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Not counting coastal cities and high cost of living cities, how do most people not afford homes? I used a mortgage calculator, and if a couple has a income of 80k (40k a person), 600 in monthly debt, and a down payment if 10k, they could afford a home of 300k! Even 200k will get you something decent. That’s a pretty nice home in most of America, and making 40k a year isn’t hard. What am I missing?
How hard is it to make an $80k household income in areas where a 2,500 square foot single-family home is $300k?
how do most people not afford homes?
[snip]
What am I missing?
A lot.
How far in the sand does one's head have to be stuck to ask a ridiculous question like this?
Quote:
Originally Posted by oregonwoodsmoke
Because people don't want to live where nice homes are $300,000. They prefer to stick to highly desirable areas and whine because they can't afford to buy a house.
This is almost as unaware of a statement as the OP.
People go where the jobs are. If that were not the case, highly affordable cities such as my hometown of Erie, Pa., would not have lost 30 percent of its population over the last 60 years.
I misquoted and thought I would correct my prior statement. My error.
Quote:
Originally Posted by Chas863
No problem. I just didn't want your incorrect statement to stand uncorrected and perhaps mislead others who didn't know. We all make mistakes. In fact, I remember one I made about 40 years ago.
My point was that here in Florida on a $300K house, you are $800 in before you ever pay the mortgage.
Homes are expensive. It isn't just financing a $300K note.
Not counting coastal cities and high cost of living cities, how do most people not afford homes? I used a mortgage calculator, and if a couple has a income of 80k (40k a person), 600 in monthly debt, and a down payment if 10k, they could afford a home of 300k! Even 200k will get you something decent. That’s a pretty nice home in most of America, and making 40k a year isn’t hard. What am I missing?
Not everyone has a yearly income of 80K. We never did, with the two of us working. And it's not just the mortgage. You have taxes, insurance, upkeep, etc.
Not counting coastal cities and high cost of living cities, how do most people not afford homes? I used a mortgage calculator, and if a couple has a income of 80k (40k a person), 600 in monthly debt, and a down payment if 10k, they could afford a home of 300k! Even 200k will get you something decent. That’s a pretty nice home in most of America, and making 40k a year isn’t hard. What am I missing?
I made over $80,000 a year by myself and had a FICO score of over 800, and I had to jump through hoops to get approved for my mortgage.
It also depends where you are and what property taxes are. Our home was $102,000 but property taxes are almost $7000 a year.
$40K minus taxes
New Car payments plus insurance and upkeep $600 a month from the budget each
Food and Miscalaneous $300 to $500 each month
Many have student loans $200 to $1000 month
Consumer debt/Credit card payment $400 monthly (some way more)
Living my best life monthly expense: $300
This is before utilities and other responsibilities. It is doable.
The above eats half of their paycheck. So for many it is hard to save the downpayment and closing cost.
Not many are willing to make the sacrifice. But you are correct. If many would slash their unnecessary expenses they could afford a house
Yep. But they just gotta have the latest and greatest iPhones, drive a new car, have a full-boat cable TV package and finance a lifestyle on credit cards.
Many are not educated in real-life economics such as amortization, the effects of compound interest and the true cost of 'credit'. They have been inundated with decades of consumerism that has taught them to look at economics as 'how much can I afford to spend each month?' The concept of 'delayed gratification' is foreign to them.
Even buying a house, I think that the 'average' people don't understand that a 30-year note is not the only option...but is the 'best' for the bank because the way the payments are calculated they have *all* of their money back at about the 1/3 mark of the payment schedule and the rest is gravy.
They don't understand that if they 'did without' all of the 'extras', scrimped, saved and invested for 10 years they could buy a house with a huge down-payment and only a 5, 10, or 15 year note, or even buy outright with cash by keeping their eyes open for the right opportunity.
Not counting coastal cities and high cost of living cities, how do most people not afford homes? I used a mortgage calculator, and if a couple has a income of 80k (40k a person), 600 in monthly debt, and a down payment if 10k, they could afford a home of 300k! Even 200k will get you something decent. That’s a pretty nice home in most of America, and making 40k a year isn’t hard. What am I missing?
Tons.
Some people are single - no dual income.
Property taxes and insurance can be pretty high depending on the location.
People look to buy where their job market is.
In my area, 200k buys a dump, which is true in many other areas as well. Most people want to wait until they can afford something decent.
LOTS of people make less than 40k a year.
You are not using common sense here.
Last edited by ChessieMom; 07-07-2021 at 02:48 PM..
Not counting coastal cities and high cost of living cities, how do most people not afford homes? I used a mortgage calculator, and if a couple has a income of 80k (40k a person), 600 in monthly debt, and a down payment if 10k, they could afford a home of 300k! Even 200k will get you something decent. That’s a pretty nice home in most of America, and making 40k a year isn’t hard. What am I missing?
Getting $10k together for a sizeable chunk of the population is never going to happen. Even if by chance they start on the road to saving up that amount they will find a way to screw that up.
Big reason why the sub prime loans were so popular back 14 years ago. Zero down and a loan that starts out with affordable payments. My question back then was why would anyone sign up for a sub prime loan? My first sentence answers that.
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