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People are buying or refinancing due to interest rates. It's just that simple.
There are certain sectors of the economy that are hurting, the hospitality industry for one. This will soon pass. The highly leveraged will hurt the most.
And again people with good jobs are the ones buying luxury cars. The ones that can work from home and not waiting on an eviction when moratorium ends.
Not true from the circle I am in, about 10k people. Has to do with money management. Also, just because someone buys a luxury car doesn't mean they can pay for it....."has to do with money management." lol
Let the Jones' do what they do and don't worry about them.
Now you're moving the goalposts, though. You said everyone "should" be putting 20%, or else they really couldn't afford the home. We chose not to put 20% (or more) down for the very reason I posted earlier.
Why is it limited to 20% v. 50%? Why does the argument not still hold at 5% v. 20%?
20% is the traditional line in the sand for mortgages. PMI goes away there, many jumbos require 20%, and a few other things. I agree it's a bit arbitrary, but it's also a far cry from 5%.
If the "goalposts" here are 15% vs 20%, or even 10% vs 20%, I could see a little give provided the banks also started waiving things like PMI at those levels.
But here's the other thing about your particular argument -- you've already inferred that you could have put 20% down should you need to, and chose to put less down to try to grow that money in other ways. That's not an argument to affordability when you have the funds but choose to leverage in the name of investment. And if you read my original post, that's what I'm saying -- do you have the 20% to put down?
The far more typical case is someone walking in with $2,000 (or even $15,000/5%) to their name and wanting a bank to loan them $300,000 for a home. They're not asking for a no down mortgage to invest their money. They're putting everything they have on the table in hopes it's enough to buy a house. They're going to be house rich cash poor, and I'd like to think we both agree that's really the true test of affordability.
People can afford more home, people can work remotely, people do not want to go though more shut downs in an apartment, people are getting out of blue cities like SF and NYC.
Yup.
Covid has changed American ideas about a lot of things, and one of them is home owning.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Quote:
Originally Posted by middle-aged mom
The stimulus money was capped. An Individual filer with income > $99,000 and Joint filers with no qualifying children capped out at $198,000.
There are thousands of local economies and housing markets in the US. What matters is what the wage buys in the local market.
That's right. Here a 20% down payment on a fixer, entry level house (if you could find one) would require $120k, for the median home price of $994,886 it would require $199k down for the 20%. That is a little more than the median family income, at $183k. No one is going to buy a house on stimulus money. What I found strange is that people with that kind of income, most still working from home and saving commute costs still got stimulus money.
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