Agreed. And I could never afford the house I own today, or any house really. My "starter" house (I hate that term) is my forever house.
“Say goodbye to the 20% down payment. Zillow says you’ll need to put down roughly 35%, or almost $128,000, to afford a typical U.S home”
- Thread starter RBH
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Agreed. And I could never afford the house I own today, or any house really. My "starter" house (I hate that term) is my forever house.
I mean, that's what happens when you turn homeownership into an investment vehicle. Everyone wants a piece of the pie.
Welcome to the neofeudal rentier economy where there is the reinstatement of landed gentry who do nothing but buy stuff up and leech rents from everyone, producing nothing and adding nothing to the real economy.
I am starting to think the way to solve this is more penalizing and limiting this rent-seeking investor class behavior, even moreso than just building more housing in general. In fact, more housing doesn't get built in large part because there is incentive to keep housing scarce with how easy it is to buy up it up en masse, given you have the money.
I am starting to think the way to solve this is more penalizing and limiting this rent-seeking investor class behavior, even moreso than just building more housing in general. In fact, more housing doesn't get built in large part because there is incentive to keep housing scarce with how easy it is to buy up it up en masse, given you have the money.
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I can see some densification happening in my city but there's two factors of friction here. First, because home development is still largely driven by profits, even new houses that are built more densely are now much smaller but 1) still expensive, 2) cheaply built to maximize revenue. At the prices they're being sold as it doesn't "feel" right to be paying that much and still have shared walls and cheap finishes.
The second factor is that even with more dense areas you still need cars because most of the city outside of these pockets of new denser developments are still hopelessly car-centric. You simply cannot function in most cities in NA without a car. I think over time that may change, and I'm certainly seeing some movement towards the "15-minute" layout but it'll take a very long time before an entire formerly car-centric city to be completely transformed, and that's assuming car/suburban-sprawl loving people won't push back (which they will).
I was fortunate enough not to have to put 20% down on my house. But I also had some grants that helped as first-time owner
Pretty much. My area is small town Midwest . About 2.5 hours west of Chicago, but you can buy a nice 3 bedroom for 200k or what would be considered luxury for 400k. Time for all of ya to move out here. It'll help increase the value of my house, but I'm not moving unless necessary due to my 2.9% rate. Also, there's no flooding or no tornados yet, just the occasional storm with high winds.
A family moved in across the street from Arizona they work from home. So it's starting to happen. I imagine, slowly, in the next 10-15 years ,this town will be much different due to remote jobs.
I literally don't understand how its harder.
If inflation is making everything more expensive, and the income gap is wider than ever, then in theory shouldn't there be less liquid cash wealth to go around?
Are we talking higher competition for dwindling inventory of very specifically desirable communities?
If inflation is making everything more expensive, and the income gap is wider than ever, then in theory shouldn't there be less liquid cash wealth to go around?
Are we talking higher competition for dwindling inventory of very specifically desirable communities?
The problem isn't getting approved for a loan it's winning the bid for a house and being able to afford the damn monthly payments.
I went looking for months this year and even as the interest rates are sky high it's fucking miserable trying to get bids accepted when you're fighting against people making cash offers or saying they'll put some obscene percentage down. I gave up. It's a nightmare
People might end up trying to make that happen quicker. I know doctors that are SOL with buying homes
I was extremely fortunate to be able to put down 20% on a 2-bedroom townhouse (with shared walls! it's practically an apartment!) last year, at 39 years old. It is the biggest purchase I will ever make, and this is going to be my forever home. No idea how anyone could afford anything bigger.
The best case for "preserving the view" is to:
- allow mixed development
- change double staircase rule to allow single staircase high apartments with more rooms as a result (no inner pathway between the two stairs cutting the building in half, taking away 20% of usable building space, allowing for more rooms in an apartment or bigger rooms
- fucking stop and delete the park space rule
- allow mixed-use housing, double houses, 2- or 3-floor houses in suburbs
- allow 10-30 floor affordable apartments in urban centers
- fucking develop an affordable, cheap, not-only-pointing-to-the-city-center, public transit system
those all will take heat from housing, because the ease of living apart from single or double-story suburb housing will make the whole market more affordable. Not everyone wants to own a house, if they could live in affordable apartments that are in the center of all that they need.
One of the best financial decisions I made was to buy way under what I could afford so I could do a 15 year mortgage. Only 35 more payments and my house is paid off. Blessed to not be dealing with current interest rates. That shit sucks and I feel for people.
I make really good money, but I dont save for shit. On my 3rd home and I put down 5% each time. So idk about all this.
So here in Australia, we have regional prejudice from banks despite them constantly saying they totally don't. When my partner and I went for a bank loan, we found most banks would not give us the typical 10-20% but instead wanted us to pay 30%+ and in some cases come up with 50% of the deposit. Thankfully we found Commonwealth who allowed us to only go in at 10% deposit.
It was fucking depressing being told that the place you have chosen to live, which mind you is significantly cheaper at $98k for a three bedroom house, instantly removes the standards given to anyone in X area footprint. I completely understand that house values in the rural/remote areas is significantly cheaper and thus return of investment is sometimes even risky, but to straight up discriminate based on post code is shit.
I know we are incredibly lucky to now own a home, albeit it is one that has had issues now with it having asbestos in the interior/exterior cladding, but it just made the feeling of finally being able to afford the thing everyone clamours for that bit less joyful. We should be actively encouraging further expansion to those rural areas, because they will not only uplift small, potentially dying towns due to cost of living, but it will enable reduction in impact heavy areas like built up cityscapes. Even more obvious now with things like work from home.
It was fucking depressing being told that the place you have chosen to live, which mind you is significantly cheaper at $98k for a three bedroom house, instantly removes the standards given to anyone in X area footprint. I completely understand that house values in the rural/remote areas is significantly cheaper and thus return of investment is sometimes even risky, but to straight up discriminate based on post code is shit.
I know we are incredibly lucky to now own a home, albeit it is one that has had issues now with it having asbestos in the interior/exterior cladding, but it just made the feeling of finally being able to afford the thing everyone clamours for that bit less joyful. We should be actively encouraging further expansion to those rural areas, because they will not only uplift small, potentially dying towns due to cost of living, but it will enable reduction in impact heavy areas like built up cityscapes. Even more obvious now with things like work from home.
Glad to see your town growing, it is really good to see these small towns prosper. Just gotta keep it at a decent size though so not to get radically big and break all the infrastructure.
I barely earn a living wage and won't qualify for a loan despite my credit score. I hope to find a 1 or 2 br hovel in flyover country I can pay cash on. Years of ramen, rice and potatoes (and a brutally fought divorce settlement), hopefully ending in something without too much asbestos in the attic and radon in the yard.
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When I was looking, we could do maybe 25% or a dollar amount close to the recommendation for one we really wanted, but we'd still get beat at times. And even then, the monthly payments are still appalling. There's just no way in.
I listened to a financial podcast the other day and one of the pieces of advice they gave to new parents was to buy a house near the university you want your kids to attend, and rent it out until they go to university to live in it.
I think cars still have a place and am not here to say to ban cars. I am only saying that with good infrastructures, you don't need to depend on a car to do a lot of your daily things such as taking the kids to school, going to the grocery, going to a doctor's appointment... etc. When more people are able to do those things without needing a car, then when you are trying to drive for work purpose or somewhere rural, you won't be competing on the road with the aforementioned people. When all the infrastructure is built for a single form of transportation, personal cars, then people lose their freedom to travel in alternative ways. I only want infrastructure to accommodate people who do want to travel without a personal vehicle for most of their daily needs.
As for density, I am referring to things like this. So much wasted space in San Francisco, ground zero for affordability crisis, on single family houses or low-density homes.
They should have more taller buildings that's at least 5+ stories tall at key areas and have train connections.
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Seems like social media and better jobs made young people move to big cities en masse and now everyone expects to be able to all buy in the same city. Instead of going back to the suburbs in a random town like their parents did.
Seems like that's why prices raced up in every major market.
Yup. I'm in the SF Bay Area and I'm seeing these 1.8M houses that have like $15,000 monthly payments and I'm like...who can even afford this shit now?
You can get an FHA loan…I paid 3% down on my 600k brand new house in Seattle mortgage as a married student. People just don't understand their options.
I think cars still have a place and am not here to say to ban cars. I am only saying that with good infrastructures, you don't need to depend on a car to do a lot of your daily things such as taking the kids to school, going to the grocery, going to a doctor's appointment... etc. When more people are able to do those things without needing a car, then when you are trying to drive for work purpose or somewhere rural, you won't be competing on the road with the aforementioned people. When all the infrastructure is built for a single form of transportation, personal cars, then people lose their freedom to travel in alternative ways. I only want infrastructure to accommodate people who do want to travel without a personal vehicle for most of their daily needs.
As for density, I am referring to things like this. So much wasted space in San Francisco, ground zero for affordability crisis, on single family houses or low-density homes.
They should have more taller buildings that's at least 5+ stories tall at key areas and have train connections.
.
You and I completely agree, I'm just thinking in the longer term where I wish more cities in the US were viable to live in without a car and do exactly as you say: go to work and back, get kids to school and back, run all your errands without needing to get on a car. In some cities things are moving in that direction but are doing so glacially, and even without any pushback from NIMBYs I think it would take a lifetime or longer before they realize that vision.
The SF example is on point, and is a case in point on how awful NIMBYism and using housing as a speculative investment vehicle can have catastrophic results.
Those are the avenues (both sides of Golden Gate Park) and they will never build up. We almost got a 8 story apartment building snuck in there last year but the SF NIMBY Voltron formed after 30 years of hibernation and made it vanish.I think cars still have a place and am not here to say to ban cars. I am only saying that with good infrastructures, you don't need to depend on a car to do a lot of your daily things such as taking the kids to school, going to the grocery, going to a doctor's appointment... etc. When more people are able to do those things without needing a car, then when you are trying to drive for work purpose or somewhere rural, you won't be competing on the road with the aforementioned people. When all the infrastructure is built for a single form of transportation, personal cars, then people lose their freedom to travel in alternative ways. I only want infrastructure to accommodate people who do want to travel without a personal vehicle for most of their daily needs.
As for density, I am referring to things like this. So much wasted space in San Francisco, ground zero for affordability crisis, on single family houses or low-density homes.
They should have more taller buildings that's at least 5+ stories tall at key areas and have train connections.
.
Yeah, especially since 500k is like a studio or single bedroom here. Maaaaybe I could see swinging 3k a month if you had dual 100k+ incomes, but I just don't see how it's possible otherwise
I have the downpayment money due to some long term money management/saving, but it does fuck all for me because I can't afford $6k a month on the mortgage. And that's for a cheap starter home in my area.
Based on my understanding of the text, it is not a requirement to have a 20% down payment, it is just that if you assume local median income and assume that one should not spend more than 30% of income on housing, then, based on the prices, you would need to have such a down payment. You could choose to have a lower down payment, but that would increase the housing burden beyond 30%. I think the 30% are pretty low, especially if you are living in an area with very expensive housing, because the other products you purchase do not scale linearly with the local median income. Food and services may, but products such as clothing, tech, books, and so on can easily be ordered online for prices that are not dependent on the local median income. Therefore, if you earn the local median and the local median is absurdly high (like >100k as cited here for Seattle) then it would be, from my perspective, reasonable to go beyond the 30%.
What is this rule? If I google it, I just get sent back to this thread.
That's the problem, they have increased property taxes quite abit in the last few years. So I initially went from a mortgage of $926 a month in 2014 to $875 in 2021 and now it's $1100 due to taxes and insurance. It's doable, but all essentials such as groceries, utilities, insurance , transportation, ect went up along with it. Our wages increased also, but not at the same clip. I have less money in the bank than I did 5 years ago.
No son? No problem! We will simply dispatch an ancient demon to follow your brood until such a time that the soul of a first born male can be collected!
Not from US, but I assume it's about minimum number of parking spaces per housing/area
CHAPTER 8 GENERAL PROVISIONS - 2018 INTERNATIONAL ZONING CODE (IZC)
ICC Digital Codes is the largest provider of model codes, custom codes and standards used worldwide to construct safe, sustainable, affordable and resilient structures.
codes.iccsafe.org
35% down payment is not going to change any of that dynamic. Ultimately, you either have the highest offer (making it worthwhile to pass on the best cash offer) or you have special circumstances that the seller vibes with.
You look at prices in California, specifically SF, or in Canada like Toronto - these homes are not for the middle class. Average American cannot afford a 1 million dollar house.
Unless you're a lawyer, doctor, or fund manager, you simply do not have the income to afford a 500k+ mortgage. 30-year MTG puts you at about $40k a year just on the loan, not including tax and insurance. Factor that in, and you're at $50k+ a year, just to stay in your home. That's as much as many earn in an entire year.
No wonder we have created a permanent renter life.
Unless you're a lawyer, doctor, or fund manager, you simply do not have the income to afford a 500k+ mortgage. 30-year MTG puts you at about $40k a year just on the loan, not including tax and insurance. Factor that in, and you're at $50k+ a year, just to stay in your home. That's as much as many earn in an entire year.
No wonder we have created a permanent renter life.
Where I live this is pretty much what 90% of sales in metro are going for anyway. :/
Things selling for 100k over initial asking price isn't even uncommon...
Everythings completely stuffed...
If you did that with current interest rates you'd be looking at a monthly payment of nearly $4k on the mortgage alone, over $5100 including taxes and fees (and that's assuming there's no HOA, and that your credit score is over 800). Guess college students today should just stop buying avocado toast and get a 2nd, 3rd, 4th and 5th job so they can do what you did.
Yeah, shit is fucked, and the only way it's going to get better is for many MANY more homes to be built. This is basically a straight up supply and demand issue. I'll probably be in my place until retirement at the least (about 20 years from now). Bought it in 2016. Just checked comparables in my area, and the prices are absolutely bananas.
Correct; the seller could not possibly care less how much you're putting down, they get a big check at closing no matter what. All they care about is the final price (the higher the better, obviously).
Correct; the seller could not possibly care less how much you're putting down, they get a big check at closing no matter what. All they care about is the final price (the higher the better, obviously).
I recently bought my first property and didn't realise that the mortgage only covered the official valuation (Scotland). So any amount you bid over that valuation had to be paid up front in addition to the deposit. If you get into a bidding war higher than the valuation then you're screwed.
Not saying it would was just replying to the person saying you can get a loan for such a low % down. That's just not the hurdle for people anymore.
That's brutal. Honestly though I'd imagine it helps prevent the sort of rampant bidding wars and bullshit we have to contend with here in the states. So maybe a double edge sword of sorts.