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I hate this obsession some people have with how others choose to spend their money.
The points of my post were related to the OP's question. However, when the superficial becomes an obsession rammed down peoples throats through every advertising medium. When teens kill over a name brand coat or tennis shoes, when the culture has shaped peoples values to equate more stuff to being a higher quality individual, then people do have the right to be appalled and speak out about those that follow blindly.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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That would mean with the median home in King County at $400,000 that the required salary would be $120,000, yet the median family income is only half that, about $68,000. I guess mot that many people pay attention this rule of thumb.
That would mean with the median home in King County at $400,000 that the required salary would be $120,000, yet the median family income is only half that, about $68,000. I guess mot that many people pay attention this rule of thumb.
well 120k split it into a couple, thats 60k per year, or 28 an hour. so both parents have to make 28 an hour to buy a home safely here.
The points of my post were related to the OP's question. However, when the superficial becomes an obsession rammed down peoples throats through every advertising medium. When teens kill over a name brand coat or tennis shoes, when the culture has shaped peoples values to equate more stuff to being a higher quality individual, then people do have the right to be appalled and speak out about those that follow blindly.
And to add to that list....when people borrow for homes irresponsibly and it takes the economy into the toilet as a result, we have a right to speak out. Yes, I get it. The banks were at fault, too...but that does not excuse the irresponsible borrowers.
People are idiots. Why would you pay 3 to 4 times your household income for a home in this interest rate environment? Unless you have NO PLANS to move and are 100% assured of your income it will end badly. Home pricing is a function of interest rates and payments. People buy the payment.
We are in a period of historically low rates. A 200,000 mortgage @ 5% is only 1074 per month. If rates rise to the historical norm of 8.5% that same home would cost 1538.00 per month.
Good luck selling the home to someone else if life events force you to make a change. The pool of qualified buyer shrinks with every tick rise in interest rates. The rise in interest rates will result in a decreasing valuation of your "investment".
The "icing on the cake" is that household income in the United States has been DECLINING over the past ten years which further reduces the chances of home appreciation.
Buy a house today and you had better LOVE it. You should be 100% positive you will want to live there for the next 30 years as well.
THIS^^^^^. Well said. The rank and file are not buying the homestead, they're buying the PAYMENT. Furthermore, as you have highlighted, households age 20-59 don't homestead in this American labor surplus economy. People get forced out of domicile all the time. Compound that to the singular direct correlation between eligible buyers and interest rates, and you have nowhere to go to unload when interests rates rise.
I would never drop that much liquid into a house. Houses are vacuum cleaners, mere utilities. As such, the cheapest house I can find with a school district I can live with for my children is the ticket. Underbuying also gives me breathing room in the likely event of having to unload due to job loss/transfer.
Housing in New england jumped the shark a long time ago. That's why the young are leaving in droves. The cheaper roof in the South or Midwest fulfills the shelter requirement just as well as the overpriced cottage in Boston, and it costs 1/3. The median National Household income is 60K. By that measure the median home price should be 120K...but it isn't, it's closer to 200K. People are overpaying for housing. Now, you want to do that willingly because you get a high out of having a huge house? Knock yourself out. But don't call it an investment, because it ain't. It's a utility, a liability in the ledger at that.
EDIT: To add. I'd never bet the house payment on a dual income household. Man that's asking for trouble in the event people start diverging from the common goal or a divorce. We have a saying in aviation regarding underpowered piston twin engine aircraft: the second engine merely takes you farther to the scene of the crash. Dual incomes are a worse proposition than merely sucking it up on one income when it comes to meet black on household expenses. Talk about relationship mortgaging.
THIS^^^^^. Well said. The rank and file are not buying the homestead, they're buying the PAYMENT. Furthermore, as you have highlighted, households age 20-59 don't homestead in this American labor surplus economy. People get forced out of domicile all the time. Compound that to the singular direct correlation between eligible buyers and interest rates, and you have nowhere to go to unload when interests rates rise.
I would never drop that much liquid into a house. Houses are vacuum cleaners, mere utilities. As such, the cheapest house I can find with a school district I can live with for my children is the ticket. Underbuying also gives me breathing room in the likely event of having to unload due to job loss/transfer.
Housing in New england jumped the shark a long time ago. That's why the young are leaving in droves. The cheaper roof in the South or Midwest fulfills the shelter requirement just as well as the overpriced cottage in Boston, and it costs 1/3. The median National Household income is 60K. By that measure the median home price should be 120K...but it isn't, it's closer to 200K. People are overpaying for housing. Now, you want to do that willingly because you get a high out of having a huge house? Knock yourself out. But don't call it an investment, because it ain't. It's a utility, a liability in the ledger at that.
EDIT: To add. I'd never bet the house payment on a dual income household. Man that's asking for trouble in the event people start diverging from the common goal or a divorce. We have a saying in aviation regarding underpowered piston twin engine aircraft: the second engine merely takes you farther to the scene of the crash. Dual incomes are a worse proposition than merely sucking it up on one income when it comes to meet black on household expenses. Talk about relationship mortgaging.
also the part i dont understand is why people think im willing to pay more money for an aging home? i just do not understand it...people move into an old house, buy new appliances, get new floors, and create a garden then they think its worth 40% more than they bought it for. its still the same structure with age, im not paying for it.
there are plenty of ways people are going about having low mortgages and some even choose no mortgages (although that is like living in the old days.
i have a simple conversation with coworkers about trailer homes all the time. if you could just leave the ego behind, households that make 60k/yr could own a trailer on a large lot of land and have next to zero mortgage and afford better things. but its part of the 'american dream' to have a suburb house with a white fence that they cant afford. its a status issue, people think they will be frowned upon for living in a cabin or trailer and not having mortgages. the ones that dont care about what others think will be the ones living it up.
when people decide to take out loans for 200k+ i cant believe they are so careless to buy into an old structure that someone else planned out. for that kind of money i would assume youd at least construct the blue prints to your home. or the people that buy into subdivision lots that are literally 5 ft from your neighbor, you might as well just live in an apartment.
I bought my first home with cash. It is a small house on 15 acres in Tennessee. It gives me peace of mind to know all I have to pay to live here is tax and insurance. I don't care about school districts or having nearby restaurants or shopping.
I guess it is all about priorities. I look at subdivisions as just about the WORST way you could possibly live. Neighbors within ten feet of your home.......
EDIT: To add. I'd never bet the house payment on a dual income household. Man that's asking for trouble in the event people start diverging from the common goal or a divorce. We have a saying in aviation regarding underpowered piston twin engine aircraft: the second engine merely takes you farther to the scene of the crash. Dual incomes are a worse proposition than merely sucking it up on one income when it comes to meet black on household expenses. Talk about relationship mortgaging.
In her book "The Two Income Trap", Elizabeth Warren pretty much said the same thing.
In 1995, after the 20% down payment, my townhouse cost 2x my income or 1x my household income. I was 28 then. It was never a struggle to pay the mortgage if one of us was unemployed.
also the part i dont understand is why people think im willing to pay more money for an aging home? i just do not understand it...people move into an old house, buy new appliances, get new floors, and create a garden then they think its worth 40% more than they bought it for. its still the same structure with age, im not paying for it.
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when people decide to take out loans for 200k+ i cant believe they are so careless to buy into an old structure that someone else planned out. for that kind of money i would assume youd at least construct the blue prints to your home. or the people that buy into subdivision lots that are literally 5 ft from your neighbor, you might as well just live in an apartment.
Because inexpensive, new houses on large lots are out in the middle of BFE around here, and our family would prefer to have a short commute, an excellent school district, and easy access to healthcare and other amenities. Location, location, location.
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