Don't throw tomatoes but...how the heck does a 23 yr old afford a house?

[CCrox24]

I KNOW y'all hate the house topic, but I am just curious about this one. I was just on another board and literally the avg age that people were buying homes ranged from 23-25. Now, I am thinking that these people must live in a low cost area. I don't know ANYONE that is 23 that owns a home. However I live in one of the biggest cities in the US where maybe it'sjust too expensive. Maybe these people live in East Nowhere.

[jrwilheim]

I KNOW y'all hate the house topic, but I am just curious about this one. I was just on another board and literally the avg age that people were buying homes ranged from 23-25. Now, I am thinking that these people must live in a low cost area. I don't know ANYONE that is 23 that owns a home. However I live in one of the biggest cities in the US where maybe it'sjust too expensive. Maybe these people live in East Nowhere.

Two words: Mommy and Daddy.

It really is sickening watching people buy houses for their children. This one guy I used to work with was bouncing from sublet to sublet because his mother was buying him a studio apartment in Chelsea and renovating it. Granted, the idea is that it will be a pied-a-terre for her when she comes to town on business as well as his ordinary residence, but still, the idea of someone buying a house for their grown-up child is ludicrous.

[wordsmith]

Live in an affordable area. One of my childhood friends got married at 20, had a baby at 22, and owned a home by 23. It's called two incomes and a mortgage in a place with a reasonable cost of living.

[WorkInProgress]

The only two 24 (so, not quite 23, but still) year olds I personally know who have purchased homes (one got a condo and one a small house) saved. A lot.

The one who bought the condo lived with her parents (I don't know whether they charged her rent or not) until purchasing the condo, and saved a ton of money that way. Also, she has a great job that pays really well.

The one who bought the house sold his car and had some money saved up and used that for the down payment. His grad school (plus a stipend) was paid for by the school, so he didn't owe anything on that, and the rent on his apt there was small. But he's a really smart cookie, so he's not a "normal" case.

[workaholic?]

Two words: Mommy and Daddy.

i sort of take offense to that. i don't own a house, but most of my friends do, and some of them own more than one...and their parents didn't help them at all. like the OP said, we live in an area that USA Today ranked as one of the top 10 most undervalued housing markets in the country. my boyfriend bought his house at 22 with zero help from parents and has paid off about 35,000 in principle in just 3 years. another friend at work bought his house on his own at 24 and now owns a second that he rents out...and he's looking for a third, and he's still only 25.

i don't think it's fair to assume that just because someone owns a house at an early age their parents bought it for them.

[Ciderhillnh]

Two words: Mommy and Daddy.

It really is sickening watching people buy houses for their children. This one guy I used to work with was bouncing from sublet to sublet because his mother was buying him a studio apartment in Chelsea and renovating it. Granted, the idea is that it will be a pied-a-terre for her when she comes to town on business as well as his ordinary residence, but still, the idea of someone buying a house for their grown-up child is ludicrous.


I take offense to this. My parents and I went into a home as a joint venture…..I pay the mortgage, bills etc, its an investment for them.

Our signed agreement is when we sell, they get their initial investment back plus 2/3 profit…..I get 1/3 profit and all the money I put in to pay for the house while I lived there.

[MerrillLynch06]

Honestly, if you have a SO and you two buy it together I dont see it being that far out of reach. I mean, money might be tight but it is defintley do able.

[wordsmith]

If they've done it on their own, though, by that age, I'd say it's a reasonable guess that they live in an area like I do, where the housing market is ultra reasonable.

[jrwilheim]

On second thought...let me take back that remark about Mommy and Daddy. Maybe it's not such a great idea for us to start asking these kinds of questions about other people's finances.

A couple of years ago, I had a conversation with a good friend because I had had a check bounce at the bank and had had to borrow some cash from a third friend until payday (this was just after I'd moved into my current apartment and had almost nothing). She is a prodigious saver, almost to the point of being a miser, and she asked something like, "You've always wondered how I save all this money...I don't understand how you spend all this money."

Well, this year, after I got interested in financial planning, she and I sat down and I did a plan for her about how to invest her 401(k) money. It turned out, once I had all the details, that she and I actually spent about the same amount of money each month. The only reason she had seen me as a profligate spender and I saw her as an over-saver was that she was earning about $1000 more than me. And I wasn't living a beyond my means at all--I was saving about 10% of my income, etc. And it turned out she was doing all this saving because she had plans to go to England for a year with her fiance, and anticipated not being able to save anything while they were there.

So we don't always know the full picture.

[frogleggz]

My husband and I bought our house earlier this year at 24 and 25, without help from parents. We live in a relatively high COL area, but we have relatively high incomes and a relatively gigantic mortgage. A lot of people, even with our incomes, would not be comfortable with our monthly payment, but we chose to do this and we can handle it.

[Winter Storm]

Most 20-somethings I know that own, did so by age 25. In Baltimore it is pretty doable. Some may get down payments from family or savings, some just paid through the nose until their income increased. Either way, I know many who have done it and now own homes that have increased tremendously in value.

Me, I've had a down payment for some time, but I didn't have the income to make mortgage payments in my early 20s.

[jrwilheim]

i sort of take offense to that. i don't own a house, but most of my friends do, and some of them own more than one...and their parents didn't help them at all. like the OP said, we live in an area that USA Today ranked as one of the top 10 most undervalued housing markets in the country. my boyfriend bought his house at 22 with zero help from parents and has paid off about 35,000 in principle in just 3 years. another friend at work bought his house on his own at 24 and now owns a second that he rents out...and he's looking for a third, and he's still only 25.

i don't think it's fair to assume that just because someone owns a house at an early age their parents bought it for them.

Sorry...you have to remember it's the New York me that has these gut reactions. No one in their early 20s in New York is buying an apartment without parental help.

[frogleggz]

some just paid through the nose until their income increased.

Ha, that's me.... damn, my nose hurts!!

[lonestar]

SO makes a huge difference...for us one income earners it's a bit tougher to envision, I imagine.


honestly, though with mortgage rates rising those that are on an adjustable mortgage might be hurting...besides, I like renting right now...

[CCrox24]

Sorry...you have to remember it's the New York me that has these gut reactions. No one in their early 20s in New York is buying an apartment without parental help.


They have to have help. I agree with you. Because people in their early 20s most likely earn no more than 50K a year. You can't afford a house on that in NYC.

Oh, I didn't think about dual incomes - I guess if there's two people making good money then they can afford the mortgage payment.

My question is - how do people save up this massive 50K downpayment? Maybe they're buying houses and not putting anything down... I don't know. It'll take me 5 years to save up 50K. Maybe more.

[Xander]

Wow, this is like the opposite of the college students thread... :huge:

At this point, there's no way I can afford a house on my own. Time to get a wife! :eek:

[LaFille]

They have to have help. I agree with you. Because people in their early 20s most likely earn no more than 50K a year. You can't afford a house on that in NYC.

Oh, I didn't think about dual incomes - I guess if there's two people making good money then they can afford the mortgage payment.

My question is - how do people save up this massive 50K downpayment? Maybe they're buying houses and not putting anything down... I don't know. It'll take me 5 years to save up 50K. Maybe more.


wow, that seems like a lot. i guess housing is really cheap where i live as well. i know mid-20 somethings who are buying houses with SO's on their own with pretty average jobs.

[Winter Storm]

My question is - how do people save up this massive 50K downpayment? Maybe they're buying houses and not putting anything down... I don't know. It'll take me 5 years to save up 50K. Maybe more.

I don't know ANYONE who has saved up $50k for a downpayment. Here in Baltimore, they have all types of programs for first-time buyers for little money down and even no money down. I know someone who bought a house on $5000 down. Granted, it wasn't a McMansion, but it was a house.

[workaholic?]

I don't know ANYONE who has saved up $50k for a downpayment. Here in Baltimore, they have all types of programs for first-time buyers for little money down and even no money down. I know someone who bought a house on $5000 down. Granted, it wasn't a McMansion, but it was a house.

i don't think it's really feasible to actually SAVE $50,000 for a downpayment, but if you live in an area like mine where the housing market has actually risen a lot of the past few years, it would be quite easy to end up with at least that much in equity if you've owned your house for a few years. when we move, my bf will probaby have around $80k in equity to put down on a house.

[CCrox24]

^Well, they must be making lots of money because with no money down...the mortgage payment must be sky high.

[embrassezla]

My husband and I bought our house earlier this year at 24 and 25, without help from parents. We live in a relatively high COL area, but we have relatively high incomes and a relatively gigantic mortgage. A lot of people, even with our incomes, would not be comfortable with our monthly payment, but we chose to do this and we can handle it.
Same as my situation.

[shimma]

JR - the world is not NYC.

CCRox - saving up 50K is damn hard, but it can be done. it's called work your ass off for years to make lotsa money, live way below your means, and save save save. repeat for several years.

[Kitty]

My boyfriend and I could easily afford a house if we didn't live where we live. Combined, we make about $175k a year. We could probably swing a condo here, but it would mean cutting back on all luxuries.

[Chameleon]

^Well, they must be making lots of money because with no money down...the mortgage payment must be sky high.
Not necessarily. Check out this mortgage calculator (http://www.bloomberg.com/invest//calculators/mortgage.html). If you are buying a house that was $200,000, at a 6.25% rate for 30 years, your mortgage would be
$1,231 with 0% down,
$1,170 with 5% down,
$1,108 with 10% down,
$1047 with 15% down, and
$983 with 20% down.

So it's about $250 monthly between putting 0% down and 20%. Of course if you are paying less than 20% you have to pay private mortgage insurance (~$100 monthly?) until you've paid off 20% of the house but it also means you don't have to pony up $40K when you close on the house.

ETA: Your mortgage isn't the only thing to budget in when considering a house - there's the increased insurance, utilities, property taxes, home and lawn maintainance costs, home association costs etc. I'd like to start paying my mortgage more aggressively once I get over this HUGE hump of fix-up/new furnishing costs. It's scary to watch all that money go primarily to paying off interest, though I'm curious to see how much of a tax break it will be...

[lonestar]

jeez if I made half of that (re: kitty's post) I could afford a damn good house here...

[Kitty]

jeez if I made half of that (re: kitty's post) I could afford a damn good house here...


yeah, well, cost of living is high here and houses start around 1 million.

[lonestar]

where do you live again? San Francisco?

honestly I always loved apartments...especially in cities like San Fran...I thougt about the burbs but nothing beats city living...(except getting your car broken into...but I am going to get an apartment with a garage next time).

[Skyblade]

I don't know anyone my age that bought a house in Santa Barbara. One exception is I know a couple my age who bought a house, but they have friends living with them paying them rent so they can afford it. I don't know how much they saved for a down payment though.

[and1grad]

yeah, well, cost of living is high here and houses start around 1 million.
Yup. My friend's mom is a mortgage broker in the bay and thats exactly what she says. I cant say enough about San Ramon (where she lives). She has a SWEET 2bdr townhome there, I'm talkin "Cribs" nice, and it went for 750k...but that was last year. Now? Who knows.

[Kitty]

Yup. My friend's mom is a mortgage broker in the bay and thats exactly what she says. I cant say enough about San Ramon (where she lives). She has a SWEET 2bdr townhome there, I'm talkin "Cribs" nice, and it went for 750k...but that was last year. Now? Who knows.

My parents have a 3bdr/2br and I remember when they got it appraised when I was like 7 - for $350,000. They just got it appraised again (granted, they've done some remodel) and it's $1.5 million. CRAZY.

[wordsmith]

I should point out that I'm on the opposite end of the spectrum from Kitty...incredibly low cost of living, incredibly low real estate costs, by comparison...but even so, for young adults to be affording a house on local wages (which also are commensurate to a low COL area, of course), they're not buying Cribs or McMansions. They're buying fixer-uppers, starter homes, the like.

[steph78]

i don't think it's really feasible to actually SAVE $50,000 for a downpayment, but if you live in an area like mine where the housing market has actually risen a lot of the past few years, it would be quite easy to end up with at least that much in equity if you've owned your house for a few years. when we move, my bf will probaby have around $80k in equity to put down on a house.
I have $50k saved for a downpayment, it can be done! Shimma's right - it doesn't happen right away. It has taken 4-5 years of religiously putting money away every single month. My husband is still in grad school even though I've been out for five years, so we just live like we're both still in grad school except for the occasional splurge - leaves a lot left over for savings.

We've often debated our choice to rent for the past few years instead of buying. In certain housing markets it is totally possible to buy at a young age even without help. We totally could have afforded to buy something here in Atlanta (reasonable housing market) when we first got married with one of those smaller downpayment plans for first time buyers (even though we had no appreciable savings at that point and I was making $45,000 and my husband was in school). We considered this seriously but we thought my husband was only going to be in school for 2-3 more years so buying a house wouldn't be worth it for that short period of time. A couple years has turned into 5+ and we are still in the same apartment. We probably would have profited over that period of time by buying a house, but hindsight is 20-20. At least now we have a gigantic downpayment saved up because we kept our cost of living down all these years....

[lonestar]

Actually, my hometown was just rated the second cheapest to live in on cnn.com: Best cities for buying a home (http://money.cnn.com/magazines/moneymag/bpretire/2006/top25s/affordable.html?cnn=yes)

$45,000 is the average home price. But who wants to live there?
\
Actually, the one nice thing is that you are 1 1/2 hours from Toronto and 3 hours from Cleveland, and you can get a killer home for $100k, but you have to deal with snow...

and if you want to buy a house in the suburbs, it's much more expensive...

[MollyMe]

For me, it seems like most people in the post-college, mid-20's own a home. Many of those people are also married and have two incomes.
Cost of housing is really cheap here.
My friend owns a home on only 35K. It is not that big though but only he lives there.

I have a relative who lives in the Bay area. Her house was sold for 1.5M. Here, that house would cost 125K.

[LakeJay]

Actually, my hometown was just rated the second cheapest to live in on cnn.com: Best cities for buying a home (http://money.cnn.com/magazines/moneymag/bpretire/2006/top25s/affordable.html?cnn=yes)



Camden, NJ at #4? Very interesting. That is very cheap housing for NJ. Granted I think you'll need to invest 4 times that much in a security system, weapons, bulletproof vests, etc.

[littledancerus]

The people around my age that own homes are married or did so with their SO. I don't see myself doing it for a looooong time. For one, my parents live in the middle of nowhere so I can't live with them to save for one. For two, they aren't going to help me buy one... with any kind of agreement. For three, I'm just not settled enough to make that kind of commitment. I want to move to a different city in 1.5 years so it'd just be stupid to even try. What I wonder is these single people who did save a bunch of money for a down payment, did they not go to college? I'm confused. I've been out of college a whole 2 years... not enough time to save up a ton of money even if I could live at home w/ the rents. Really, for married people or people with SO's it's a whole different ballgame. It's not even something you can compare. :googly:

[LakeJay]

My 23 year old cousin did just buy a very nice house. He lives outside of Kansas City. My other cousin my age also has a house in Louisville, Kentucky. At times I am envious that they have saved up for an investment such as a house whereas I am a year or two away from buying one but then I am reminded that I live in Northern New Jersey. And if I were to buy a condo it still would cost more than their 2 houses put together.
With that said, you play your cards right you can buy a house at an "early" age. Save up and do your homework is the way I see it. I haven't done my homework and I sure as hell have not saved up so that's why I'm where I am.

[ebruening]

I really don't see myself having enough saved up to buy a house for QUITE some time. I live in a relatively low cost of living area, with relatively low real estate costs, but also with sky high property taxes.

[SunDevil]

When I was 23, I had no money at all besides what I needed to buy the basic food and water to survive. I got a job when I was 24, and now 28 months later, I have $39,000 saved up. I could easily buy a home here (a house that would be good enough for me would cost $80k, if I wanted to impress some people, I would have to pay $150k). I could easily afford the monthly payments.

But, there is the maintenance issue, and the fact that I leave town for weeks at a time. Paying $7200/year in rent would be about the same as the interest I would have to pay on a mortgage (but the interest is tax deductible...)

If I was 3 years younger and didn't have to try and find a job right after the dot com crash, hiring freezes and terrorist attacks, I could have had one year of work under my belt by 23. If I had a long term gf who also had a job (and was good with saving money), it could easily be possible. It isn't so much how much money you have now, but how much you will earn over the next 30 years and how stable your income will be during that time. I would always worry about losing your job within the first 2 years after buying a house and having to try and find something else (anything else) in your area.

[red]

JR, honestly i don't get why you are so bitter. didn't your grandmother just give you a year's worth of rent? lots of people has some form of help, parents paying for college, adults who live at home, etc. not that my parents or my in-laws (HA!) bought us a house but i just think you are being sort of weird about it seeing that you have had help from family.

we saved a 20% downpayment. now of course i wish we had bought a house with no money down years ago like friends who saw their homes double in value, but hindsight is 20/20. i guess i was raised to be a saver and my husband was raised with no money sense, so we saved until we could put 20% down.

we were able to do it since we both went to cheap schools and only have a BA. no higher education, no loans but also no fancy diplomas... i can't say whether it was a good trade-off. my career sucks and his is on the rise even though i went to a "better" cheap school. i was 27 when we bought but he's older.

[capella]

I bought my house 2 days before my 24th birthday (Jan. '05). I was able to do this because...

A. I'm married and dual incomes are very useful for big purchases.

B. I chose to move to a state and a city that had a VERY reasonable cost of living (I paid 138,500 for my 1300 sq. ft. house). I went from 300K-500K for a "decent" home in the suburban DC-metro area to a 45-minutes-away-from-Orlando-almost-rural-town.

C. I made a choice to get into a career where I made a stable, albeit not a lot, of money. And my husband did the same.

D. I didn't save up any money, but I did get an 80/20 loan, which saved me from having PMI. By the time I had saved up 20% I would have been paying the same (or more) mortgage payment as I am now. I would have paid much more for my house than I would have been able to save so it didn't make any sense for me. Plus I now have enough equity that it doesn't matter that I didn't put anything down.

E. I refi'd into a fixed rate loan as soon as I could.

And I borrowed about 2K for closing costs from my grandmother. I ended up not needing all of it and so I really only borrowed 700, which I've long since paid back.

[wordsmith]

Actually, my hometown was just rated the second cheapest to live in on cnn.com: Best cities for buying a home (http://money.cnn.com/magazines/moneymag/bpretire/2006/top25s/affordable.html?cnn=yes)

$45,000 is the average home price. But who wants to live there?


Evidently about 293,000 people at last count.

[TinyDancer]

I'm single. I bought my first place at 25. I'm now on condo #2 and almost 27.

I didn't put much down at all, and my monthly payments are pretty high. . . but I am a pretty frugal person in terms of my expenses.

I buy reasonable houses that I have to do some work on. . . and mostly stuff that I can do myself (painting, tearing up carpet, etc.).

I built a little bit of equity between condo #1 & condo #2. I'm already thinking about how much I will have next time I go to buy and saving more money to put down.

It's doable, BUT you have to really be willing to save. You may have to sacrifice in other departments.

[HIKU]

First property at age 19: F!@#$ up royaly on a contract and had a major head ach. Lived thru it and I bought a condo this year, I'm only 21.
It is possible, do your homework... MANY OPPROTUNITES WILL RISE WITHIN THE NEXT COUPLE OF MONTHS....

http://money.cnn.com/2006/09/13/real_estate/foreclosures_spiking/index.htm?postversion=2006091508

NOTICE OF DEFAULT SALES: this is how I got my first property... do your homework. Anything is possible.

[lostindc]

My question is - how do people save up this massive 50K downpayment? Maybe they're buying houses and not putting anything down... I don't know. It'll take me 5 years to save up 50K. Maybe more.

My question is where can 50K actually be considered a down payment? There aren't many places in the DC area priced at 250K and below.

BTW there are a lot of people that put 5% or less down (Some actually put 0 down) in today's crazy mortgage environment. Be careful as many of these loans are toxic.

[jrwilheim]

JR, honestly i don't get why you are so bitter. didn't your grandmother just give you a year's worth of rent? lots of people has some form of help, parents paying for college, adults who live at home, etc. not that my parents or my in-laws (HA!) bought us a house but i just think you are being sort of weird about it seeing that you have had help from family.

My grandmother did not GIVE me a year's worth of rent; she LENT it to me. She is getting back every penny over the course of the year. There's a big difference between a large loan that has to be paid back and an outright gift of an apartment or something like that. No one in my family would have $70,000-$80,000 to give me for a down payment, let alone $400,000+ to buy an apartment in the West Village.

There is a matter of degree involved here. I have gotten some help from family at times when the wolves were at my door, and I borrowed a little from my grandmother to buy furniture. But I was not handed a large pile of cash on some theory that my life would be wretched and miserable if I was not building equity as a twentysomething working my first job out of college. I got help with something I needed (a roof over my head), not with something I did not need (purchasing an apartment in a hot neighborhood). I see owning a home, instead of renting, as a luxury, not a necessity, and I would never ask my family for help buying a home, as opposed to just keeping a roof over my head in a crisis.

There is also a difference in attitude here. I made the arrangement with my grandmother concerning my rent as a last resort, to keep the roof over my head, after I lost a job through no fault of my own and was unable to find another one by the time I needed to renew the lease. I was embarassed to have to ask her for this help. I did not see anything like this kind of embarassment from my co-worker whose mother was buying him a studio in the West Village, nor do I see it in stories about other people in NYC my age who have become homeowners through the help of Mommy and Daddy.

[yankeeyosh]

The problem that I see is that if you have buy a simple house...with a $200K mortgage...you're going to be paying nearly $2,000 a month or so. Seriously, how can anyone not making six figures do this? Even if you make a 20% down payment, it's still going to be over $1,500 a month...not including other expenses, like taxes.

I just think many 20-somethings are getting waaaaaay over their heads...are buying houses because of pressure by parents and peers, and they have no clue what they're getting themselves into. I'm making $50K, and there's no way on G-d's green earth that I can afford anything right now. I'm barely able to pay $1,100 in rent. How can I tack on another $500+ a month plus extra expenses?

[SunDevil]

If you have two incomes, that isn't too much of a problem.

$2,000 a month is $24,000 a year, so if you made $50,000, the government taxes $11,000. That would leave $15,000 or $1,250 a month extra for food ($200), insurance($100), gas($75), utilities ($100) and a bunch of other stuff that is in my budget. Most mortgage lenders won't lend you that kind of money if your income isn't 30% or less of the monthly payment.

The second thing to remember is that with inflation trends, people like my Dad had the income level 30 years after he bought the house I grew up in, to pay off the mortgage in one year (if no taxes or expenses) He spent something like $80k back in 1973, and that is what he was making when he retired in 2003 and was making the last house payments. The monthly payment on a $500,000 house might not be so bad in 30 years when you are making $500,000 a year. But that may not happen like it did for our parents.

[yankeeyosh]

If you have two incomes, that isn't too much of a problem.

$2,000 a month is $24,000 a year, so if you made $50,000, the government taxes $11,000. That would leave $15,000 or $1,250 a month extra for food ($200), insurance($100), gas($75), utilities ($100) and a bunch of other stuff that is in my budget. Most mortgage lenders won't lend you that kind of money if your income isn't 30% or less of the monthly payment.

The second thing to remember is that with inflation trends, people like my Dad had the income level 30 years after he bought the house I grew up in, to pay off the mortgage in one year (if no taxes or expenses) He spent something like $80k back in 1973, and that is what he was making when he retired in 2003 and was making the last house payments. The monthly payment on a $500,000 house might not be so bad in 30 years when you are making $500,000 a year. But that may not happen like it did for our parents.

But I don't have two incomes...only one. I haven't been able to save a dime since I've been here since my rent is so incredibly high. And really, no one making less than six figures would pay the rent I'm paying in most cases...and that's not even close to a mortgage. Honestly, I still don't understand how anyone, unless they have an incredibly high salary, can afford a house ANYWHERE in the Northeast, unless they get major help by family.

[SunDevil]

There aren't that many people making 6 figures. People do buy houses on one income and don't have too many problems.

Have you really looked at your finances to see exactly where all your money is going, and if there is anything that could be changed? My rent is $7200/year, and I'm assuming yours is well under the $24,000/year that the mortgage would be but much higher than mine. If it is doubled what mine is, you would just need $9600/year more for the mortgage payments. You would get probably half that in tax benefits for paying all of that interest. And to come up with the other $4300, I let you figure out where you can cut back or earn more to make up the difference.

[bluup10]

I KNOW y'all hate the house topic, but I am just curious about this one. I was just on another board and literally the avg age that people were buying homes ranged from 23-25. Now, I am thinking that these people must live in a low cost area. I don't know ANYONE that is 23 that owns a home. However I live in one of the biggest cities in the US where maybe it'sjust too expensive. Maybe these people live in East Nowhere.

Well, I was 22 years old, with no tertiary education and earning a decent amount of money. I wanted to buy a house and went to my bank and even got an estate agent to scout around for me.
The only reason I put it off for a while, was that the levies were outrageous!! And of course, the classic that people would ask me "Why are you buying a house when you're still so young?"

So, it doesn't surprise me that many, many more young people can afford buying a house/flat.

[bluup10]

i sort of take offense to that. i don't own a house, but most of my friends do, and some of them own more than one...and their parents didn't help them at all. like the OP said, we live in an area that USA Today ranked as one of the top 10 most undervalued housing markets in the country. my boyfriend bought his house at 22 with zero help from parents and has paid off about 35,000 in principle in just 3 years. another friend at work bought his house on his own at 24 and now owns a second that he rents out...and he's looking for a third, and he's still only 25.

i don't think it's fair to assume that just because someone owns a house at an early age their parents bought it for them.

je suis d'accord.

[lonestar]

But I don't have two incomes...only one. I haven't been able to save a dime since I've been here since my rent is so incredibly high. And really, no one making less than six figures would pay the rent I'm paying in most cases...and that's not even close to a mortgage. Honestly, I still don't understand how anyone, unless they have an incredibly high salary, can afford a house ANYWHERE in the Northeast, unless they get major help by family.

A. By livin in affordable Northeastern cities like Hartford, Albany, Buffalo, Rochester, Manchester, Scranton, Syracuse, ect...ie. staying away from high-cost areas.

B. By saving up a sizeable down-payment.

C. By cutting down on other expenditures. If you buy a house in my hometown for $120,000 and you put $20k down, over a 30 year mortgage your payments are $583 a month. That's assuming a rate of 5.3%. $120k will get you a damn fine house where I come from, and really the only high cost you may have to worry about is winter month heating bills (my mother's last couple winters she saw $190 monthly heating bills - Buffalo is COOOOLLDDD in the winter...).

[yankeeyosh]

There aren't that many people making 6 figures. People do buy houses on one income and don't have too many problems.

Have you really looked at your finances to see exactly where all your money is going, and if there is anything that could be changed? My rent is $7200/year, and I'm assuming yours is well under the $24,000/year that the mortgage would be but much higher than mine. If it is doubled what mine is, you would just need $9600/year more for the mortgage payments. You would get probably half that in tax benefits for paying all of that interest. And to come up with the other $4300, I let you figure out where you can cut back or earn more to make up the difference.

Well, if my rent was more "normal", I'd be doing fine. The problem is that instead of my habitational expenses going down, they'd go way UP.

After all my basic expenses, I have roughly $900 a month "discretionary". But the problem is that things out of my control come up constantly, and the $900 might become $500. If you tack on the $500 to my rent, you get $1,600. If you consider the mortgage, taxes, etc., that still isn't enough to pay for a house. And this means absolutely no money in my entertanment budget.

[lonestar]

Evidently about 293,000 people at last count.

Right but when I was about 12 yeas old the city population was 375,000...the city has lost a lot of people in the last 10-15 years and is experiencing incredible population loss...they either move to the suburbs, which really has contributed to city decline, or they are moving to Charlotte, NC (a lot people from the Buff move to Charlotte...people from Buffalo call Charlotte "Buffalo South".)

It's killing city businesses like bars, movie theatres, ect...because people leave the city limits and stay in the "strip mall" areas of the suburbs for these things...

[yankeeyosh]

A. By livin in affordable Northeastern cities like Hartford, Albany, Buffalo, Rochester, Manchester, Scranton, Syracuse, ect...ie. staying away from high-cost areas.

B. By saving up a sizeable down-payment.

C. By cutting down on other expenditures. If you buy a house in my hometown for $120,000 and you put $20k down, over a 30 year mortgage your payments are $583 a month. That's assuming a rate of 5.3%. $120k will get you a damn fine house where I come from, and really the only high cost you may have to worry about is winter month heating bills (my mother's last couple winters she saw $190 monthly heating bills - Buffalo is COOOOLLDDD in the winter...).

About a month ago, I ran some numbers, and I determined that when you take everything (incl. taxes and other expenses into consideration), every $10,000 requires nearly $100. So a $100,000 mortgage wil run nearly $1,000 a month. And there's no way I can get something with only a $100,000 mortgage in this town. Maybe if I lived in western NY, yes. But not here.

And that doesn't include maintenance...something you don't worry about if you're in an apartment.

[lonestar]

About a month ago, I ran some numbers, and I determined that when you take everything (incl. taxes and other expenses into consideration), every $10,000 requires nearly $100. So a $100,000 mortgage wil run nearly $1,000 a month. And there's no way I can get something with only a $100,000 mortgage in this town. Maybe if I lived in western NY, yes. But not here.

When I lived in Boston I knew people who commuted from Nashua, Manchester, Worcester, ect...are those cheaper areas?

I definetly think that if one really wanted to own a home they could do it...it is certainly possible as evidenced by the board. It obviously takes certain sacrifices, especially if you live in a high cost area.

[yankeeyosh]

When I lived in Boston I knew people who commuted from Nashua, Manchester, Worcester, ect...are those cheaper areas?

Not anymore. You can't get anything here in a 50 mile radius for under $200K, unless you get a really crappy fixer-upper that's about to fall to the ground.

[lonestar]

Also, I don't see home ownership as a bad thing...I know you think too many people are being "pressured" into it, but I see it a little different...homes are ussually a pretty good investment because the value is almost always increasing (as long as you're in a good area). Granted mortgage payments may get higher, but for the most part people who own homes will see a return opon sale, ect...

So, if kids our age can swing it, I certainly see nothing wrong with it...

Also, don't forget many people who have mortgages make it work by cutting out other expenses like, for instance have no car payments, ect...I imagine a person making $40k - 50k in a reasonable area could swing it.

[yankeeyosh]

Also, I don't see home ownership as a bad thing...I know you think too many people are being "pressured" into it, but I see it a little different...homes are ussually a pretty good investment because the value is almost always increasing (as long as you're in a good area). Granted mortgage payments may get higher, but for the most part people who own homes will see a return opon sale, ect...

So, if kids our age can swing it, I certainly see nothing wrong with it...

Also, don't forget many people who have mortgages make it work by cutting out other expenses like, for instance have no car payments, ect...I imagine a person making $40k - 50k in a reasonable area could swing it.

All else being equal, it's a good investment. But, if there's no guarantee that someone's going to be living in an area for more than a couple of years, it makes absolutely no sense to buy.

Another thing I worry about is that people who never made a rent payment in their lives, who are living with their parents just to save that 10% for a downpayment, have absolutely no clue what's going to happen to their cash flow. They could be struggling mightily for years on end...one month of unemployment away from being homeless. They can't go back to grad school full time, they can't take a lower paying job...essentially, their futures have been sealed for the next thirty years.

When the next recession happens, our generation will be screwed.

[yankeeyosh]

I do want to note, however, that the recent explosion in home ownership among people under 25 clearly shows that we are doing much better financially as a whole than our immediate predecessors...despite all the naysayers who say that salaries are lower. About three times as many people under 25 are purchasing homes now than they did a dozen or so years ago. This is despite the doubling or even tripling of home prices in some markets. Yes, interest rates have been low, but it doesn't make up for the incredible rise in prices. Many might be pressured by parents or peers, but clearly, the fact that home ownership among the very young is so strong indicates that we have more money than we think we do.

[HIKU]

B.T.W.

I have a $220,000 - 30 yr fixed at 6.89%:
Monthly About: $1,440

Dont assume a $200k loan is $2k a month =)

Anyways... here's an example on what's going on in my area:

CALIFORNIA:
Realestate in CA for the last 50 yrs or so has an average of 6-7% gain on a cycle of 6-10 years. These pass 3-4 years the realestate in CA has gone up 30-40% depending on the area. This maybe the cause of multiple variables such as, low interest rate, exotic loans, and etc. etc. BUT the bottom line is the market went up 30-40% because of it. If the average cycle is about 6-10 years, I would bet the market WILL SHIFT and level out. Basic concept of supply and demand.

I currently have about $30k in liquid assests, when the market dips or when I find a good deal from a seller who is in financial troubles because of thos exotic loans, money is to be made in realestate.

f.y.i.
Anyone who knows or follows realestate should tell you, we do not know what the market will do. The feds has recently stated they maynot up the prime rate, and we may even see a rate decrease in 07. If this accures, we may see another hiccup in the market BUT it is all speculation. With that said, the lender also have some concerns on some of those exotic loans like many has stated in this thread. They are tighting up on lending the money out.... for those that want a house within the next 2-5 years, realestate is a diamond in the ruff.

[old_school_soul]

About a month ago, I ran some numbers, and I determined that when you take everything (incl. taxes and other expenses into consideration), every $10,000 requires nearly $100. So a $100,000 mortgage wil run nearly $1,000 a month.

I call bullshit. You need to run your numbers again. My first townhouse was $220,000. I put 10% cash down (my own money, thanks) and another 10% with a secondary loan. Total payments were $1600 a month (including insurance and taxes). And this was with a 30 yr fixed rate of 7.25% (bought it in 2001).

Owning a home greatly reduces the amount you pay in taxes. I believed it increased my return by about $3,000 ~ which is about $250 a month. So technically I was paying about $1350 a month.

On top of that you deal with appreciation of the house, which if/when you decide to sell is money in your pocket.

[HIKU]

I call bullshit. You need to run your numbers again. My first townhouse was $220,000. I put 10% cash down (my own money, thanks) and another 10% with a secondary loan. Total payments were $1600 a month (including insurance and taxes). And this was with a 30 yr fixed rate of 7.25% (bought it in 2001).

Owning a home greatly reduces the amount you pay in taxes. I believed it increased my return by about $3,000 ~ which is about $250 a month. So technically I was paying about $1350 a month.

On top of that you deal with appreciation of the house, which if/when you decide to sell is money in your pocket.

Good call... this is why people ask "how can I do it" "how can I afford this" and etc etc. I always recommend this, dont listen to any advice from someone who hasnt been thru it... all must make sure to do there due dilegance when it comes to financial issues such as these.

[frogleggz]

I agree that $2K for a $200K mortgage doesn't make sense. PITI on my 440K mortgage runs about $3200, and that is with an approximately 7% interest rate. By the $2K for $200K calculation, I would be shelling out nearly $5K a month. :eek:

Oh, and the tax break really is glorious... covers property taxes and insurance.... but of course, we do shell out a lot of money for repairs and improvements.

[asm198]

My fiance bought our house when he was 24. The house price was around 110,000 and he makes 30-35k, I think. At the time he bought, he was paying about the same amount as what our mortgage is now, which is around $900. He wanted to own and figured that he could be paying that much for a two br apartment or he could buy a 4 br house.

The main reason he could afford it is that we live in an affordable city in the midwest. We bought an older home in a suburb that isn't trendy and is kind of far away from pretty much everything (about 10-20 minutes), but we bought what we could afford. Our plan is to live here for 5-7 years, sell, and move to a part of town with better schools. For now, we are happy where we live and it works for us.

[AshleyJordan]

I know also that some cities (like NYC, where I am,) have first-time homebuyers initiatives for middle income (read, $40,000-$70,000 annual salary) buyers, including grants for downpayment. That's what I'm doing, because it's free money and purchasing a one-bedroom condo in Brooklyn or Queens will end up being much more affordable than renting a one-bedroom apartment in Bk or Queens. . . .especially if the market continues to cool off. I've already noticed prices falliing a little bit in Brooklyn, which I never would have imagined a year ago!

[yankeeyosh]

I call bullshit. You need to run your numbers again. My first townhouse was $220,000. I put 10% cash down (my own money, thanks) and another 10% with a secondary loan. Total payments were $1600 a month (including insurance and taxes). And this was with a 30 yr fixed rate of 7.25% (bought it in 2001).

Owning a home greatly reduces the amount you pay in taxes. I believed it increased my return by about $3,000 ~ which is about $250 a month. So technically I was paying about $1350 a month.

On top of that you deal with appreciation of the house, which if/when you decide to sell is money in your pocket.

Here's the problem with your argument in my case. I live in a part of the country where taxes are notoriously high. So I think that the $1,600 monthly payment will be about $1,800 in my case. If this was a condo, I am sure it would be very close to $2,000 a month. And that is still much more than I can afford right now...and much more than anyone can reasonably afford who's making less than, say, $80-90K.

[Chameleon]

Actually, yankeeyosh, the property tax in Boston isn't significantly larger than the property tax in DC (~$11.1 per $1000 in Boston vs ~$9.2 per $1000 in DC if this (http://www.boston.com/news/local/massachusetts/articles/2005/12/09/property_taxes_rise_92_in_city/) and this (http://www.washingtonpost.com/wp-dyn/content/article/2006/02/27/AR2006022701385.html) are right), for a $220,000 house you'd only be paying $420 more a YEAR in Boston, so $1600 a month becomes $1635.

[capella]

Well, here's my issue with the whole 1600-2000 a month isn't such a big deal argument. Currently, I make around 2K a month. Yep. That's all folks. My husband makes about the same. We pay 1145 for mortgage and about another 300 a month in taxes and insurance. So 1445 a month. That's a pretty big chunk out of 4K a month IMO.

It's fine for now, but could we up it to 1600 a month or 2k? Not in any way that's comfortable. We pay about 400 for the car payment and insurance. We pay about 250 in electric, 110 in cable/internet, 300 for school loans, 80 for cell phones, 100 for water, and whatever we can to pay down CC debt, then food, gas, etc. Alright then for now. I don't think we're all that extraordinary in the bill arena.

Let's say we want to have kids. Well, clearly we can't afford for one of us to stay home. We also can't afford daycare (since it runs about 400 a month for the CrackHead Day Care Center and 600-1000 for a decent day care center. All of that on top of the other added expenses. We also make too much to qualify for any kind of assistance.

So what is an average couple like us to do? Shell out half of our take home in mortgage costs? It's close enough to that as it is and we live in a REALLY modest home.

I think it's certainly not as easy as it looks. Sure, you CAN buy a home young if you choose to live in the right area. But that means unless you and your SO make a ton of money together... you're going to have to sacrifice other things to do it (such as not have kids for a bazillion years because you can't afford them). If you work in a really high COL area you're going to have trouble affording these kinds of payments on an average salary. Let's not underestimate the strain a 1600 a month payment makes on an average salary.

[yankeeyosh]

Actually, yankeeyosh, the property tax in Boston isn't significantly larger than the property tax in DC (~$11.1 per $1000 in Boston vs ~$9.2 per $1000 in DC if this (http://www.boston.com/news/local/massachusetts/articles/2005/12/09/property_taxes_rise_92_in_city/) and this (http://www.washingtonpost.com/wp-dyn/content/article/2006/02/27/AR2006022701385.html) are right), for a $220,000 house you'd only be paying $420 more a YEAR in Boston, so $1600 a month becomes $1635.

Whoops...I forgot OSS lived in DC. Still, I would think the Boston taxes aren't much cheaper than those in New York...where my parents are paying ~$8,000 a year for a house valued at roughly $400-450K.

[yankeeyosh]

Well, here's my issue with the whole 1600-2000 a month isn't such a big deal argument. Currently, I make around 2K a month. Yep. That's all folks. My husband makes about the same. We pay 1145 for mortgage and about another 300 a month in taxes and insurance. So 1445 a month. That's a pretty big chunk out of 4K a month IMO.

It's fine for now, but could we up it to 1600 a month or 2k? Not in any way that's comfortable. We pay about 400 for the car payment and insurance. We pay about 250 in electric, 110 in cable/internet, 300 for school loans, 80 for cell phones, 100 for water, and whatever we can to pay down CC debt, then food, gas, etc. Alright then for now. I don't think we're all that extraordinary in the bill arena.

Let's say we want to have kids. Well, clearly we can't afford for one of us to stay home. We also can't afford daycare (since it runs about 400 a month for the CrackHead Day Care Center and 600-1000 for a decent day care center. All of that on top of the other added expenses. We also make too much to qualify for any kind of assistance.

So what is an average couple like us to do? Shell out half of our take home in mortgage costs? It's close enough to that as it is and we live in a REALLY modest home.

I think it's certainly not as easy as it looks. Sure, you CAN buy a home young if you choose to live in the right area. But that means unless you and your SO make a ton of money together... you're going to have to sacrifice other things to do it (such as not have kids for a bazillion years because you can't afford them). If you work in a really high COL area you're going to have trouble affording these kinds of payments on an average salary. Let's not underestimate the strain a 1600 a month payment makes on an average salary.

Exactly. Agree with you 100%, Amy.

[Deadend]

Actually, my hometown was just rated the second cheapest to live in on cnn.com: Best cities for buying a home (http://money.cnn.com/magazines/moneymag/bpretire/2006/top25s/affordable.html?cnn=yes)

$45,000 is the average home price. But who wants to live there?
\
Actually, the one nice thing is that you are 1 1/2 hours from Toronto and 3 hours from Cleveland, and you can get a killer home for $100k, but you have to deal with snow...

and if you want to buy a house in the suburbs, it's much more expensive...

Ya but were you actually in Buffalo Buffalo, or were you in Tonawanda or another one of those big long indian names all the sub-urbs have there? Because buffalo is da GHET-TO.

PS I think in Buffalo you probably don't have to worry about the cold too much anyways. Look around and there will probably be a house on fire somewhere in the neighbourhood.

[LaFille]

Ya but were you actually in Buffalo Buffalo, or were you in Tonawanda or another one of those big long indian names all the sub-urbs have there? Because buffalo is da GHET-TO.

PS I think in Buffalo you probably don't have to worry about the cold too much anyways. Look around and there will probably be a house on fire somewhere in the neighbourhood.



even the big suburban homes in western NY can be FAR less expensive than their counterparts elsewhere in the US though... thing is, property taxes in NY are extremely high...

as for the snow, i LOVE it! maybe i'm a masochist though... :huge:

[lonestar]

Ya but were you actually in Buffalo Buffalo, or were you in Tonawanda or another one of those big long indian names all the sub-urbs have there? Because buffalo is da GHET-TO.

PS I think in Buffalo you probably don't have to worry about the cold too much anyways. Look around and there will probably be a house on fire somewhere in the neighbourhood.

No I grew up in the city...there are parts of the city that are just fine...like around Delaware Park, North Buffalo near Hertel and Shoshone, Oakland Place...

It's not that terrible...sure the masten district and lovejoy are absolute shitholes - kinda like in that movie THE CROW, but they are not the only parts of the city. It is sad that the crime rate is so high...it is ranked with a crime index 200, 100 being the average and in 2004 there were 17.9 murders/100,000 people when the average is 5.5.

[Chameleon]

Exactly. Agree with you 100%, Amy.
I don't think anyone is saying $1600-$2000 isn't a big deal, just correcting faulty assumptions on how much it actually costs.

[dengeist]

I think it depends on where you live and your situation. Some people live in an area where houses still cost 60k, some people do get help from their parents (which really isn't a bad thing in this case IMO), some people are married, some people saved, some people got one of those scam intrest-only mortgages and some people lucked up and got a really good job right out of the box. It really depends.

My mother lives in Syracuse and the value of houses is still relatively low. 120k can buy you a nice, victorian styled two or three family home which would generate income. Not a bad deal. If I lived in an area like that, I'd seriously consider buying a home.

Some people have parents who had the foresight to save for their children. I plan on doing this and I think it's a really good start.

People get married and combined income allows them to buy a house. If I were married, I don't think I'd want to live in an apartment for very long.

Some people stay at home or just manage to save enough for a down payment. More power to them!

I've read a couple of articles about some people in our age group that get those interest only mortgages and those adjustable rate mortgages and they are starting to be in a lot of trouble.

I know a couple of people that graduated with a bachelor's in whatever and are making 70 or 80k right out of college. If I had that much discretionary income, I'd buy a house or condo too.

It really depends on a lot of factors. Personally, I live in an area where a little two bedroom bungalow costs 195k in the suburbs and that's a HUD home! So there will be a lot of hidden costs. A regular two bedroom house in the suburbs costs up in the 450k range. A regular four bedroom, two family house costs is about the same but that's in the HOOD! Property tax is sky-high in Jersey, so that also factors in.

I know a couple of people my age that own a home or a condo. I know a few people that are looking into it though, myself included. I'd say it's within the realm of possibility and not all that unusual.

[SunDevil]

Well, here's my issue with the whole 1600-2000 a month isn't such a big deal argument. Currently, I make around 2K a month. Yep. That's all folks. My husband makes about the same. We pay 1145 for mortgage and about another 300 a month in taxes and insurance. So 1445 a month. That's a pretty big chunk out of 4K a month IMO.

It's fine for now, but could we up it to 1600 a month or 2k? Not in any way that's comfortable. We pay about 400 for the car payment and insurance. We pay about 250 in electric, 110 in cable/internet, 300 for school loans, 80 for cell phones, 100 for water, and whatever we can to pay down CC debt, then food, gas, etc. Alright then for now. I don't think we're all that extraordinary in the bill arena.

Let's say we want to have kids. Well, clearly we can't afford for one of us to stay home. We also can't afford daycare (since it runs about 400 a month for the CrackHead Day Care Center and 600-1000 for a decent day care center. All of that on top of the other added expenses. We also make too much to qualify for any kind of assistance.

So what is an average couple like us to do? Shell out half of our take home in mortgage costs? It's close enough to that as it is and we live in a REALLY modest home.



But, you both would hopefully be making more money if you lived in NYC, Boston, LA San Diego or San Fran. You might not be able to afford the same size of house for the money, but if your finances are stable and you don't have too much in the way of bills, it is possible.

Now, while there is only one of me, here is how my expenses compare to yours. Not everyone has the same bills that you do, so some people could afford the higher mortgage payment.

car payment and insurance : $400 vs $45
electric: $250 vs $25 (I don't live in FL were you have to use AC)
cable/internet: $110 vs $0
school loan(s): $300 vs $60
cell phone(s): $80 vs $25
water: 100 vs $10(incl in rent)

That is $1240 vs $165

I know that I only have an apartment right now, and if I did live in a house that those numbers would be a little higher. But, I can't see them more than doubling to $400 month.

If you can find an open lot in an area still, I still like the idea of building your own house (well sub-contracting out a lot of it) You could build a $400,000 house for around $150,000 in labor in materials in the high price areas.

[yankeeyosh]

But, you both would hopefully be making more money if you lived in NYC, Boston, LA San Diego or San Fran. You might not be able to afford the same size of house for the money, but if your finances are stable and you don't have too much in the way of bills, it is possible.

Now, while there is only one of me, here is how my expenses compare to yours. Not everyone has the same bills that you do, so some people could afford the higher mortgage payment.

car payment and insurance : $400 vs $45
electric: $250 vs $25 (I don't live in FL were you have to use AC)
cable/internet: $110 vs $0
school loan(s): $300 vs $60
cell phone(s): $80 vs $25
water: 100 vs $10(incl in rent)

That is $1240 vs $165

I know that I only have an apartment right now, and if I did live in a house that those numbers would be a little higher. But, I can't see them more than doubling to $400 month.

If you can find an open lot in an area still, I still like the idea of building your own house (well sub-contracting out a lot of it) You could build a $400,000 house for around $150,000 in labor in materials in the high price areas.

Well, it's true that basic expenses can vary from person to person, let's look at what you said:


car payment and insurance : $400 vs $45

Most people have car payments...unless their parents showed their largesse or they're OK with their 88 Buick. If you're under 25 and not from East Podunk, USA, your insurance will almost certainly be $1,500 or more/yr, or $125/mo...even for a crappy car.

electric: $250 vs $25 (I don't live in FL were you have to use AC)

Come winter, it's a LOT more than that. Especially if you own a house.

cable/internet: $110 vs $0
That's borderline discretionary, although to most in Gen 'Y', they can't really live without it...to some degree, at least.


school loan(s): $300 vs $60$300 is closer to the median on a standard 10 year plan.

cell phone(s): $80 vs $25
For most phone plans, even the basic plan is $45-50 a month after taxes and everything.

water: 100 vs $10(incl in rent)
Water is going to be more if you own a house.

So I think your expenses are quite a bit less than the "norm". Granted, people can scrimp on some things, and I applaud those efforts, but some things, like loans and electricity, can't be reduced. Also, some people have long commutes, have to get their clothes drycleaned all the time, have credit card debt, etc. (the latter might be their own undoing, but still...).

[SunDevil]

I would also hope to make a little more $$$ if I moved to the East or West coast. I have a 95 Saturn that I was able to pay off in the first year (I gave my Dad the Blue Book value). My insurance is $540/year right now, it was $1000 in Phoenix 3 or 4 years ago.

If you have electric heat, it will cost more. If you have gas, your gas bill will be higher. Or you can live in San Diego and not worry about either being really high.

I have never paid to have my laundry dry-cleaned or done for me. I spend $12.50 every 6 weeks to put it in the laundry machines here. If I had a house, it would run up my electric bill if I had to use my own washer & dryer.

I get 90% of the TV shows I want to watch over a digital HDTV over the air antenna. It looks just as good as digital cable. If I need to watch sports on ESPN, I will go to the sports bar. There are a few shows that I use bit torrent to d/l from the internet. There are 15 wifi access points around me, so that is taken care of.

But, everyone has there breaking point for how much they can spend on a house loan. I know that I wouldn't want to spend all of my money towards a house and not be able to save and invest in anything else for the next 30 years. But, I can understand how some people wouldn't have a problem with getting a $2,000/month mortgage in certain areas.

[Chameleon]

Most people have car payments...unless their parents showed their largesse or they're OK with their 88 Buick. If you're under 25 and not from East Podunk, USA, your insurance will almost certainly be $1,500 or more/yr, or $125/mo...even for a crappy car.

97 Honda Accord, bought it 3 years ago, paid it off. People keep saying you can have it if you really wanted to and yes, there are people that can't afford a house or aren't willing to make the sacrifices. If you don't think a house is in the future for you, that's really okay, yankeeyosh.

Could we stop with the "But Mommy and Daddy spoil them" excuses? Some people start from a more priviledged position, what's to be gained from villifying them? Really?

[Winter Storm]

...So I think your expenses are quite a bit less than the "norm". Granted, people can scrimp on some things, and I applaud those efforts, but some things, like loans and electricity, can't be reduced. Also, some people have long commutes, have to get their clothes drycleaned all the time, have credit card debt, etc. (the latter might be their own undoing, but still...).

Mark, I think while you can come up with a million different reasons for why Gen X or Gen Y shouldn't be able to afford houses so young, the reality is many of them can come up with a million of ways they managed to do just that. Yes, many 20-somethings have managed to buy homes. It can be expensive but they are making it work. Obviously it can be done and geographic location, income and a dozen other factors play a large part. I think they best we can do is try not to get so obsessed over how everyone else has done it and stop worrying so much it.

I mean you could sit around and worry about every single nickle or you can just worry about that when it is your time. And your time will come eventually.

[lonestar]

I mean you could sit around and worry about every single nickle or you can just worry about that when it is your time. And your time will come eventually.

Right on point...statistics can be fun but life is far to complicated to be reduced into easily digestible numbers...

[Winter Storm]

Most people have car payments...unless their parents showed their largesse or they're OK with their 88 Buick. If you're under 25 and not from East Podunk, USA, your insurance will almost certainly be $1,500 or more/yr, or $125/mo...even for a crappy car.

I've been driving a 2000 Honda Accord for over 3 years and I paid mine off the first year. I generally don't carry car payments and buy cars I can pay off quickly. That comes from years worth of savings.


$300 is closer to the median on a standard 10 year plan.

I believe I am on the standard plan and my payments are only $82 monthly. Again, I planned well in college and began making regular loan payments my sophomore year to keep future payments lower.

Like Chameleon said, if you really want to do something, you can find a way.

[red]

yeah, i agree with Chameleon re: the whole mommy and daddy shtick.

this thread is pretty tiresome if you ask me. the same thread over and over again.

[capella]

But, you both would hopefully be making more money if you lived in NYC, Boston, LA San Diego or San Fran. You might not be able to afford the same size of house for the money, but if your finances are stable and you don't have too much in the way of bills, it is possible.

Now, while there is only one of me, here is how my expenses compare to yours. Not everyone has the same bills that you do, so some people could afford the higher mortgage payment.

car payment and insurance : $400 vs $45
electric: $250 vs $25 (I don't live in FL were you have to use AC)
cable/internet: $110 vs $0
school loan(s): $300 vs $60
cell phone(s): $80 vs $25
water: 100 vs $10(incl in rent)

That is $1240 vs $165

I know that I only have an apartment right now, and if I did live in a house that those numbers would be a little higher. But, I can't see them more than doubling to $400 month.

If you can find an open lot in an area still, I still like the idea of building your own house (well sub-contracting out a lot of it) You could build a $400,000 house for around $150,000 in labor in materials in the high price areas.
OK, but I think your bills are far below what most people pay. And these numbers are for TWO people. It's double the cost, even though we do get double the income. We are also both teachers and no, we really wouldn't make a ton more (especially when factoring in the COL) if we moved to another area.

The 400 for car and insurance- 309 for car payment (15K loan) and 92 for insurance monthly (that's for two cars... one is paid off)

The electric bill is about average I'd say. Sure it might cost less some months, but heating in the north is going to average out the cooling costs in the south.

I think it's great that you don't pay for cable or internet, and while I see how it might be a discretionary expense... I do need the internet for my job and the cable is about our only entertainment expense. We aren't living it up most weekends. This weekend I spent about 7 hours working at school and more working around the house and on school stuff at home.

School loans include BOTH of us. I have around 15K in loans and he has about 10K left.

Cell phones are for both of us and we don't carry a land line. 80 bucks for a family plan is about the best deal out there. Believe me... I've looked.

And the water bill is what the water bill is.

I am not saying it's impossible, clearly it isn't because I own a home, but I do think that it's not as easy as saying... What the heck! You mean you can't afford to own a home???!?!? I chose to move here for the express purpose of being able to buy a home. It takes sacrifice to do it and I don't expect that MOST people can swing a 1600-2000K mortgage payment. Especially not in their 20's. Taxes and insurance are a whole other ball game as well. It's not so simple. I can see why the thought would make people freak out. It's definitely takes a conscious effort.

[yankeeyosh]

Mark, I think while you can come up with a million different reasons for why Gen X or Gen Y shouldn't be able to afford houses so young, the reality is many of them can come up with a million of ways they managed to do just that. Yes, many 20-somethings have managed to buy homes. It can be expensive but they are making it work. Obviously it can be done and geographic location, income and a dozen other factors play a large part. I think they best we can do is try not to get so obsessed over how everyone else has done it and stop worrying so much it.

I mean you could sit around and worry about every single nickle or you can just worry about that when it is your time. And your time will come eventually.

I never brought this up...I wasn't intending on starting this thread. I honestly wish people would stop these threads because they DO get on my nerves. But I'm just telling the truth. And the truth is that unless you're making a tremendously high salary, at least half of your income will go into something related to your house. And I think that in five years, when I expect there will be a major economic downturn, it will come back to haunt them.



yeah, i agree with Chameleon re: the whole mommy and daddy shtick.

this thread is pretty tiresome if you ask me. the same thread over and over again.

Again, I am just making an observation. There was NO opinion in the whole post about that.

[yankeeyosh]

I am not saying it's impossible, clearly it isn't because I own a home, but I do think that it's not as easy as saying... What the heck! You mean you can't afford to own a home???!?!? I chose to move here for the express purpose of being able to buy a home. It takes sacrifice to do it and I don't expect that MOST people can swing a 1600-2000K mortgage payment. Especially not in their 20's. Taxes and insurance are a whole other ball game as well. It's not so simple. I can see why the thought would make people freak out. It's definitely takes a conscious effort.

Again, agree with you 100%. This is EXACTLY what I'm trying to say.

[Winter Storm]

I never brought this up...I wasn't intending on starting this thread. I honestly wish people would stop these threads because they DO get on my nerves. But I'm just telling the truth. And the truth is that unless you're making a tremendously high salary, at least half of your income will go into something related to your house. And I think that in five years, when I expect there will be a major economic downturn, it will come back to haunt them.

Well, yeah someone else may have brought the topic up, but you can choose to either jump in and preach the same stuff you've been preaching (which is basically saying young 20-somethings as a whole are getting in way over their heads despite what various resources or individual circumstances they may have) or stay out of it if it bothers you so much.

The only point I'm trying to make is regardless of how much it is costing people, its their money, their choice and for the most part, I don't see anyone who really regrets having bought their homes young. And it most cases I see (really all of them), the houses have gone on to appreciate so much that it has become a great investment and in an economic downturn, has only benefited them.

And even if it hasn't, why even be bothered by it? Why even spend so much time fussing over and breaking figures over how someone else can afford their home? I just don't get why there is so much concern over what other people do with their money. I feel like, when you have the money and are seriously in the market to buy, that is when you start worrying about it. Til then, why the concern? Best thing to do is save as much as possible and cross that bridge when you get there. If others have managed to, so be it. Doesn't have to affect your situation at all.

That's all I'm saying.

[lonestar]

I agree with that too...

Mark, I understand the symptoms where you are constantly analyzing, comparing, grouping and classifying things but I don't understand why it bothers you so much. I don't know why you think you're in "last place" or something. You seem to get distressed because you percieve (correctly or incorrectly) that other people may have it better than you do (whether they own houses, make more money, are in management slots, or even in the area of relationships). But the truth is that everybody on this board and everybody in the world has their own set of problems to deal with; people have to overcome difficult situations every day, week, month and year. The people that you think have cherry lives still have problems...

There are thousands of people that are probably doing "better" than me in many ways classified by society (job, money, relationship, ect.). There are also thousands of people that don't have some of the things that I enjoy...I guess my point is no situation is problem-free.

[yankeeyosh]

Well, yeah someone else may have brought the topic up, but you can choose to either jump in and preach the same stuff you've been preaching (which is basically saying young 20-somethings as a whole are getting in way over their heads despite what various resources or individual circumstances they may have) or stay out of it if it bothers you so much.

The only point I'm trying to make is regardless of how much it is costing people, its their money, their choice and for the most part, I don't see anyone who really regrets having bought their homes young. And it most cases I see (really all of them), the houses have gone on to appreciate so much that it has become a great investment and in an economic downturn, has only benefited them.

And even if it hasn't, why even be bothered by it? Why even spend so much time fussing over and breaking figures over how someone else can afford their home? I just don't get why there is so much concern over what other people do with their money. I feel like, when you have the money and are seriously in the market to buy, that is when you start worrying about it. Til then, why the concern? Best thing to do is save as much as possible and cross that bridge when you get there. If others have managed to, so be it. Doesn't have to affect your situation at all.

That's all I'm saying.

It is a good investment...I've never said it wasn't. But what I am saying is that unless you are 100% sure of where you are going in the next few years, it is not worth it. It makes it hard to go back to school...if you want to go into a lower-paid profession you can't...if you might want to move to another city in a year or two, it's a financial pain. What also bothers me is that so many people are becoming housepoor...spending every dime they have on their houses...that they cannot contribute to the overall economy otherwise. This might be an underlying factor to the next major economic downturn...especially as this generation enters its thirties.

[Winter Storm]

...I've never said it wasn't. But what I am saying is that unless you are 100% sure of where you are going in life, it is not worth it.
YOU DO NOT KNOW THIS. You cannot possibly speak on everyone else's situation. It is a huge blanket statement that ignores everyone else's individual situation. You just can't make a statement like that for everyone. And who is ever 100% sure of where they are going in life? Life throws all sorts of curves and turns and you have to be able to make decisions sometimes not knowing where you'll be in 5-10 years.

It makes it hard to go back to school...if you want to go into a lower-paid profession you can't...if you might want to move to another city in a year or two, it's a financial pain.

What you are doing is making a bunch of excuses that may be preventing you from buying a home, but it cannot be assumed of everyone else.


What also bothers me is that so many people are becoming housepoor...spending every dime they have on their houses...that they cannot contribute to the overall economy otherwise. This might be an underlying factor to the next major economic downturn...especially as this generation enters its thirties.

And how do you really know how much other people are spending on their houses. Are you again assuming that they are going broke paying for their homes? Again, why does their financial stability bother you so much? Cause it really doesn't have to

The people I knpw who own aren't at all "house-poor". They still travel, attend grad school, shop and dine at their leisure and have active social lives with cash in their pockets. So perhaps what you may perceive right in front of you, isn't reality everywhere else.

You may want to consider that.

[yankeeyosh]

YOU DO NOT KNOW THIS. You cannot possibly speak on everyone else's situation. It is a huge blanket statement that ignores everyone else's individual situation. You just can't make a statement like that for everyone. And who is ever 100% sure of where they are going in life? Life throws all sorts of curves and turns and you have to be able to make decisions sometimes not knowing where you'll be in 5-10 years.


I agreed with this, but I did change this before you posted...I mean the next few years...not life.


What you are doing is making a bunch of excuses that may be preventing you from buying a home, but it cannot be assumed of everyone else.

If you're making $50K a year, how the hell can you afford a $1,600 mortgage payment on your own...not including taxes or anyting? You would take home roughly $2,800 a month, so it would eat up more than half your take-home in MORTGAGE alone. Most people that are making $50K a year are paying $800 a month in rent. It's a comfortable salary, but not comfortable to buy a house in most of the Megalopolis corridor. If you live in an area where houses are $120K or less, then yes, it's possible. NOT $200K or more.

I'm not going to comment on this anymore unless there's an absolute reason to...this is a very sticky topic, and I wish people would stop posting threads on this.

[Winter Storm]

If you're making $50K a year, how the hell can you afford a $1,600 mortgage payment on your own...not including taxes or anyting? You would take home roughly $2,800 a month, so it would eat up more than half your take-home in MORTGAGE alone. Most people that are making $50K a year are paying $800 a month in rent. It's a comfortable salary, but not comfortable to buy a house in most of the Megalopolis corridor.

Again, who the hell cares what someone else is doing with their money. When its your money, then you worry about it. You can't say what is comfortable for someone else. That is assumption and presumption.

I'm not going to comment on this anymore unless there's an absolute reason to...this is a very sticky topic, and I wish people would stop posting threads on this.

An easier solution would be to ignore threads that annoy you so much. This will probably come up a few more times before the New Year and its your choice to jump in the convo if you so desire to.

I'm not picking on you Mark, just giving you a different perspective to consider.

[lonestar]

I agreed with this, but I did change this before you posted...I mean the next few years...not life.



If you're making $50K a year, how the hell can you afford a $1,600 mortgage payment on your own...not including taxes or anyting? You would take home roughly $2,800 a month, so it would eat up more than half your take-home in MORTGAGE alone. Most people that are making $50K a year are paying $800 a month in rent. It's a comfortable salary, but not comfortable to buy a house in most of the Megalopolis corridor. If you live in an area where houses are $120K or less, then yes, it's possible. NOT $200K or more.

I'm not going to comment on this anymore unless there's an absolute reason to...this is a very sticky topic, and I wish people would stop posting threads on this.

I think there are a lot of special lending situations where you may be able to lower your monthly payments. Also, I don't see why it is so bad that people our age are buying homes. If anything, I think that would be a good sign of a strong economy for people in their late 20s and early 30s...

[Kingdom]

I KNOW y'all hate the house topic, but I am just curious about this one. I was just on another board and literally the avg age that people were buying homes ranged from 23-25. Now, I am thinking that these people must live in a low cost area. I don't know ANYONE that is 23 that owns a home. However I live in one of the biggest cities in the US where maybe it'sjust too expensive. Maybe these people live in East Nowhere.Just an example, but you can buy a small home in parts of Texas for around 40-50 grand.