I am only saying purchasing a place to live should be your top priority, it goes under one of the basic needs of food, shelter, clothing. Shelter that can be taken away from you at any given time is not going to cut it long term. You are basically asking me to imagine making one bad decision after another bad decision in order to prevent me from ever being able to afford the important thing which is property. You also forgot to mention someone in their early 20’s leasing a brand new car helping to insure that they will never have money saved. You make your own opportunities in life and America has millions of opportunities, land and housing for anyone that does not want to spend their entire life living up their own ***.
The Finance Thread
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There's plenty of places in the country that would be enough though. I "only" make not much more than that and it goes a long way here. To me $2200 a month just for rent seems insane. That's my mortgage, property taxes, homeowners insurance, utilities, insurance on four vehicles, health insurance, gas, and groceries combined. If I could work remote I think I'd try to find somewhere even cheaper to live than here.
I've only ever lived here, so maybe I just don't get it. One of my cousins moved to Seattle years ago and he had to live in his car for several years just to save up enough to rent a place. And he loves it there. So maybe I'm missing something. I get it if you have some high end job that you need to live in a HCOL area, but I don't get why regular people with regular incomes would live somewhere that they're priced out of basic existence.
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Well I live in the city in the Northeast so it's expensive af. A tiny house is over $550,000 right now. Rents are through the roof. They always have been but it keeps getting worse. I'd like to move somewhere cheaper but it's just not that easy. I WFH but the company I work for won't just let people move anywhere they want, you have to get special permission to move to another state. And there are people in my family with medical issues so I would feel like I'm betraying them by moving out of state. There may come a time relatively soon where they will need my help. So it's not as easy as just picking up and moving somewhere cheaper or I'd start looking into that.
I agree purchasing a place to live should be a priority if it's also a possibility. For many people it simply isn't a possibility. If you can't save for a down payment, you can't buy a house. There's no way of wiggling out of that hard fact.
Not sure what leasing a car has to do with anything, the person I know who I cited owns their car outright it's not a lease.
The United States has one of the least equal distributions of income and wealth, and therefore opportunities, in the entire post-industrial West. And as automation increases these inequalities will only get worse. The bottom 50% of Americans have very few opportunities to speak of. Upward mobility in the US is far lower than it is for our post-industrial peers. See the graphs below for details. In an economic system as unequal as the US is, having money and being born into favorable socioeconomic conditions maximizes your opportunity as well as your ability to exploit those opportunities. Conversely, being poor creates a dearth of opportunity. It's the old adage, it takes money to make money. That is especially true in the US. If you are born poor and have health issues you will probably stay poor.
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I see some nice houses here for like $250k, the issue is it would still be tight for me to buy that even if I put a big down payment. And not only that, after the crash that house would've sold for probably $120k at some point, who's to say it couldn't happen again, and then you're underwater without a job trying to make the payments. Working part time job somewhere if you could find one isn't going to cut it. That's what scares me with this wobbly economy. And now we have higher interest rates but house prices aren't budging where I am.
I do agree income inequality is an issues I do think the government needs to do more to ensure that people don't have to worry about not having a home if they genuinely aren't able to afford one. Something happens where you can't work or can't work a job that pays enough, what do you do? I think people should not have to worry that they won't have a place to sleep if something happens.
I do agree income inequality is an issues I do think the government needs to do more to ensure that people don't have to worry about not having a home if they genuinely aren't able to afford one. Something happens where you can't work or can't work a job that pays enough, what do you do? I think people should not have to worry that they won't have a place to sleep if something happens.
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^ Yep fair point, doesn't make sense to buy anything right now even if you have the cash, it's just going to depreciate in value. I think they will drop eventually it takes times for rising rates etc. to cycle through the economy and to be felt as lower prices.
Honestly the entire way our economic system is structured is the issue. The game is rigged unfortunately.
Honestly the entire way our economic system is structured is the issue. The game is rigged unfortunately.
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I don't know that they will drop as far as they did last time, since that seemed to a much steeper drop than usual. But I do think there will be some kind of drop, and right now just seems to be the worst time to buy that I've ever seen since I've been paying attention. Which admittedly, has only been a decade or so. But then again, I thought early 2020 would end up being bad but it's managed not to crash yet.
At least if prices do drop, even if you get a mortgage and the rate is high, you can (probably) refinance to a lower rate later on. With these high prices, you can't just refinance away the debt, you still owe whatever you buy it for. And also, with a higher price means your property taxes will be higher. Which like rent, can go up every year.
I bought my house in 2008 for $183,000, but the prices had yet to drop that much when I bought it. I had just joined the Air Force reserve in 2005 and was on full time orders. I don't remember what I was making but I remember averaging it out one time around $18 an hour. I rented the cheapest 1 bedroom apartment I could find for $450 a month. I already had a fairly new 2002 Pontiac Sunfire I bought used for $8,000 and I was basically able to save 35,000
living in that apartment until I bought my house using that as a down payment. I could sell my house for around $480,000 now. Within the last 14 years I probably put in over $50,000 just for repairs and other remodeling, landscaping projects. I probably paid around $30,000 in interest and refinancing fees. Maybe around another $30,000 for insurance and property taxes. I wonder if I sold my home today if I would recoup every single living expense I paid out in the last 14 years and then some.
living in that apartment until I bought my house using that as a down payment. I could sell my house for around $480,000 now. Within the last 14 years I probably put in over $50,000 just for repairs and other remodeling, landscaping projects. I probably paid around $30,000 in interest and refinancing fees. Maybe around another $30,000 for insurance and property taxes. I wonder if I sold my home today if I would recoup every single living expense I paid out in the last 14 years and then some.
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I was running some numbers today, and basing house prices now compared to what a similar house would have sold for in 2019-summer 2020, we would need a 60% drop in prices just to get the price similar again in my area. That doesn't include that interest rates have nearly doubled. A correction of 10-20% would not be nearly enough.
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Yah. But at least it gives us a little bit of a chance. It might be possible to buy something at a high rate then refinance later on when rates come back down. Honestly I think my only choice is to move to another state, somewhere cheap. My only concern with that I guess is the job market there if I end up getting laid off from my WFH job. Often the reason why home values are low in certain areas are because they lack good employment opportunities.
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Well ****.
Honestly, this is what it will feel like.
Honestly, this is what it will feel like.
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Definitely. You see houses for sale where the prices are cheap but what you don't know is it's a rust town with no jobs other than working part time at Dollar General or the corner restaurant. Which may not pay the bills.
We shall see if prices are going down and when. I know some think it will crater next year, but I think that's far too soon, the housing prices move slow, and are quicker to go up than go down. Layoffs and pay cuts are also going to be an issue if we/as we head into a recession, and that will cause many not to want to buy (or be unable to). I think that's a major concern at this point, and could delay it being an opportunity to buy even further until those areas start to correct into a stronger economy/job market. Which hopefully one could get back into a steady/good paying job after layoffs in time before housing prices shot up again.
If you have a stable job, and you know for sure your job is stable then this could be a great opportunity to get into the house you want at a good price. And I'd rather buy into the bottom of the market with high interest rates than do the opposite.
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I honestly don't think that will work. I don't think it's really a problem monetary policy can fix. Or fiscal policy either. The days of cheap labor and cheap energy and cheap financing are over. It feels like the end of an era. It's the new global macro-economic reality. This isn't the result of the actions of any one politician, though a decade+ of consensus around stimulative policies didn't help. The pandemic and the war were just the catalysts. The new reality is being felt across the globe and I don't know that the same old fiscal tools will do anything to help this time 'round. I think we're all just going to have to adapt to the new reality.
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My wife and I got pre-approval for a loan to buy a second rental property last week. Our first one is just our last house we decided to keep and rent out when we bought our current house. We'd been saving up a down payment for awhile. Now with what we've been approved for we're looking for a duplex or a lower priced quadplex. Rates suck right now, but as long as the numbers make sense we can refinance down the road if/when rates go back down. So now we'll be looking and ready to make an offer if something promising pops up.
My eventual goal is owning some storage units. Or some other small business my wife could run at least at first. Either way I feel like with how late of a start I got in life I'm going to have to take some risks to get where I want to be financially. Going to start here and see how it goes. I'm both excited and nervous.
My eventual goal is owning some storage units. Or some other small business my wife could run at least at first. Either way I feel like with how late of a start I got in life I'm going to have to take some risks to get where I want to be financially. Going to start here and see how it goes. I'm both excited and nervous.
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