability didnt even get bad UNTIL then. People who bought before then are probably fine. The issue has really only gotten terrible the last few years.
The facts are the facts, things are WAY WAY more expensive from a housing standpoint now than just 3-4 years ago. It's undeniable.
quote:
“I’m so happy with buying a home,” said 24-year-old homeowner Dominic Verrichia, who bought his home in Ventnor City, New Jersey, in October 2020, when the 30-year fixed mortgage rate was 2.83%, according to Freddie Mac.
Someone who bought BEFORE things got bad. In fact this was written 7 months ago and references 2023 data (of people who bought then and BEFORE then). Again, home affordability didnt even get bad UNTIL then. People who bought before then are probably fine. The issue has really only gotten terrible the last few years.
The facts are the facts, things are WAY WAY more expensive from a housing standpoint now than just 3-4 years ago. It's undeniable.
Posted on 3/13/25 at 12:03 pm to thunderbird1100
quote:How many of those that are complaining today voted for biden in 2020? If they voted for biden, they are getting exactly what they asked for in 2020. If they voted for Trump in 2020, I might have a little more compassion. But again, adapt and overcome. If you can't have what you want where you are, go somewhere else.
That's just under 100% more expensive....just so maybe you can understand the insanity involved in that
Posted on 3/13/25 at 12:04 pm to thunderbird1100
To be fair to the make sacrifices crowd I do know several folks that are my age and own nice large houses. They all received down payment help from their parents though.
Unfortunately my parents left me zilch.
Unfortunately my parents left me zilch.
Posted on 3/13/25 at 12:05 pm to VADawg
quote:True, but that might be the goal. Make the loan, allow the couple to make payments for a few years, collect the interest, when the couple defaults take the home and resell....
There is a very high likelihood that loan ends up underwater.
Posted on 3/13/25 at 12:07 pm to RollTide4547
If you borrowed 200k for a home in 2020 your monthly interest/principal payment would be about $820, today that same loan would cost about $1300
That doesnt even factor in the median home has appreciated 25% since then
That doesnt even factor in the median home has appreciated 25% since then
Posted on 3/13/25 at 12:08 pm to RollTide4547
quote:
True, but that might be the goal. Make the loan, allow the couple to make payments for a few years, collect the interest, when the couple defaults take the home and resell....
Any lending company caught doing this on purpose should have their entire leadership team lined up against a wall and shot.
Posted on 3/13/25 at 12:09 pm to RollTide4547
quote:
Didn't say it was smart to allocate that much to payment. Didn't say it was wise to buy a 800K home.
You pretty explicitly stated you can buy an $840k home making $10k/mo after tax right now, and sure, anyone could, and they would be absolutely broke doing so. Sorry you cant do math as it stand for current housing, but sure 4 years ago, that was actually somewhat a reality. Because instead of a $4.3k/mo mortgage only, it would be more like $2.8k/mo which at 28% of your after tax pay isnt that bad. you see how things have changed in such a short of amount of time? And that $840k house now was probably $600k 4 years ago too, which means the payment would be about $2k for mortgage only...thats downright affordable for someone making $10k after tax. At $4.3k/mo, not so much
quote:
Pointing out that in a rural setting you can buy MUCH more house.
This is not some new revelation to anyone. Everyone knows the more rural you go housing becomes cheaper. There's a reason for that, it's less desirable
This post was edited on 3/13/25 at 12:10 pm
Posted on 3/13/25 at 12:09 pm to GeauxBurrow312
Honestly now that I am thinking about it I don't know anyone my age that owns a large home that didn't come from money.
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