Home Ownership vs. Renting

[kalm]

Is owning your own home still a part of the American Dream?
Should it be? Without reading the details of the proposal, does well functioning capitalism that serves a strong middle class and democracy require some regulation here?

I think so.

[kalm]

https://www.cnbc.com/2023/02/21/how-wal ... -rent.html

[clenz]

I’m not sure I’ll actually own anytime soon. I’ve been renting for 3 years and the idea I’ll ever home is further away than it was when I moved out post divorce with $105 in my bank account.

What I can afford is dog shit that needs 3 times what I’d pay for the house in repairs/upgrades and there is a 95% chance it’s in a neighborhood I wouldn’t want to live in anyway.

Pretty great to work for one of the largest mortgage lending CUs in the Midwest, on the mortgage side of things, and be renting because of interest rates and housing prices.

Hell, even at this point renting is getting fucking stupid. I moved into a 2 bedroom apartment in a decent enough complex at the low income rate because I could use my kids to qualify for the income threshold. At this point I no longer qualify for that and my rent has gone up $300 in the last year and a half but it’s still half the price of any other place I’d be willing to look at renting. I get COL in Iowa is cheap compared to most places but I’m not paying 1500+utilities to fucking rent a 3 bed 1 bath apartment or condo.

Sent from my iPhone using Tapatalk

[UNI88]

Let's add the impact of laws, regulations, and fees meant to protect the environment by discouraging development on affordable housing.

It's had a yuge impact in Portland and I would guess other even more expensive cities on the west coast.

[dbackjon]

Biggest impact on housing costs in Phoenix have little to do with regulations (more like the lack of regulations)

Corporate ownership of homes, and STR's are constricting the market - tens of thousands of houses, condos, etc off the market as rentals or for sale, but available as hotel spaces via STR's.

And our GOP legislature has banned cities from doing any meaningful regulation of STR's.

[GannonFan]

Biggest impact on housing costs in Phoenix have little to do with regulations (more like the lack of regulations)

Corporate ownership of homes, and STR's are constricting the market - tens of thousands of houses, condos, etc off the market as rentals or for sale, but available as hotel spaces via STR's.

And our GOP legislature has banned cities from doing any meaningful regulation of STR's.

Don't doubt that - the AirBnB's of the world have been a godsend to the travel and tourism market, but as Newton observed every action has an equal and opposite reaction. How to balance all of this will be interesting, I'm pretty sure we'll not get it perfectly right.

[SuperHornet]

My take (and others may feel free to disagree):

1. For single people, it's probably best to rent, particularly given the responsibility for upkeep. You typically don't have that when you rent.

2. For married people, particularly those with children, it's probably best to own and just deal with the responsibility for upkeep, since owning a home helps propel one toward retirement.

Of course, this logic gets thrown on its head if one lives in an area where the average mortgage payment is less than the average rent payment. (Is that still a thing these days?)

[BDKJMU]

My take (and others may feel free to disagree):

1. For single people, it's probably best to rent, particularly given the responsibility for upkeep. You typically don't have that when you rent.

2. For married people, particularly those with children, it's probably best to own and just deal with the responsibility for upkeep, since owning a home helps propel one toward retirement.

Of course, this logic gets thrown on its head if one lives in an area where the average mortgage payment is less than the average rent payment. (Is that still a thing these days?)

Single in 20s yes, esp if you’re going to be making several moves. If you’re single in your 30s, and think you might be at a location for a number of years, best to buy if you can afford it. Good idea to start building equity.

Bottom line the time to buy, be it 20s, 30s, 40s, single or not, is when:
-You think you’re going to be somewhere at least several years.
-You can afford it.

Afford it by the old rule of thumb I think it was your mortgage shouldn’t be more than around 28% of your gross income.

Another one I vaguely remeber was you ahouldn’t spend more on a house than about 2 1/2 times your annual income. Course back before the last bubble you had people buying houses that were 4 to 5x their annual income.

[houndawg]

I’m not sure I’ll actually own anytime soon. I’ve been renting for 3 years and the idea I’ll ever home is further away than it was when I moved out post divorce with $105 in my bank account.

What I can afford is dog shit that needs 3 times what I’d pay for the house in repairs/upgrades and there is a 95% chance it’s in a neighborhood I wouldn’t want to live in anyway.

Pretty great to work for one of the largest mortgage lending CUs in the Midwest, on the mortgage side of things, and be renting because of interest rates and housing prices.

Hell, even at this point renting is getting fucking stupid. I moved into a 2 bedroom apartment in a decent enough complex at the low income rate because I could use my kids to qualify for the income threshold. At this point I no longer qualify for that and my rent has gone up $300 in the last year and a half but it’s still half the price of any other place I’d be willing to look at renting. I get COL in Iowa is cheap compared to most places but I’m not paying 1500+utilities to fucking rent a 3 bed 1 bath apartment or condo.

Sent from my iPhone using Tapatalk

A friend's property a couple of miles from me just sold for $350/$375k. 10 acres, pecan grove, two ponds, four bedroom house, detached garage, man cave/grow room. Probably the mortgage payment would be in the range highlighted. Taxes a little over 4k - Illinois' high tax reputation comes from Chicago and the collar counties, six hours south it is very affordable.

[clenz]

Cool. How many millennials do you know that can pull a down payment and then mortgage payment on a 375k loan.

Plus the escrow and whatever else is required for 10 acres.

On top of that I’m a single male with 2 kids.

The hell makes you think I can pull that? This isn’t the 1970s when boomers could buy a house for 3 days worth of salary and a firm handshake.


Sent from my iPhone using Tapatalk

[SeattleGriz]

We've always had to battle a high cost, low inventory market out here in the Seattle area and it's really starting to pound new home buyers. The only ones that can afford a new home are the ones working for Amazon, Boeing, Google or Microsoft.

This last summer a guy came in and bought a house in our neighborhood for $675K and flipped it for $1.5M. Was insane to watch my house jump $300K on Zillow simply because of that house.

As I grew up in a trailer, I've worked pretty hard to be a stepping stone for my kids. Make it so they didn't have to pay their way for everything like the wife and I. Our house is going to be a big factor in helping them and it is a shame the market is being gobbled up by equity firms.

[BDKJMU]

Cool. How many millennials do you know that can pull a down payment and then mortgage payment on a 375k loan.

Plus the escrow and whatever else is required for 10 acres.

On top of that I’m a single male with 2 kids.

The hell makes you think I can pull that? This isn’t the 1970s when boomers could buy a house for 3 days worth of salary and a firm handshake.

Sent from my iPhone using Tapatalk

Sure the 70s median home prices to median income ratios were low by historic standards, about 50%-60% for what they are now, but lawl boomers weren’t buying homes for 3 days, 3 weeks, 3 months, or even 3 years worth of salary. The below has the 1970s at about between 3.6 and 4.4 years median home price/median family income ratio,
https://www.longtermtrends.net/home-pri ... ome-ratio/
But boomers were also paying way higher interest rates on mortgages, negating much of the benefit of lower home prices vs incomes.

[BDKJMU]

With the above link the last housing bubble the number peaked at 6.81 and bottomed out at 4.73.

This housing bubble it peaked last May/June at 7.76, and was falling as of last data end of Jan to 7.54. Its undoubtedly still falling, probably in the 7.4s or 7.3s now. Still way too high. How much further it falls will depend on a host of factors- do interest rates continue to rise, do we have a major recession, local, state, fed policies, new home construction, price of materials, etc, etc.
https://www.forbes.com/advisor/mortgage ... expensive/

Since the US is short close to 3-4 million homes, esp starter, Local, state, and fed govts need to do everthing possible to get out of the way as far as regs and encourage mass starter home construction with a ‘Build Baby Build’ mantra..Unfortunately, that won’t happen in most of the country.

[houndawg]

Cool. How many millennials do you know that can pull a down payment and then mortgage payment on a 375k loan.

Plus the escrow and whatever else is required for 10 acres.

On top of that I’m a single male with 2 kids.

The hell makes you think I can pull that? This isn’t the 1970s when boomers could buy a house for 3 days worth of salary and a firm handshake.


Sent from my iPhone using Tapatalk

A few - but they live in boom areas where the asking price is just the start, I throw those numbers out by way of contrasting what the $300K - $400K range gets you in different parts of the country. In southern Illinois it can get you what I described, in Tampa it gets you a house in a gated community where your neighbor can hear you break wind.