Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
You're loony. Where in this country is renting cheaper than owning a house?
Rent for a 2br/1ba apartment in central Maryland is about $1,300 a month in decent suburbs. My 3ba/2.5ba house costs me $1,250 for the mortgage. If I were to rent this place out I could easily get $1,900 within the week of advertising it, and could likely get $2,100-2,200 if I didn't mind waiting a month.
I will say this though: most of my generation would be wise to shun the cities unless they have stellar job prospects and room for future growth. But if you're going to be working at Home Depot or Starbucks (cliche, but similar jobs as well) anyway you might as well do it in a small or medium sized town in the Midwest or the South where the cost of living is reasonable. You will still struggle, but my generation has to learn the value of that.
Southern California comes to mind...good luck as a new buyer purchasing a house and having your mortgage cheaper than rent.
Plus I don't know anyone in my age group (late 20s) who can afford a down payment on a "starter home" over $400K which is typical for LA/OC/SD unless you want a falling down shack in the ghetto.
But where I live now, yes it's cheaper to buy than rent, however the housing costs have shot up like crazy in the last 5+ years or so as there has been massive growth so while previously there were many affordable, perfectly nice homes for under $200K that number is dwindling and it's not unheard of for crazy bidding wars to happen over a house that's not all that special. If you move from a high cost of living area and can afford the homes that are more costly, then sure, but even here, purchasing a starter home is becoming more difficult for your average Joe/Jane.
Some random drive-by comments. We lend nationwide (portfolio) and our minimum square footage is 500 square feet..........Except NYC, the minimum is 300 square feet. That's not much room, and when these places go for 400-500K (or more), it's sobering.
Some of the student loan balances I've seen tells me this is our next financial crisis. Many have payments equal or greater than their housing payments. Where does it say you can only get a job if you have more education than common sense? I am not putting down education, but many used education as a way to escape starting their adult life. We all know former professional students.
There are many programs open to first time buyers with zero to 3% down. However, motivation is still the primary requirement to purchase a home. It's easier to give a cat a pill with your eyes closed than it is to get someone to buy that really doesn't want to do so.
For decades, I've believed there should be required mandatory life skills classes taught in all high schools. These classes should cover checking, savings, CDs, investments and all aspects of credit. There's enough material to be taught over a year. Some schools have started to incorporate this into their curriculum, some even have partnered with credit unions and opened mini or limited branches to teach students banking from both perspectives, consumer and business. But these schools are far too few in numbers.
But I agree, millennial, schmillenial. Broad brushes (and labels) don't work and do more harm than good. We need to get away from that habit.
So here is the thing. In my field, a bachelor's degree is required for any position. At least an associate's (but more often than not, a bachelor's). Sometimes they will say experience can be substituted for education, but I'd be willing to bet if someone has slightly less experience but they do have a degree, they will be hired instead. Is that right? Absolutely not, but that seems to be how it is. I went to college because I knew I needed that piece of paper to get a job in the field that interested me and it paid off. I would have loved to "start my adult life" at 18 instead of 21, but honestly my friends who started at 18 and never went to college or trade school are still working low paying jobs and living paycheck to paycheck. Not necessarily a smart financial decision.
Having said that, I do agree that not everyone needs to attend college and it's a shame trade schools aren't talked about as much anymore. I admire people who work in the trades because I'm not mechanically inclined at all and I think both ways of attaining education should be given equal attention because frankly both types of work (blue collar and "white collar") are equal in terms of effort and usually salary if you work long enough. But you have to have some sort of education to advance beyond a basic, entry level job that is low paying. Even admin type jobs at least require a 2 year degree.
I always wonder about those 0% down programs (or FHA 3% which requires PMI until you refinance if I remember correctly). I grew up in an area hit hard by the recession and a lot of people lost their homes or ended up upside-down because they also bought with a 0 or low percentage down program and ended up owing a lot more than their house was worth. It honestly scared me to see that and it does put me off from buying until I have a decent down payment set up. Worse, even now, while some areas have recovered, some haven't, so they're basically trapped unless they can take a financial hit when they move. I like having the flexibility to move for a better job if needed. I would have no problem selling a house here but where I grew up, I would be stuck.
I do agree with your statement about the life skills classes. I wish they taught those, they sure didn't when I was in high school.
It's from the French beaucoup, as in "Merci beaucoup" (thank you very much). Beaucoup (or buku or boku) bucks is very much money. Urban Dictionary: Boo Koo Bucks
I know that, silly. It's just that spelling the word "buku" or "boocoo" or "boku" makes the user of the word look like they just fell off the boat. ("You" in the plural, generic sense.)
I know that, silly. It's just that spelling the word "buku" or "boocoo" or "boku" makes the user of the word look like they just fell off the boat. ("You" in the plural, generic sense.)
Thats why I did not respond because I had a feeling you were being obtuse and pedantic.
...our greatest asset is the equity we have built up over the years by buying rather than renting. In my case several hundred thousand thousand dollars. If I had chosen to rent through the years and perhaps taken the easy route (no maintenance, freedom to move at will, etc) I probably would have payed about the same in rent as I did in mortgage.
This is highly market-dependent. Were you to have bought a house in my area, you'd not have seen much appreciation since the late 1990s. You would have done admirably well in the 1980s, but then towards century's end, the financial appeal of ownership would have been much vitiated.
Quote:
Originally Posted by pitroad
...It's a 100% guarantee rent will not provide any equity ......
But in some markets, there's nearly 100% guarantee that investing in one's residential house, provides lower rate of return that putting the money in a checking account, bearing 0% interest.
Quote:
Originally Posted by poppydog
Pitroad, how much have you spent on home improvements over the years? Ever had to put on a new roof, or new deck? New water heater? Remodeled a kitchen or bath? Those are things renters don't pay for. Subtract whatever you've spent there in your equations....
These are crucial points! It’s often overlooked, how traditional residential property-appreciation assumes fairly regular updates. Imagine living in a house for 40 years, and never updating the kitchen. Or the carpets. Or applying new paint. What happens to the value of this house?
By my reckoning, the main reason to buy rather than to rent, is privacy. True privacy means no HOA, no close neighbors and no pedestrian or vehicular traffic. It means acreage – massive acreage! – in an inaccessible, untrodden location. This is fairly easy to find in the American Midwest, but unfortunately it comes with a cost: zero or outright negative appreciation.
Quote:
Originally Posted by clawsondude
...Maintenance can be a pain sometimes. As far as that goes though, it feels much different working on your own property than doing it for your dad when you're a kid!
I take the exact opposite view. While working on my parents’ house as a teenager, I’d not worry about whether the home-improvements would or would not make financial sense. That was their problem. I was just the muscle. Second, upon completing job (hopefully correctly), I would be praised. Who is going to praise me now? The neighbors? The county commissioners?
Quote:
Originally Posted by pittsflyer
The crudy thing is you still have property taxes, utilities and insurance. That can stack up to $1,000 a month in my area and those are charges you can never escape. ...
Exactly. My house was paid off, long ago. But the property tax and insurance keep rising – even as the market-value keeps falling.
Quote:
Originally Posted by vision33r
Many young foreign millennials believe the 1st thing to do coming to America is to buy a home quickly. Some of the priciest properties are purchased by immigrants in large cities on both coasts and even in Canada. ...
This is because they don’t settle in East Bumble, Singehorseville, Ramshacklesburg or New Stasistown. They buy in or around major metro areas, university towns, job centers – where property is in demand.
Quote:
Originally Posted by Larry Siegel
...and in Cleveland and Pittsburgh you can buy a decent house for $5000 down and $500 a month principal and interest. Millennials really are buying them - it's cheaper than rent.
This is true throughout the Midwest, excluding Chicago and the marquee university towns. But even if buying is more affordable than renting, buyers will still be stuck with non-appreciating houses. Decades later, they'll have fallen behind their compatriots in the more expensive markets, while not really coming out far ahead of the local renters.
In my locale, things are evolving to the point that a livable but modest house, is reaching price-parity with a luxurious new pick-up truck. Let me reiterate that: a high-end (but still mainstream) personal motor vehicle, is selling for the price of a single-family house, on a fifth-acre lot, with a garage, a basement, 3 bedrooms and 2 baths. It is not uncommon, to see such a truck, parked in the driveway of such a house.
Quote:
Originally Posted by Serious Conversation
...With any luck, I'll be buying my first house within the next calendar year.
Update?
Quote:
Originally Posted by blind spot
Southern California comes to mind...good luck as a new buyer purchasing a house and having your mortgage cheaper than rent.
But where I live now, yes it's cheaper to buy than rent, however the housing costs have shot up like crazy in the last 5+ years or so as there has been massive growth ...
This is a perfect example, of how it may be cheaper to rent than to buy, but in terms of long-term price appreciation, it's still better to buy. In desirable areas, where the housing market is robust, even crashes and incongruous imbalances between renting and owning, still favor the owners. In a moribund market, even if it's cheaper to buy than to rent,
Hey guys, I am not criticizing anyone here. I am a Baby Boomer with kids, grand kids, and just recently GREAT grand-kids. I guess my question/concern was the somewhat recent trend to forgo buying homes as a lifelong investment. My baby-boomer experience was just the opposite and wondered what people were thinking today. Perhaps that is not the the way to go today .... just worry about the decisions being made today and looking for insight.
I guess that baby boomers and gen xer’s are all home owners and not renters.....
So here is the thing. In my field, a bachelor's degree is required for any position. At least an associate's (but more often than not, a bachelor's). Sometimes they will say experience can be substituted for education, but I'd be willing to bet if someone has slightly less experience but they do have a degree, they will be hired instead. Is that right? Absolutely not, but that seems to be how it is. I went to college because I knew I needed that piece of paper to get a job in the field that interested me and it paid off. I would have loved to "start my adult life" at 18 instead of 21, but honestly my friends who started at 18 and never went to college or trade school are still working low paying jobs and living paycheck to paycheck. Not necessarily a smart financial decision.
Having said that, I do agree that not everyone needs to attend college and it's a shame trade schools aren't talked about as much anymore. I admire people who work in the trades because I'm not mechanically inclined at all and I think both ways of attaining education should be given equal attention because frankly both types of work (blue collar and "white collar") are equal in terms of effort and usually salary if you work long enough. But you have to have some sort of education to advance beyond a basic, entry level job that is low paying. Even admin type jobs at least require a 2 year degree.
I always wonder about those 0% down programs (or FHA 3% which requires PMI until you refinance if I remember correctly). I grew up in an area hit hard by the recession and a lot of people lost their homes or ended up upside-down because they also bought with a 0 or low percentage down program and ended up owing a lot more than their house was worth. It honestly scared me to see that and it does put me off from buying until I have a decent down payment set up. Worse, even now, while some areas have recovered, some haven't, so they're basically trapped unless they can take a financial hit when they move. I like having the flexibility to move for a better job if needed. I would have no problem selling a house here but where I grew up, I would be stuck.
I do agree with your statement about the life skills classes. I wish they taught those, they sure didn't when I was in high school.
The issues with the trades is that they are often times done in inclement weather, at odd hours, in crappy dirty conditions, etc. I am almost complete with an A&P cert and found out that a lot of outfits are tearing down planes outside in the snow .... wtf. Why not pull it into a heated, radiant infloor hangar? Why not wait for nice days to do certain types of craft labor etc.
The craft labor itself is not the issue, I love craft labor, its the situations that employers will put you in to perform said craft labor. Thats why people, I think, shy away from it. It just boils down to a lot of employers and our culture being vicious and nasty.
I guess that baby boomers and gen xer’s are all home owners and not renters.....
Its harder to get out of a house that you "own" when the annual lay offs roll around every Christmas than it is an apartment. Millennials are dealing with one of the most vicious and nasty markets in a very long time, they need to be nimble and able to move at the drop of a hat. They also have to minimize expenses because they could go from making 30/hr to 10/hr over night.
Employers are at their absolute nastiest, they would sell your child literal poison if they could get away with it and it would make their share holders a few extra bucks. I don t know if I was living under a rock for the last 2 decades but it seems to me that the upper echelon of the USA is greedier and nastier than ever before.
You will even see posters on there espousing how moral and right share holder profits are above all else and how you as a human being are a schelep with no worth unless you have lots of "skills", of course the "skills" that are envouge shift with the wind and you to are suppose to get a new degree every couple of years otherwise you are "static" and "not with the times".
No one wants to disrupt the status quo so we all have to living increasing degraded qualities of life with each passing year, unless you get super lucky of course, meaning that you graduate with the exact right set of skills in the right area that is envouge and are able to maximize your capitalization before the winds pass and can save enough to live off the flawless investments you made.
As US citizens we have absolutely no means of recourse for corporate behavior, other than "don't shop there" because of course a 350 million person boycott works, they know it doesn't that's why they spitefully say it. Things that work, the corporation will vehemently fight.
This is highly market-dependent. Were you to have bought a house in my area, you'd not have seen much appreciation since the late 1990s. You would have done admirably well in the 1980s, but then towards century's end, the financial appeal of ownership would have been much vitiated.
But in some markets, there's nearly 100% guarantee that investing in one's residential house, provides lower rate of return that putting the money in a checking account, bearing 0% interest.
These are crucial points! It’s often overlooked, how traditional residential property-appreciation assumes fairly regular updates. Imagine living in a house for 40 years, and never updating the kitchen. Or the carpets. Or applying new paint. What happens to the value of this house?
By my reckoning, the main reason to buy rather than to rent, is privacy. True privacy means no HOA, no close neighbors and no pedestrian or vehicular traffic. It means acreage – massive acreage! – in an inaccessible, untrodden location. This is fairly easy to find in the American Midwest, but unfortunately it comes with a cost: zero or outright negative appreciation.
I take the exact opposite view. While working on my parents’ house as a teenager, I’d not worry about whether the home-improvements would or would not make financial sense. That was their problem. I was just the muscle. Second, upon completing job (hopefully correctly), I would be praised. Who is going to praise me now? The neighbors? The county commissioners?
Exactly. My house was paid off, long ago. But the property tax and insurance keep rising – even as the market-value keeps falling.
This is because they don’t settle in East Bumble, Singehorseville, Ramshacklesburg or New Stasistown. They buy in or around major metro areas, university towns, job centers – where property is in demand.
This is true throughout the Midwest, excluding Chicago and the marquee university towns. But even if buying is more affordable than renting, buyers will still be stuck with non-appreciating houses. Decades later, they'll have fallen behind their compatriots in the more expensive markets, while not really coming out far ahead of the local renters.
In my locale, things are evolving to the point that a livable but modest house, is reaching price-parity with a luxurious new pick-up truck. Let me reiterate that: a high-end (but still mainstream) personal motor vehicle, is selling for the price of a single-family house, on a fifth-acre lot, with a garage, a basement, 3 bedrooms and 2 baths. It is not uncommon, to see such a truck, parked in the driveway of such a house.
Update?
This is a perfect example, of how it may be cheaper to rent than to buy, but in terms of long-term price appreciation, it's still better to buy. In desirable areas, where the housing market is robust, even crashes and incongruous imbalances between renting and owning, still favor the owners. In a moribund market, even if it's cheaper to buy than to rent,
There are a variety of reasons NOT to buy and reasons to buy. In California, it may be cheaper to rent, but if you have kids, the really cheap areas could be in a poor school district and then you’ll end up paying more in the long run to pay for private school. I had a family member in that situation. Her rent was much less than buying, but to move into a good school district, that difference diminished and in 5 years from now it would probably be gone. In 7 or 8 years, the rent would probably be more than buying. Obviously if you have no kids, you can continue to rent.
I live in the Chicagoland area. This area has not done all that well in terms of increase in value, but the taxes are really high and variable. I moved from another state where taxes were reasonable and values were going up. I owned a condo there. (I am Gen X). I am still not sure it is worth it to buy anything here and just have my down payment money in investments for now. I feel like 1/3 of my payment here would be going toward taxes. I am not completely sure I will stay long term, so it does not make sense for me to stay.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
