Trying to buy a house is 'playing a game you can't win'
Trying to buy a house is 'playing a game you can't win'
The US housing market has changed dramatically since the pandemic - an issue looming over the election.
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The median home sale price in the US has jumped by nearly 30% since the end of 2019, hitting $420,000 this spring.
At a time of rising property values globally, the leap has been one of the most dramatic in the world, according to the International Monetary Fund.
And that's not factoring in the added costs from higher interest rates, which now stand at roughly 7% for the 30-year, fixed-rate mortgage that is typical in the US, up from about 3% in 2020.
Homebuyers today need an annual income of more than $100,000 - well above the country's household median of about $75,000 - to comfortably afford a home in most places in the US, research firms such as Zillow and Bankrate say, and face monthly payments that have roughly doubled in just four years.
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We own a house. It's a nice house in a nice neighborhood, but in an undesirable town in an undesirable state, so it's worth very little comparatively.
Because of that, we can't afford to move.
We literally have to wait for my mother to die so I can inherit her money and her house. I hate how ghoulish that is, but that's how we've been forced to live. And we're some of the lucky ones.
I had a long talk with my daughter about this last week.
I bought a small 700 square foot house about a year and a half ago. I'll have it completely paid off in ten years.
My daughter made all the right moves and is making more money in her early twenties than she knows what to do with.
So here's the plan:
When my house is paid off, she'll have a house of her own.
I'll retire and go live with her.
Then we rent out my house, but not in the traditional way. We're going to look for somebody who is genuinely looking but unable to buy. We'll go in the rent to own model, so eventually the tenant owns my house and the daughter has cash from the proceeds to go buy another house and rent it to own.
I'm sure somebody on lemmy will find reason to punch holes in this plan and call us horrible capitalist pigs, but short of outright giving everything away, this was the best we could come up with to use family assets for the good of others without starving ourselves.
If I could take living with my mother, I would say that would be a great plan for us.
As some people who saw my threads in Casual Conversation about my trip to the Mayo Clinic, 10 days with her almost killed me.
I love her, but she is a nutcase. Not in any seriously dangerous or offensive way, but she is a nutcase.
My visit to my daughter's apartment did concern me in that I saw not one but two Scrabble sets on her shelf.
And she doesn't have means to make coffee. That part will get immediately remedied.
But seriously, she and I are quite close. I was telling her that my biggest concern going forward is living alone and going full blown dementia as I failed in securing long term care.
I also told her to never, under any circumstances, sign anything remotely related to my healthcare because the fine print will make her assume financial responsibility. Fuck that. Dump my withering winkled ass in a storm drain before I let that happen.
As long as it's regular Scrabble and not the stupidest board game of all time, Scrabble: The Presidential Edition
https://boardgamegeek.com/boardgame/39585/scrabble-the-presidential-edition
One electoral college is bad enough, wtf was scrabble thinking adding that as a rule lmao
I bought a house when I was in college. It was a shitty 900 square foot 2 bedroom for 40k. My mortgage was $109 a month. After I graduated and moved away, I tried two rent to own contracts. First one was a disaster. They paid for a few months and then after a couple of court appearances, they got evicted and owe me several thousand dollars.
The second contract was "successful." It was a professor of mine that went through a nasty divorce and had credit problems. Dude took the full term to pay me off even though I suggested that he take a loan in an attempt to rebuild their credit. Nope. Just gave me money each month.
Three months after paying me off, he left the house and moved into on campus housing for adults. Let someone buy it at a tax sale or something.
I don't get it. I know I'm probably more aligned with boomers than I am with my millennials, but why wouldn't you want to own your house that you've been paying for? Renting is nice because it's not your problem if something breaks, but the vast majority of rental owners are shitty and are going to fix things the cheapest way possible.
Upkeep can be a PITA, mentally as well as financially.
I found out that local housing co-ops offer 3 bedroom 2 baths for rent at like 800, honestly I'd prefer that over owning a home.
I don't get how you don't get it. I mean that with no animosity of any kind. I'm genuinely curious when people talk about buying a house like it's a common sense option.
As a millennial in my early 30's, the only people I know my age that own a house are people with parents that essentially handed them a fully built life when they came of age. As in, paid for college, bought their first (or first few) cars, floated them after college, paid for their weddings, then paid half or the full deposit on their "starter" home. And that's not a specific person I have in mind. That's every friend I have who owns a house. Their parents had that kind of money. Every other person I know that doesn't have rich parents (I'm in this camp) is working themselves to the bone just to scrape by. After 16 years in the workforce, 14 of those years being in a highly niche (but terribly paid) tech role, I can barely afford to keep a car running doing all of the work myself, let alone scrape together an extra $200 to get a secured card so I can finally start building credit. My pay checks are already consumed by the time they hit my account, and there's a seemingly endless backlog of debt from decades of poverty. My parents are finally at a point were they can help their kids at times, but it's in small amounts and they can only help one or two of us at a time. But, they're boomers who might never retire, so even taking small loans from them feels bad. It's an incredibly disparaging state of existence. I'm leaving out a lot of details for the sake of not writing a novel, but, I'm not financially illiterate, and I'm not giving up. I've just accepted the bleakness of my reality while I slowly grind myself (hopefully) out of it over the next 2 to 3 decades.
I'm not trying to whine, or point out your privilege. What I'm saying is; this is my reality. One in which the concept of "extra money" you can put aside for smart investments is a nice delusion to entertain. The fact that people like you are out there wondering why someone our age wouldn't buy a house boggles my mind, but also shows a very stark contrast in the lives of working/povery-class people and middle class and up. That is a huge problem.
But that's just my perspective. As I said, I'm genuinely curious to hear yours. How are you in a position where buying a house is the obvious option when statistics show that is very much not the case for most people under 40?
Edit: spelling.
So I was you. I wasn't financially stable until well into my forties. I would say I wasn't raised by anybody. Forget about no parental money. I had no parental guidance, and from that I made a TON of beyond stupid decisions.
Fast forward, and I finally got my shit together. I was able to get my daughter through college without debt and her mother sold her a car for a reasonable price.
So now she's in her early twenties making more money than I do, and she's always concerned with mismanaging it. But being who she is, she's also constantly worried that she's not doing enough good for others.
Her first house will be with her own money, but I was fortunate enough to help her get into that position.
Just on principle, I'm hell bent on leaving an estate to her even if she won't need it. From there, I just hope it further supplies her with the tools to realize her ultimate altruistic ambitions.
This being Lemmy, I'm sure something about this is wrong or evil or selfish. I can't accommodate every random Internet criticism, so I do the best I can.
As to the daughter, I'm just so proud of her. Aside from the line of work, she's artistic and empathetic and caring. You know, an exponentially better person than I could ever hope to be.
I joined the army before I was 18. I saved money while I was in Baghdad. My first house was 40k in 2006. I live in a small town in the middle of corn and soy fields. I have a union job. My wife and I are good about not blowing money. I put $20 bucks a week into different savings accounts to help pay for big expenses.
I'd love to own. Problem is, I did the math recently. Mortgage payments on a house in my area start at more than double what I'm paying for rent. And that's only the mortgage, not PMI or or tax or home maintenance costs.
To be fair, I live in a relatively HCoL area (just outside Boston). But owning is still wildly more expensive than renting.
It might work if I was married and we had two nice incomes. But I've also priced it out with a multi-bedroom house and renting out the other rooms. I'd have to charge rent above market rate just to break even. It doesn't make any sense to me.
I'm not denying that I got very lucky with my timing. But also I chose a very low cost of living area.
It was a shitty 900 square foot 2 bedroom for 40k. My mortgage was $109 a month.
How long ago was this? I wanted to do something like that in 2009, but banks refused to write a loan that small because (with laws limiting origination fees to a percentage of principal etc.) there wasn't any profit in it. (I ended up buying a 3-bedroom house for ~$100k instead, and the super-cheap house I wanted sold for cash to a flipper, who put an addition on it and sold it again a year later for ~$300k).
Dude took the full term to pay me off even though I suggested that he take a loan in an attempt to rebuild their credit. Nope. Just gave me money each month.
As the landlord/creditor, you could've reported the on-time payments to the credit bureaus yourself, I think.
It was 2006.
Yeah, I think you might have snuck in shortly before the origination fees regulations changed. Lucky!
I'm also in a small town and used a local bank.