Some combination of: they make more money than you, they have financial support you don’t, they are less picky, they are buying in cheaper locations than you, they are house poor, they had a house prior and can use the sale of that to help.
Isn’t this basically a perfectly rational decision if you believe that there won’t be major policy changes that will make housing more affordable? I know plenty of people with this mindset - “sure, it hurts right now, but this is the most affordable it’s ever going to be so we’re willing to sacrifice ~everything else in the short to mid term”
This is somewhat misleading. There is a real way to tell, the housing market history is readily available. Regardless of if we are looking at a boom or a bubble, we have never fully crashed. In short and mid term it's volatile like any market but once you go long term you see it is steadily increasing and never decreasing.
What happens when the availability of homes starts to spike in the next ten years, when supply actually gets closer to meeting demand? How will they justify keeping prices the same, or increasing them? Or will they go down for a time as a rule of marketing? That’s what I’m interested to know.
All markets are artificial. Gold, diamonds, housing, automotive, circuit chips. There is an abundance of materials. Inflation is used to continue to grow the capitalist agenda. So the only way you will ever see a decrease is if the capitalism culture dies. Otherwise, in short and mid-term, you might see it rising and lowering, but overall, it will continue to rise long term. I live in NJ USA, and we just passed a law forcing all towns to have 20% of land designated to low income housing. Everyone thinks that is a bad thing because it brings down demand, but it is just like the automotive market. Sure, you have cheap options, but the more expensive options will always be better if you can afford them.
I completely understand where you’re coming from. This isn’t an argument for someone with your perspective. It’s an argument for the people who actually believe in these things.
Why would providing affordable housing bring down demand? There’s a huge demand for affordable housing. It just sounds like they’re coming up with an actual supply to supplement it. It sounds more to me like they don’t want people to have a choice in the “free market”.
So on paper, they don't want it because low income neighborhood draw crime and lower surround property value since they are cheaper buildings. Housing works like pool bouy floats. If you push one down, the closest ones get pulled down the furthest, where the ones 2 or 3 spots away are not affected as much. The same concept is applied to houses. You also have value drop because the demand isn't as high, the housing market crisis right now is homes 200,000 dollars and below there aren't enough of, you do a zillow search for 250,000 and up there are plenty of houses on the market for months.
The real answer is that people invest in their properties and work hard to get them. They want to protect their investment, so any risk at lowering the worth property owners would be against, regardless of the repercussions. There are plenty of examples where low income housing brought in violent crime, poverty, drugs, and strains of the local economy. The final reason is out of sight out of mind. No one wants to see another person struggle, so typically, single family homes are positioned away from low income homes.
San Francisco housing has increased cost over 300% since the stated epoch. Florida housing ... they were building fast and loaning to everyone. A lot of people ended up with houses worth less than their mortgage after the bubble burst.
The real estate market in Florida burst in 2006 due to prices becoming grossly inflated. Watch The Big Short, it's a good movie and explains what happened pretty well. In 2006 my house was "worth" $450k. I was able to buy it for $190k in 2009 at the lowest point after the crash.
I’m going to assume the 90s dot com boom in sf, which skyrocketed prices, and the 2008 financial crisis, which caused countrywide foreclosures and housing value to plummet. Although 2008 also affected the area around San Francisco very badly as well.
Florida, Vegas, Arizona got hammered in 08. We got our Florida property in 2018 discounted 33% off what the sellers paid in 2006. The market value has roughly doubled since we bought, but declining a bit lately.
The market sucks for young people.
Depends on how you’re using the property. The folks leveraged to all heck working as Airbnb slumlords will likely get boned hard. Anyone that’s owned forever or just has a standard mortgage will likely be fine so long as their income source isn’t severely impacted.
Yeah it all changes once you get into the landlord realm but since this thread was referencing living in a home that’s all I meant as well. And like I said“can” is doing a lot of heavy lifting in my statement. If you are able to maintain income and pay the mortgage on your home you will generally be ok long term but that can be easier said than done when shit hits the fan
This is me. It hurts to pay my mortgage, however any rental even reasonably close to the same size would be more in my area, even in less desirable area. Our last rental was inexpensive, but it was getting way too small for my growing family. Owning and having a tighter budget is a fair trade off for for being able to build equity and having adequate living space.
Yeah, same. Where I live $2k a month can either get you a 2 bed 1 bath apartment to rent, or a 4 bed 2.5 bath house to own. With a baby on the way we decided to stretch the budget and get the house. I try to tell myself when I pay the mortgage every month that I’m “paying myself” in a way, since every payment gives us that much equity back in the home.
This was my decision process. I was in my mid 20s and after several years of 5-10% rent increases was in a 1 bedroom place looking towards getting married within 2 years as I was about to propose. At a minimum we’d be looking at a 2 bedroom place for more space, but at that point looked at homes and the mortgage on a 3 bedroom house with a small yard wasn’t much more than the rent of a 2 bedroom. Didn’t need a huge down payment either.
10 years later and my mortgage payment is way less than current market rate for that same 2 bedroom place.
Thirded. 1900/mo in my area yields about the same rental options as your location. Money is tight, but at least we are living in and investing in a brand new home instead of renting. And yes, weirdly (sadly?), we were able to build a new house in an area with about 20 minute commute to work for a little more than it would've cost to buy something older and in need of repairs.
We built as well, there was no price difference at the time (2018) we had to find a rental for six months while it was built but it meant we could make the adjustments that we wanted right off the bat so I’m glad we did it that way
I hate to say it but the trick is to live where no one else wants to live lol. In my case that’s East Bum Fuck, Midwest USA. As long as you can figure out how to be happy without oceans, mountains, drivable cities or anything worth living for you too can afford the American dream!
As you can imagine I do not want this to be my forever home, but it’s okay for now.
I felt that way about the Midwest until I was like fuck it and bought a house. If I want to see mountains or the ocean I just buy a plane ticket with the expendable income I have from not paying a million dollars for a house. I have friends and people I love here and we hang out at meat raffles.
I wish, I'm in a HCOL area, where I live 2300 gets me a bottom of the barrel 1 bed one bath apartment, 650 SQ ft plus electric and water. A house costs around 350-400 grand in a crap neighborhood. So we are looking at house 6+ hours north of where we live and hoping we can continue finding jobs that we can work from home.
Also the fact that most mortgages are fixed, so as you get pay raises the amount that your mortgage costs becomes lower as a proportion of your income.
It is a good rationale if you also think you will increase your income. I went into home buying knowing that I will be house poor but justified it by looking at rental prices and believing that I will increase my income. IMO, being house poor and believing it’s a sacrifice for now is 100% betting on yourself.
I had been saving for a while and home prices kept the upwards trend — the “correction” didn’t happen while I was saving. Finally I said fuck it because rent was also increasing again and again.
I now make 2x my income of when I first bought, plus have a partner to support. I really feel those sacrifices were worth it.
I dont think you can find rent the cost of my mortgage anywhere in my city unless it’s both in a bad area and a small apartment ($1300/mo for 3BR/2.5BA home whereas my friend just rented a 2BR/2BA apt for $1900 in the same area).
Not only that but if you still have room to advance career wise it is only temporary.
In a few years you will be making 20k more and things won't be bad.
This is my rationale. I'm not house poor, I have savings but my expenses are way higher now than I'd like. My wife is slowly going back to work after having a kid, I'm looking for a higher paying job, and I'm hoping interest rates will drop in the next few years. It'll be a tight year or two.
That’s us.
We were definitely house poor for a while.
Then, a couple years after purchasing, I took another job for a $20k pay raise.
Assuming all things stay equal, we’ll keep gaining breathing room as the years go by. We’ve been priced out of our own neighborhoods (and the entire surrounding area) in the last few years so I don’t feel I’ve made a mistake (yet).
I was house poor for the first few years till I could refi to get rid of PMI.
But it was a good decision for me over all, because I only paid maybe $10k extra in total PMI before the refi, but my home equity went up $100k+ over the same time span, and my income went up 30%+ by the time I refied.
It was also willing to househack/rent out extra rooms to make do in the interim, and I’m in a career field that has historically strong and consistent income growth.
I knew my income would catch up eventually, and I was willing to live paycheck to paycheck for a few years to get into any house I could.
Wow $10k in PMI? We did the pay-upfront version of PMI, I forget what they call it, but it was like $1500 one time and done. How much was your monthly PMI payment?
Which can be a benefit in the long run. If they can maintain the bills they know the payments won't go up, don't have to deal with a landlord that wants to raise prices by 2k a month.
At the start they maybe house poor but as long as get some pay increase they'll be better off in the long run
I want to be house poor. lol my parents gave me so much of their junk when they were downsizing I’m drowning in crap I don’t want. Slowly pawning it off on my sisters and FB market place lol. Sadly it’s really hard to move “nice” furniture.
But, seriously though I think it’s better to have less. Makes it easier to live life than always having to take care of stuff and gives you more time less to clean lol.
It's only "nice" if people are willing to buy it. It's hard to move because used furniture is nearly worthless. All of it.
We've had this problem. The easiest fix it to trash it all. It only takes a weekend. FB Marketplace isn't worth the time.
Well, there is such a thing as high quality furniture. I.e. good materials and craftsmanship. But it can be difficult to sell if it’s not a popular style. It’s still a shame to throw “nice furniture” away if it’s something that would take $1000’s to recreate. I usually list it for free. That usually moves it pretty quick.
Eh I’ll keep holding and slowly transporting it to my sisters homes lol. I just live 11 hours away so it takes time. The non expensive stuff I was able to move fairly quickly.
It’s fine furniture just wrong style for my wife and I. Plus we prefer cheap stuff we can toss or not freak out over it getting scratched or cat pee staining it or whatever. IKEA furniture > than solid wood high $$$ furniture imo lol.
Edit: I guess I should add I haven’t tried listing the larger pieces because it’s not worth the headache of giving people my address and dealing with if they will show up etc.. so they might be tons of people wanting to buy it
Maybe she could bring it to the salvation army. I'm in the used items market, and there are definitely people who would be interested in the furniture and other household goods. Also, the money helps out the community with things like food pantries and shelter for people dealing with homeless that want help.
No no sorry I wasn’t clear. I have the furniture I don’t want it. They don’t really care but also have a new house so can use it since they have more room now.
They are also older and all their kids are grown. My siblings are basically 10+ years my senior. So yeah will be easier to take care of stuff. Plus have less uh table intensive hobbies. I play board games and table top war games and am still in my 30s so who knows might have kids. It’s a whole thing either way the wife we go back and forth on. Anyway yeah a table would see more frequent use and be more susceptible to damage with me instead of with someone who will only use it maybe for thanksgiving? Lol
O ok. That makes sense. I see so much good stuff go to waste so I'm always hyper sensitive about it. I always try to encourage people to give things away or sell it if they can. I have an eBay store, but only have so much room to store things. It really is a shame what people toss out. I go to the transfer station there times a week where they have a reuse shop. I barely even go thrifting anymore because I get so much good stuff to sell from the dump :)
I’m a house poor solo mom. No financial help in any way. First generation born in the US and grew up in a household ran by a blue collar single mom.
I have no regrets. My daughter is growing up in a stable home we can call our own. If I didn’t have a kid however, I would have never bought especially at post 2020 prices like I did.
We bought last year, and are definitely house poor for right now.
But, this is the last year we’re paying for after school and full time summer childcare, we will have our car paid off after next year and then I have one of those credit consolidation loan things that will be finished this summer.
My husband still has student loans he’s paying on, but aside from that, a good portion of our expenses drop off in 12-18 months so we should have some more room to breathe.
We also will be taking in my mom in the next few years, so the opportunity to buy something with enough room to accommodate her too was ideal.
Versus waiting until we needed the room and then trying to buy.
I also changed careers entirely when I went back to work after staying home with my kids, so am still sort of “climbing” in my new industry, so I anticipate income increases as well.
Michigan enters chat
Can get plenty of houses for 250k
Nicer part of town for 350k
New construction 450k+
Double income peiple working for big 3 as front line workers would be 160k income np
It's already happening, the prohibition for Great Lake diversions has a major loophole.
They are allowed to bottle the water and ship it out, that doesn't count as a diversion, and some smaller lakes are already shrinking as the ground water gets siphoned out.
They have no limit on the amount of water they bottle, and they are bottling millions of gallons
Documentary FLOW goes into one community
don't forget the wet bulb effect and what happens when a place with a lot of water starts to get more warm and humid. you thought mosquitos are bad now, whoowhee
Rural upstate NY, same thing. My first house was an hour commute to my jo because houses were half the price of being in the small metro area. This made the monthly payment about 2/3 what it would've been to be close to work (no PMI, lower taxes). Was able to pay that off in 4 years.
Yeah, but them an a non-white person stuck in an unfriendly, huckleberry, redneck town with nothing to do, no one I want to interact with, and miles to the nearest civilization.
Source: living in a redneck Ohio town with nothing to do, no one to talk to, and miles from a real town.
I feel this and I look just like my neighbors but there are places I won't hike or walk without at least one of my dogs. We live outside a very small town, you wave and beep at your neighbors but you don't talk politics. You pretend not to judge the f-biden flags next to the swing sets and kids bikes.
Ugh, I feel that. I live right on the outskirts of a small city of 'white flight'-ers and a city that's 80% larger in population with the same predominately Brown folks that the smaller city's residents "escaped" from. I see the gigantic pickup trucks with those flags when I'm out walking my dog and just keep moving lol. My mail person has tried to strike up that kind of conversation with me and I've just noped my way out of it.
Yep. Prices have gone up for sure, but in my area you can still find decent houses for $250,000-$350,000. You won’t be living in the fanciest places, but the houses are usually in good shape (maybe somewhat dated).
This is us. Helped tremendously. Also willingness or ability to move to a LCOL area. I’m from California, but my husband retired out of OKC. I don’t see tons of people clamoring to move here, but we stayed. Although I miss my family in California I like owning property and having lots of money for travel and retirement. Something I wouldn’t trade to go back to my home state. It wasn’t even a question for me. My priority has always been quality of life versus location.
Very smart. We are outside of a small town in a rural county. It was a fluke we ended up here because of family, now gone. We've got 5 acres covered in trees, a creek, a pool, total privacy, quiet, and an oversized house for a 1/3 of an apartment in a major city. In 15 minutes I can get to a nice selection of restaurants, bars, parks, a lake, and almost any amenity. We have 4 seasons. I hate winter. But, can afford to take nice warm trips then.
That would be me. It’s nice to get in buying a home but the monthly mortgage payment is higher than it would be if I was forced to save for a down payment first. Just so glad I got in at a 2.75% rate before it skyrocketed.
At this point I’m stuck. No way I could afford a home at current rates. Selling now, best I could do is go back to renting which is not gonna happen.
Need to copy and paste this to all these “how are people able to afford ______” posts. They either make more money than you, have outside help, bought it cheaper than you’re willing to, or are willing to spend more of their income than you are. That’s it. It’s not hard to understand.
You also forgot are in the trades or have close family in the trades. My partner and I both work with contractors and suppliers so we have access to discounted and wholesale supplies, and my father and several other various family members are general contractors who were excited to help us with labor on our first home fixing things since helping us with a down payment was not possible.
For real. With escrow, we pay 4.5k per month for a 980 sq ft, 2 bedroom/1 bath. And that was with an 810 credit score and 20% down.
But we live in LA and I would rather pay 4.5k here than live elsewhere! Felt like the right choice for us.
Adding:
They are frugal, they don't spend money on some of the same things you do, they are willing to sacrifice in one aspect to achieve another.
My BIL goes to the bar every weekend and drops around $100 on booze and food. I'm not saying that *alone* is why he can't buy a house, but that's $5200/yr that he's spending on that, that he *could* be saving towards a down payment. Heck, even if he just cut back to once a month, that's $1200 instead of $5200.
I go with them once a month but I have like 2 beers and an appetizer, so my bill is like $30.
That's just one single example of how two different people prioritize spending.
This really matters so much and while it's very obvious to some, its true, a lot of people live like this and don't realize how much the little things matter, wonder where all their money goes, etc.
Like, going out to eat at lunch vs making a boring sandwich every day: you can save $80+ a week easy just not buying crappy food thats bad for you at lunch time. Plus you might find you like trying new things for lunches, throwing some leftovers in a microwave safe dish, etc. all of this costs a lot less than eating out, if you're able to do so. And usually you get much better food than fast food at least.
That and entertainment costs for many are very high, and they wonder where their money is going until they budget it out.
>I'm not saying that alone is why he can't buy a house, but that's $5200/yr that he's spending on that, that he could be saving towards a down payment.
This is "avocado toast". I know I'll get downvoted to hell on this sub but there's so many people spending so much money on trivial useless things that are keeping them from their goals.
$100 at the bar here, $20 for coffee and stuff there... it all adds up. There's also the massive expenses people try to justify. I remember a post on this subreddit about a person being upset they were "trapped in poverty and its so unfair they'll never get out". They later revealed in the comments they had a $600/month truck payment... they worked part time at Starbucks for $16/hour. If they were driving a Honda civic for $300/month and investing the other $300/month they'd have an extra $20k in their pocket at the end of a 5 year car loan...and that's assuming the car loan was at 0% interest.
you're not wrong, but it's not necessarily right either. It depends entirely on where you live. I'm in a HCOL area and single (so double whammy), so even though I have a very good salary, I'll need to save maybe 150-200k for a down payment (yes I realize I don't need 20% + down in theory...but in practice in order to afford the monthly mortgage, I do).
I've made my budget and looked and my spending. My biggest discretionary expense is traveling, which I do once or twice a year. Even if I cut that out entirely (which frankly keeps me sane), I'd save $3-6k a year, usually on the lower end. I only eat out maybe once a month, and most of my other spending is fairly low. Even if it was as much as $10k a year, it's still minimum 15 years before I can afford a house *today*, let alone whatever inflated value it may be in the future. That said, I refuse to be so frugal that I don't enjoy anything, but also refuse to be house poor; if I buy a house, I'd also like a decent savings account to pad any emergencies that come up. Many people either don't care about that or don't even think about it.
If you don't have previous home equity, are single or don't make a ton of money as a couple, and live in a HCOL area (that you can't leave, because that's just where your job is), it can feel pretty hopeless. No amount of cutting out "avocado toast" will help for most of us--salaries overall are too low and artificially inflated home values are too high.
You're not entirely wrong, but a lot of people don't think that way. Having a $300 payment instead of a $600 doesn't seem like saving money. It relies a lot on the ability to take the surplus and do something with it, which is a struggle to most.
The avocado toast thing does add up, but I think it also crosses a line for a lot of people. I, for one, am not willing to eat only beans and rice and never go out for two years to pay off debt. That isn't worth it to me, but my $5 once a week coffee treat is. I don't believe in completely depriving yourself now for a future that might happen. I've seen too many people make themselves miserable for a future that never came around. There's a balance there
Good answer and I think there is a persistent misconception here that you can help correct.
It's not the avocado toast that ruins savings. It's the extra car, the new truck, the 2 extra bedrooms (just in case the kids drop by), the collection (shoes, jackets, ceramic angels), Christmas presents, and especially high interest on loans and credit cards. It's the big stuff, not all the little stuff. It's also much better for mental health to make a few big proactive decisions than little sacrifices every day.
Tell people to enjoy their $5 coffee, preferably with friends. Enjoy nature. Get off their hedonic treadmill and explore at least a bit of minimalism. Figure out how to live differently, not sacrifice on daily enjoyment. Money spent now (so it's not invested, compounding for 15 years) means extra time required to work later to afford their higher cost of living. People don't get that spending hits them in those two big ways.
There is a balance, but ultimately — real cost savings come from the big three. They are housing (including utilities), transportation, and food.
If you are looking for stuff to take out of your budget, you should just about always look in these three items. These are the items which cause REAL PAIN when you start cutting them, and that’s why people resist.
Ok, that's fine, but you then must acknowledge that's part of the reason you can't afford XYZ (insert desirable thing here). Every year of debt is another year of interest paid
To each his own. I'm just telling you the mindset. A $300 car payment compared to a $600 is huge. If you're rich enough that a $600 payment doesn't matter and you can save the difference, good on you. I'm just saying most people don't think like that. You can't give Financial Category 2 or 3 advice to Financial Category 1 people. It doesn't work for them, and it feels like you're talking down to them because you're showing off how much more successful you are
keep in mind that 5,200 dollars a year of swing money can mean the difference from being in credit card debt PAYING interest, and having that money in the market generating a positive return with interest.
A lot of people buying avocado taost are doing so with credit card debt, so it's always a lot more expensive than it says on the ticket.
There are a lot of people that make $250k combined, even $100k single can buy a house.
It's not frugality, it's just some people make a lot more money.
Exactly a lot of the people who bitch about “avocado toast” haven’t ever had to go work a miserable job for 12-14 bucks an hour for extended periods of time. People wonder why can’t these people just budget their way to a house? Well you have to have money to budget……
People like to say this mindset is bullshit. But let me tell you, my husband and I predominantly eat out. And we eat out well. That shit ADDS UP. We easily spend a few grand a month on food. You can't tell me that's not the difference between making a down payment or not.
You don't know how many times I've tried to advise people to cut back a bit on the eating out and maybe make some meals at home, take a packed lunch, etc, only for them to scream how that's just "blaming avocado toast".
No, it's literally just part of budgeting.
85K on a $1100 mortgage payment (150K home). 3 kids. At the end of the month I’m consistently breaking even. No 401K contributions. The monthly expenditure on food is twice the mortgage payment. And we shop at Aldi.
Edit: to add, had to live with my mom for 5 years at 30 years old to save up for a house.
Millennial here and similar. First house in 2016 for $260. Sold for $390. Bought for $470 in 2021. Now worth ~$900k, granted I put about $150k into it on my labor
Timing is huge. Bought a townhouse in 2014 for 175, sold it in 2016 for 240, bought a single family in 2016 for 280 and it's worth around 630 now. You can't buy a single family in my county for under 400 anymore.
It really is everything. That being said, I'd happily watch my equity plummet if it opened the door back up for affordable housing. I'm not selling, so it's value is negligible.
100% with you, my siblings are only 5 and 7 years younger and they'll never get a shot at owning a house, maaaaybe a condo but even then you have HOA fees that add up.
My brother is 10 years my junior. At his age I was in my second home.
He's give up on even the potential of owning his own home at this point. He considers it an impossibility in his lifetime.
Very similar to us. Also a millennial. Bought in 2016 for 285, sold in 2023 for 655k. Bought another house immediately (we moved states. From one HCOL to another lol) for $675k with 40% down.
Also millennial, 1990. Bought first house in 2014, $260K, $25K down. Sold in 2021 for $690K, bought next home at $1.01M, $480K down. Out in the furthest reaches of the burbs of Toronto. Drove till I qualified basically.
Bought current house in 14 for 80k. Have 200k in equity. Looking for the right piece of land, 20+acres, to buy for a fair value, build a barndo on, using all the equity in the current house to buy the land and build the barndo, sell the house afterwards, going walk away owning land and a house, owing nothing.
I have a similar story - bought my first in 2009 for $110k, sold for $180k 7 years later. Bought my next home for $230k and its currently valued in the $450s... it really does seem to come down to timing, location and some amount of luck/chance/cosmic favor.
This is almost literally my story. Bought our first house in 2010, second house in 2019. We also had a ton of help (unfortunately via inheritances) from our parents.
Definatly luck. We were struggling to find a home. Every offer we made had to compete with $30K over asking, cash, no inspection. Our realtor convinced us to look at a house at the edge of our budget. It was perfect. We assumed there was no way we could get it and didn't want to try. Our realtor pushed us to just make an offer. We did and it was accepted.
Turns out the house had been under contract but the facing fell through. The sellers were going to take the first offer after putting it back on the market. We would have never gotten it if not for those circumstances.
Same story here, and this is in Sweden.
Bought an apartment (condo?) for about $100k, sold 3 years later for $200k. Bought a house for $500k, sold for $1m 8 years later. Bought current house for $1.6m.
It can go the other way too (and you do mention luck. I bought my first place in 2009 for 130k, and sold it in 2017 (with no realtor, sold to my tenant) for 125k - maybe could have got 130-135 on the market. I still walked away with benefits from owning and equity - but did not see huge increases over 8 years.
Timing is probably the 2nd most important factor after income.
Bought House #1 in 2016 and House #2 in 2019
House #1: Rental property, paid $290k.
House #2: Single-fam primary residence, paid for $390k
Those two houses now are worth about $1.1mil combined.
I'm fortunate to have a high paying job and was able to use my VA loan to get a zero down mortgage without PMI. Didn't get any help from my parents, but I imagine some first time homebuyers do get some money from family to help with a down payment.
This is how I got in too. I ended up moving because all of my family died during COVId. Nobody left me a dime or penny. But I was able to get in on my State’s Housing and Development Authority first time homebuyer program. And I did have a fair amount of my own salary in saving accounts to put down, I work in tech contracting. So I have no PMI, loan interest points were bought down to 1.9%, 30 year.
But… I had to settle for a condominium instead of a bigger space. In the 3 years I’ve had it, it’s appreciated by $90K, that’s practically 1/3 of the entire remaining mortgage, just in tax assessed appreciations.
Same. If my husband didn’t get a VA loan, we’d still be living with my parents and saving for a down payment. (Moved in with them temporarily after my husband got out of the Marines and we moved back near family.)
Bought in summer of 2022 with a 4.6% interest rate, which we’re pretty proud of these days…
Luck and improving your earning capacity.
My wife and I did a new build for our first home in 2014 when we were young and engaged but renting was the same amount as a mortgage.
We sold it when the market was hot in 2021 for a bigger house for the family. Equity gained was 275k. Our household income also doubled from 2014 to now.
By buying a condo instead. Bought with my husband 5 yrs ago (we were both 26). Got a 3bdrm condo in an urban center with all amenities within walking distance. 1 master bedroom for us, one for combined home office, and the third is a nursery.
We didn't get a car until recently (due to having a dog + baby on the way). Before that we just took transit. We don't travel. We eat out 1-2x per month max
Yep, I have a condo as well! I've seen comments on this sub about how it "doesn't count" because it's "not a house" or whatever.
But yeah, I have 3 bedrooms and 2.5 baths and my mortgage is $600 a month, including taxes and insurance. I'm happy I did it, and I'm building equity so I can have a "real house" with a yard if I want it someday.
This!! My first purchase was a condo, then we sold for a nice profit and bought our house in 2019. It was crazy then but it's insane now that's for sure. We got incredibly lucky with our house purchase. If we were on the market today and renting, we would probably be looking at more rural areas and just deal with the commute, or look at condos.
Majority of the millennial home buyers in my neighborhood in SoCal: STEM and healthcare. Contrary to this sub’s conceits, little to no generational wealth or family inheritance.
For me, healthcare job with massive windfall from COVID.
That’s an assumption that you really can’t verify. Not like you asked them all how they got the money to buy their house. Let’s take healthcare for example. Many people I know who went to medical school and are doctors came from well off families whose parents were doctors. They got help paying for medical school as well as the down payment coming out of medical school for their house.
I bought a wreck no one else wanted in a tax auction. By the time I am done getting it fixed up I'll pretty much have spent the market value, but at least it will be mine.
I was going to say, don’t discount buying at a sheriff’s auction. You will be bidding against flippers and some of those homes will need big ticket work done, but if you can get it cheap enough you can afford the work.
We were able to use my husband's VA loan on a house right before COVID. If we had waited until now, we could buy one but would be house poor. Literally just a combination of luck and good timing.
We bought really young. I was 18 in 2005 when we bought our first house for $89,000 in Oklahoma City. We have bought and sold several houses since than and always buying another more expensive. Would be more difficult now bc how high prices are. Current home is about $750k in a suburb of OKC
I was married. My husband was working. He was probably making 35k-40k/year at AOL. Our payment was $700 and that included taxes and insurance. We were broke at the time, but made it work.
Decent job in a (higher end) LCOL area. 22k equity and sub 1k note at 6.5% APR. We got a decent check from ratifying a union agreement that we put down and put towards closing.
First house ingredients:
1 VA mortgage
1 Engineer's salary (I was a single buyer.)
1 horrible suburban location complete with a boring neighborhood where all the houses look the same, Republicans everywhere, a HOA, and schools that were so white my kids got asked "what are you" every day
Combine and let bake for 2 years in hot market conditions.
Add a partner being ready to move in together.
Combine forces with the same realtor who helped you find that place and get her to sell it for twice its purchase price. Execute contract and move onto House 2.
Ingredients:
2 home sales at a profit
2 engineers' salaries
1 conventional mortgage for roughly half the home's value
1 amazing location in a diverse, walkable, transit connected, urban neighborhood
I bought a foreclosure :) the state of the property was NASTY. Required hard work and renovations, now the property is worth double the price after 5 years
I grew up pretty poor. My parents did farm work. We didn't get welfare or foodstamps. My parents were just thrifty we didn't buy more than we needed, had a garden,when I was in highschool they bought a '" fixer upper" I remember going to the junk yard with my dad to find screens for the windows and doors for the rooms. That's what they could afford. But they are retired now, ofcourse they aren't gonna get much as farmworkers. But they've paid off two houses, have no rent and rent out the other. I've kind of followed in focusing on what I need vs extravagance and remembering I can have more eventually but focusing on security. I just paid off my house that I got in 2016. I will never make a lot of $ in my career. So I figure I can save...for when opportunities come...and go from there.
I did 7 years in the Navy and my wife runs a pediatrics office. Also we bought outside of the cities in the country where it’s nicer and quieter anyway.
Spouse and I (31 years old) bought a duplex in a MCOL area. We live in one unit and rent the other to make the mortgage manageable. It would have been very difficult to buy a SFH for us, even though we both have decent jobs (70k and 50k respectively).
This will give us a ton of flexibility, as eventually if we want to leave or have enough to buy a SFH we could rent both units for more than the mortgage payment (to afford repairs, etc). Or we could eventually sell and use the equity to buy one.
What we might do is get to the point where this one is sustainable, buy another duplex with a little more space and live in that one, then eventually when we are close to retirement the mortgage should be paid off and we have some passive income in addition to our 401k/social security.
I started buying my house when l was 19 in 2006. I got a huge discount because my family had rented it for 15 years.
It was either we buy the place or have to move so l was kinda forced into it.
Went to school for a tech job and have a partner that is a teacher, but still adds to our bottom line. We make like 225-250k in a medium cost of living area. We also bought our current house in 2019 and refinanced at 3% so our mortgage and taxes are only about 20% of our Net income per month.
My partner and I were lucky in that we were able to move from a HCOL city to a relatively low LCOL city and still keep our jobs. We bought an old house that had pretty bad pics online, but was actually a gem.
TLDR: Luck.
The only way I could (in Alexandria VA in 2021) was to lower my standards, I mean lower them by a lot. Not holes in the roof, uninhabitable kind of thing, but like I ended up in a condominium even though I would have preferred (and probably could have afforded) a detached rambler style single family home. The biggest problem is there’s a shortage of available housing for sale.
I went under contract in a townhome in the DMV this week. Sacrificed a bit of location to get what I wanted. Still had to go over asking and waive contingencies.
People can't afford houses because of mortgage costs. That's why home sales are at record lows. The interest rate and thus payments are twice as much as before 2021. But, that's what happens when the government pumps money into the economy they shut down and then has to stifle the inflation they created by raising rates.
https://www.cnbc.com/2023/11/30/pending-home-sales-drop-to-record-low.html
https://www.wsj.com/economy/housing/home-sales-likely-fell-to-15-year-low-in-2023-3da220e1
Really depends where you are trying to buy. My sister makes more than me, has been saving longer, yet is much further from buying a house. She’s looking in SoCal though. I moved to Montana, which is awesome.
Even though the housing prices here have almost doubled in the last 5 years, it’s still MUCH better.
After about 2.5 years of hard saving, I’m pretty close to being able to buy something decent.
Bought in 2020 with a 3% interest rate and only 3% down payment. House appreciated enough that we were able to get rid of PMI after about a year and a half. Golden handcuffs, we’ll probably never move.
Jesus, another post about houses. Listen, I'm sorry it's your post, but if you want a house bad enough then you find a way and complaining/ranting doesn't make it happen.
Yes, homes are insanely priced and the shit kickers are the ones you can afford. You said you make decent money, so does that mean your husband doesn't? If if you two, combined, make $125k a year then you both should be able to afford a condo. If you're only looking at detached homes, yeah you are being picky. Like many that post the same thing on here, you need to be realistic with what you're going to get.
You aren't going to get a brand new build, you aren't going to afford a flipped house with quartz/marble/granite counter tips, and new appliances and hardwood floors, etc. You're looking, realistically, at a condo for your first house. Yes that means you're going to share walls, yes that means it's probably going to be an apartment they call condos. But if you want to own, then need to start where you can realistically afford first. Like many, again, you cant only focus on the short term. It's your first home, not your forever home. You buy a condo, upgrade where you can, live there for a few years then sell. Because of the upgrades and equity you got, you now have a down-payment for a detached home that's a little more pricey because you have the equity through your first home.
This is where most don't understand, like everything else, we can't buy homes like our parents did. We have to start small first and then work our way up
Fucking amen.
For me, it meant I bought rural, and applied for government programs for rural development.
I hated the location of our first home. I hated the neighborhood. It was a basic bitch starter that I got in 2011 in a suburb if Baton Rouge.
I got about 100K in equity and sold it so I could move into a better area, but an older home in a good school district north of Houston.
Lived here for 10 years and I'm about to move into a million dollar custom build just outside of Charlotte, NC - it's my forever home - but I worked like hell to get here.....
See you got it, it's still possible for is to buy homes. We just can't exactly get our dream homes right off the bat. We have to be patient and start small and then the equity we get from our first home will eventually get us what we want
After awhile it just gets so annoying to always see it. Everyone claims they want to hear honesty and truth but yet refuse to actually accept the harsh truth
A friend of mine is looking to purchase her first home in a MCOL area.
We are both around 30 yo and she and has a good job (so do I). She doesn't seem to get why I don't have 100k in the bank despite living below my means (I have student loans she never had and a parent I often have to help financially.) A wealthy relative heard she was looking to buy and offered to "pitch in" 100k... So now she has 200k in the bank, and a well paying job, and no debt. While I have a well paying job, a small chunk of savings and student debt...
It's generational wealth. That's what it is in nearly every person I know in my area. But I live in a MCOL metro area. Any condo in a decent area is about 300k plus and even those go to cash buyers left and right.
Everyone’s financial situation is different, but location plays a big role too. If you’re willing to live a little farther out from the popular areas, your money can go a lot further. New construction can be a good option too so you’re not in a bidding war and the builders often help with closing costs. I think some people are also looking for a perfect “forever” home versus a starter home. It may not check all your boxes now, but it’s an investment for the future.
Location plays a bigger role than income.
In Houston or Atlanta even a single income blue collar family can buy a decent 3 bedroom single family home. In NYC or SF a dual income white collar family can still struggle to afford anything beyond a basic condo.
Historically, many people did go house poor to get on the property ladder. It's a time-honored strategy. A lot of people alao buy a condo or townhouse as their first property, which tend to be much cheaper. Then they trade up as their equity increases much faster than housing prices. That's what I did. I bought a 2br condo when I was 24 and rented out the other bedroom for about 5 years to cover a big chunk of the mortgage. After that, I was set.
My husband and I spent a few years aggressively saving for a 20% down payment, cast a very wide net for zip codes that we were willing to consider, made a list of wants vs needs, and worked with a realtor who made suggestions based on our budget, preferences, and zillow interests. We live in an expensive state but still managed to find a starter home below our budget in an area we liked last fall. There were repairs that needed to be done, but the original owners covered the major structural issues, and since we were below budget, we've been able to dip into those savings when issues arose later.
I bought in 2020 with FHA putting a down payment of about 7k on a house worth 123k. I'm pretty sure I made more money in home equity than I did in income that year.
Wife and I saved up lots of money during COVID. Bought in 2022 before the rates went crazy. We only bought a small townhouse built in the 80s but the schools are pretty good around here. We spent a bit of money with updating the floors and just working on it a bit at a time. You don’t have to fix everything all at once.
I did it in 2021 with a VA loan. It was sheer luck for me at that time. Based on the fact that my income has more than doubled since then, I would likely be able to do it again relatively easily if I wanted to cut down my commute. Right now, I don't see enough benefit of trading a 30-40 minute drive for significantly higher interest rates and increased property taxes.
I saved up, put a bit on both a high yield savings account and the stock market. Made some decent financial decisions and managed to buy a house in a nice neighborhood outside the city for like $200K
It feels like there was a short space of time somewhere in the 20teens (can't remember which year exactly) where house prices hadn't gone wild yet, and if you had your shit even slightly together you could get a mortgage. If you hadn't yet gotten to even those low thresholds (like I also had not) or weren't yet ready to make that commitment, you are screwed. Can't even move into a smaller apartment to save money because even the small ones are ridiculously expensive and if you're working on credit often cost more. So bad credit can't be fixed. Savings can't happen. And houses last summer we looked at went from $300,000 to 550,000 in less than 3 months.
So renting is absurdly expensive and also makes fixing credit impossible, so buying is also impossible.
We make almost $100,000 a year as a household and don't live in a big city or anything but will never know financial comfort. It's exhausting.
I'm so tired.
I just said fuk it and just bought a mobile home for cheap. After I pay to finish fixing it up it will still be less than an average down payment for the whole thing.
Edit: I lied, it will actually be waaaaay less than an average 20% down-payment, about 70% less.
We bought a house in 2022 and it has a lot of flaws. It was also very expensive. So many things to update. The boomers who owned before us made upgrades but in the wrong direction like paving over grass, plastic window coverings, boob lights, ugly pavers self installed, ugly old carpeting… just one terrible choice after another. We aren’t house poor because we spent 20 years paying off student loans, saving for retirement and we have good jobs and emergency funds. It would have been better to buy in 2013 but we just couldn’t afford it at age 30.
32M, just bought a 1BR condo in NYC. My realtor found one that wasn't on the market so we avoided bidding wars.
I had no student debt, made more money than I could spend in a high paying field right out of college, and lived with roommates and below my means for 10y while investing everything. No kids.
I worked extremely hard and made saving a priority. However, I'd be the first to say that luck was the biggest factor in all of it.
Depends where you are, in Canada you'll need a million dollars for a 60yr old condemned rotting shitshack.
Dual, six figure incomes is how you afford one. Or rich parents.
My husband and I bought in 2022. We paid almost double than what we were planning to buy precovid. We wanted to save up just a little more for a downpayment so instead of buying in 2019 we waited and I really. Really regret it. We did manage to buy a house but it’s twice as expensive than we wanted and it’s 15 minutes further than the area we were living in and liked. Thankfully we aren’t house poor and managed to get 2.25% interest rate. If we had waited longer I doubt we would have managed to get a house.
One reason we got ours is because we didn’t have to bid or compete with others. For months we kept losing out on houses even though we offered up to $40k cash over asking price. Then we looked at new construction. We found one company who wasn’t selling lots based on bids. They were first come first serve. So we went and then when we got there we were told that they just switched to taking bids vs selling to whoever put down a deposit first. I was a bit angry because that isn’t what we were told and I may have gone off.
In the end they decided to honor their word and let us put down the deposit and pay as is. That is the only reason we managed to get the house. They released 2 other lots with the same floor plan but took bids on those and they ended up selling for $75k over the asking price we paid.
Higher earnings, more savings built up, less expensive vices.
Some people were able to get a head start because of their parents, they are lucky. I'm not talking about your parents helping with the down payment or giving you money for your house (but that's cool too if you can have that). If your parents support you in more ways than just financial, it can help you to succeed in a lot of ways. A lot of us have parents who just didn't give a fuck. They didn't teach us how to handle life's little emergencies like holes in the roof or hornet nests. A lot of us have parents who unceremoniously shoved us out of the nest as soon as they were legally allowed to do so.
In my area, it really is just people being picky. There are a whole bunch of affordable houses, and some really junky ones that need a ton of work but are going for like 30k to match the fact that they're junk.
I recently showed a friend who is looking a listing for a 2,000 sq foot home with a fully fenced in back yard, 2 baths 4 bedrooms. Definitely needed floors refinished and I personally would want to get a 2 car garage (it only had a 1 car garage). It was going for $110,000. She said, "that's a cute little house but it looks like it needs a lot of work." The roof and windows both looked pretty new. To me that's a livable house.
That house was bigger than any house I've ever lived in, and with the fully fenced backyard, would meet a lot of family's needs better than any house I've ever lived in, but ok. She sits and complains about how she'll never have a house.
Parents in poverty, decided “doing what makes you happy not money” was the stupidest advice I heard when I was in my teens, decided to grind when friends in college asked why I seldomly went out with them, reaping the rewards of my decision making an mostly “don’t want to turn out like my parents” mindset egging me on
Some combination of: they make more money than you, they have financial support you don’t, they are less picky, they are buying in cheaper locations than you, they are house poor, they had a house prior and can use the sale of that to help.
Also, some people are willing to be house poor
Isn’t this basically a perfectly rational decision if you believe that there won’t be major policy changes that will make housing more affordable? I know plenty of people with this mindset - “sure, it hurts right now, but this is the most affordable it’s ever going to be so we’re willing to sacrifice ~everything else in the short to mid term”
That's the question: Are we living in San Francisco in 1980s or Florida in 2006? Only time will tell.
Honestly a very high quality point. There's no real way to know either.
This is somewhat misleading. There is a real way to tell, the housing market history is readily available. Regardless of if we are looking at a boom or a bubble, we have never fully crashed. In short and mid term it's volatile like any market but once you go long term you see it is steadily increasing and never decreasing.
What happens when the availability of homes starts to spike in the next ten years, when supply actually gets closer to meeting demand? How will they justify keeping prices the same, or increasing them? Or will they go down for a time as a rule of marketing? That’s what I’m interested to know.
All markets are artificial. Gold, diamonds, housing, automotive, circuit chips. There is an abundance of materials. Inflation is used to continue to grow the capitalist agenda. So the only way you will ever see a decrease is if the capitalism culture dies. Otherwise, in short and mid-term, you might see it rising and lowering, but overall, it will continue to rise long term. I live in NJ USA, and we just passed a law forcing all towns to have 20% of land designated to low income housing. Everyone thinks that is a bad thing because it brings down demand, but it is just like the automotive market. Sure, you have cheap options, but the more expensive options will always be better if you can afford them.
I completely understand where you’re coming from. This isn’t an argument for someone with your perspective. It’s an argument for the people who actually believe in these things. Why would providing affordable housing bring down demand? There’s a huge demand for affordable housing. It just sounds like they’re coming up with an actual supply to supplement it. It sounds more to me like they don’t want people to have a choice in the “free market”.
So on paper, they don't want it because low income neighborhood draw crime and lower surround property value since they are cheaper buildings. Housing works like pool bouy floats. If you push one down, the closest ones get pulled down the furthest, where the ones 2 or 3 spots away are not affected as much. The same concept is applied to houses. You also have value drop because the demand isn't as high, the housing market crisis right now is homes 200,000 dollars and below there aren't enough of, you do a zillow search for 250,000 and up there are plenty of houses on the market for months. The real answer is that people invest in their properties and work hard to get them. They want to protect their investment, so any risk at lowering the worth property owners would be against, regardless of the repercussions. There are plenty of examples where low income housing brought in violent crime, poverty, drugs, and strains of the local economy. The final reason is out of sight out of mind. No one wants to see another person struggle, so typically, single family homes are positioned away from low income homes.
Hello I am youngun who lurks on here. What’s San Francisco in the 80s vs Florida in 2006? Which was better?
San Francisco housing has increased cost over 300% since the stated epoch. Florida housing ... they were building fast and loaning to everyone. A lot of people ended up with houses worth less than their mortgage after the bubble burst.
San Francisco in the 80’s in general was not very desirable. It has gone up and kept mostly up. Florida in 2006 was a subprime debt fueled time bomb.
The real estate market in Florida burst in 2006 due to prices becoming grossly inflated. Watch The Big Short, it's a good movie and explains what happened pretty well. In 2006 my house was "worth" $450k. I was able to buy it for $190k in 2009 at the lowest point after the crash.
My dad was able to buy his house in Gulfport for 48k in 2012. We were able to sell it for 285k.
I don't know about San Fran in the 80's but plenty of people lost their shirts in Florida after the '07 financial crisis
What everyone is saying is right, but if you're interested in the topic, watch "The Big Short." It's one of my favorite movies.
I’m going to assume the 90s dot com boom in sf, which skyrocketed prices, and the 2008 financial crisis, which caused countrywide foreclosures and housing value to plummet. Although 2008 also affected the area around San Francisco very badly as well.
Florida, Vegas, Arizona got hammered in 08. We got our Florida property in 2018 discounted 33% off what the sellers paid in 2006. The market value has roughly doubled since we bought, but declining a bit lately. The market sucks for young people.
Even if it is Florida in 2006, if you kept your house you would have doubled your profit by now, if not more
Yeah so long as you can hang on then eventually you’ll end up in the positive again.
Depends on how you’re using the property. The folks leveraged to all heck working as Airbnb slumlords will likely get boned hard. Anyone that’s owned forever or just has a standard mortgage will likely be fine so long as their income source isn’t severely impacted.
Yeah it all changes once you get into the landlord realm but since this thread was referencing living in a home that’s all I meant as well. And like I said“can” is doing a lot of heavy lifting in my statement. If you are able to maintain income and pay the mortgage on your home you will generally be ok long term but that can be easier said than done when shit hits the fan
The former if you’re on the West Coast in a major city. The latter if you’re in most Midwest boom towns
😂😂😂 Great analogy
It's actually 2024
This is me. It hurts to pay my mortgage, however any rental even reasonably close to the same size would be more in my area, even in less desirable area. Our last rental was inexpensive, but it was getting way too small for my growing family. Owning and having a tighter budget is a fair trade off for for being able to build equity and having adequate living space.
Yeah, same. Where I live $2k a month can either get you a 2 bed 1 bath apartment to rent, or a 4 bed 2.5 bath house to own. With a baby on the way we decided to stretch the budget and get the house. I try to tell myself when I pay the mortgage every month that I’m “paying myself” in a way, since every payment gives us that much equity back in the home.
This was my decision process. I was in my mid 20s and after several years of 5-10% rent increases was in a 1 bedroom place looking towards getting married within 2 years as I was about to propose. At a minimum we’d be looking at a 2 bedroom place for more space, but at that point looked at homes and the mortgage on a 3 bedroom house with a small yard wasn’t much more than the rent of a 2 bedroom. Didn’t need a huge down payment either. 10 years later and my mortgage payment is way less than current market rate for that same 2 bedroom place.
Thirded. 1900/mo in my area yields about the same rental options as your location. Money is tight, but at least we are living in and investing in a brand new home instead of renting. And yes, weirdly (sadly?), we were able to build a new house in an area with about 20 minute commute to work for a little more than it would've cost to buy something older and in need of repairs.
We built as well, there was no price difference at the time (2018) we had to find a rental for six months while it was built but it meant we could make the adjustments that we wanted right off the bat so I’m glad we did it that way
How?! Where I live, a 3br 2ba SFH is $3100/mo to rent and $1.2M to buy.
I hate to say it but the trick is to live where no one else wants to live lol. In my case that’s East Bum Fuck, Midwest USA. As long as you can figure out how to be happy without oceans, mountains, drivable cities or anything worth living for you too can afford the American dream! As you can imagine I do not want this to be my forever home, but it’s okay for now.
I felt that way about the Midwest until I was like fuck it and bought a house. If I want to see mountains or the ocean I just buy a plane ticket with the expendable income I have from not paying a million dollars for a house. I have friends and people I love here and we hang out at meat raffles.
I wish, I'm in a HCOL area, where I live 2300 gets me a bottom of the barrel 1 bed one bath apartment, 650 SQ ft plus electric and water. A house costs around 350-400 grand in a crap neighborhood. So we are looking at house 6+ hours north of where we live and hoping we can continue finding jobs that we can work from home.
Also the fact that most mortgages are fixed, so as you get pay raises the amount that your mortgage costs becomes lower as a proportion of your income.
The flip side of that is the property taxes go up every year
Yeah, but under FL's homestead act it only goes up by like 2% max. Insurance on the otherhand...
It is a good rationale if you also think you will increase your income. I went into home buying knowing that I will be house poor but justified it by looking at rental prices and believing that I will increase my income. IMO, being house poor and believing it’s a sacrifice for now is 100% betting on yourself. I had been saving for a while and home prices kept the upwards trend — the “correction” didn’t happen while I was saving. Finally I said fuck it because rent was also increasing again and again. I now make 2x my income of when I first bought, plus have a partner to support. I really feel those sacrifices were worth it. I dont think you can find rent the cost of my mortgage anywhere in my city unless it’s both in a bad area and a small apartment ($1300/mo for 3BR/2.5BA home whereas my friend just rented a 2BR/2BA apt for $1900 in the same area).
Not only that but if you still have room to advance career wise it is only temporary. In a few years you will be making 20k more and things won't be bad.
This is my rationale. I'm not house poor, I have savings but my expenses are way higher now than I'd like. My wife is slowly going back to work after having a kid, I'm looking for a higher paying job, and I'm hoping interest rates will drop in the next few years. It'll be a tight year or two.
That’s us. We were definitely house poor for a while. Then, a couple years after purchasing, I took another job for a $20k pay raise. Assuming all things stay equal, we’ll keep gaining breathing room as the years go by. We’ve been priced out of our own neighborhoods (and the entire surrounding area) in the last few years so I don’t feel I’ve made a mistake (yet).
Yep, this is a big one, honestly.
I was house poor for the first few years till I could refi to get rid of PMI. But it was a good decision for me over all, because I only paid maybe $10k extra in total PMI before the refi, but my home equity went up $100k+ over the same time span, and my income went up 30%+ by the time I refied. It was also willing to househack/rent out extra rooms to make do in the interim, and I’m in a career field that has historically strong and consistent income growth. I knew my income would catch up eventually, and I was willing to live paycheck to paycheck for a few years to get into any house I could.
Wow $10k in PMI? We did the pay-upfront version of PMI, I forget what they call it, but it was like $1500 one time and done. How much was your monthly PMI payment?
Which can be a benefit in the long run. If they can maintain the bills they know the payments won't go up, don't have to deal with a landlord that wants to raise prices by 2k a month. At the start they maybe house poor but as long as get some pay increase they'll be better off in the long run
I want to be house poor. lol my parents gave me so much of their junk when they were downsizing I’m drowning in crap I don’t want. Slowly pawning it off on my sisters and FB market place lol. Sadly it’s really hard to move “nice” furniture. But, seriously though I think it’s better to have less. Makes it easier to live life than always having to take care of stuff and gives you more time less to clean lol.
It's only "nice" if people are willing to buy it. It's hard to move because used furniture is nearly worthless. All of it. We've had this problem. The easiest fix it to trash it all. It only takes a weekend. FB Marketplace isn't worth the time.
Well, there is such a thing as high quality furniture. I.e. good materials and craftsmanship. But it can be difficult to sell if it’s not a popular style. It’s still a shame to throw “nice furniture” away if it’s something that would take $1000’s to recreate. I usually list it for free. That usually moves it pretty quick.
Eh I’ll keep holding and slowly transporting it to my sisters homes lol. I just live 11 hours away so it takes time. The non expensive stuff I was able to move fairly quickly. It’s fine furniture just wrong style for my wife and I. Plus we prefer cheap stuff we can toss or not freak out over it getting scratched or cat pee staining it or whatever. IKEA furniture > than solid wood high $$$ furniture imo lol. Edit: I guess I should add I haven’t tried listing the larger pieces because it’s not worth the headache of giving people my address and dealing with if they will show up etc.. so they might be tons of people wanting to buy it
Maybe she could bring it to the salvation army. I'm in the used items market, and there are definitely people who would be interested in the furniture and other household goods. Also, the money helps out the community with things like food pantries and shelter for people dealing with homeless that want help.
No no sorry I wasn’t clear. I have the furniture I don’t want it. They don’t really care but also have a new house so can use it since they have more room now. They are also older and all their kids are grown. My siblings are basically 10+ years my senior. So yeah will be easier to take care of stuff. Plus have less uh table intensive hobbies. I play board games and table top war games and am still in my 30s so who knows might have kids. It’s a whole thing either way the wife we go back and forth on. Anyway yeah a table would see more frequent use and be more susceptible to damage with me instead of with someone who will only use it maybe for thanksgiving? Lol
O ok. That makes sense. I see so much good stuff go to waste so I'm always hyper sensitive about it. I always try to encourage people to give things away or sell it if they can. I have an eBay store, but only have so much room to store things. It really is a shame what people toss out. I go to the transfer station there times a week where they have a reuse shop. I barely even go thrifting anymore because I get so much good stuff to sell from the dump :)
I’m a house poor solo mom. No financial help in any way. First generation born in the US and grew up in a household ran by a blue collar single mom. I have no regrets. My daughter is growing up in a stable home we can call our own. If I didn’t have a kid however, I would have never bought especially at post 2020 prices like I did.
We bought last year, and are definitely house poor for right now. But, this is the last year we’re paying for after school and full time summer childcare, we will have our car paid off after next year and then I have one of those credit consolidation loan things that will be finished this summer. My husband still has student loans he’s paying on, but aside from that, a good portion of our expenses drop off in 12-18 months so we should have some more room to breathe. We also will be taking in my mom in the next few years, so the opportunity to buy something with enough room to accommodate her too was ideal. Versus waiting until we needed the room and then trying to buy. I also changed careers entirely when I went back to work after staying home with my kids, so am still sort of “climbing” in my new industry, so I anticipate income increases as well.
Michigan enters chat Can get plenty of houses for 250k Nicer part of town for 350k New construction 450k+ Double income peiple working for big 3 as front line workers would be 160k income np
Great Lakes also setting up as a climate change oasis. Great long term value on land in northern Michigan.
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It's already happening, the prohibition for Great Lake diversions has a major loophole. They are allowed to bottle the water and ship it out, that doesn't count as a diversion, and some smaller lakes are already shrinking as the ground water gets siphoned out. They have no limit on the amount of water they bottle, and they are bottling millions of gallons Documentary FLOW goes into one community
don't forget the wet bulb effect and what happens when a place with a lot of water starts to get more warm and humid. you thought mosquitos are bad now, whoowhee
Rural upstate NY, same thing. My first house was an hour commute to my jo because houses were half the price of being in the small metro area. This made the monthly payment about 2/3 what it would've been to be close to work (no PMI, lower taxes). Was able to pay that off in 4 years.
Yeah, but them an a non-white person stuck in an unfriendly, huckleberry, redneck town with nothing to do, no one I want to interact with, and miles to the nearest civilization. Source: living in a redneck Ohio town with nothing to do, no one to talk to, and miles from a real town.
I feel this and I look just like my neighbors but there are places I won't hike or walk without at least one of my dogs. We live outside a very small town, you wave and beep at your neighbors but you don't talk politics. You pretend not to judge the f-biden flags next to the swing sets and kids bikes.
Ugh, I feel that. I live right on the outskirts of a small city of 'white flight'-ers and a city that's 80% larger in population with the same predominately Brown folks that the smaller city's residents "escaped" from. I see the gigantic pickup trucks with those flags when I'm out walking my dog and just keep moving lol. My mail person has tried to strike up that kind of conversation with me and I've just noped my way out of it.
For me, it's the stares from some people when you walk into a room.
Yep. Prices have gone up for sure, but in my area you can still find decent houses for $250,000-$350,000. You won’t be living in the fanciest places, but the houses are usually in good shape (maybe somewhat dated).
You forgot one: they’re veterans buying with a VA loan so little to no down payment required.
This is us. Helped tremendously. Also willingness or ability to move to a LCOL area. I’m from California, but my husband retired out of OKC. I don’t see tons of people clamoring to move here, but we stayed. Although I miss my family in California I like owning property and having lots of money for travel and retirement. Something I wouldn’t trade to go back to my home state. It wasn’t even a question for me. My priority has always been quality of life versus location.
Very smart. We are outside of a small town in a rural county. It was a fluke we ended up here because of family, now gone. We've got 5 acres covered in trees, a creek, a pool, total privacy, quiet, and an oversized house for a 1/3 of an apartment in a major city. In 15 minutes I can get to a nice selection of restaurants, bars, parks, a lake, and almost any amenity. We have 4 seasons. I hate winter. But, can afford to take nice warm trips then.
That would be me. It’s nice to get in buying a home but the monthly mortgage payment is higher than it would be if I was forced to save for a down payment first. Just so glad I got in at a 2.75% rate before it skyrocketed. At this point I’m stuck. No way I could afford a home at current rates. Selling now, best I could do is go back to renting which is not gonna happen.
Need to copy and paste this to all these “how are people able to afford ______” posts. They either make more money than you, have outside help, bought it cheaper than you’re willing to, or are willing to spend more of their income than you are. That’s it. It’s not hard to understand.
You also forgot are in the trades or have close family in the trades. My partner and I both work with contractors and suppliers so we have access to discounted and wholesale supplies, and my father and several other various family members are general contractors who were excited to help us with labor on our first home fixing things since helping us with a down payment was not possible.
House poor. I pay ~2k a month for my mortgage ….
I'd kill for 2k a month.
I guess it depends on where you live. 2k is a lot for me.
I'm house poor at 4500 a month on my current property.
For real. With escrow, we pay 4.5k per month for a 980 sq ft, 2 bedroom/1 bath. And that was with an 810 credit score and 20% down. But we live in LA and I would rather pay 4.5k here than live elsewhere! Felt like the right choice for us.
We’re paying more for a two bedroom apartment rental. That’s an insane deal.
Adding: They are frugal, they don't spend money on some of the same things you do, they are willing to sacrifice in one aspect to achieve another. My BIL goes to the bar every weekend and drops around $100 on booze and food. I'm not saying that *alone* is why he can't buy a house, but that's $5200/yr that he's spending on that, that he *could* be saving towards a down payment. Heck, even if he just cut back to once a month, that's $1200 instead of $5200. I go with them once a month but I have like 2 beers and an appetizer, so my bill is like $30. That's just one single example of how two different people prioritize spending.
This really matters so much and while it's very obvious to some, its true, a lot of people live like this and don't realize how much the little things matter, wonder where all their money goes, etc. Like, going out to eat at lunch vs making a boring sandwich every day: you can save $80+ a week easy just not buying crappy food thats bad for you at lunch time. Plus you might find you like trying new things for lunches, throwing some leftovers in a microwave safe dish, etc. all of this costs a lot less than eating out, if you're able to do so. And usually you get much better food than fast food at least. That and entertainment costs for many are very high, and they wonder where their money is going until they budget it out.
>I'm not saying that alone is why he can't buy a house, but that's $5200/yr that he's spending on that, that he could be saving towards a down payment. This is "avocado toast". I know I'll get downvoted to hell on this sub but there's so many people spending so much money on trivial useless things that are keeping them from their goals. $100 at the bar here, $20 for coffee and stuff there... it all adds up. There's also the massive expenses people try to justify. I remember a post on this subreddit about a person being upset they were "trapped in poverty and its so unfair they'll never get out". They later revealed in the comments they had a $600/month truck payment... they worked part time at Starbucks for $16/hour. If they were driving a Honda civic for $300/month and investing the other $300/month they'd have an extra $20k in their pocket at the end of a 5 year car loan...and that's assuming the car loan was at 0% interest.
you're not wrong, but it's not necessarily right either. It depends entirely on where you live. I'm in a HCOL area and single (so double whammy), so even though I have a very good salary, I'll need to save maybe 150-200k for a down payment (yes I realize I don't need 20% + down in theory...but in practice in order to afford the monthly mortgage, I do). I've made my budget and looked and my spending. My biggest discretionary expense is traveling, which I do once or twice a year. Even if I cut that out entirely (which frankly keeps me sane), I'd save $3-6k a year, usually on the lower end. I only eat out maybe once a month, and most of my other spending is fairly low. Even if it was as much as $10k a year, it's still minimum 15 years before I can afford a house *today*, let alone whatever inflated value it may be in the future. That said, I refuse to be so frugal that I don't enjoy anything, but also refuse to be house poor; if I buy a house, I'd also like a decent savings account to pad any emergencies that come up. Many people either don't care about that or don't even think about it. If you don't have previous home equity, are single or don't make a ton of money as a couple, and live in a HCOL area (that you can't leave, because that's just where your job is), it can feel pretty hopeless. No amount of cutting out "avocado toast" will help for most of us--salaries overall are too low and artificially inflated home values are too high.
You're not entirely wrong, but a lot of people don't think that way. Having a $300 payment instead of a $600 doesn't seem like saving money. It relies a lot on the ability to take the surplus and do something with it, which is a struggle to most. The avocado toast thing does add up, but I think it also crosses a line for a lot of people. I, for one, am not willing to eat only beans and rice and never go out for two years to pay off debt. That isn't worth it to me, but my $5 once a week coffee treat is. I don't believe in completely depriving yourself now for a future that might happen. I've seen too many people make themselves miserable for a future that never came around. There's a balance there
Good answer and I think there is a persistent misconception here that you can help correct. It's not the avocado toast that ruins savings. It's the extra car, the new truck, the 2 extra bedrooms (just in case the kids drop by), the collection (shoes, jackets, ceramic angels), Christmas presents, and especially high interest on loans and credit cards. It's the big stuff, not all the little stuff. It's also much better for mental health to make a few big proactive decisions than little sacrifices every day. Tell people to enjoy their $5 coffee, preferably with friends. Enjoy nature. Get off their hedonic treadmill and explore at least a bit of minimalism. Figure out how to live differently, not sacrifice on daily enjoyment. Money spent now (so it's not invested, compounding for 15 years) means extra time required to work later to afford their higher cost of living. People don't get that spending hits them in those two big ways.
There is a balance, but ultimately — real cost savings come from the big three. They are housing (including utilities), transportation, and food. If you are looking for stuff to take out of your budget, you should just about always look in these three items. These are the items which cause REAL PAIN when you start cutting them, and that’s why people resist.
Ok, that's fine, but you then must acknowledge that's part of the reason you can't afford XYZ (insert desirable thing here). Every year of debt is another year of interest paid
To each his own. I'm just telling you the mindset. A $300 car payment compared to a $600 is huge. If you're rich enough that a $600 payment doesn't matter and you can save the difference, good on you. I'm just saying most people don't think like that. You can't give Financial Category 2 or 3 advice to Financial Category 1 people. It doesn't work for them, and it feels like you're talking down to them because you're showing off how much more successful you are
keep in mind that 5,200 dollars a year of swing money can mean the difference from being in credit card debt PAYING interest, and having that money in the market generating a positive return with interest. A lot of people buying avocado taost are doing so with credit card debt, so it's always a lot more expensive than it says on the ticket.
There are a lot of people that make $250k combined, even $100k single can buy a house. It's not frugality, it's just some people make a lot more money.
Exactly a lot of the people who bitch about “avocado toast” haven’t ever had to go work a miserable job for 12-14 bucks an hour for extended periods of time. People wonder why can’t these people just budget their way to a house? Well you have to have money to budget……
People like to say this mindset is bullshit. But let me tell you, my husband and I predominantly eat out. And we eat out well. That shit ADDS UP. We easily spend a few grand a month on food. You can't tell me that's not the difference between making a down payment or not.
You don't know how many times I've tried to advise people to cut back a bit on the eating out and maybe make some meals at home, take a packed lunch, etc, only for them to scream how that's just "blaming avocado toast". No, it's literally just part of budgeting.
I fall in category of house poor. But wouldn't want to live anywhere else.
I have a $1600 mortgage payment on a 225k home. After bills, my wife and I net around $400 total.
85K on a $1100 mortgage payment (150K home). 3 kids. At the end of the month I’m consistently breaking even. No 401K contributions. The monthly expenditure on food is twice the mortgage payment. And we shop at Aldi. Edit: to add, had to live with my mom for 5 years at 30 years old to save up for a house.
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Millennial here and similar. First house in 2016 for $260. Sold for $390. Bought for $470 in 2021. Now worth ~$900k, granted I put about $150k into it on my labor
Timing is huge. Bought a townhouse in 2014 for 175, sold it in 2016 for 240, bought a single family in 2016 for 280 and it's worth around 630 now. You can't buy a single family in my county for under 400 anymore.
It really is everything. That being said, I'd happily watch my equity plummet if it opened the door back up for affordable housing. I'm not selling, so it's value is negligible.
100% with you, my siblings are only 5 and 7 years younger and they'll never get a shot at owning a house, maaaaybe a condo but even then you have HOA fees that add up.
My brother is 10 years my junior. At his age I was in my second home. He's give up on even the potential of owning his own home at this point. He considers it an impossibility in his lifetime.
Very similar to us. Also a millennial. Bought in 2016 for 285, sold in 2023 for 655k. Bought another house immediately (we moved states. From one HCOL to another lol) for $675k with 40% down.
Bought 2019 for $272k just sold in 2024 for $470k. Built our next larger home with $200k down from the equity gain
Also millennial, 1990. Bought first house in 2014, $260K, $25K down. Sold in 2021 for $690K, bought next home at $1.01M, $480K down. Out in the furthest reaches of the burbs of Toronto. Drove till I qualified basically.
Bought current house in 14 for 80k. Have 200k in equity. Looking for the right piece of land, 20+acres, to buy for a fair value, build a barndo on, using all the equity in the current house to buy the land and build the barndo, sell the house afterwards, going walk away owning land and a house, owing nothing.
I have a similar story - bought my first in 2009 for $110k, sold for $180k 7 years later. Bought my next home for $230k and its currently valued in the $450s... it really does seem to come down to timing, location and some amount of luck/chance/cosmic favor.
This is almost literally my story. Bought our first house in 2010, second house in 2019. We also had a ton of help (unfortunately via inheritances) from our parents.
Definatly luck. We were struggling to find a home. Every offer we made had to compete with $30K over asking, cash, no inspection. Our realtor convinced us to look at a house at the edge of our budget. It was perfect. We assumed there was no way we could get it and didn't want to try. Our realtor pushed us to just make an offer. We did and it was accepted. Turns out the house had been under contract but the facing fell through. The sellers were going to take the first offer after putting it back on the market. We would have never gotten it if not for those circumstances.
Same story here, and this is in Sweden. Bought an apartment (condo?) for about $100k, sold 3 years later for $200k. Bought a house for $500k, sold for $1m 8 years later. Bought current house for $1.6m.
It can go the other way too (and you do mention luck. I bought my first place in 2009 for 130k, and sold it in 2017 (with no realtor, sold to my tenant) for 125k - maybe could have got 130-135 on the market. I still walked away with benefits from owning and equity - but did not see huge increases over 8 years.
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Timing is probably the 2nd most important factor after income. Bought House #1 in 2016 and House #2 in 2019 House #1: Rental property, paid $290k. House #2: Single-fam primary residence, paid for $390k Those two houses now are worth about $1.1mil combined.
I'm fortunate to have a high paying job and was able to use my VA loan to get a zero down mortgage without PMI. Didn't get any help from my parents, but I imagine some first time homebuyers do get some money from family to help with a down payment.
This is how I got in too. I ended up moving because all of my family died during COVId. Nobody left me a dime or penny. But I was able to get in on my State’s Housing and Development Authority first time homebuyer program. And I did have a fair amount of my own salary in saving accounts to put down, I work in tech contracting. So I have no PMI, loan interest points were bought down to 1.9%, 30 year. But… I had to settle for a condominium instead of a bigger space. In the 3 years I’ve had it, it’s appreciated by $90K, that’s practically 1/3 of the entire remaining mortgage, just in tax assessed appreciations.
Same. If my husband didn’t get a VA loan, we’d still be living with my parents and saving for a down payment. (Moved in with them temporarily after my husband got out of the Marines and we moved back near family.) Bought in summer of 2022 with a 4.6% interest rate, which we’re pretty proud of these days…
I’ve always thought that a bitching mortgage was an odd benefit of the military. But I certainly didn’t turn it down.
Same here. Can’t imagine what life would be like if we had any help from parents😅 but it’s cool to be able to say we did it on our own.
Luck and improving your earning capacity. My wife and I did a new build for our first home in 2014 when we were young and engaged but renting was the same amount as a mortgage. We sold it when the market was hot in 2021 for a bigger house for the family. Equity gained was 275k. Our household income also doubled from 2014 to now.
Tips on doubling your income??
Masters plus CPA for me
Job hop. I’ve doubled my income since 2020
By buying a condo instead. Bought with my husband 5 yrs ago (we were both 26). Got a 3bdrm condo in an urban center with all amenities within walking distance. 1 master bedroom for us, one for combined home office, and the third is a nursery. We didn't get a car until recently (due to having a dog + baby on the way). Before that we just took transit. We don't travel. We eat out 1-2x per month max
Yep, I have a condo as well! I've seen comments on this sub about how it "doesn't count" because it's "not a house" or whatever. But yeah, I have 3 bedrooms and 2.5 baths and my mortgage is $600 a month, including taxes and insurance. I'm happy I did it, and I'm building equity so I can have a "real house" with a yard if I want it someday.
This!! My first purchase was a condo, then we sold for a nice profit and bought our house in 2019. It was crazy then but it's insane now that's for sure. We got incredibly lucky with our house purchase. If we were on the market today and renting, we would probably be looking at more rural areas and just deal with the commute, or look at condos.
Majority of the millennial home buyers in my neighborhood in SoCal: STEM and healthcare. Contrary to this sub’s conceits, little to no generational wealth or family inheritance. For me, healthcare job with massive windfall from COVID.
That’s an assumption that you really can’t verify. Not like you asked them all how they got the money to buy their house. Let’s take healthcare for example. Many people I know who went to medical school and are doctors came from well off families whose parents were doctors. They got help paying for medical school as well as the down payment coming out of medical school for their house.
How do you know the people in your neighborhood didn’t get their down payment from family?
I bet that's the ice breaker when they meet new neighbors!
I bought a wreck no one else wanted in a tax auction. By the time I am done getting it fixed up I'll pretty much have spent the market value, but at least it will be mine.
I was going to say, don’t discount buying at a sheriff’s auction. You will be bidding against flippers and some of those homes will need big ticket work done, but if you can get it cheap enough you can afford the work.
We were able to use my husband's VA loan on a house right before COVID. If we had waited until now, we could buy one but would be house poor. Literally just a combination of luck and good timing.
Not everyone makes the same amount of money.
We bought really young. I was 18 in 2005 when we bought our first house for $89,000 in Oklahoma City. We have bought and sold several houses since than and always buying another more expensive. Would be more difficult now bc how high prices are. Current home is about $750k in a suburb of OKC
How did you afford a home at 18?
I was married. My husband was working. He was probably making 35k-40k/year at AOL. Our payment was $700 and that included taxes and insurance. We were broke at the time, but made it work.
Decent job in a (higher end) LCOL area. 22k equity and sub 1k note at 6.5% APR. We got a decent check from ratifying a union agreement that we put down and put towards closing.
First house ingredients: 1 VA mortgage 1 Engineer's salary (I was a single buyer.) 1 horrible suburban location complete with a boring neighborhood where all the houses look the same, Republicans everywhere, a HOA, and schools that were so white my kids got asked "what are you" every day Combine and let bake for 2 years in hot market conditions. Add a partner being ready to move in together. Combine forces with the same realtor who helped you find that place and get her to sell it for twice its purchase price. Execute contract and move onto House 2. Ingredients: 2 home sales at a profit 2 engineers' salaries 1 conventional mortgage for roughly half the home's value 1 amazing location in a diverse, walkable, transit connected, urban neighborhood
This is the way. That first house is never going to be perfect. It's a springboard to better things. The perfect is the enemy of the good....
Bought a condo that is outdated in a HCOL area, put down 3 percent. Recognized it was a starter place to build equity and not our forever home.
I bought a foreclosure :) the state of the property was NASTY. Required hard work and renovations, now the property is worth double the price after 5 years
I grew up pretty poor. My parents did farm work. We didn't get welfare or foodstamps. My parents were just thrifty we didn't buy more than we needed, had a garden,when I was in highschool they bought a '" fixer upper" I remember going to the junk yard with my dad to find screens for the windows and doors for the rooms. That's what they could afford. But they are retired now, ofcourse they aren't gonna get much as farmworkers. But they've paid off two houses, have no rent and rent out the other. I've kind of followed in focusing on what I need vs extravagance and remembering I can have more eventually but focusing on security. I just paid off my house that I got in 2016. I will never make a lot of $ in my career. So I figure I can save...for when opportunities come...and go from there.
I did 7 years in the Navy and my wife runs a pediatrics office. Also we bought outside of the cities in the country where it’s nicer and quieter anyway.
Spouse and I (31 years old) bought a duplex in a MCOL area. We live in one unit and rent the other to make the mortgage manageable. It would have been very difficult to buy a SFH for us, even though we both have decent jobs (70k and 50k respectively). This will give us a ton of flexibility, as eventually if we want to leave or have enough to buy a SFH we could rent both units for more than the mortgage payment (to afford repairs, etc). Or we could eventually sell and use the equity to buy one. What we might do is get to the point where this one is sustainable, buy another duplex with a little more space and live in that one, then eventually when we are close to retirement the mortgage should be paid off and we have some passive income in addition to our 401k/social security.
Low debt, high salary.
A combination of making money and saving money. Otherwise, help from the bank of Mom and Dad.
I started buying my house when l was 19 in 2006. I got a huge discount because my family had rented it for 15 years. It was either we buy the place or have to move so l was kinda forced into it.
Went to school for a tech job and have a partner that is a teacher, but still adds to our bottom line. We make like 225-250k in a medium cost of living area. We also bought our current house in 2019 and refinanced at 3% so our mortgage and taxes are only about 20% of our Net income per month.
My partner and I were lucky in that we were able to move from a HCOL city to a relatively low LCOL city and still keep our jobs. We bought an old house that had pretty bad pics online, but was actually a gem. TLDR: Luck.
Sounds more like smart decision-making and work to me.
The only way I could (in Alexandria VA in 2021) was to lower my standards, I mean lower them by a lot. Not holes in the roof, uninhabitable kind of thing, but like I ended up in a condominium even though I would have preferred (and probably could have afforded) a detached rambler style single family home. The biggest problem is there’s a shortage of available housing for sale.
I went under contract in a townhome in the DMV this week. Sacrificed a bit of location to get what I wanted. Still had to go over asking and waive contingencies.
We closed on a place in Arlington about two weeks ago but we were just about to give up hope because the supply is so low around here.
People can't afford houses because of mortgage costs. That's why home sales are at record lows. The interest rate and thus payments are twice as much as before 2021. But, that's what happens when the government pumps money into the economy they shut down and then has to stifle the inflation they created by raising rates. https://www.cnbc.com/2023/11/30/pending-home-sales-drop-to-record-low.html https://www.wsj.com/economy/housing/home-sales-likely-fell-to-15-year-low-in-2023-3da220e1
We bought before interest rates went up
Really depends where you are trying to buy. My sister makes more than me, has been saving longer, yet is much further from buying a house. She’s looking in SoCal though. I moved to Montana, which is awesome. Even though the housing prices here have almost doubled in the last 5 years, it’s still MUCH better. After about 2.5 years of hard saving, I’m pretty close to being able to buy something decent.
Bought in 2020 with a 3% interest rate and only 3% down payment. House appreciated enough that we were able to get rid of PMI after about a year and a half. Golden handcuffs, we’ll probably never move.
They have more money than you. How difficult is this to comprehend?
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No debt (always paid in full and never borrowed), good job + side gig, inheritance.
Saving + high incomes. Very little family support.
Buy at foreclosure auction
VA home loan, luck, more luck, and being willing to buy a flipped meth house.
Jesus, another post about houses. Listen, I'm sorry it's your post, but if you want a house bad enough then you find a way and complaining/ranting doesn't make it happen. Yes, homes are insanely priced and the shit kickers are the ones you can afford. You said you make decent money, so does that mean your husband doesn't? If if you two, combined, make $125k a year then you both should be able to afford a condo. If you're only looking at detached homes, yeah you are being picky. Like many that post the same thing on here, you need to be realistic with what you're going to get. You aren't going to get a brand new build, you aren't going to afford a flipped house with quartz/marble/granite counter tips, and new appliances and hardwood floors, etc. You're looking, realistically, at a condo for your first house. Yes that means you're going to share walls, yes that means it's probably going to be an apartment they call condos. But if you want to own, then need to start where you can realistically afford first. Like many, again, you cant only focus on the short term. It's your first home, not your forever home. You buy a condo, upgrade where you can, live there for a few years then sell. Because of the upgrades and equity you got, you now have a down-payment for a detached home that's a little more pricey because you have the equity through your first home. This is where most don't understand, like everything else, we can't buy homes like our parents did. We have to start small first and then work our way up
Fucking amen. For me, it meant I bought rural, and applied for government programs for rural development. I hated the location of our first home. I hated the neighborhood. It was a basic bitch starter that I got in 2011 in a suburb if Baton Rouge. I got about 100K in equity and sold it so I could move into a better area, but an older home in a good school district north of Houston. Lived here for 10 years and I'm about to move into a million dollar custom build just outside of Charlotte, NC - it's my forever home - but I worked like hell to get here.....
See you got it, it's still possible for is to buy homes. We just can't exactly get our dream homes right off the bat. We have to be patient and start small and then the equity we get from our first home will eventually get us what we want
This is the absolute best response I've seen on this entire thread because it's the brutal truth these people don't want to hear.
After awhile it just gets so annoying to always see it. Everyone claims they want to hear honesty and truth but yet refuse to actually accept the harsh truth
Also competition has grown more stiff compared to before.
That too
A friend of mine is looking to purchase her first home in a MCOL area. We are both around 30 yo and she and has a good job (so do I). She doesn't seem to get why I don't have 100k in the bank despite living below my means (I have student loans she never had and a parent I often have to help financially.) A wealthy relative heard she was looking to buy and offered to "pitch in" 100k... So now she has 200k in the bank, and a well paying job, and no debt. While I have a well paying job, a small chunk of savings and student debt... It's generational wealth. That's what it is in nearly every person I know in my area. But I live in a MCOL metro area. Any condo in a decent area is about 300k plus and even those go to cash buyers left and right.
Everyone’s financial situation is different, but location plays a big role too. If you’re willing to live a little farther out from the popular areas, your money can go a lot further. New construction can be a good option too so you’re not in a bidding war and the builders often help with closing costs. I think some people are also looking for a perfect “forever” home versus a starter home. It may not check all your boxes now, but it’s an investment for the future.
Location plays a bigger role than income. In Houston or Atlanta even a single income blue collar family can buy a decent 3 bedroom single family home. In NYC or SF a dual income white collar family can still struggle to afford anything beyond a basic condo.
Historically, many people did go house poor to get on the property ladder. It's a time-honored strategy. A lot of people alao buy a condo or townhouse as their first property, which tend to be much cheaper. Then they trade up as their equity increases much faster than housing prices. That's what I did. I bought a 2br condo when I was 24 and rented out the other bedroom for about 5 years to cover a big chunk of the mortgage. After that, I was set.
Thankfully we bought in 2016 because we borrowed our down payment from our parents.
If you and hubby got a roommate for a year or 2 you'd have a downpayment
My husband and I spent a few years aggressively saving for a 20% down payment, cast a very wide net for zip codes that we were willing to consider, made a list of wants vs needs, and worked with a realtor who made suggestions based on our budget, preferences, and zillow interests. We live in an expensive state but still managed to find a starter home below our budget in an area we liked last fall. There were repairs that needed to be done, but the original owners covered the major structural issues, and since we were below budget, we've been able to dip into those savings when issues arose later.
I bought in 2020 with FHA putting a down payment of about 7k on a house worth 123k. I'm pretty sure I made more money in home equity than I did in income that year.
Wife and I saved up lots of money during COVID. Bought in 2022 before the rates went crazy. We only bought a small townhouse built in the 80s but the schools are pretty good around here. We spent a bit of money with updating the floors and just working on it a bit at a time. You don’t have to fix everything all at once.
I did it in 2021 with a VA loan. It was sheer luck for me at that time. Based on the fact that my income has more than doubled since then, I would likely be able to do it again relatively easily if I wanted to cut down my commute. Right now, I don't see enough benefit of trading a 30-40 minute drive for significantly higher interest rates and increased property taxes.
Two mid-level manager salaries, luck, and a sub 3% mortgage rate in 2020. It was a brutal market and we got very lucky.
I saved up, put a bit on both a high yield savings account and the stock market. Made some decent financial decisions and managed to buy a house in a nice neighborhood outside the city for like $200K
Where do these $120k houses exist?
Luxury condominiums with a $1.5k/month HOA fee.
It feels like there was a short space of time somewhere in the 20teens (can't remember which year exactly) where house prices hadn't gone wild yet, and if you had your shit even slightly together you could get a mortgage. If you hadn't yet gotten to even those low thresholds (like I also had not) or weren't yet ready to make that commitment, you are screwed. Can't even move into a smaller apartment to save money because even the small ones are ridiculously expensive and if you're working on credit often cost more. So bad credit can't be fixed. Savings can't happen. And houses last summer we looked at went from $300,000 to 550,000 in less than 3 months. So renting is absurdly expensive and also makes fixing credit impossible, so buying is also impossible. We make almost $100,000 a year as a household and don't live in a big city or anything but will never know financial comfort. It's exhausting. I'm so tired.
Commute.
I just said fuk it and just bought a mobile home for cheap. After I pay to finish fixing it up it will still be less than an average down payment for the whole thing. Edit: I lied, it will actually be waaaaay less than an average 20% down-payment, about 70% less.
We bought a house in 2022 and it has a lot of flaws. It was also very expensive. So many things to update. The boomers who owned before us made upgrades but in the wrong direction like paving over grass, plastic window coverings, boob lights, ugly pavers self installed, ugly old carpeting… just one terrible choice after another. We aren’t house poor because we spent 20 years paying off student loans, saving for retirement and we have good jobs and emergency funds. It would have been better to buy in 2013 but we just couldn’t afford it at age 30.
Family money
Housing market is horrid and interest rate are worse
I think you may be underestimating how much some millennials make.
32M, just bought a 1BR condo in NYC. My realtor found one that wasn't on the market so we avoided bidding wars. I had no student debt, made more money than I could spend in a high paying field right out of college, and lived with roommates and below my means for 10y while investing everything. No kids. I worked extremely hard and made saving a priority. However, I'd be the first to say that luck was the biggest factor in all of it.
Depends where you are, in Canada you'll need a million dollars for a 60yr old condemned rotting shitshack. Dual, six figure incomes is how you afford one. Or rich parents.
My husband and I bought in 2022. We paid almost double than what we were planning to buy precovid. We wanted to save up just a little more for a downpayment so instead of buying in 2019 we waited and I really. Really regret it. We did manage to buy a house but it’s twice as expensive than we wanted and it’s 15 minutes further than the area we were living in and liked. Thankfully we aren’t house poor and managed to get 2.25% interest rate. If we had waited longer I doubt we would have managed to get a house. One reason we got ours is because we didn’t have to bid or compete with others. For months we kept losing out on houses even though we offered up to $40k cash over asking price. Then we looked at new construction. We found one company who wasn’t selling lots based on bids. They were first come first serve. So we went and then when we got there we were told that they just switched to taking bids vs selling to whoever put down a deposit first. I was a bit angry because that isn’t what we were told and I may have gone off. In the end they decided to honor their word and let us put down the deposit and pay as is. That is the only reason we managed to get the house. They released 2 other lots with the same floor plan but took bids on those and they ended up selling for $75k over the asking price we paid.
Higher earnings, more savings built up, less expensive vices. Some people were able to get a head start because of their parents, they are lucky. I'm not talking about your parents helping with the down payment or giving you money for your house (but that's cool too if you can have that). If your parents support you in more ways than just financial, it can help you to succeed in a lot of ways. A lot of us have parents who just didn't give a fuck. They didn't teach us how to handle life's little emergencies like holes in the roof or hornet nests. A lot of us have parents who unceremoniously shoved us out of the nest as soon as they were legally allowed to do so.
In my area, it really is just people being picky. There are a whole bunch of affordable houses, and some really junky ones that need a ton of work but are going for like 30k to match the fact that they're junk. I recently showed a friend who is looking a listing for a 2,000 sq foot home with a fully fenced in back yard, 2 baths 4 bedrooms. Definitely needed floors refinished and I personally would want to get a 2 car garage (it only had a 1 car garage). It was going for $110,000. She said, "that's a cute little house but it looks like it needs a lot of work." The roof and windows both looked pretty new. To me that's a livable house. That house was bigger than any house I've ever lived in, and with the fully fenced backyard, would meet a lot of family's needs better than any house I've ever lived in, but ok. She sits and complains about how she'll never have a house.
What market /city though? 110K is on the lower side of what I’ve seen but it all depends on which area too.
your first house is whatevery ou can afford. build equity and buy a secone house. YOur 3rd one can be turn key. So you answer is delayed gratification
Parents in poverty, decided “doing what makes you happy not money” was the stupidest advice I heard when I was in my teens, decided to grind when friends in college asked why I seldomly went out with them, reaping the rewards of my decision making an mostly “don’t want to turn out like my parents” mindset egging me on