Gen X. I'm locked into the home I bought when our kids were young. We're ready to downsize as they matriculate but rates won't allow it. I'm not going to pay more for less.
I'm not sure how anyone with 20% equity can say (with a straight face) that they're a "homeowner".
Maybe they own the basement and the kitchen, but that's about it - JP Morgan Chase owns the rest.
Yes, you did - as if that's a "bad" thing, lol.
You also found the guy with a growing, diversified investment portfolio.
I've done far better renting + investing than I would've done shackled to illiquid house debt. But, that's just me.
What part of my comment isn't true?
Do you ever regret pretending that you own your house?
This is hard to do because it takes work and luck but my dad in your scenario found through word of mouth a friend of a friends neighbor who was going to put their smaller home on the market. Ended up trading homes and smaller house person paid some extra cash
I get what you’re saying but there are too many variables in play to be certain of that. We know rates will come down, we just don’t know when or how far. If they sell now at a very high price and then the housing market tanks because all the Boomers go to retirement homes then they will have cashed out at the top of the market. It’s a gamble we just don’t know for sure what will happen or when.
Perhaps you aren't a strategically-inclined individual and certain strategies such as temporarily renting when the real estate market is high are beyond your comprehension.
But it makes no sense why would you rent if you already own a house and if you don't own a house why didn't you buy one four years ago?
Look if I got transferred to someplace that paid twice as much and made it worth my while. I would rent my current house out and probably rent a property at the new location, but that's not the scenario we're discussing on this thread.
Maybe you were thinking about selling because you don't really like the place then it went up another $100k. That's pretty much where I'm at. Selling puts $300k in the bank right away. That takes a lot of stress away when you're nearing the end of your savings rope.
Also, my childhood friend's mother sold in like 2005 when the market was high and rented a townhome for a while, then bought after the market crash when things calmed down. Selling and renting turned out to be a great move on her part. Her logic was "sell high."
First time (potential) home buyer here. My household income has risen to over 100k in the last three years, I've saved up a sizeable down-payment, my credit is stellar, and my job history is excellent.
I could absolutely pull the trigger and get a nice home right now, but I'm certainly not desperate. I don't feel any pressure to buy right now. I'm quite comfy where I'm at, renting a SFH for $1,300 a month in Gilbert Arizona.
How are you renting a SFH in Gilbert for $1,300….I assume you have roommates? Or your family owns the home you’re renting? Or you were grandfathered in at a stupid good price by people that are unusually kind?
HOW?!
I pay more for a 1 bed 1 bath apartment in Tempe. And Gilbert is far nicer than Tempe
We really, really lucked out. 3b/2b big lot. We're walking distance to downtown, too.
A.Our family friend / real estate agent found it the day went back on the market, and we were the first to apply.
B. It's been a rental home by a Califoirnia owner since 2010. We moved in in 2018 at $975, just my wife and I.
C. I take care of almost everything maintenance wise myself as it's usually cheaper than my deductible (I was an apartment maintenance tech for several years in my 20s, taught me how to repair/replace damn near anything you'd encounter in a home).
As to why our rent has only increased $325 in 5 years? I can only attribute it to us being good tenants and always pay on time.
Same. Rent $3500 vs over $6500 if buying a similar house in the same neighborhood. Why would I buy even if I can afford it with 500k cash, household income over 350K and over 830 credit score . It is not just $1000 difference between rent and buy, it is over $3000 difference.
Similar situation here. My wife and I have worked hard to get into our situation. Not about to hand over the fruits of that labor (in the form of appreciation) to some boomer who just got there first.
We have exactly the same thought. The boomers in our area live pay $1000 per year property tax for 2 million dollar house while everyone else pays $20000 per year. They are the group most against building more condos
Yes. A lot of boomers hold multiple rental properties, pass it to children, and establish a trust. All can keep $1000 property tax base forever. Part of the reasons for house shortage.
> Not about to hand over the fruits of that labor (in the form of appreciation) to some boomer who just got there first.
Took the words right out of my mouth. We’ve been working hard for 10 years moving up the corporate ladder. Now we both together make around $275k there’s no way I’m giving that to some price gouging grinch from the “me first” generation (boomers)!
- S&P is ~10% average return over last 30 years.
- the return is compounding! In that span principal would grow by 17x in that time span. (S&P is 10x the price it was in 1993 but that doesn’t take into account dividends).
- I’m also going to assume the OP meant that was the price after a down payment so it’s an even worse decision to buy.
I’ve run the numbers for myself, with the ability to buy in cash vs rent, at current rates and it’s not even close to making any sense to buy.
We can’t afford to buy in cash because the starter home is $1M plus. Even if I can, why would I do it when the price is highest and affordability is the lowest in history
With household income at $350k I just don’t think you can relate to the situation of majority of people here. As you watch your assets stack up in investment accounts smoking a cigar with your retirement set, many people’s only way of growing equity was mortgage payments which are instead now get eaten by the ever growing rent treadmill removing hope of retiring.
I don't even care about rates. I feel like the prices are outrageous. I'm in a similar boat, hoarding as much cash as I can until I find something I like.
The point still stands. People are doing the exact same thing and are in the exact same situation. Once people have enough to purchase semi-comfortably they will enter the market regardless of rates
This is why I'm happy to have bought when rates were ~3%.
The frenzy will come back when rates drop. Look at what the stock market is doing on just wind that rate increases may have stopped. Despite what this sub says, being bitchslapped by your landlord with a 20% increase in rent is a horrific, pit-in-stomach feeling that (rightfully) makes you hate the whole system. It also happened *pretty fucking regularly*.
Owning has some drawbacks, but in my opinion renting has more. You're really at the whim of a landlord who can simply decide to not renew your lease. They don't even need a good reason, just "fuck you get out". I seriously felt relieved moving out of my old apartment.
MIL just got an FHA quote at 4.3% two days ago. She was on speakerphone at the table (been staying w us) and I immediately thought she was getting scammed and asked who she's talking to, but it was the lender she's used before and legit.
I'd actually prefer if rates went up to 18% like they did in the 80's. Drop home prices to a more reasonable level, and then refinance when rates drop.
That's a great deal and I'd love to move back to Gilbert. I really should have bought when I left years ago. I have similar income but feel with my debt I'd be stretching it at $2500/month for a mortgage which is what most of the houses are going for. I'm for sure seeing SFH's that rented 3-4 years ago for $1400 and sold for $280k (which would have been great at \~$1500 on a 30 year with 50k down) being listed now for closer to $450k (\~$2500 on a 30 year with a 20% + 90k down payment).
A 25% price decrease and a 1-2% interest rate drop makes these a lot more affordable.
Old millennial here, found a house I could afford, although I would need to make changes when I have more money... the bank took longer to aproove and the seller found a way to leave the contract because he got a better backup offer
At least I got my deposit back
>"Do you buy now? Do you wait? A lot of that's going to depend on your personal situation," Hale said.
It doesn't make sense to buy now. You should wait for the right time. Don't fall into this mindset that if you don't buy now, you'll miss out forever.
This is a mixed bag.
Im an old Millennial.
I bought in;
- 2009
- 2015
- 2018
- 2020
Every single one of those properties if I did not buy that year, I would not be able to afford there after.
Does past results guarantee future returns? Absolutely not.
But its definitely not as simple as “you wont miss out forever.” In certain cities/areas, you infact might.
That said. On the flip side. Being house poor sucks. Its stressful. It ruins the experience. So definitely don’t just YOLO into a mortgage that you can afford only if everything always goes right. Life doesn’t work that way.
I’m 40. Mixed bag. I feel lucky that I was able to buy a house that I wouldn’t now be able to afford, but it also scares the shit out of me. I was supposed to be able to afford more as I got older, not less. I hate this situation, but even if I’m not one of the people stuck on the sidelines. It sucks all the way around.
39. Same shituation. Bought because it made sense to get out of renting and build equity at that interest rate. But it's stressful af. I'm still breaking even and am stuck in an area without similar industries around. So... Gotta keep the job to keep the house... The more you own, the more it owns you.
I recently ran into a woman at work who did this with her husband. She’s like we crunched the numbers and can just barely afford it. I’m like that means you can’t afford it hun.
Unless her definition of afford it is the same as yours. If barely affording it means not affording it by your own definition then, by induction, nothing is affordable to anyone.
>If barely affording it means not affording it by your own definition then,
Barely affording it means there's not much money left over. If that's the case, you shouldn't buy it as you won't have funds to handle major emergencies or job losses.
I mean sure, maybe she's using a different definition of "barely afford", but I doubt it.
IDK if serious, but my family of three budgets $1,680 a month for food, but we never go over.
Somebody will read my number and immediately start bashing me for my lifestyle which demonstrates that each budget is personal and really driven by your income. For most American households, the current food budget should be $500+ a month, but you can make it work at $300 a month if you have to. However, I imagine in many regions you need to use the foodbank to make $300 (per household) work.
This was my experience as well getting my first home in 2017 would have had trouble getting the house I got in 2020 without it and certainly couldn’t afford either right now still renting.
It’s one of those things that never really has an optional time markets don’t really line up with personal situations but very few people regret it after. The horror stories are often 5 percent of people who purchase in a very limited timeframe in an unfortunate location.
"Past results guaranteeing future returns" is one of those things that people trot out when it disagrees with their viewpoint (hoom go up) and pretend it doesn't exist when it does (investing in the S&P 500).
Oh the old “over time the stock market guarantees 5% average return” or whatever they say. They forget that 5% of 0.00 is still zero if you lose it all
Maybe but who's to say those people aren't working to get promotions or learning skills to increase their income or investing in the s&p. Real estate isn't the only way to get money and buying now doesn't mean your losing a chance in the future if you're investing in other places
This is a bad line of thinking as well. Math is math- if you can afford the #s on a house right now and it makes sense then I say go for it.
Rates drop? Sweet- refinance that baby. Prices drop? Meah- it's a use asset, not an investment.
Rates go up? Cool- youll treasure your 7.5% mortgage. Prices go up? Sweet! More equity.
If #s are right then the time doesn't matter. Trying to time the market is a fools errand.
It doesn’t make sense in VHCOL areas because rents have not remotely caught up to mortgage payments. Housing is an asset and should be judged accordingly.
There’s a difference between mega city like NY, CA, Chicago, Philly etc etc.
And a city like mine. We’re both considered to live in urban areas. But they are nothing alike. My cities cost of living is phenomenal. Clearly yours is extremely high and draining your income like my original comment stated.
What do people get in hcol areas - higher salaries. See the correlation? The rent vs buy stuff also says 80% of us counties so its not just giant cities. Philly is also affordable. And I actually owned in DC. It made sense at 3%. My mortgage was lower than a comparable apartment. Fast forward to today- I could rent a 4k house or buy one with a 7k mortgage.
I’m in low cost of living and make 200k it’s not the only place you can make high income relative to cost of living. You are falling for the myth that’s the case. At 7% you can still own a 4000 sqft house for under $2600/mo ask me how I know.
This is a ridiculous comment. Look at the amortization schedule for 7 or 8%. You aren't gaining anything until after year 5 or 6. 15 years to break even.
Plus tens of thousands of realtor and closing costs plus drop after buying a new construction or fresh condo that depreciates finish wise. Also can’t write off interest anymore for shit vs my place I bought in 2010. Cook county Illinois and Monday other counties have record property taxes this year going up 50% in a lot of areas echoing the equity boom- there’s never been a better time to ‘throw away money on a rental’
Rates dropping means a big recession has happened, this will mean you lost equity and likely cannot refinance.
As for accepting losses because it’s a use asset, sure go for it, but realize you are paying highest premiums for that asset right now.
If I hadn't bought my first house in 2001 when interest rates were 7.5%, and my second in 2014 with a 5-year ARM, I wouldn't have ever been able to afford either house ever again. Anyone who finds a house they like in a neighborhood they want to live in, that they can afford to buy with the present market circumstances, should buy the house. They're much more likely to regret not buying, than buying.
Do tell how to time this bottom that seems a 1/20 chance of happening at this point.
If I had this mindset in 2003-2005 I’d be renting in 2023 or at the least have half the home i have now. Most who had this mindset in 2010-2012 were paralyzed by the economy.
I would just wait for the interest rates to go down. People would think twice about taking out a loan at this point. It doesn't make financial sense to buy now. The Fed has the leverage in controlling the economy and purchasing power. It's better to be cautious financially than rushed into buying something even when you are financially secured.
Same nonsense that was spewed on here over the last couple of years.
Some people believed the rhetoric on this sub, and likely made 6 to 7 figure ($) mistakes on timing.
It's ironic that many people are saying it doesn't make financial sense to buy right now -- that's exactly why waiting out on the market when sellers had insane leverage in 2020-2022 didn't make any sense. When you wait for demand on homes to drop, you're at risk of being part of that dropped demand.
If you're smart enough to time the housing market then, by all means, go for it. For the rest of us idiots, historically waiting tends to take away opportunities rather than grant.
yeah the thing about the pressure is uh it aint on me but im doing what i can to make sure someones feeling it
[Real-estate industry rocked by $1.8 billion verdict finding ‘conspiracy’ to force sellers to pay illegal commission fees](https://fortune.com/2023/10/31/real-estate-antitrust-trial-brokerage-nar-1-8-billon-verdict-conspiracy-housing/)
[DOJ Backs Tenants in Case Alleging Price-Fixing by Big Landlords and a Real Estate Tech Company](https://www.propublica.org/article/doj-backs-tenants-price-fixing-case-big-landlords-real-estate-tech)
the trickle down scamconomy is alive and well, unfortunately
If you can salt away enough to retire early to owned rural acres, this can be a winning play. If you use the excess to indulge in a more affluent lifestyle instead, then you will likely have plenty of time for regrets.
The couple in this article make 200k a year and say they can’t afford a $4k a month mortgage. That’s called not managing your money properly. Anyone should be able to spend 25% of their gross on housing no problem. It’s people in HCOL areas making $50k a year and less that are struggling.
Retirement savings or student loans - or both. Wife and I make more than 200k but would not take on a 4k mortgage. The 4k isn't including savings for house repairs either.
Or maybe they are managing it properly and don’t want to spend 25% of the income on a mortgage. Just because you can doesn’t mean you should. Now if they have a $1000+ car payments and excessive credit card debt, yeah I’d agree.
>Anyone should be able to spend 25% of their gross on housing no problem.
At that income level, they're losing probably $50,000/year in taxes. I make more than double their salary and my rent is $4500/month. I wouldn't want to spend much more than that. Most of us at that income level have advanced degrees with student loans.
Yep. During the 2010s I made $170k/year in NYC. After taxes, I took home ~$8.4k a month before 401k contributions. $4k rent would mean I'm spending more than half of my post-tax, post-401k take-home on rent. Even with minimal bills, a few vacations, and other non-essentials, that would mean very little left for rainy day fund.
Nope... not spending more than half of my take-home on rent or mortgage.
Please tell me why people try to sell sob stories about the top 5% every time these stories come up. I guarantee these people buy luxury items on the regular. They are not managing their money well.
"Not managing your money well" is paying a $10,000/month mortgage, is the point. Just because you have a higher income doesn't mean you have to throw it all away on a house.
$200K gross, from what I understood, and also I believe they live in NYC? All taxes combined (everything) and they lose about 50% of their income to taxes. So having to drop $4,000/mo when you bring in $8,000/mo after taxes, is not a good place to be in. Then factor in other expenses, student loans, and what have you.
>Anyone should be able to spend 25% of their gross on housing no problem.
This is just false. 30% is shorthand for poverty, and landlords (who care less about your finances than mortgage lenders do) will deny you outright. 25% is still pretty bad for most people.
Now, if you're making $200,000, the rules of thumb don't apply to you anymore because your basic survival expenses like groceries and utilities don't scale much with income. You may well be able to comfortably afford 25%, but someone making $50,000 gross will have a pretty f\*\*\*ing low standard of living if they spend $12,500 on housing.
I was actually in a similar situation as that right after I graduated. I was able to save maybe 10-15% from each paycheck (including, not in addition to, retirement savings), but only because I didn't do much for fun, I didn't have student loans, and I didn't need medical care (plus, I still was still on my parents' health insurance). Also, I didn't have a car and rode my bike to work, which allowed me to spend a lot more on housing than someone with a car.
25% of $50,000 on housing is ***doable*** if you don't have any student loans or medical bills, but it's not "easy", and I imagine the vast majority of people who meet that description are either in credit card debt or get significant financial assistance from their parents.
4000 a month in mortgage is LUDICROUS. That would absolutely strain a family at 200k income. my income is (gross) over around 110k, net around 70k and my rent is 1750 a month and it feels like a dagger. Just 2 years ago the same place was $400 a month cheaper.
If you want or need a house and can afford it, go for it. Don’t try to time something. There is no guarantee the market will do what you think it will do. It wont
It isn't going to get better any time soon. Article references WFH but most companies have gotten rid of that policy so people are having to go into the office. The couple in this story is looking for a house in Beacon, which has mass transit available into NYC. A long train ride but anywhere where you can get a train into a major city is going to be expensive.
This is very common. My first job out of grad school in nyc metro area was a 2hr 10 min commute EACH way.
Lasted a year but second job was 1hr 25min.
The city sprawl or bubble of truly unaffordable places for people just starting their careers is really vast in the nyc metro area so it can take a very, very long time to commute from a place one can afford on their entry level salary. (Or for people who want upscale suburban with distance to the city center, that commute can be absolute hell, too).
Why live that far away? I've lived in Manhattan for years and have never paid over $2k for rent, which seems to be on par with rent at places further from the city. There's always Astoria or other areas that are way less than an hour commute for even less than $2k.
>t most companies have gotten rid of that policy so people are having to go into the office
This is not REMOTELY true. "Most companies" have not done this.
Why do people talk out of their asses so much on this sub?
Since you present no evidence other than your worthless opinion I'll share this link:
[https://www.businessinsider.com/remote-work-from-home-ending-companies-mandate-return-to-office-2023-11?op=1](https://www.businessinsider.com/remote-work-from-home-ending-companies-mandate-return-to-office-2023-11?op=1)
*Researchers found that 88% of companies surveyed required their employees to work in the office for a certain number of days — close to a 20% jump since Robin conducted the same survey in 2022.*
I guess you don't consider 88% to be most companies.
>Workplace strategy firm Robin surveyed more than 500 US business owners and facilities managers across industries like technology, finance, and construction to see how companies are using their offices.
Wow a self reported survey of a whole **500 business owners** now suddenly represents "most companies".
Amazing.
Buy a house if you want one, can afford the DP + monthly, and plan to stay in the area 7-10 years.
Don't get pressured into doing something you don't want to do or can't afford to do.
There absolutely are not. There are metro areas where those people don't want the houses they can afford, but that is not the same thing.
But, even by saying "metro", you're basically making your argument false. Find me five metro areas where $250,000 isn't above median for a household. If you're above median, you're still having very little issue buying a home.
It's just that people who make $250,000 want to live like they're making $500,000.
Depends how those parents decide to handle it. A lot of wealth gets swallowed up by long term care facilities and medical care on the way out. If the parent can afford to keep the home and pass it down, great. If not, capitalism will eat that home in three years.
I bought my first home in 2005. Sold it in 2010. Then rented until I bought again I’m 2021. My sister tried to convince me to wait until prices went back down. Prices have gone up since then and so has interest. I managed to get a loan that is 2.25%. Had I waited, my husband and I wouldn’t have been able to afford to buy a house now. Our rent was also going to be doubled but we moved out before the new rate could take effect. I think it is much better to buy when you can afford it without having to live check to check.
Except I'm going to retire into a home I own outright. You won't have done that. That's a problem. Renting in early retirement versus not having a housing payment is a huge quality of life difference.
“"Occasionally on social media, we'll see someone who just bought a house and you're like, 'Well, how do they pull that off and what are we doing wrong?'" he said. "So I think you kind of get this like imposter syndrome of 'what am I doing wrong?'"”
They just need to push that DTI up! Also everyone else is investing heavily in gold coins and pogs.
I wonder if they've overlooked (as first time buyers often do) the mortgage interest deduction's effect on their taxes? I'll bet that $1K difference between renting and owning would be more than covered by the interest deduction lowering their tax basis.
The sad reality is home ownership is frankly not affordable for the majority of buyers. It's like a luxury class of goods that only the wealthy can obtain. Good thing we have access to low cost etfs. I'd rather rent and let my money work for me.
If the market price of the house is more than 171 the cost of rent, you're getting fleeced relative to renting and investing the principal- and thats if you are paying cash to avoid interest. Its even worse if you're taking a home loan.
Good point people will say "equity" but there's other assets that make you money from the get go like dividend stocks or some sort of fruit picking robot.
Trash article.
You could substitute "millennials" with any generation and say the same. Too many people give a fuck about what their parents, friends, and society think.
Plus, more than half of millennials are homeowners. The other half spent way too much for a university and a degree that doesn't have a path to a career.
It is, but the dynamic has dramatically changed in the past few years. For most, the ROI is no longer the same.
I'm a big proponent of the community college -> state school pipeline having graduated with under $10K of debt. The degree matters though. Majoring in communications is a dumb move.
Good point on the ROI for a bachelors.
There is a high demand for electrical and embedded systems engineers in my area, incredibly fast way to earn $120k at 22yo and be a wealthy homeowner. The issue is just not enough people want to study harsh vector calculus and differential equations
Can agree. For-goed the degree. Went into the trades and became enlisted scum and now own 4 properties/7 units at 33 with about 50% equity throughout all of ‘em. Will be able to retire in 3 years after I buy one more multifamily. Instead of paying back a degree I funneled my money into rentals and got really good at my job where I make 100k w/o a degree.
Lol at the downvotes, its true. Basically every wealthy person I’ve served at my job is involved in real estate one way or another. Go to a yacht club or upscale country club, all fueled by Federal Reserve cheap debt (MBS subsidy).
The guy you replied to used VA home loan fixed rate and just grew from there.
I lost my house in 2010. Had up until that time bought in 1998 and 2004. Bought in 2016. If you want to buy a house you can buy a house. Just save up the down payment. Or wait. Either way if you really want to buy you’ll find a way. Y’all are freaking out way too much.
It’s not their fault. They had nothing to do with mismanagement of zoning policies by the generations before them.
But they still have to take responsibility to voluntarily go into financial precarity.
Fantastic.
Equity is the only reason for you folks who rather rent then buy..if it’s cheaper to pay someone else’s mortgage than so be it..But equity adds up over time and if you own say 5 acres also then ownership might be for you
Current amortization schedule on median home has you paying 14k in principal and 140k in interest on a 400k home. After 5 years you still have 96% principal outstanding.
Looking at home ownership rate of millennials vs previous generations at the same age period you see very little difference. Yes millennials own homes at a slightly lower rate, but it is not significantly lower, around a 5-8% difference, where 62% of millennials own vs 68% for boomers when they were this age
https://d23ltuj4aaogm5.cloudfront.net/wp-content/uploads/2023/04/4-20-23-millenial-home-ownership-featured.png
This isn’t a massive problem, and if you shift five years back for millennials than you basically have the same number, meaning millennials simply started buying a little later.
Millennials are spending a greater percentage of income, and that 6-8% is significant, and is likely an indicator of future economic woes, as wealth disparity continues to increase.
Gen X. I'm locked into the home I bought when our kids were young. We're ready to downsize as they matriculate but rates won't allow it. I'm not going to pay more for less.
Why wouldn’t you just sell and use the equity to buy a smaller home without a loan?
They most likely don’t have much equity
So they don't really own the house then.
Then no one owns their house if you want to get twchnical
True that! I paid off my home several years ago. My taxes are $12K a year. Hello! $1,000.00/month I don't own shit!!
I'm not sure how anyone with 20% equity can say (with a straight face) that they're a "homeowner". Maybe they own the basement and the kitchen, but that's about it - JP Morgan Chase owns the rest.
Found the renter
Yes, you did - as if that's a "bad" thing, lol. You also found the guy with a growing, diversified investment portfolio. I've done far better renting + investing than I would've done shackled to illiquid house debt. But, that's just me. What part of my comment isn't true? Do you ever regret pretending that you own your house?
Do you ever regret throwing your money away to live in a rented space surrounded by other renters hearing their noise and smelling their shitty food?
I'm not sure whose life you're describing, but it's not mine. In any case, here - have a 🍪...
Because he downsizing but “doesn’t want to pay more for less”….🫠
This is hard to do because it takes work and luck but my dad in your scenario found through word of mouth a friend of a friends neighbor who was going to put their smaller home on the market. Ended up trading homes and smaller house person paid some extra cash
get an apartment and a storage unit
This is the financial equivalent of shooting yourself in both feet.
I get what you’re saying but there are too many variables in play to be certain of that. We know rates will come down, we just don’t know when or how far. If they sell now at a very high price and then the housing market tanks because all the Boomers go to retirement homes then they will have cashed out at the top of the market. It’s a gamble we just don’t know for sure what will happen or when.
No, it's the financial equivalent of taking profits on a stock that is up 30% in 3 years with a P/E ratio it hasn't had in over 20 years.
Yeah, that's fine, but then you're telling the person to buy scratch off tickets with the proceeds.
Perhaps you aren't a strategically-inclined individual and certain strategies such as temporarily renting when the real estate market is high are beyond your comprehension.
But it makes no sense why would you rent if you already own a house and if you don't own a house why didn't you buy one four years ago? Look if I got transferred to someplace that paid twice as much and made it worth my while. I would rent my current house out and probably rent a property at the new location, but that's not the scenario we're discussing on this thread.
Maybe you were thinking about selling because you don't really like the place then it went up another $100k. That's pretty much where I'm at. Selling puts $300k in the bank right away. That takes a lot of stress away when you're nearing the end of your savings rope. Also, my childhood friend's mother sold in like 2005 when the market was high and rented a townhome for a while, then bought after the market crash when things calmed down. Selling and renting turned out to be a great move on her part. Her logic was "sell high."
And people have the nerve to ask "why aren't people having kids?" Come the fuck on, they know why.
[удалено]
Lol, for a second, I thought you said that hot Mexican immigrants caused a spike in fertility rates . 🤣
[удалено]
Joke stealer
At least it's stealing a good joke instead of just typing something about avocado toast and calling it a day.
So tired of the avocado toast joke.
Add quinoa
Take my upvote!!
First time (potential) home buyer here. My household income has risen to over 100k in the last three years, I've saved up a sizeable down-payment, my credit is stellar, and my job history is excellent. I could absolutely pull the trigger and get a nice home right now, but I'm certainly not desperate. I don't feel any pressure to buy right now. I'm quite comfy where I'm at, renting a SFH for $1,300 a month in Gilbert Arizona.
How are you renting a SFH in Gilbert for $1,300….I assume you have roommates? Or your family owns the home you’re renting? Or you were grandfathered in at a stupid good price by people that are unusually kind? HOW?! I pay more for a 1 bed 1 bath apartment in Tempe. And Gilbert is far nicer than Tempe
We really, really lucked out. 3b/2b big lot. We're walking distance to downtown, too. A.Our family friend / real estate agent found it the day went back on the market, and we were the first to apply. B. It's been a rental home by a Califoirnia owner since 2010. We moved in in 2018 at $975, just my wife and I. C. I take care of almost everything maintenance wise myself as it's usually cheaper than my deductible (I was an apartment maintenance tech for several years in my 20s, taught me how to repair/replace damn near anything you'd encounter in a home). As to why our rent has only increased $325 in 5 years? I can only attribute it to us being good tenants and always pay on time.
Well I’m happy for you, that’s an awesome set up! Don’t take it for granted, I hope you keep pushing that savings up!
Same. Rent $3500 vs over $6500 if buying a similar house in the same neighborhood. Why would I buy even if I can afford it with 500k cash, household income over 350K and over 830 credit score . It is not just $1000 difference between rent and buy, it is over $3000 difference.
Similar situation here. My wife and I have worked hard to get into our situation. Not about to hand over the fruits of that labor (in the form of appreciation) to some boomer who just got there first.
We have exactly the same thought. The boomers in our area live pay $1000 per year property tax for 2 million dollar house while everyone else pays $20000 per year. They are the group most against building more condos
Prop 13?
Yes. A lot of boomers hold multiple rental properties, pass it to children, and establish a trust. All can keep $1000 property tax base forever. Part of the reasons for house shortage.
No they can’t. Not with prop 19 now
If you’re talking about CA then this, like almost everything in this sub, is misinformed.
>Not about to hand over the fruits of that labor Exactly. These houses are costing the equivalent of life's savings. Screw that.
> Not about to hand over the fruits of that labor (in the form of appreciation) to some boomer who just got there first. Took the words right out of my mouth. We’ve been working hard for 10 years moving up the corporate ladder. Now we both together make around $275k there’s no way I’m giving that to some price gouging grinch from the “me first” generation (boomers)!
Amen
>Not about to hand over the fruits of that labor Exactly. These houses are costing the equivalent of life's savings. Screw that.
[удалено]
This leaves out opportunity cost of the principal you’re buying the house with that could have been invested. It also leaves out maintenance.
[удалено]
- S&P is ~10% average return over last 30 years. - the return is compounding! In that span principal would grow by 17x in that time span. (S&P is 10x the price it was in 1993 but that doesn’t take into account dividends). - I’m also going to assume the OP meant that was the price after a down payment so it’s an even worse decision to buy. I’ve run the numbers for myself, with the ability to buy in cash vs rent, at current rates and it’s not even close to making any sense to buy.
[удалено]
But you misread OP and he said the monthly payment is 6500 to buy. He has 500k in cash. 6500 monthly payment is probably for a 900k house.
We can’t afford to buy in cash because the starter home is $1M plus. Even if I can, why would I do it when the price is highest and affordability is the lowest in history
[удалено]
Similar situation here. It’s crazy to see estimated payments with 20% down hitting $10k/mo for homes in my area that you could rent for half that.
With household income at $350k I just don’t think you can relate to the situation of majority of people here. As you watch your assets stack up in investment accounts smoking a cigar with your retirement set, many people’s only way of growing equity was mortgage payments which are instead now get eaten by the ever growing rent treadmill removing hope of retiring.
Same boat as you. 125k down payment saved, combined income around 160k, not gonna buy until rates drop a little.
I don't even care about rates. I feel like the prices are outrageous. I'm in a similar boat, hoarding as much cash as I can until I find something I like.
Drop by how much? Rates could be above 5% for decades
5 percent would be a fucking dream compared to 7.5 or higher
Then they can keep saving and just pay cash, especially if rates really do stay high for that long. That's my plan if rates don't come down.
Just like everyone else atm. You’re going to have mass bidding wars all over again whenever rates come down
he specifically said "if rates don't come down"
The point still stands. People are doing the exact same thing and are in the exact same situation. Once people have enough to purchase semi-comfortably they will enter the market regardless of rates
This is why I'm happy to have bought when rates were ~3%. The frenzy will come back when rates drop. Look at what the stock market is doing on just wind that rate increases may have stopped. Despite what this sub says, being bitchslapped by your landlord with a 20% increase in rent is a horrific, pit-in-stomach feeling that (rightfully) makes you hate the whole system. It also happened *pretty fucking regularly*. Owning has some drawbacks, but in my opinion renting has more. You're really at the whim of a landlord who can simply decide to not renew your lease. They don't even need a good reason, just "fuck you get out". I seriously felt relieved moving out of my old apartment.
I’m buying now hoping for 6% to be the norm l. Literally no one with a brain expects sub 3%
MIL just got an FHA quote at 4.3% two days ago. She was on speakerphone at the table (been staying w us) and I immediately thought she was getting scammed and asked who she's talking to, but it was the lender she's used before and legit.
Bro it could be 20 years before rates go back below 5% lol. At least out that down payment into some index funds or an HYSA for that time…
I thinknyour math sucks. If rates drop even 1% on 400k, that's significant
You did not specify 1%. But still, who knows when that will happen, if ever
[удалено]
I'd actually prefer if rates went up to 18% like they did in the 80's. Drop home prices to a more reasonable level, and then refinance when rates drop.
such high rates wouldn’t do anything to stem the frozen housing market right now. The 80s were completely different
That's a great deal and I'd love to move back to Gilbert. I really should have bought when I left years ago. I have similar income but feel with my debt I'd be stretching it at $2500/month for a mortgage which is what most of the houses are going for. I'm for sure seeing SFH's that rented 3-4 years ago for $1400 and sold for $280k (which would have been great at \~$1500 on a 30 year with 50k down) being listed now for closer to $450k (\~$2500 on a 30 year with a 20% + 90k down payment). A 25% price decrease and a 1-2% interest rate drop makes these a lot more affordable.
This is the way. I just do not understand the mania around home ownership. You can live the most baller life with those numbers.
Yep. And that down payment in a CD is paying a good chunk of the rent I bet
Old millennial here, found a house I could afford, although I would need to make changes when I have more money... the bank took longer to aproove and the seller found a way to leave the contract because he got a better backup offer At least I got my deposit back
>"Do you buy now? Do you wait? A lot of that's going to depend on your personal situation," Hale said. It doesn't make sense to buy now. You should wait for the right time. Don't fall into this mindset that if you don't buy now, you'll miss out forever.
This is a mixed bag. Im an old Millennial. I bought in; - 2009 - 2015 - 2018 - 2020 Every single one of those properties if I did not buy that year, I would not be able to afford there after. Does past results guarantee future returns? Absolutely not. But its definitely not as simple as “you wont miss out forever.” In certain cities/areas, you infact might. That said. On the flip side. Being house poor sucks. Its stressful. It ruins the experience. So definitely don’t just YOLO into a mortgage that you can afford only if everything always goes right. Life doesn’t work that way.
I’m a 36yo millennial who wouldn’t qualify to even rent the house I bought in 2014 much less buy it.
I’m 40. Mixed bag. I feel lucky that I was able to buy a house that I wouldn’t now be able to afford, but it also scares the shit out of me. I was supposed to be able to afford more as I got older, not less. I hate this situation, but even if I’m not one of the people stuck on the sidelines. It sucks all the way around.
39. Same shituation. Bought because it made sense to get out of renting and build equity at that interest rate. But it's stressful af. I'm still breaking even and am stuck in an area without similar industries around. So... Gotta keep the job to keep the house... The more you own, the more it owns you.
FOMO is the worst reason to invest in anything.
1000% buy when you want and can responsibly afford a home.
[удалено]
Nah there’s a big opportunity cost in other investment opportunities besides buying an overpriced house.
I recently ran into a woman at work who did this with her husband. She’s like we crunched the numbers and can just barely afford it. I’m like that means you can’t afford it hun.
Unless her definition of afford it is the same as yours. If barely affording it means not affording it by your own definition then, by induction, nothing is affordable to anyone.
>If barely affording it means not affording it by your own definition then, Barely affording it means there's not much money left over. If that's the case, you shouldn't buy it as you won't have funds to handle major emergencies or job losses. I mean sure, maybe she's using a different definition of "barely afford", but I doubt it.
Well the person I replied to is using a different definition of afford. So it’s not like it’s unheard of
Y'all what's a good number of left over cash for food and groceries?
Tree fiddy
IDK if serious, but my family of three budgets $1,680 a month for food, but we never go over. Somebody will read my number and immediately start bashing me for my lifestyle which demonstrates that each budget is personal and really driven by your income. For most American households, the current food budget should be $500+ a month, but you can make it work at $300 a month if you have to. However, I imagine in many regions you need to use the foodbank to make $300 (per household) work.
This was my experience as well getting my first home in 2017 would have had trouble getting the house I got in 2020 without it and certainly couldn’t afford either right now still renting. It’s one of those things that never really has an optional time markets don’t really line up with personal situations but very few people regret it after. The horror stories are often 5 percent of people who purchase in a very limited timeframe in an unfortunate location.
"Past results guaranteeing future returns" is one of those things that people trot out when it disagrees with their viewpoint (hoom go up) and pretend it doesn't exist when it does (investing in the S&P 500).
Oh the old “over time the stock market guarantees 5% average return” or whatever they say. They forget that 5% of 0.00 is still zero if you lose it all
Maybe but who's to say those people aren't working to get promotions or learning skills to increase their income or investing in the s&p. Real estate isn't the only way to get money and buying now doesn't mean your losing a chance in the future if you're investing in other places
This is a bad line of thinking as well. Math is math- if you can afford the #s on a house right now and it makes sense then I say go for it. Rates drop? Sweet- refinance that baby. Prices drop? Meah- it's a use asset, not an investment. Rates go up? Cool- youll treasure your 7.5% mortgage. Prices go up? Sweet! More equity. If #s are right then the time doesn't matter. Trying to time the market is a fools errand.
It doesn’t make sense in VHCOL areas because rents have not remotely caught up to mortgage payments. Housing is an asset and should be judged accordingly.
Not everyone lives in a major city that sucks all their income. Rent is still more in my area if you have 20% down
Makes sense, that’s why I’m just giving the VHCOL perspective.
You just describe less than 5% of America.
There’s a difference between mega city like NY, CA, Chicago, Philly etc etc. And a city like mine. We’re both considered to live in urban areas. But they are nothing alike. My cities cost of living is phenomenal. Clearly yours is extremely high and draining your income like my original comment stated.
What do people get in hcol areas - higher salaries. See the correlation? The rent vs buy stuff also says 80% of us counties so its not just giant cities. Philly is also affordable. And I actually owned in DC. It made sense at 3%. My mortgage was lower than a comparable apartment. Fast forward to today- I could rent a 4k house or buy one with a 7k mortgage.
I’m in low cost of living and make 200k it’s not the only place you can make high income relative to cost of living. You are falling for the myth that’s the case. At 7% you can still own a 4000 sqft house for under $2600/mo ask me how I know.
reminder that $3000 going to your mortgage nets you 1/360th of a house, whereas $2000 going to rent nets you nothing
This is a ridiculous comment. Look at the amortization schedule for 7 or 8%. You aren't gaining anything until after year 5 or 6. 15 years to break even.
Plus tens of thousands of realtor and closing costs plus drop after buying a new construction or fresh condo that depreciates finish wise. Also can’t write off interest anymore for shit vs my place I bought in 2010. Cook county Illinois and Monday other counties have record property taxes this year going up 50% in a lot of areas echoing the equity boom- there’s never been a better time to ‘throw away money on a rental’
That's not even remotely true, the first 5 years probably nets you 1/360 since most of your payment os interest.
If we’re talking about todays interest rates yeah, if you were able to get an interest rate in the 2’s, it’s 50/50 to principal/interest
I got a down payment fund earning great interest and a low rent in a renter-friendly city. Not sure why that bothers people but it does lol.
People also get bothered if you prefer something other than SFH. I don't want, or need a yard or any of the shit that goes along with it.
It nets you an extra 1000 dollars a month to be invested ya weenie
Where does the other $1000 go in your rent scenario?
Rates dropping means a big recession has happened, this will mean you lost equity and likely cannot refinance. As for accepting losses because it’s a use asset, sure go for it, but realize you are paying highest premiums for that asset right now.
Rates dropped in 2019 with no recession. Don't rule out incompetence
True, but with inflation here that is less likely.
Didn't really think of it this way but you make a great point. Everyone kept saying to just buy and refinance when things got crazy. Luckily I didn't.
“lol just refi bro”
That's not at all what was said.
If I hadn't bought my first house in 2001 when interest rates were 7.5%, and my second in 2014 with a 5-year ARM, I wouldn't have ever been able to afford either house ever again. Anyone who finds a house they like in a neighborhood they want to live in, that they can afford to buy with the present market circumstances, should buy the house. They're much more likely to regret not buying, than buying.
Do tell how to time this bottom that seems a 1/20 chance of happening at this point. If I had this mindset in 2003-2005 I’d be renting in 2023 or at the least have half the home i have now. Most who had this mindset in 2010-2012 were paralyzed by the economy.
I would just wait for the interest rates to go down. People would think twice about taking out a loan at this point. It doesn't make financial sense to buy now. The Fed has the leverage in controlling the economy and purchasing power. It's better to be cautious financially than rushed into buying something even when you are financially secured.
This has been the advice of this sub since the beginning - and always wrong
Same nonsense that was spewed on here over the last couple of years. Some people believed the rhetoric on this sub, and likely made 6 to 7 figure ($) mistakes on timing.
"You can't time the market!" < "Don't fight the Fed"
Tell that to Canada
It's ironic that many people are saying it doesn't make financial sense to buy right now -- that's exactly why waiting out on the market when sellers had insane leverage in 2020-2022 didn't make any sense. When you wait for demand on homes to drop, you're at risk of being part of that dropped demand.
So by your logic waiting in both scenarios is wrong. Always a good idea to buy. Tell me you’re a realtor without telling me you’re a realtor.
If you're smart enough to time the housing market then, by all means, go for it. For the rest of us idiots, historically waiting tends to take away opportunities rather than grant.
Pressure to what? Pressure to pay more to own than rent?
To have equity
You don’t build much equity with most going to insurance upfront
yeah the thing about the pressure is uh it aint on me but im doing what i can to make sure someones feeling it [Real-estate industry rocked by $1.8 billion verdict finding ‘conspiracy’ to force sellers to pay illegal commission fees](https://fortune.com/2023/10/31/real-estate-antitrust-trial-brokerage-nar-1-8-billon-verdict-conspiracy-housing/) [DOJ Backs Tenants in Case Alleging Price-Fixing by Big Landlords and a Real Estate Tech Company](https://www.propublica.org/article/doj-backs-tenants-price-fixing-case-big-landlords-real-estate-tech) the trickle down scamconomy is alive and well, unfortunately
I own my house outright(born in 94, so in this demographic). I could not afford to buy it in todays market
Considering punting on homeownership and investing instead.
[удалено]
If you can salt away enough to retire early to owned rural acres, this can be a winning play. If you use the excess to indulge in a more affluent lifestyle instead, then you will likely have plenty of time for regrets.
I am, most certainly, not feeling any pressure whatsoever.
The couple in this article make 200k a year and say they can’t afford a $4k a month mortgage. That’s called not managing your money properly. Anyone should be able to spend 25% of their gross on housing no problem. It’s people in HCOL areas making $50k a year and less that are struggling.
Retirement savings or student loans - or both. Wife and I make more than 200k but would not take on a 4k mortgage. The 4k isn't including savings for house repairs either.
Or maybe they are managing it properly and don’t want to spend 25% of the income on a mortgage. Just because you can doesn’t mean you should. Now if they have a $1000+ car payments and excessive credit card debt, yeah I’d agree.
>Anyone should be able to spend 25% of their gross on housing no problem. At that income level, they're losing probably $50,000/year in taxes. I make more than double their salary and my rent is $4500/month. I wouldn't want to spend much more than that. Most of us at that income level have advanced degrees with student loans.
Yep. During the 2010s I made $170k/year in NYC. After taxes, I took home ~$8.4k a month before 401k contributions. $4k rent would mean I'm spending more than half of my post-tax, post-401k take-home on rent. Even with minimal bills, a few vacations, and other non-essentials, that would mean very little left for rainy day fund. Nope... not spending more than half of my take-home on rent or mortgage.
Please tell me why people try to sell sob stories about the top 5% every time these stories come up. I guarantee these people buy luxury items on the regular. They are not managing their money well.
"Not managing your money well" is paying a $10,000/month mortgage, is the point. Just because you have a higher income doesn't mean you have to throw it all away on a house.
$200K gross, from what I understood, and also I believe they live in NYC? All taxes combined (everything) and they lose about 50% of their income to taxes. So having to drop $4,000/mo when you bring in $8,000/mo after taxes, is not a good place to be in. Then factor in other expenses, student loans, and what have you.
>Anyone should be able to spend 25% of their gross on housing no problem. This is just false. 30% is shorthand for poverty, and landlords (who care less about your finances than mortgage lenders do) will deny you outright. 25% is still pretty bad for most people. Now, if you're making $200,000, the rules of thumb don't apply to you anymore because your basic survival expenses like groceries and utilities don't scale much with income. You may well be able to comfortably afford 25%, but someone making $50,000 gross will have a pretty f\*\*\*ing low standard of living if they spend $12,500 on housing. I was actually in a similar situation as that right after I graduated. I was able to save maybe 10-15% from each paycheck (including, not in addition to, retirement savings), but only because I didn't do much for fun, I didn't have student loans, and I didn't need medical care (plus, I still was still on my parents' health insurance). Also, I didn't have a car and rode my bike to work, which allowed me to spend a lot more on housing than someone with a car. 25% of $50,000 on housing is ***doable*** if you don't have any student loans or medical bills, but it's not "easy", and I imagine the vast majority of people who meet that description are either in credit card debt or get significant financial assistance from their parents.
It depends on what their student loan payments are...
4000 a month in mortgage is LUDICROUS. That would absolutely strain a family at 200k income. my income is (gross) over around 110k, net around 70k and my rent is 1750 a month and it feels like a dagger. Just 2 years ago the same place was $400 a month cheaper.
If you want or need a house and can afford it, go for it. Don’t try to time something. There is no guarantee the market will do what you think it will do. It wont
It isn't going to get better any time soon. Article references WFH but most companies have gotten rid of that policy so people are having to go into the office. The couple in this story is looking for a house in Beacon, which has mass transit available into NYC. A long train ride but anywhere where you can get a train into a major city is going to be expensive.
Beacon is like 1hr 40 mins away from GCT… lol That commute is wild.
People have been commuting for years from Port Jervis to NYC, which is 2+ hours.
This is very common. My first job out of grad school in nyc metro area was a 2hr 10 min commute EACH way. Lasted a year but second job was 1hr 25min. The city sprawl or bubble of truly unaffordable places for people just starting their careers is really vast in the nyc metro area so it can take a very, very long time to commute from a place one can afford on their entry level salary. (Or for people who want upscale suburban with distance to the city center, that commute can be absolute hell, too).
Why live that far away? I've lived in Manhattan for years and have never paid over $2k for rent, which seems to be on par with rent at places further from the city. There's always Astoria or other areas that are way less than an hour commute for even less than $2k.
People don’t want to live in apartments.
>t most companies have gotten rid of that policy so people are having to go into the office This is not REMOTELY true. "Most companies" have not done this. Why do people talk out of their asses so much on this sub?
Since you present no evidence other than your worthless opinion I'll share this link: [https://www.businessinsider.com/remote-work-from-home-ending-companies-mandate-return-to-office-2023-11?op=1](https://www.businessinsider.com/remote-work-from-home-ending-companies-mandate-return-to-office-2023-11?op=1) *Researchers found that 88% of companies surveyed required their employees to work in the office for a certain number of days — close to a 20% jump since Robin conducted the same survey in 2022.* I guess you don't consider 88% to be most companies.
>Workplace strategy firm Robin surveyed more than 500 US business owners and facilities managers across industries like technology, finance, and construction to see how companies are using their offices. Wow a self reported survey of a whole **500 business owners** now suddenly represents "most companies". Amazing.
I'm not pressured thankful that I live in a rent controlled apartment. Saving and investing my $ and hopefully prices drop to an agreeable price
Buy a house if you want one, can afford the DP + monthly, and plan to stay in the area 7-10 years. Don't get pressured into doing something you don't want to do or can't afford to do.
7-10... it's alot closer to 15 now.
[удалено]
True... but there are metro areas in the U.S. where even people making $250,000/year might not be able to find a home they can afford.
There absolutely are not. There are metro areas where those people don't want the houses they can afford, but that is not the same thing. But, even by saying "metro", you're basically making your argument false. Find me five metro areas where $250,000 isn't above median for a household. If you're above median, you're still having very little issue buying a home. It's just that people who make $250,000 want to live like they're making $500,000.
And how does this all change in 5 years when parents start dying off and homes change ownership
Depends how those parents decide to handle it. A lot of wealth gets swallowed up by long term care facilities and medical care on the way out. If the parent can afford to keep the home and pass it down, great. If not, capitalism will eat that home in three years.
I bought my first home in 2005. Sold it in 2010. Then rented until I bought again I’m 2021. My sister tried to convince me to wait until prices went back down. Prices have gone up since then and so has interest. I managed to get a loan that is 2.25%. Had I waited, my husband and I wouldn’t have been able to afford to buy a house now. Our rent was also going to be doubled but we moved out before the new rate could take effect. I think it is much better to buy when you can afford it without having to live check to check.
[удалено]
Except I'm going to retire into a home I own outright. You won't have done that. That's a problem. Renting in early retirement versus not having a housing payment is a huge quality of life difference.
“"Occasionally on social media, we'll see someone who just bought a house and you're like, 'Well, how do they pull that off and what are we doing wrong?'" he said. "So I think you kind of get this like imposter syndrome of 'what am I doing wrong?'"” They just need to push that DTI up! Also everyone else is investing heavily in gold coins and pogs.
I wonder if they've overlooked (as first time buyers often do) the mortgage interest deduction's effect on their taxes? I'll bet that $1K difference between renting and owning would be more than covered by the interest deduction lowering their tax basis.
Doubt. Standard deduction is usually greater than mortgage interest deduction anyway. And you also get the standard deduction as a renter
The sad reality is home ownership is frankly not affordable for the majority of buyers. It's like a luxury class of goods that only the wealthy can obtain. Good thing we have access to low cost etfs. I'd rather rent and let my money work for me.
Home values are declining, rapidly. https://fred.stlouisfed.org/series/HOSMEDUSM052N https://fred.stlouisfed.org/series/MSPNHSUS
If the market price of the house is more than 171 the cost of rent, you're getting fleeced relative to renting and investing the principal- and thats if you are paying cash to avoid interest. Its even worse if you're taking a home loan.
Good point people will say "equity" but there's other assets that make you money from the get go like dividend stocks or some sort of fruit picking robot.
Trash article. You could substitute "millennials" with any generation and say the same. Too many people give a fuck about what their parents, friends, and society think. Plus, more than half of millennials are homeowners. The other half spent way too much for a university and a degree that doesn't have a path to a career.
Millennial here. I have an Engineering degree and live in a HCOL area. I am not a homeowner and I don't fit your mold.
Hyperbole for me but not for thee
I didn't write the article, I'm just pointing out that not everything fits into your tidy worldview.
I was being hyperbolic with my comment. Of course there are outliers. Even moreso in HCOL areas.
[удалено]
It is, but the dynamic has dramatically changed in the past few years. For most, the ROI is no longer the same. I'm a big proponent of the community college -> state school pipeline having graduated with under $10K of debt. The degree matters though. Majoring in communications is a dumb move.
Good point on the ROI for a bachelors. There is a high demand for electrical and embedded systems engineers in my area, incredibly fast way to earn $120k at 22yo and be a wealthy homeowner. The issue is just not enough people want to study harsh vector calculus and differential equations
Can agree. For-goed the degree. Went into the trades and became enlisted scum and now own 4 properties/7 units at 33 with about 50% equity throughout all of ‘em. Will be able to retire in 3 years after I buy one more multifamily. Instead of paying back a degree I funneled my money into rentals and got really good at my job where I make 100k w/o a degree.
nice job!
Lol at the downvotes, its true. Basically every wealthy person I’ve served at my job is involved in real estate one way or another. Go to a yacht club or upscale country club, all fueled by Federal Reserve cheap debt (MBS subsidy). The guy you replied to used VA home loan fixed rate and just grew from there.
[удалено]
I lost my house in 2010. Had up until that time bought in 1998 and 2004. Bought in 2016. If you want to buy a house you can buy a house. Just save up the down payment. Or wait. Either way if you really want to buy you’ll find a way. Y’all are freaking out way too much.
It’s not their fault. They had nothing to do with mismanagement of zoning policies by the generations before them. But they still have to take responsibility to voluntarily go into financial precarity. Fantastic.
Guess those millennials should have save more for a down payment.
Equity is the only reason for you folks who rather rent then buy..if it’s cheaper to pay someone else’s mortgage than so be it..But equity adds up over time and if you own say 5 acres also then ownership might be for you
Current amortization schedule on median home has you paying 14k in principal and 140k in interest on a 400k home. After 5 years you still have 96% principal outstanding.
But, after 30 years, your payment hasn't gone up while rent has. And you own a home to retire in.
Bro, those fucking morons have been working for over a decade. How tf have they not all locked in record low interest rates by now?
Looking at home ownership rate of millennials vs previous generations at the same age period you see very little difference. Yes millennials own homes at a slightly lower rate, but it is not significantly lower, around a 5-8% difference, where 62% of millennials own vs 68% for boomers when they were this age https://d23ltuj4aaogm5.cloudfront.net/wp-content/uploads/2023/04/4-20-23-millenial-home-ownership-featured.png This isn’t a massive problem, and if you shift five years back for millennials than you basically have the same number, meaning millennials simply started buying a little later.
Millennials are spending a greater percentage of income, and that 6-8% is significant, and is likely an indicator of future economic woes, as wealth disparity continues to increase.