I think the issue is what if you have no parents or parents with no money (or negative moneys). You could do everything right, go to school, get a professional job, and still not be able to buy a place.
The housing market is definitely fucked worldwide. Many don’t have parents with money and can only rent or not even move out of their parents house.
Some of us got lucky with minimal down payment from their parents 5-10 years ago. Its just ridiculous how the market changed in such a small time. Like the houses are still the same, the population did not grow exponentially. Wtf is going on?
I thought I got hosed 10 years ago but when I look at prices now it is night and day. The demand has pushed people into smaller towns and into the rural areas so now I get to see a modular home that sold for $75,000 10 years ago be listed for $300,000 and sell.
The cost of new houses is not helping and talking with some small scale builders (they can only build 1 or 2 at a time) the cost to build is high enough to give many pause.
This is what happens when real estate becomes your nations biggest industry.
I have seen houses prices in some places in USA and property taxes. I hope you have very high salaries ( like more than 3-4 k / month ) . the property taxes sometimes are highter than a rent here ( italy ) in a medium size city. I mean with 6k / year you can rent a 2 room apartment not so far from the city center ( like 15 minutes by car )
My buddy is a small scale builder and he’s on the sidelines currently. They have a few lots to build on in a subdivision. He’s decided not to start for fear that his margin is going to evaporate or worse he’s going to have to carry them. Carrying inventory will kill your business as a builder. He’s even contemplating selling the lots since there is some cost in taxes and maintenance, though nowhere near the costs of an improved property.
What happened is that after 2008, builders became afraid to build (for good reason), and since then housing construction still hasn’t rebounded to what it needs to be to meet demand. The houses they are building are bigger (5bd compared to 2-3bd), so new homes are also more expensive to begin with. Both first-time buyers and downsizing boomers are competing for the tiny supply of 2-3bds.
I don’t know what city you’re talking about but you can easily buy a home in a major city such as Chicago on the average salaries for white collar workers
So your house was somewhere in the 75k to 150k range? Average home prices where I live and work are 800k. That would mean a down-payment of 80k to 160k. You would absolutely “need to have super rich parents” to get that kind of help. I’m happy for you that you were able to secure a home of your own with the help of family. That just isn’t a simple reality for most most people who don’t have super wealthy parents where I am from.
You only need 3% of the loan for a down-payment. That would be $500k assuming OP did not add anything in.
My parents helped my wife and I a bit. I grew up in a 1000 sqft house with 2-3 other siblings. I do, however recognize that not everyone’s parents were lucky enough to have that much stashed away but should still have the opportunity to purchase a home.
That’s true in the US, but depends heavily on the country: if you’re buying in London, you only need 5% as a general rule, but other regulations push the average down payment to about 14% before purchasing is on the table. In the Netherlands, from my understanding, you wouldn’t need a down payment at all.
I’m italian and here in 800k dollars is a very big house in a very good place. Or a good apartment in a big city. Your salaries are so good? I mean here median salary is like 1.9k dollars/ month ( after taxes and health insurance ). Your salary after taxes and insurance should be 6-8k dollars/month for a normal job. You have such high salaries?
No, we probably have a bigger gap between housing cost and worker pay. In my area:
Median household income $61k/year last year (per household not person)
Median price of a house that same year was apparently $400k. Including those way far away from the city. In my average but in the city neighborhood new builds are going for close to a million and older houses about 400k.
Median rent monthly here is an eye watering $2,350.
In italy is 30k, median price of one house is , i think between 100k and 200k ( apartment ). One million here you buy a 4000 sq.ft. indipendent house with garden in one of the best city places near downtown. ( btw we have a greater people density, so land here costs much more than in usa ).
2350 month… You rent a mansion.
Btw we have no so much new houses. The cities are way older. The maximum price is for ancient reinessance palace with ancient frescoes or roman ruins included. They are selling a palace ( 10000 sq.ft. ) with reinessance frescoes that need a lot of work ( so i think 1 million more to renewate it ) for 2 millions.
Yes, the pay is an half. But the house prices are quite cheaper ( but the houses are smaller , 1800 sq.ft. apartment, 270k $. But if you need less space you can find for less than 100k.
Yes I think the big problem here (right here, maybe not USA as a whole) is there is no more little cheap places to buy, and the apartments for rent, they do not care if vacant - if they have 100 units and could rent them all out for $1k/month or rent half for $3k, they raise rent to $3k and leave half of them empty.
I think median pay for one worker is around $40k but many households have more than one worker.
You have really high property taxes, they cost as much as a rent in my country ( we have property taxes here, too, but not so high ) , it is impossible to rent something 1k/ month if fixed taxes are 400 or 800 / month. Your corporation have too much money to settle ( cause over evaluation of stocks ) and you goverment taxes too much houses ( cause corporations pay too low taxes ).
I’m in Florida and sales tax is high (not as high as most European VAT but high) and property tax high because they like to say “no state income tax” . Though if the house is your home, not an investment, it’s lower and the yearly increase capped at 3% no matter the value assessment . And yes we bought a house and about 1/3 of the monthly cost is taxes and property insurance. And yes - corporations here and the richest families pay not enough. But with property taxes at least corporations & landlords do pay higher rate than homeowners (that is a part of why rents have increased, the skyrocketing property values. But most of that increase is greed, profit). So if one actually can buy the apartment the property taxes will not be so bad over time, even if the value shoots up, and will come down if value drops.
It’s complicated but I think the main issues are greed and to some extent zoning & land use patterns - not so much inside the city - we have a good mix of houses, apartments, businesses, but so much land used for sprawling suburbs not more compact development, and that’s expensive in a lot of ways.
So with your rent you pay income taxes for the richest…
This is the reason in italy a lot of people oppose the transfer of taxation from income to property. If i gain a lot of money i will pay more taxes, but if i have a bad moment , i will be able to not sell my house or pay a rent. And my capital in real estate will be not slashed by taxes/expenses.
Borrowed 3k from my bad didn’t have to pay back. There is nothing wrong with getting help from family to buy a home. Fuck this article. The housing issue is caused by large corporations who are buying up all the houses along with interest rates keeping average person from buying a home.
There is nothing wrong with getting help from family to buy a home.
It is indicative of a problem that nearly half of home buyers have to. And indicative that we are possibly heading in a direction where only those with familial wealth will own housing. This is objectively a problematic direction.
Also, yes, if it’s some absurd amount like $200k borrowed, nepotism is the right word. A couple grand may not be a lot to you, but there are places where it is as well. I know for a fact plenty of people from my hometown would struggle to loan their child even a couple thousand to buy a home. But the child is stuck paying rent that’s more than a mortgage, keeping them from savings up for said down payment. The fact we can’t save money is a problem, and parents giving their children money to buy a house just masks the issue except for those without that money.
You’re not wrong but again it because of greedy corruption and corporations buying our politicians.
Until we rise up and demand better it going get worse. Unfortunately we can’t band together when 40 to 50% of Americans like the boot on their necks. Long as it hurts others too.
3k doesn’t make you rich. I get 3k every tax return just on the kids or I did now one is over 18.
Now if it was 10k or more than maybe but even that is middle class not rich people money. Believe it or not having a million dollars will not make you rich. Oh it helps but it easy to lose and go poor again.
People don’t understand what rich really is. 10 million our more now your a rich fuck because you now have generational wealth.
It was a joke on “bad” not “dad”. Not saying there is anything wrong with parents helping family to buy a home. Its not the parents or childrens fault that the market requires this now.
Edit: I will make a comment on your statement about rates however. Rates are and have been historically low but prices high and going ever higher. It does not matter if the rate is 0.5% but the price is so high you can’t even save the down payment.
3% is super low, not sure what country this is in but even if you can put up 3% can you afford the monthly payments?
For example for lets say a 1 million $ home (normal for a HCOL city) you have a $30,000 down payment and a monthly $5500 (based on about a 4.7% rate). This still seems hard. The down payment is not the only limit to home ownership.
There are not many here in Seattle aside from condo or townhouse HOAs. The condo dues are generally around that but they cover the maintenance of the whole building. In the suburbs the HOA dues are generally $50-100. That gets you a sign and maybe a small park. I don’t need a sign and I already pay money for parks in the form of taxes. Although those developments probably do not have homeless campers down the street. The ones down the street from me are fairly clean and don’t cause issues.
You are right about being able to afford it monthly. Your numbers seem like they may be closer to what they are in Canada. The median price here in Seattle is $800k which would be a $24k down-payment and a $6000 monthly payment with the average 7.1% interest rate, insurance, and taxes. Don’t know what the mortgage insurance would likely be for that but that is likely another couple hundred. That is over $72,000 per year just in housing costs.
Yes but if you don’t qualify for a special program you are only seeing a 3% down payment with an exceptionally high interest rate and significant PMI. Which makes it even more unaffordable. That might help recent high income earners with little savings but again makes it difficult for average people with average savings.
You don’t even need to have super rich parents. My mother helped me get my first home with 15K that she saved throughout the years. (I paid her back).
That was just enough for my down payment. Without that I couldn’t have gotten the house.
I think the issue is what if you have no parents or parents with no money (or negative moneys). You could do everything right, go to school, get a professional job, and still not be able to buy a place.
The housing market is definitely fucked worldwide. Many don’t have parents with money and can only rent or not even move out of their parents house.
Some of us got lucky with minimal down payment from their parents 5-10 years ago. Its just ridiculous how the market changed in such a small time. Like the houses are still the same, the population did not grow exponentially. Wtf is going on?
I thought I got hosed 10 years ago but when I look at prices now it is night and day. The demand has pushed people into smaller towns and into the rural areas so now I get to see a modular home that sold for $75,000 10 years ago be listed for $300,000 and sell.
The cost of new houses is not helping and talking with some small scale builders (they can only build 1 or 2 at a time) the cost to build is high enough to give many pause.
This is what happens when real estate becomes your nations biggest industry.
I have seen houses prices in some places in USA and property taxes. I hope you have very high salaries ( like more than 3-4 k / month ) . the property taxes sometimes are highter than a rent here ( italy ) in a medium size city. I mean with 6k / year you can rent a 2 room apartment not so far from the city center ( like 15 minutes by car )
Voglio andare e vivere in Italia!
The job market is not so good and the salaries are way lower than in usa
My buddy is a small scale builder and he’s on the sidelines currently. They have a few lots to build on in a subdivision. He’s decided not to start for fear that his margin is going to evaporate or worse he’s going to have to carry them. Carrying inventory will kill your business as a builder. He’s even contemplating selling the lots since there is some cost in taxes and maintenance, though nowhere near the costs of an improved property.
What happened is that after 2008, builders became afraid to build (for good reason), and since then housing construction still hasn’t rebounded to what it needs to be to meet demand. The houses they are building are bigger (5bd compared to 2-3bd), so new homes are also more expensive to begin with. Both first-time buyers and downsizing boomers are competing for the tiny supply of 2-3bds.
There’s an element of “be fiscally responsible and you too can save up” but more often than not, the answer is “make more money”.
Or move to a lower cost of living area… (until those areas become to expensive)
Lower CoL usually equals lower pay too.
Yeap, and extra long commutes to higher paying jobs. I know people doing 1.5 hour drives one way to their job.
The real move is to sell your car and move into the city where you can walk bike or take transit to your high paying job.
And never own a home.
I don’t know what city you’re talking about but you can easily buy a home in a major city such as Chicago on the average salaries for white collar workers
Yes, that is the status quo now in Canada, you need to make $150,000 a year, minimum, to afford a mortgage to buy a low-quality apartment or home.
That’s right. You can do everything right and still live and die poor. End the myth of meritocracy, it’s all classism.
So your house was somewhere in the 75k to 150k range? Average home prices where I live and work are 800k. That would mean a down-payment of 80k to 160k. You would absolutely “need to have super rich parents” to get that kind of help. I’m happy for you that you were able to secure a home of your own with the help of family. That just isn’t a simple reality for most most people who don’t have super wealthy parents where I am from.
You only need 3% of the loan for a down-payment. That would be $500k assuming OP did not add anything in.
My parents helped my wife and I a bit. I grew up in a 1000 sqft house with 2-3 other siblings. I do, however recognize that not everyone’s parents were lucky enough to have that much stashed away but should still have the opportunity to purchase a home.
That’s true in the US, but depends heavily on the country: if you’re buying in London, you only need 5% as a general rule, but other regulations push the average down payment to about 14% before purchasing is on the table. In the Netherlands, from my understanding, you wouldn’t need a down payment at all.
I’m italian and here in 800k dollars is a very big house in a very good place. Or a good apartment in a big city. Your salaries are so good? I mean here median salary is like 1.9k dollars/ month ( after taxes and health insurance ). Your salary after taxes and insurance should be 6-8k dollars/month for a normal job. You have such high salaries?
No, we probably have a bigger gap between housing cost and worker pay. In my area:
Median household income $61k/year last year (per household not person)
Median price of a house that same year was apparently $400k. Including those way far away from the city. In my average but in the city neighborhood new builds are going for close to a million and older houses about 400k.
Median rent monthly here is an eye watering $2,350.
In italy is 30k, median price of one house is , i think between 100k and 200k ( apartment ). One million here you buy a 4000 sq.ft. indipendent house with garden in one of the best city places near downtown. ( btw we have a greater people density, so land here costs much more than in usa ).
2350 month… You rent a mansion. Btw we have no so much new houses. The cities are way older. The maximum price is for ancient reinessance palace with ancient frescoes or roman ruins included. They are selling a palace ( 10000 sq.ft. ) with reinessance frescoes that need a lot of work ( so i think 1 million more to renewate it ) for 2 millions.
Yes, the pay is an half. But the house prices are quite cheaper ( but the houses are smaller , 1800 sq.ft. apartment, 270k $. But if you need less space you can find for less than 100k.
Yes I think the big problem here (right here, maybe not USA as a whole) is there is no more little cheap places to buy, and the apartments for rent, they do not care if vacant - if they have 100 units and could rent them all out for $1k/month or rent half for $3k, they raise rent to $3k and leave half of them empty.
I think median pay for one worker is around $40k but many households have more than one worker.
You have really high property taxes, they cost as much as a rent in my country ( we have property taxes here, too, but not so high ) , it is impossible to rent something 1k/ month if fixed taxes are 400 or 800 / month. Your corporation have too much money to settle ( cause over evaluation of stocks ) and you goverment taxes too much houses ( cause corporations pay too low taxes ).
I’m in Florida and sales tax is high (not as high as most European VAT but high) and property tax high because they like to say “no state income tax” . Though if the house is your home, not an investment, it’s lower and the yearly increase capped at 3% no matter the value assessment . And yes we bought a house and about 1/3 of the monthly cost is taxes and property insurance. And yes - corporations here and the richest families pay not enough. But with property taxes at least corporations & landlords do pay higher rate than homeowners (that is a part of why rents have increased, the skyrocketing property values. But most of that increase is greed, profit). So if one actually can buy the apartment the property taxes will not be so bad over time, even if the value shoots up, and will come down if value drops.
It’s complicated but I think the main issues are greed and to some extent zoning & land use patterns - not so much inside the city - we have a good mix of houses, apartments, businesses, but so much land used for sprawling suburbs not more compact development, and that’s expensive in a lot of ways.
So with your rent you pay income taxes for the richest…
This is the reason in italy a lot of people oppose the transfer of taxation from income to property. If i gain a lot of money i will pay more taxes, but if i have a bad moment , i will be able to not sell my house or pay a rent. And my capital in real estate will be not slashed by taxes/expenses.
I’m moving to Italy!
800k is a pretty damn nice place unless you live in a super high cost of living place where it may only get you a decent place.
Borrowed 3k from my bad didn’t have to pay back. There is nothing wrong with getting help from family to buy a home. Fuck this article. The housing issue is caused by large corporations who are buying up all the houses along with interest rates keeping average person from buying a home.
It is indicative of a problem that nearly half of home buyers have to. And indicative that we are possibly heading in a direction where only those with familial wealth will own housing. This is objectively a problematic direction.
Also, yes, if it’s some absurd amount like $200k borrowed, nepotism is the right word. A couple grand may not be a lot to you, but there are places where it is as well. I know for a fact plenty of people from my hometown would struggle to loan their child even a couple thousand to buy a home. But the child is stuck paying rent that’s more than a mortgage, keeping them from savings up for said down payment. The fact we can’t save money is a problem, and parents giving their children money to buy a house just masks the issue except for those without that money.
You’re not wrong but again it because of greedy corruption and corporations buying our politicians.
Until we rise up and demand better it going get worse. Unfortunately we can’t band together when 40 to 50% of Americans like the boot on their necks. Long as it hurts others too.
I wish I had a rich bad.
3k doesn’t make you rich. I get 3k every tax return just on the kids or I did now one is over 18.
Now if it was 10k or more than maybe but even that is middle class not rich people money. Believe it or not having a million dollars will not make you rich. Oh it helps but it easy to lose and go poor again.
People don’t understand what rich really is. 10 million our more now your a rich fuck because you now have generational wealth.
It was a joke on “bad” not “dad”. Not saying there is anything wrong with parents helping family to buy a home. Its not the parents or childrens fault that the market requires this now.
Edit: I will make a comment on your statement about rates however. Rates are and have been historically low but prices high and going ever higher. It does not matter if the rate is 0.5% but the price is so high you can’t even save the down payment.
Not enough now, here in the UK at least
Single 35yo. Earning alright. Mortgage on a 160k flat required a £90k deposit. Was a fucking nightmare, but at least I got it locked in at 4%
That down payment is nutty, but at least you now only have a 70k mortgage. Is it common for people to borrow for the deposit in the UK?
I didn’t borrow for my deposit, majority was saved with a bit of inheritance. But I can see how people might.
Lol a downpayment nowadays is easily two to three times that.
That is not true, there are programs and different types of loans where you can buy a house with as little as 3% down payment.
3% is super low, not sure what country this is in but even if you can put up 3% can you afford the monthly payments?
For example for lets say a 1 million $ home (normal for a HCOL city) you have a $30,000 down payment and a monthly $5500 (based on about a 4.7% rate). This still seems hard. The down payment is not the only limit to home ownership.
Forgot to add the extra 300 a month in shitty HOA fees that all places seem to have in HCOL areas.
Urgh, HOAs are the devil. Condo fees are also bad, some people pay about the same in fees as on their mortgage.
There are not many here in Seattle aside from condo or townhouse HOAs. The condo dues are generally around that but they cover the maintenance of the whole building. In the suburbs the HOA dues are generally $50-100. That gets you a sign and maybe a small park. I don’t need a sign and I already pay money for parks in the form of taxes. Although those developments probably do not have homeless campers down the street. The ones down the street from me are fairly clean and don’t cause issues.
The US allows only a 3% down-payment.
You are right about being able to afford it monthly. Your numbers seem like they may be closer to what they are in Canada. The median price here in Seattle is $800k which would be a $24k down-payment and a $6000 monthly payment with the average 7.1% interest rate, insurance, and taxes. Don’t know what the mortgage insurance would likely be for that but that is likely another couple hundred. That is over $72,000 per year just in housing costs.
Yes but if you don’t qualify for a special program you are only seeing a 3% down payment with an exceptionally high interest rate and significant PMI. Which makes it even more unaffordable. That might help recent high income earners with little savings but again makes it difficult for average people with average savings.
My country has 15% downpayment required by law.