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re: The math for buying a home no longer works, per WSJ
Posted on 12/20/23 at 9:13 am to GreatLakesTiger24
Posted on 12/20/23 at 9:13 am to GreatLakesTiger24
First time home buyers should be buying below their income levels. That allows them to build up equity and stay within an appropriate % of their income. Once they build up equity, buying housing appropriate to their income level becomes more attainable, and eventually may be able to buy above their income level
Also using a median basis for income and comparing it to a median basis for home ownership doesn’t make sense. That assumes everyone should be able to buy a home - which is false, tons of people have to rent or choose to rent. That also assumes that people can only buy one home, also false. Tons of people in upper income brackets buy multiple houses. It’s just a poor and lazy comparison by some blogger
Also using a median basis for income and comparing it to a median basis for home ownership doesn’t make sense. That assumes everyone should be able to buy a home - which is false, tons of people have to rent or choose to rent. That also assumes that people can only buy one home, also false. Tons of people in upper income brackets buy multiple houses. It’s just a poor and lazy comparison by some blogger
This post was edited on 12/20/23 at 9:15 am
6
Posted on 12/20/23 at 9:22 am to Upperdecker
quote:
First time home buyers should be buying below their income levels.
Then they spend all their savings on guns and ammo to fend off the undesirables
Posted on 12/20/23 at 9:34 am to Upperdecker
(no message)
This post was edited on 12/20/23 at 9:47 am
Posted on 12/20/23 at 9:34 am to Upperdecker
quote:
First time home buyers should be buying below their income levels.
The biggest problem is most banks won't give you a mortgage that small because there's not enough profit in a small loan for the lender.
It's easier to get approved for a $200-300k loan vs a $50-150k loan.
The current system does not allow most people to buy below their income
This post was edited on 12/20/23 at 9:37 am
Posted on 12/20/23 at 10:00 am to Upperdecker
quote:
First time home buyers should be buying below their income levels. That allows them to build up equity and stay within an appropriate % of their income. Once they build up equity, buying housing appropriate to their income level becomes more attainable, and eventually may be able to buy above their income level
I have friends who did this. They are stuck in a house they've outgrown and probably make 1.5x what their house is worth, but don't feel like they can afford (or just don't want to afford) to buy something larger in this current market.
On the other hand, we bought a house that was about 3x our gross, but that we could grow into as our family grows and our incomes grow. We're locked into a 2.75% interest rate on a home that is now less than 2x our income and we have space to have more kids (currently only have 1).
This post was edited on 12/20/23 at 10:04 am
Posted on 12/20/23 at 2:15 pm to Upperdecker
(no message)
This post was edited on 3/13/24 at 11:53 am
Posted on 12/20/23 at 3:22 pm to Upperdecker
quote:
First time home buyers should be buying below their income levels. That allows them to build up equity and stay within an appropriate % of their income.
Unless they’re buying a trailer, there are no decent homes beneath their income level, unless they move to the worst corners of the Hood.
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