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Which is why the answer is to live at home and commute. The 7,000 undergraduate state university in my town is $14,408 in tuition and fees. There's bus service so you don't need a car on the days you can't get to campus on a moped/scooter. Minimum wage is $13.50. There aren't many jobs that pay less than $20. You can at least do your first two years there without needing any student loans. Work full time during summer break and Christmas break banking pretty much all of it. There are lots of part time jobs where you can study much of the time during the 7 months you're actually in classes.
I was 30 when I started, I had to support myself. I already explained the only NJ school that had my program was 2 hours from me. I did go to CC the first 2 years, as I also stated in my post, but that still left $32,000 for the last 2 years, again in the 90's. Now the same school for those 2 years would be $84,000. However, the salaries in my field have not increased all that much in that time. In fact due to Medicare changes, my industry experienced pay cuts in 2019. I'm making now what I made 15 years ago. Also it's now a Masters degree, when I graduated it was a bachelors. So it would be actually much more than $84,000 to complete the degree I completed back then.
Aside from salary, my health care was free through my employer in the 90's. Now average employee share can be hundreds a pay period for a family. When I worked in schools in 2000, I paid $5.00 a pay for the highest tier insurance. My niece who is a teacher, pays $900 a month as her share for her and 2 kids. And even with health insurance, I paid $14,000 out of pocket for my back surgery and the treatment that proceeded it in 2016. That would have been a small fraction of that 20 years ago.
Salaries have not kept up with rising costs. To me you'd have to be brain-dead to not be able to see how much harder it is to get a leg up today.
If the claim is that everyone should be able to afford a house because:
Quote:
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.
..then the point is that, since not everyone goes to college, it means that not everyone fits the above scenario and therefore cannot go prancing out to buy a house at 25 - 27. This "realistic situation" is not realistic for everyone.
I never understood who that was. I'm not a Twitter person either though.
Neither am I, but Lech Mazur is the owner of Advameg, which owns this site, and I guess he used at least one of his sites to display his tweets for a time.
There are people who think they can't afford to buy and they will have a bunch of rationalizations and excuses about how it would never work. Then there are people who want a house badly enough to figure out how to do it, and they just do it and they buy a house.
Quote:
Originally Posted by Sand&Salt
Yes---I sold my horse and my partner sold his Cessna 150 for the down-payment, and we still owed on both of them, lol.
Yeah, I don't understand poor people. If you want a house, just get rich, and if you can't get rich, just sell one of your luxury animals or airpanes, duh!
2,500sqft is the standard now? Lol I can't even imagine a house that big unless I had 5 kids, 4 pets, and 3 cars lol I'm plenty happy with half that size.
You may not have several home offices with very specific requirements. That takes care of two rooms in our home.
Blue collar workers cannot work remotely. They didn't just build affordable houses back then though, they had the G.I. Bill which helped a lot of vets buy homes, a program many on these threads would call socialist today. It actually was a socialist program, but it helped create the middle class. But now socialism is the "S" word and people have been unfortunately brainwashed to believe it hurts the middle class. On many threads here, you can find people complaining about the requirement for towns to build affordable houses, and in fact we had a president pretty much scaremonger people into believing it would bring gang members into the suburbs.
Now if corporations are buying up all the homes to resell or rent them at a premium (there is a thread topic on this I think on Real Estate but not sure), as well as people coming from foreign countries on real estate junkets to buy investment homes (a lot of wealthy Chinese do this, in fact they bought 11.5 billion worth of American real estate in 2019-2020, a sixth of the total real estate sold) I can't see how we ever get back to a healthy middle class that can afford homes.
The median Levittown house sold brand new for about $8k in 1951. The equivalent cost today would be about ~80-85k. If William Levitt wasn't a capitalist I don't know who is.
We CAN build housing units that would retail for about that much and still turn a profit. Safety and environmental regulations would probably push cost up to the low-mid 100s range, they could sell them for... say starting at about 140k, developers would make good money. Multi-family units we could push down to ~115ish. We choose not to.
I was 30 when I started, I had to support myself. I already explained the only NJ school that had my program was 2 hours from me. I did go to CC the first 2 years, as I also stated in my post, but that still left $32,000 for the last 2 years, again in the 90's. Now the same school for those 2 years would be $84,000. However, the salaries in my field have not increased all that much in that time. In fact due to Medicare changes, my industry experienced pay cuts in 2019. I'm making now what I made 15 years ago. Also it's now a Masters degree, when I graduated it was a bachelors. So it would be actually much more than $84,000 to complete the degree I completed back then.
Aside from salary, my health care was free through my employer in the 90's. Now average employee share can be hundreds a pay period for a family. When I worked in schools in 2000, I paid $5.00 a pay for the highest tier insurance. My niece who is a teacher, pays $900 a month as her share for her and 2 kids. And even with health insurance, I paid $14,000 out of pocket for my back surgery and the treatment that proceeded it in 2016. That would have been a small fraction of that 20 years ago.
Salaries have not kept up with rising costs. To me you'd have to be brain-dead to not be able to see how much harder it is to get a leg up today.
These changes did not happen over night. You stagnated.
The median Levittown house sold brand new for about $8k in 1951. The equivalent cost today would be about ~80-85k. If William Levitt wasn't a capitalist I don't know who is.
We CAN build housing units that would retail for about that much and still turn a profit. Safety and environmental regulations would probably push cost up to the low-mid 100s range, they could sell them for... say starting at about 140k, developers would make good money. Multi-family units we could push down to ~115ish. We choose not to.
I was talking about the GI Bill being a socialist program, not the developments. I agree with you. The problem is though that the demand for housing by the wealthy is at all-time highs, too. What is the incentive for a builder to build $140,000 homes when they can sell out a development of $500,000 homes? This is what caused the housing crisis/homeless crisis on the west coast, California, Oregon, Washington state. They were able to build and sell out very high-end homes as the tech industry took off there and brought in highly paid tech workers, and people sold their more affordable homes to developers who knocked them down and built $700,000 homes in their place.
You would need to incentivize it somehow, which would require some type of government incentive program that people would then denounce as socialist.
My alma mater that I earned a bachelor's degree in 2007 from, is more than double what it was when I went. It cost me about $12k a year for BOTH tuition and room and board. I had a job at Wal-Mart almost the whole time that ususally gave me 28-32 hours, and I typically worked another job for 10-15 hours too. I started at $7 an hour as a cashier and ended at $11 as a CSM (customer service manager). It wasn't possible to be fully independent at that wage rate... I could pay tuition OR pay my living costs at that wage. But I could come pretty close to paying both with other support, some scholarships, etc..
College costs were actually pretty stable from the mid 1990s to 2007.
It was the 2008-12 period that the cost absolutely skyrocketed about 15-25% per year in that period; that was the period where the state (Texas) basically cut its support. Most states have done similarly. After about 2010-11 here were inexorable annual increases in the 7-10% range to bring it to its current cost of attendance of about $26k per year.
The Wal-Mart job today would start at about $12 and work up to maybe $17. At 30 hours a week you'd make about 21k a year... not enough.
On top of that the town's rents have gotten more expensive as the major metro 40 minutes away has expanded to turn it into an exurb. I was able rent a room for $400 back then. 44 hours on the clock at $9 an hour at Wal-Mart paid for that; got that in about a week and half. When I started making a bit more money I moved up to my own 1br apartment that was about $650. Today minimum rents in the town are about $1000. Our student working at Wal-Mart making $13.50 an hour would need to work over 70 hours to pay his rent.
Last edited by redguard57; 07-17-2021 at 11:57 AM..
These changes did not happen over night. You stagnated.
Yes of course I did. I was a delinquent who grew up unsupervised in a home with a lot of issues, made a slew of mistakes, quit high school at age 18 and then went on 12 years later to graduate college Magna *** Laude with a degree I paid for myself. I then paid off student loans until my 40's. Am I supposed to be ashamed of that? All of that contributes to answering the question posed by OP, does it not? The question posed by OP was "why can't a lot of people afford good homes" and it can't be answered accurately by assuming everyone follows the same path of graduating high school and going to college, nor by assuming that anyone who can't afford a home must be addicted to iPhones and Starbucks. As tempting as it may be for some to want clear black and white answers to OP's questions, life is rarely that black and white. And the answers aren't as simple as "live at home and go to state college" because as my story and the posts about lower IQ people points out, not everyone has that option. Not everyone has a life that goes from childhood to adulthood in a smooth trajectory, some have obstacles others don't. But even for those that do, expenses are much higher for both college and life itself, and salaries have not kept up with the rising costs.
Over 60% of Americans don't follow the path of graduate high school and go on to college. In the past, they didn't have to in order to buy a home. All of this is answering the question of why posed by OP. Of course the changes didn't happen overnight. They rarely do. If they did happen overnight, more people would protest them. When they happen incrementally people don't even realize their way of life is being threatened, like the proverbial frog in the pot.
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This "realistic situation" is not realistic for everyone.
