Managed this as a millennial - had absolutely nothing to do with my parents helping pay half my deposit. Nope, absolutely nothing to do with that whatsoever.
I have an offer for a family member to pay the entire deposit and I’m still not buying a house. I’m in top percentile income too but I’d rather retire early and meagerly rent than be stuck for the next 3 decades.
how is owning a home a barrier to early retirement more than paying rent with money you will never see again? you wouldnt be stuck for 30 years and if someone’s gifting you 20% it seems foolish not to. perhaps you should do some self education on retirement and money
Buying a house increases the switching cost of moving to seek new job opportunities. Since we’re no longer in the days of pensions renting makes sense. Imagine buying a home in Detroit before inscrutable politics and macroeconomics caused it to decline; buying a home means you risk holding the bag, especially if you don’t know how to manage risk from climate change in the coming decades.
Rent often isn’t too far off from the cost of buying. The main financial advantage of buying comes from appreciation, which I would say is a pretty big gamble.
The housing market is in a bubble right now. Buying a house is no guarantee of equity when the value can plummet and put you underwater at a moment’s notice.
The value of a paid off home is not the equity, that’s just numbers on a paper until you die and your heirs sell. The value is in living for peanuts for the rest of your life.
My house is paid off. My monthly housing costs are $735 for property tax that can’t increase more than 2% year due to California law. My neighbor three doors down with the same floor plan rents for $8500/month. That difference will only increase for the next 40 (I hope) years until I die.
Yeah I don’t think people realize that the biggest advantage of owning is to lock yourself into a stable housing cost. Even before it’s paid off, you lock in a more or less stable monthly housing bill. Maintenance sucks, big ticket repairs suck. But you’re always going to need somewhere to live.
I bought a place ten years ago, and if I was renting the same house today it would be about double the mortgage. Sure, I highly doubt that doubling will happen again in another ten years. But I doubt even more that we will ever see the prices back at 2015 level.
Even my not-paid-off house is saving me money, since rent has continued increasing and my mortgage has not. I’d probably be paying at least twice in rent for this house as what my mortgage payment is. Bought it 12 years ago.
You can afford a home on a single income if your income is 3-4x of the value of the home, roughly.
Where I live lots of people can afford homes, but they are just super angry they can’t afford the homes that they want. They don’t want a 2bed condo for 400-500K. They want single family home with 4bedrooms that’s about 3-4x the size of the condo, even if they don’t have kids, and are outraged such homes aren’t affordable for a single person.
But also, lots of people, don’t save intentionally and still complain they can’t afford stuff, even thought they could if they did save. These are the types who argue with you that 300/mo on gyms is a necessity… but they never go to the gym.
Average annual family income in the US is around $80k/a. Are you seriously suggesting that families should be looking for homes in the $20k to $30k range? What kind of home, exactly, do you think you get for that?
We used to dream of being next to the fish market dumpster. We had to live in a paper bag outside a hogfat rendering plant. The smell still hasn’t gone away some 50 years later, my wife says.
I think they worded that backwards and are referring to the adage (or maybe that is what the banks go off of?) that your loan shouldn’t be for more than 3x your income. So if you make 80k per year you can generally afford a $240k house.
Going above that 3x means too much of your income goes to paying for the house and you don’t have enough for other living expenses+maintaining the house.
Just as a real example, 70-80k/year is very feasible in the Philadelphia area. I saved up around 90k across a decade (with a worse income…) and bought a place for slightly over 350k. The thing is you NEED that initial down payment amount to make those numbers work, PMI with less than a conventionally mortgage down payment is a debt trap. Most people aren’t financially literate, and people with large amounts of capital take advantage of that in the lending and real estate industries.
If you can settle or pool resources this all gets easier, and if you have disabilities or make poor financial decisions it becomes impossible and you rent trap yourself. Renting still makes more sense for people with jobs that move around, though.
Managed this as a millennial - had absolutely nothing to do with my parents helping pay half my deposit. Nope, absolutely nothing to do with that whatsoever.
I have an offer for a family member to pay the entire deposit and I’m still not buying a house. I’m in top percentile income too but I’d rather retire early and meagerly rent than be stuck for the next 3 decades.
how is owning a home a barrier to early retirement more than paying rent with money you will never see again? you wouldnt be stuck for 30 years and if someone’s gifting you 20% it seems foolish not to. perhaps you should do some self education on retirement and money
Buying a house increases the switching cost of moving to seek new job opportunities. Since we’re no longer in the days of pensions renting makes sense. Imagine buying a home in Detroit before inscrutable politics and macroeconomics caused it to decline; buying a home means you risk holding the bag, especially if you don’t know how to manage risk from climate change in the coming decades.
Rent often isn’t too far off from the cost of buying. The main financial advantage of buying comes from appreciation, which I would say is a pretty big gamble.
The housing market is in a bubble right now. Buying a house is no guarantee of equity when the value can plummet and put you underwater at a moment’s notice.
The value of a paid off home is not the equity, that’s just numbers on a paper until you die and your heirs sell. The value is in living for peanuts for the rest of your life.
My house is paid off. My monthly housing costs are $735 for property tax that can’t increase more than 2% year due to California law. My neighbor three doors down with the same floor plan rents for $8500/month. That difference will only increase for the next 40 (I hope) years until I die.
Yeah I don’t think people realize that the biggest advantage of owning is to lock yourself into a stable housing cost. Even before it’s paid off, you lock in a more or less stable monthly housing bill. Maintenance sucks, big ticket repairs suck. But you’re always going to need somewhere to live.
I bought a place ten years ago, and if I was renting the same house today it would be about double the mortgage. Sure, I highly doubt that doubling will happen again in another ten years. But I doubt even more that we will ever see the prices back at 2015 level.
Even my not-paid-off house is saving me money, since rent has continued increasing and my mortgage has not. I’d probably be paying at least twice in rent for this house as what my mortgage payment is. Bought it 12 years ago.
You can afford a home on a single income if your income is 3-4x of the value of the home, roughly.
Where I live lots of people can afford homes, but they are just super angry they can’t afford the homes that they want. They don’t want a 2bed condo for 400-500K. They want single family home with 4bedrooms that’s about 3-4x the size of the condo, even if they don’t have kids, and are outraged such homes aren’t affordable for a single person.
But also, lots of people, don’t save intentionally and still complain they can’t afford stuff, even thought they could if they did save. These are the types who argue with you that 300/mo on gyms is a necessity… but they never go to the gym.
Ok boomer
Average annual family income in the US is around $80k/a. Are you seriously suggesting that families should be looking for homes in the $20k to $30k range? What kind of home, exactly, do you think you get for that?
This is how we get trailer parks in tornado alley. Or mold infested hovels.
Cardboard box next to the fish market dumpster.
We used to dream of being next to the fish market dumpster. We had to live in a paper bag outside a hogfat rendering plant. The smell still hasn’t gone away some 50 years later, my wife says.
I think they worded that backwards and are referring to the adage (or maybe that is what the banks go off of?) that your loan shouldn’t be for more than 3x your income. So if you make 80k per year you can generally afford a $240k house.
Going above that 3x means too much of your income goes to paying for the house and you don’t have enough for other living expenses+maintaining the house.
Now good luck finding a home for only $240K in an area that actually has decent-paying jobs…
Just as a real example, 70-80k/year is very feasible in the Philadelphia area. I saved up around 90k across a decade (with a worse income…) and bought a place for slightly over 350k. The thing is you NEED that initial down payment amount to make those numbers work, PMI with less than a conventionally mortgage down payment is a debt trap. Most people aren’t financially literate, and people with large amounts of capital take advantage of that in the lending and real estate industries.
If you can settle or pool resources this all gets easier, and if you have disabilities or make poor financial decisions it becomes impossible and you rent trap yourself. Renting still makes more sense for people with jobs that move around, though.
FTFY
The building next door, with 4 units of 1100sqft each (spread over three floors, ughhhh) is $1.6 million CAD per unit.
Poster is the grandma from the picture, can we get an AMA?
That’s a really big brush you’ve got there, really painting everything in broad strokes.
Yes its everyone else’s fault