How can a lot of people not afford good homes? (build, cheaper)

[ss20ts]

Originally Posted by CarnivalGal

Actually, I just call it house payment. I, and most other people I know, say, "My taxes went up," not, "My mortgage went up." Because their mortgage didn't go up. And, yes, this is actually comes up in conversation a lot, because I live in Texas, where our property values are re-assessed and taxes change every, single year. And when I say change, I mean go up, especially now since the city I live in has seen one of the largest increases in property values in the country.

I live in NY....the land of annual tax increases so your mortgage payment goes up. And goes up I mean the taxes increase by hundreds or even thousands. You can want to see property taxes? Come to NY and NJ. We'll show you how they're done. They're outrageous here.

[ss20ts]

Originally Posted by Mightyqueen801

No, "white" is not blocked, but I can't think of what he could have typed that would asterisk four letters and leave just the e.

Typing an S instead of a W?

[ocnjgirl]

Originally Posted by ss20ts

Typing an S instead of a W?

They are close to each other, maybe that was it. It's obviously not the word white or white male since it's been repeated multi times.

[NORTY FLATZ]

I think a better question could be-

How can we help younger people get into a house as an owner?

There’s gotta be a way, without throwing $$$$$$$$$$$$$$$$$$$$ at it.

[germaine2626]

Originally Posted by Berteau

40k a year is like $20/hour. Minimum wage in many parts is $15 an hour. How can someone who’s halfway motivated not reach that income by their late 20s?

Originally Posted by EonBlueSyZ

I've wondered the same thing.

Let's take a (seemingly) realistic situation:

Somebody graduates college with minimal debt, as they didn't take out $50k a year to live in a $2k a month apartment on campus and live the high life, unaware they were paying for it.
They get a (fairly low) starting offer of $40k, and live in an apartment for $1k a month. After investing 5% into their 401k that the company matches, they start aggressively paying off their student loan debt, which takes 3-5 years.

At this point, they're probably up to at least $45k, even if they stayed in the same job and only got incremental merit increases. They've also been earning 10% in their 401k, they have no debt leftover, and they can start saving the 5% required for a down payment, which, as OP pointed out, can be as low as 10k ish.

They're now a homeowner at 25-27, with no other debt other than the mortgage (which is secured debt), on a single income under $50k.

If you added a second person to the equation, there's a reality in which the home could be 50-100% paid off by the time the couple is 30, at which point they now have no living expenses the rest of their life other than taxes.

Note: to my knowledge, none of these #s are ridiculous or outrageous. In fact, I'm pretty sure somebody could easily get a job out of college for more than 40k, and move up to more than 45k 3-5 years later. So, if anything, my timeline is LONG, not short.

So what gets in the way?

- Credit card debt,
- Car debt,
- Living above means,
- Poor rationalizing that owning isn't as good as renting,
- The allure of minimum payments,
- Poor financial literacy,
- Etc.

Oh, come on. Be realistic! How many people do you actual know, and discuss finances with, in the target age range?

My children and many of my nieces and nephews and friend's children are in the late 20s to early 40s. All are from middle class to upper middle class families. College expenses and student loans were a very common discussion among my friends and relatives for the last 20 to 25 years. Unless they had an unusual situation where their parents/grandparents paid all, or most, of their college expenses or they lived at home for two to four years, they all had fairly substantial student loans, even with working and being frugal. Most of the college grads that I personally know in that age range finally paid off their student loans in twelve to fifteen years, in their middle 30s. And, then could finally start saving for a house.

Of the many, many people that I know in that age range perhaps only 25 to 30% started out with a job that paid today's equivalent of $40,000 a year. And, those were mostly engineers or had similar high tech jobs. The others had much, much lower paying jobs, a few at minimum wage or only slightly above for the first few years out of college. You certainly can not start saving for a house when you are earning minimum wage or slightly above AND paying off student loans.

Of the dozens of college grads where I know them, or their parents, well enough to know their financial situation (at least roughly) only two were able to buy a house in their mid to late 20s. One received a substantial amount of money as an inheritance (which she used as a down payment) and this was after her college education was 100% completely paid by a combination of scholarships and money from her parents and both sets of grandparents.

The other person who bought a house at age 26, spent all four years of college living at home. After he graduated he lived at home for another five years to save money for a house. His fiancé (now wife) also lived at home during college and after she graduated. Neither of them ever lived away from their parents until they got married and bought a house together. From things that his mother has said, it is pretty obvious that the couple was ill-prepared for the realities of life away from mom and dad taking care of everything in their lives. Even common expenses like paying utility bills (electricity, gas, internet) and buying groceries and meal planning were completely new to both of them.

YMMV

BTW, minimum wage in my state is $7.25 an hour.

[CarnivalGal]

Originally Posted by EonBlueSyZ

I've wondered the same thing.

Let's take a (seemingly) realistic situation:

Somebody graduates college with minimal debt, as they didn't take out $50k a year to live in a $2k a month apartment on campus and live the high life, unaware they were paying for it. They get a (fairly low) starting offer of $40k, and live in an apartment for $1k a month. After investing 5% into their 401k that the company matches, they start aggressively paying off their student loan debt, which takes 3-5 years.

At this point, they're probably up to at least $45k, even if they stayed in the same job and only got incremental merit increases. They've also been earning 10% in their 401k, they have no debt leftover, and they can start saving the 5% required for a down payment, which, as OP pointed out, can be as low as 10k ish.

They're now a homeowner at 25-27, with no other debt other than the mortgage (which is secured debt), on a single income under $50k.

If you added a second person to the equation, there's a reality in which the home could be 50-100% paid off by the time the couple is 30, at which point they now have no living expenses the rest of their life other than taxes.

Note: to my knowledge, none of these #s are ridiculous or outrageous. In fact, I'm pretty sure somebody could easily get a job out of college for more than 40k, and move up to more than 45k 3-5 years later. So, if anything, my timeline is LONG, not short.

So what gets in the way?

- Credit card debt,
- Car debt,
- Living above means,
- Poor rationalizing that owning isn't as good as renting,
- The allure of minimum payments,
- Poor financial literacy,
- Etc.

How do they graduate from college with minimal debt? Not everyone has a family that can help them out. The days of just working your way through college, like I did, are long gone. I paid about $1000 a year in tuition in 1990. A quick Google search shows that in-state tuition, at that same school, is now $11,581. And that's just tuition, not fees, housing, etc.

[Mightyqueen801]

Originally Posted by ss20ts

Typing an S instead of a W?

I think you've got it. With the proximity of the two letters on the keyboard, that makes sense.

[Mightyqueen801]

Originally Posted by ocnjgirl

They are close to each other, maybe that was it. It's obviously not the word white or white male since it's been repeated multi times.

Besides the fact that idea that "white" would be blanked out on a site owned by a Polish man using techs in Poland is pretty unlikely.

[Mightyqueen801]

Originally Posted by CarnivalGal

How do they graduate from college with minimal debt? Not everyone has a family that can help them out. The days of just working your way through college, like I did, are long gone. I paid about $1000 a year in tuition in 1990. A quick Google search shows that in-state tuition, at that same school, is now $11,581. And that's just tuition, not fees, housing, etc.

Not everyone goes to college in the first place.

[ocnjgirl]

Originally Posted by CarnivalGal

How do they graduate from college with minimal debt? Not everyone has a family that can help them out. The days of just working your way through college, like I did, are long gone. I paid about $1000 a year in tuition in 1990. A quick Google search shows that in-state tuition, at that same school, is now $11,581. And that's just tuition, not fees, housing, etc.

My school was $16,000 a year tuition alone, in the early 90’s. Now it’s over $40,000 a year. If you want to major in PT, OT, or other specialized allied health programs there aren’t a lot of choices. The only college in NJ that offered my program was 2 hours away (mine was in Philly) so I wouldn’t have been able to commute. I also didn’t go to college till I was almost 30. His scenario is an idealized scenario, there are a lot of us that worked right out of high school and didn’t go back till later. But even at a young age to think most majors can be had without debt is fantasy. As is a city with $1000 a month apartments with $40,000 a year starting salaries.