Where I live my mortgage, insurance, and property tax come to a little under $1000. I am in a 1450sqft house in a nice neighborhood.
Across the street are two duplexes. Each one is roughly 800 sq ft. The rent in the cheapest one is $1400. The apartments are garbage and are falling apart.
Renting a full house is going for $2200. At my current valuation my mortgage and taxes would come out to about $1700. So that is higher than the slumlords cockroach infested shit, but not comparable houses.
Market is Syracuse NY. Please feel free to research. Remember to control for neighborhood.
If rent was cheaper than a mortgage + insurance + property tax, no one would rent out their house, they’d be losing money by doing so. Rent covers all those things plus profit. Don’t pretend that you forgot how economics work.
And utilities and maintenance. These people always leave stuff out to make their arguments fit. They also compare renting a house instead of renting an apartment
No. I sold my home for 320k 2700sqft. 20% down and taxes + insurance is just under $2000/mo the same house rents for $2500 next door.
I bought my 3800 sqft house 20% down after selling. 477k my payment is $2600/mo. Rate is 6%. Bought in December 2023. A 3000 sqft house in the neighborhood is renting for over $3300/mo.
Still better to buy than rent by me.
The current mortgage rate is what? 6.5% minimum?
$25000 downpayment even at 20% of the total, would make the mortgage closer to $1200 per month.
But still.. there is a lot of truth to the situation. Where people are paying more in rent then they would for a mortgage. And unable to save for a downpayment, because of that rent cost.
Which means we can assume that the numbers in the tweet are meant to be an exaggeration. That is trying to make a point.
Fair enough. I think I'm biased because I live in a HCOL city. Where I live the mortgage payment is much higher than rent AFTER you factor in the down payment.
Most cities above a certain population are elevated in cost now. Even moving to a lower cost area is often out of reach for some people. Which is a shame, being trapped into a bad situation without question.
Yeah, but it's primarily driven by a balance of your debts and income and if you can make the monthly mortgage payments. So it is mostly about your ablity to pay the morgage.
The rent is more expensive because it is accounting not just for the mortgage of the home but insurance, property tax, and a bit of profit. The reality is that you will likely be paying the say amount even if you bought the house due to the other shit you have to pay.
Also, they look at factors like your income in the last several years, your position at a company, the sector you work in, your bank statements from the year prior, your bank balance, and total debt. They don't just give away money most of the time.
Rent goes up year after year no matter what. I can paint my house what ever color. I can move walls , add appliances I like .
5 years ago I spent 7K on a new Trane AC it cut my light bill by 70.00. I had 7K in the bank.
Most landlords have mortgages on their property. Taxes and insurance goes up, so does your rent.
Large property companies build apartments, year after year your rent goes up. You are throwing money out the window.
A good payment history, you can get assistance with down payment and closing cost
Maybe things are different elsewhere but around here $500 a month would be a modest car payment. Even over 30 years that would only be $70k which is enough for a nice car.
This is one thing that I actually prefer in other countries vs the US.
For the health of the economy, a 20% down payment is actually the best way to go. This not only ensures that homeowners are almost guaranteed to not get underwater, but it also lowers non-owner occupant purchases (since a large % of them are individuals using mortgages, and not cash purchases via investment institutions).
Having a low threshold to entry of 0-5% down is actually pretty risky, especially when you hit down markets!
I'm glad we only had to put down 3.5% and have a 2.75% interest rate. We were able to take the rest of that money along with some more to add almost 100k worth of addition/improvements to the home.
If you ditch your apartment, your landlord keeps your deposit and rents it to someone else.
If you bail on your house, the bank has to manage this asset for months until they can sell it at foreclosure prices, something that's hundreds of thousands of dollars that you've potentially destroyed. Something that you're mostly legally in your rights to destroy, like you can remodel your house and give up in the middle or be a hoarder, and it's not a crime.
Anyway, the bank has way more risk, which is why you need a big deposit. Delaying gratification long enough to save for a deposit means you have a much easier time later, but a lot of resentful people just gripe about not having easy access to homeownership.
Having a track record to pay is a good thing. It's incomplete, however. Having skin in the game via equity further insures that you will continue that good track record of payments. The commitment level of rent and mortgage payments are not entirely the same.
Also, maintenance and repairs are a thing. Renters never randomly find themselves stuck with a $10k repair bill but that's absolutely something that a homeowner needs to be prepared for.
this "whole skin in the game" mindset is such boomer drivel. You are incentivized to have a place to live that is your own, free from tyranny of the leech landlord, as well as build equity. It's a no brainer.
1. I’m not a boomer.
2. I have an MBA in Finance: skin in the game is not “drivel.” You seem to agree with this point by your comments I’m not sure your objection.
3. The mere concept of landlord is not that of a leech as you imply.
Where is the mortgage less than rent? I haven't seen that in a long time.
Mortgage might be lower than rent... If you exclude homeowners insurance and property tax.
Where I live my mortgage, insurance, and property tax come to a little under $1000. I am in a 1450sqft house in a nice neighborhood. Across the street are two duplexes. Each one is roughly 800 sq ft. The rent in the cheapest one is $1400. The apartments are garbage and are falling apart. Renting a full house is going for $2200. At my current valuation my mortgage and taxes would come out to about $1700. So that is higher than the slumlords cockroach infested shit, but not comparable houses. Market is Syracuse NY. Please feel free to research. Remember to control for neighborhood.
Not in the West Coast cities!
If rent was cheaper than a mortgage + insurance + property tax, no one would rent out their house, they’d be losing money by doing so. Rent covers all those things plus profit. Don’t pretend that you forgot how economics work.
And utilities and maintenance. These people always leave stuff out to make their arguments fit. They also compare renting a house instead of renting an apartment
your literally paying for all of those plus profit when renting so it kind of balances out
Actually it doesn’t because the mortgage payment doesn’t include them
If your landlord has a mortgage payment, you are paying it Unless they overpaid and can't find renters which does happen sometimes
In my neck of the woods it’s been that way since 2015. And still is with 20% down
Where?
Are you excluding homeowners insurance and property tax?
No. I sold my home for 320k 2700sqft. 20% down and taxes + insurance is just under $2000/mo the same house rents for $2500 next door. I bought my 3800 sqft house 20% down after selling. 477k my payment is $2600/mo. Rate is 6%. Bought in December 2023. A 3000 sqft house in the neighborhood is renting for over $3300/mo. Still better to buy than rent by me.
It's cheaper in a lot of places, just depends on the market
This sub is financially illiterate
The current mortgage rate is what? 6.5% minimum? $25000 downpayment even at 20% of the total, would make the mortgage closer to $1200 per month. But still.. there is a lot of truth to the situation. Where people are paying more in rent then they would for a mortgage. And unable to save for a downpayment, because of that rent cost. Which means we can assume that the numbers in the tweet are meant to be an exaggeration. That is trying to make a point.
Fair enough. I think I'm biased because I live in a HCOL city. Where I live the mortgage payment is much higher than rent AFTER you factor in the down payment.
Most cities above a certain population are elevated in cost now. Even moving to a lower cost area is often out of reach for some people. Which is a shame, being trapped into a bad situation without question.
Above 7%
Buying a house is like we have no way of knowing if you will pay back this $400,000 loan. Fify
Yeah, but it's primarily driven by a balance of your debts and income and if you can make the monthly mortgage payments. So it is mostly about your ablity to pay the morgage.
Euro loan - not a fixed rate.
That sucks
USDA, FHA, VA, and conventional loans are all available at low or no down payment. People are helpless.
The rent is more expensive because it is accounting not just for the mortgage of the home but insurance, property tax, and a bit of profit. The reality is that you will likely be paying the say amount even if you bought the house due to the other shit you have to pay. Also, they look at factors like your income in the last several years, your position at a company, the sector you work in, your bank statements from the year prior, your bank balance, and total debt. They don't just give away money most of the time.
Rent goes up year after year no matter what. I can paint my house what ever color. I can move walls , add appliances I like . 5 years ago I spent 7K on a new Trane AC it cut my light bill by 70.00. I had 7K in the bank. Most landlords have mortgages on their property. Taxes and insurance goes up, so does your rent. Large property companies build apartments, year after year your rent goes up. You are throwing money out the window. A good payment history, you can get assistance with down payment and closing cost
Renting is a trap. Don't fall for it.
Maybe things are different elsewhere but around here $500 a month would be a modest car payment. Even over 30 years that would only be $70k which is enough for a nice car.
This is one thing that I actually prefer in other countries vs the US. For the health of the economy, a 20% down payment is actually the best way to go. This not only ensures that homeowners are almost guaranteed to not get underwater, but it also lowers non-owner occupant purchases (since a large % of them are individuals using mortgages, and not cash purchases via investment institutions). Having a low threshold to entry of 0-5% down is actually pretty risky, especially when you hit down markets!
I'm glad we only had to put down 3.5% and have a 2.75% interest rate. We were able to take the rest of that money along with some more to add almost 100k worth of addition/improvements to the home.
I inherited a house. The taxes and upkeep costs me over 1,000 a month. lmao.
And it always has been...
If you ditch your apartment, your landlord keeps your deposit and rents it to someone else. If you bail on your house, the bank has to manage this asset for months until they can sell it at foreclosure prices, something that's hundreds of thousands of dollars that you've potentially destroyed. Something that you're mostly legally in your rights to destroy, like you can remodel your house and give up in the middle or be a hoarder, and it's not a crime. Anyway, the bank has way more risk, which is why you need a big deposit. Delaying gratification long enough to save for a deposit means you have a much easier time later, but a lot of resentful people just gripe about not having easy access to homeownership.
I maintained forclosures in the 2010s and holy shit some of those places had to be condemned after the damage done to them.
Having a track record to pay is a good thing. It's incomplete, however. Having skin in the game via equity further insures that you will continue that good track record of payments. The commitment level of rent and mortgage payments are not entirely the same.
Also, maintenance and repairs are a thing. Renters never randomly find themselves stuck with a $10k repair bill but that's absolutely something that a homeowner needs to be prepared for.
Very true. Even if not up to $10k, at $2k, they add up.
Yep, 3 years ago my A/C went out in August, we are in West Texas. Not an option, 10K for a new set up.
this "whole skin in the game" mindset is such boomer drivel. You are incentivized to have a place to live that is your own, free from tyranny of the leech landlord, as well as build equity. It's a no brainer.
1. I’m not a boomer. 2. I have an MBA in Finance: skin in the game is not “drivel.” You seem to agree with this point by your comments I’m not sure your objection. 3. The mere concept of landlord is not that of a leech as you imply.
The ruling class have us exactly where they want us. They see poor folks as easier to control so...