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Hardly what I would call the "starter home" price range.
Maybe parents, rich or not, ought to be educating their young as to the difference between a starter home and a moving up home.
Depends where you live. We left California because of the ridiculous jump in real estate prices. My good friend chose to stay in LA. She and her husband (both lawyers) are looking into buying their first home right now. She is sending me links for 2 bed, 1 bath homes that cost over $500K. On top of their student loans, they will just barely be able to afford this.
Depends where you live. We left California because of the ridiculous jump in real estate prices. My good friend chose to stay in LA. She and her husband (both lawyers) are looking into buying their first home right now. She is sending me links for 2 bed, 1 bath homes that cost over $500K. On top of their student loans, they will just barely be able to afford this.
IMO that would be a bad decision. Wait a few years til the loans are paid down or off. If they can barely afford it what happens if let's say one gets laid off or has their hours cut or she wants kids ?
Living on the edge is what got so many people in trouble.
IMO that would be a bad decision. Wait a few years til the loans are paid down or off. If they can barely afford it what happens if let's say one gets laid off or has their hours cut or she wants kids ?
Living on the edge is what got so many people in trouble.
Hardly what I would call the "starter home" price range.
Maybe parents, rich or not, ought to be educating their young as to the difference between a starter home and a moving up home.
That's funny, a poster a reply or two ago just admitted to be a dual-income household earning 67K and getting parental handout of 10K and buying a 208K house, first time.....hmmm
I agree with you 200K shouldn't be a starter home, and my finances are offly similar to couple #1 above, heck I HAVE the 10K in savings in the bank right now and no car/loan/cc debt, none, but I sure wouldn't touch a 208K house expense with a 10-foot pole right now, talk about overextending myself and not knowing about it! That said, that's about the price range most people consider worth their time in the southeast/midwest for the expense of dumping cash on a house every month, as again proven by said couple above, which I find a realistic stereotype of the late 20-somethings/early 30 somethings. Not to mention, 200K is about the median price in America, which is an excellent argumentative point when compared to the median income in america of 40K, or 5x the median income gets you the median home. No I think TH77 got it right the first time. It takes subsidies as a young worker to live a median cost of living without overextending yourself. Living UNDER one's means is a virtue left for the few, and is quite disingenuous to have those beneficiaries of parental subsidies tell the struggling professional to go ahead and move and otherwise "learn" how to live within one's means. All under-30 folks I know of or otherwise interact with have afforded home owership as a function of parental subsidy,all of them, period. Absent that, it is not possible without overextending yourself. I'll continue renting until it's cheaper to own or the ghost of my grandfather pops up from the grave with a windfall or lost lottery ticket and I can join the gift money crowd.
Home Ownership expenses
--------------------------
$4000/yr - Property Taxes - Rochester, NY area
$ 800/yr - Homeowners Insurance - NY average
Subtotal = $ 400/mo
Total before mortgage = $2120/mo
$150,000 30yr 6.0% fixed mortgage = $900/mo
....
Oh, not to mention other periodic (but necessary) living expenses like haircuts, clothes, entertainment (even if its just barely), and don't even think about kids (daycare, diapers, etc).
We don't know how people do it, either (buy a house). We are renting from a friend who lives on site with us. Together my husband and I make $70,000. We have 2 kids. HOme ownership just doesn't seem possible in the near future. If we move (we've been thinking about TN) we might have a better chance.
[quote=hindsight2020;3715889]All under-30 folks I know of or otherwise interact with have afforded home owership as a function of parental subsidy,all of them, period. Absent that, it is not possible without overextending yourself. quote]
Wow. Thats a pretty sweeping statement. How about learning a skill that commands more than $30K per year.
So do the people who actually make a decent living have to get help from somebody else to buy a house? I know I didnt.
$67K combined income won't get you much, but not everybody is confined to those income limits.
Oh yea, and I just did a search on realtor.com for Rochester, new york and those homes are very affordable. For 150k you'll get a very nice house! You call that barebones? I think we've found the problem here, unrealistic expectations. There is also hundreds of very cheap homes in the 50k or less range! I think if you look hard enough, you'll find something you can afford. Just buy something you can afford.
3bed/2bath $149,900
I agree with you completely about not living in unaffordable areas like NYC and San Fran.
However, when you're looking at the Rochester area housing, and specifically the house that you pictured (I looked it up) you're paying $5,134 in taxes annually; add in PMI and you're monthly payment is over $1400 (with a $5k down payment) or just under (with a $10k down payment).
Also, the sub $50k are all in the Rochester City School District, and all in VERY unsafe neighborhoods (don't let the pictures fool you). You couldn't PAY me to send my kid to the Rochester City schools, with a 2006 graduation rate of 39%. And you're STILL paying $2k a year in taxes.
Payment + 6% interest: 1200.00
Taxes (1% of value) : 166.67 ($2000 per year)
Insurance (.5% of value: 83.33 ($1000 per year)
Maintenance (1%) : 166.67 ($2000 per year)
--------------------------------------------------
Total Monthly Payment : $1616.67
How in hell can anyone afford this unless RICH PARENTS Help them out???
ummm...get a good solid paying job.
You do realize that most people do not have rich parents and that most people do own their own homes correct????
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