Millennial Home Ownership
August 17, 2023 10:49 AM Subscribe
Gift link with more details from NYT
posted by Selena777 at 10:56 AM on August 17, 2023 [3 favorites]
posted by Selena777 at 10:56 AM on August 17, 2023 [3 favorites]
"When not forced to pay exorbitant and predatory student loan payments, more millennials were able to save to buy a house."
posted by praemunire at 11:05 AM on August 17, 2023 [40 favorites]
posted by praemunire at 11:05 AM on August 17, 2023 [40 favorites]
Gen Z (born 1997 to 2013) made the smallest gains in homeownership over five years, just 1.6 million, for a total of about 2 million homeowner households.
You goddamn slackers!
Just trying the older asshole hat on for size.
posted by Abehammerb Lincoln at 11:06 AM on August 17, 2023 [6 favorites]
You goddamn slackers!
Just trying the older asshole hat on for size.
posted by Abehammerb Lincoln at 11:06 AM on August 17, 2023 [6 favorites]
I love the closing line. Summarizes our house situation as well.
posted by samthemander at 11:13 AM on August 17, 2023
posted by samthemander at 11:13 AM on August 17, 2023
They were able to save enough from 4 years of pause during the pandemic, during which many people experienced associated job issues that elicited the need for the pause?
posted by Selena777 at 11:13 AM on August 17, 2023 [1 favorite]
posted by Selena777 at 11:13 AM on August 17, 2023 [1 favorite]
i never thought i'd be in a position to buy a house. i lucked into a well paying job last year, and i hope to buy a house next year. but the area i need to live in doesn't have much under $300k and even with a 20% down payment i'd have painfully high monthly payments. and everything has an hoa. and i can't count on having a well paying job forever (certainly not for 30 years--into my late 70s). and i really want a house now. after 25 years of apartments i am super over it, especially with how renting is these days. it all just seems so stressful and hopeless, and i'm not even seriously looking for a house yet.
posted by misanthropicsarah at 11:25 AM on August 17, 2023 [13 favorites]
posted by misanthropicsarah at 11:25 AM on August 17, 2023 [13 favorites]
Ha! boomer here. Sorry, I don't have the usual boomer take. I'm sure someone around here will have that for you. I've never been adult enough to consider owning a home until now. Now that it seems to be too late. I've got $100,000 in student loans to pay for on Library staff (not librarian) salary. I'd love to own because I'm sick of landlords and living in apartments. Especially now that rents have jumped so high that I can barely afford to live. I'm living in a slum that I wouldn't have chosen when I was younger and less particular, but it was what I could afford. Some of the kids are buying homes? Well good for them. I'm quoting The Who, sorry, but the kids are alright.
posted by evilDoug at 11:26 AM on August 17, 2023 [8 favorites]
posted by evilDoug at 11:26 AM on August 17, 2023 [8 favorites]
I'm sorry to hear this. Being saddled with the swindle of home ownership is a tough road of debt for many. Hope it works out in favor for most of them, sincerely.
posted by tiny frying pan at 11:29 AM on August 17, 2023 [2 favorites]
posted by tiny frying pan at 11:29 AM on August 17, 2023 [2 favorites]
Cusper millennial, and while we could have done it on our own and be house poor for a bit, we got an inheritance that paid the down payment, closing costs, etc. But we're always really honest about it in housing conversations, which is the least we can do, I think.
posted by atomicstone at 11:29 AM on August 17, 2023 [3 favorites]
posted by atomicstone at 11:29 AM on August 17, 2023 [3 favorites]
Home ownership can definitely be a swindle, but renting can be a swindle too. It all depends on the market, the pricing, the interest rates, etc. Building equity could be the key to wealth, or it could all disappear due to climate change or neighborhood change. It’s a huge gamble.
posted by rikschell at 11:37 AM on August 17, 2023 [11 favorites]
posted by rikschell at 11:37 AM on August 17, 2023 [11 favorites]
> Chamberlain bought her home for $457,000
If you just cut out your daily avocado toast, then you'll be able to buy your own home* after 156.5 years.
*By "your own" we mean live with AirBNB strangers forever, and by "home" we mean unregulated hotel.
posted by AlSweigart at 11:39 AM on August 17, 2023 [21 favorites]
If you just cut out your daily avocado toast, then you'll be able to buy your own home* after 156.5 years.
*By "your own" we mean live with AirBNB strangers forever, and by "home" we mean unregulated hotel.
posted by AlSweigart at 11:39 AM on August 17, 2023 [21 favorites]
i for one am glad to open my house / unregulated hotel just in time for climate change to burn and/or flood my house down
or for the insurance company to double my insurance escrow every year
posted by eustatic at 11:44 AM on August 17, 2023 [1 favorite]
or for the insurance company to double my insurance escrow every year
posted by eustatic at 11:44 AM on August 17, 2023 [1 favorite]
Building equity could be the key to wealth,
...this is such a fantastical idea from the position of my life I can't even
posted by tiny frying pan at 11:46 AM on August 17, 2023 [7 favorites]
...this is such a fantastical idea from the position of my life I can't even
posted by tiny frying pan at 11:46 AM on August 17, 2023 [7 favorites]
I made it in under the cut; but oh boy did it feel even as we were going through the whole process like it was a narrow "6-12 months earlier or 6-12 months later & we wouldn't have been able to do it" type thing. Really, that's been the feeling I've had my whole life high school on.
The (Snowpiercer?) train's pulling away from the station & building up speed; many people were never able to get on in the first place; it's not *entirely* gone; but there's a narrowing window of being able to grab on & even staying at the same speed isn't enough.
And I'd hardly say I 'did it on my own', there's an entire constellation of help & support, personal to societal. But if it was that narrow of a window for me, how's anybody *without* all that supposed to find that stability?
As I've heard said, we have rent control in this country; it just takes a sack of money to buy into it. I'm paying $1800/m, $2300/m with property taxes. My neighbor who's renting a mirror-image unit was paying $2900/m when they moved in. The apartment I lived at before moving in here was following the yearly algorithmic collusion via RealPage in lockstep every year.
10 years from now, I'll probably be paying ~$2600/m. How much is my neighbor going to be paying, & are they going to be able to keep pace with their income (much less be able to save)?
posted by CrystalDave at 11:46 AM on August 17, 2023 [9 favorites]
The (Snowpiercer?) train's pulling away from the station & building up speed; many people were never able to get on in the first place; it's not *entirely* gone; but there's a narrowing window of being able to grab on & even staying at the same speed isn't enough.
And I'd hardly say I 'did it on my own', there's an entire constellation of help & support, personal to societal. But if it was that narrow of a window for me, how's anybody *without* all that supposed to find that stability?
As I've heard said, we have rent control in this country; it just takes a sack of money to buy into it. I'm paying $1800/m, $2300/m with property taxes. My neighbor who's renting a mirror-image unit was paying $2900/m when they moved in. The apartment I lived at before moving in here was following the yearly algorithmic collusion via RealPage in lockstep every year.
10 years from now, I'll probably be paying ~$2600/m. How much is my neighbor going to be paying, & are they going to be able to keep pace with their income (much less be able to save)?
posted by CrystalDave at 11:46 AM on August 17, 2023 [9 favorites]
My wife and I are elder millenials that do not own a house. It's likely that we would never be able to own a house if I wasn't going to eventually inherit one.
posted by schyler523 at 11:49 AM on August 17, 2023 [1 favorite]
posted by schyler523 at 11:49 AM on August 17, 2023 [1 favorite]
crazy thing is even tho it's bad in the US, it's 3-5X worse in Canada, UK, Oz, NZ. Plus the Nordic states aren't too healthy now either.
"Real Estate" is weird that way, and it's no accident one of the major industry scammers from last century greased his way into power in 2016.
posted by Heywood Mogroot III at 11:55 AM on August 17, 2023 [7 favorites]
"Real Estate" is weird that way, and it's no accident one of the major industry scammers from last century greased his way into power in 2016.
posted by Heywood Mogroot III at 11:55 AM on August 17, 2023 [7 favorites]
I feel very lucky... the cheap home we bought in 2012 will be paid off before we get very far into 2024 and we'll be completely debt-free.
On the other hand, the total cost of the long list of repairs this place needs no doubt may well exceed the value of the house, so... I don't know if we're ahead of things compared to paying rent, or not really.
posted by Foosnark at 11:55 AM on August 17, 2023 [4 favorites]
On the other hand, the total cost of the long list of repairs this place needs no doubt may well exceed the value of the house, so... I don't know if we're ahead of things compared to paying rent, or not really.
posted by Foosnark at 11:55 AM on August 17, 2023 [4 favorites]
I just finally got one in the past month at 40, surely I am the one who tipped the numbers over into majority!
Only really possible because we were able to live with family and save for a few years part of which was during the student loan payment pause, and because I'm on track to get PSLF loan forgiveness soon, definitely privileges not a lot get, and because renting is so expensive for worse properties that buying is competitive here.
Of course two weeks in I find vermiculite insulation that the inspector missed or neglected to point out, so now it's headfirst into trying to pay for asbestos abatement, yay home ownership...
posted by jason_steakums at 11:58 AM on August 17, 2023 [4 favorites]
Only really possible because we were able to live with family and save for a few years part of which was during the student loan payment pause, and because I'm on track to get PSLF loan forgiveness soon, definitely privileges not a lot get, and because renting is so expensive for worse properties that buying is competitive here.
Of course two weeks in I find vermiculite insulation that the inspector missed or neglected to point out, so now it's headfirst into trying to pay for asbestos abatement, yay home ownership...
posted by jason_steakums at 11:58 AM on August 17, 2023 [4 favorites]
where do they find these people??
The top two of those don't sound so crazy? Am I missing something?
posted by corb at 12:00 PM on August 17, 2023 [4 favorites]
The top two of those don't sound so crazy? Am I missing something?
posted by corb at 12:00 PM on August 17, 2023 [4 favorites]
I’m in due diligence for a house right now but just got the news that it needs a $9,000 roof and $9,000 worth of plumbing work, and $15,000 worth of HVAC in a couple of years.
I don’t have it, and I agree as stated above the window is almost shut. I don’t think I’ll ever be in a position to make another offer if I pull out of this one but I don’t think I can make this one work.
Sorry I let the Millennial Team down, everybody.
posted by The Monster at the End of this Thread at 12:01 PM on August 17, 2023 [5 favorites]
I don’t have it, and I agree as stated above the window is almost shut. I don’t think I’ll ever be in a position to make another offer if I pull out of this one but I don’t think I can make this one work.
Sorry I let the Millennial Team down, everybody.
posted by The Monster at the End of this Thread at 12:01 PM on August 17, 2023 [5 favorites]
We (1985 millenials) bought our house in 2014 for $280k @ 4.375% interest / 30 year mortgage. We refinanced in 2021 to 2.6% interest / 12 year mortgage.
Zillow has my house at $480k, and interest rates from our same lender (a local credit union) are now at 7%.
Based on that, if we were to buy our house today on a 30 year mortgage, our current $2,000 payment (including P&I, taxes, and homeowners) would balloon to over $3,200.
It would cost us $1,200 more per month, or $14,000 more a year. We wouldn't be able to afford it, plain and simple.
Housing has become an investment vehicle for rich people, rather than a home, a place to live for a family. It's a tragedy.
posted by vitout at 12:01 PM on August 17, 2023 [31 favorites]
Zillow has my house at $480k, and interest rates from our same lender (a local credit union) are now at 7%.
Based on that, if we were to buy our house today on a 30 year mortgage, our current $2,000 payment (including P&I, taxes, and homeowners) would balloon to over $3,200.
It would cost us $1,200 more per month, or $14,000 more a year. We wouldn't be able to afford it, plain and simple.
Housing has become an investment vehicle for rich people, rather than a home, a place to live for a family. It's a tragedy.
posted by vitout at 12:01 PM on August 17, 2023 [31 favorites]
We were so close to not affording to buy our place that we spent a year on a basically usurious interest-only private mortgage before we cemented our finances enough to get a bank mortgage. On an 800sqft condo. With over 300K down from the sale of our old place in Kitchener. And in the five years since we bought this box in the sky it's appreciated 40%. That's how fucked up Toronto is.
I don't envy anyone who's trying to buy, it's absolutely bullshit right now. You have to have generational wealth, 30 years of savings, or an asshole tech job to be able to do it.
posted by seanmpuckett at 12:02 PM on August 17, 2023 [7 favorites]
I don't envy anyone who's trying to buy, it's absolutely bullshit right now. You have to have generational wealth, 30 years of savings, or an asshole tech job to be able to do it.
posted by seanmpuckett at 12:02 PM on August 17, 2023 [7 favorites]
>$15,000 worth of HVAC in a couple of years
HEEHRA will help hopefully
posted by Heywood Mogroot III at 12:05 PM on August 17, 2023 [6 favorites]
HEEHRA will help hopefully
posted by Heywood Mogroot III at 12:05 PM on August 17, 2023 [6 favorites]
The top two of those don't sound so crazy? Am I missing something?
If homeownership means having to share my room with strangers from AirB&B just to keep my mortgage paid, I'm going to continue to rent.
(Old Millennial here, fortunately living in a low-cost-of-living city. Can't buy a home quite yet but I probably will in the next year or two, which still surprises me because I lived in NYC for eight years thinking "I'll never be able to buy even an itty-bitty condo" and then I lived in Iowa for six years thinking "I can afford a place, but I don't want to live here.")
posted by Jeanne at 12:08 PM on August 17, 2023 [3 favorites]
If homeownership means having to share my room with strangers from AirB&B just to keep my mortgage paid, I'm going to continue to rent.
(Old Millennial here, fortunately living in a low-cost-of-living city. Can't buy a home quite yet but I probably will in the next year or two, which still surprises me because I lived in NYC for eight years thinking "I'll never be able to buy even an itty-bitty condo" and then I lived in Iowa for six years thinking "I can afford a place, but I don't want to live here.")
posted by Jeanne at 12:08 PM on August 17, 2023 [3 favorites]
>Am I missing something?
$160k for a duplex w/ $1800/mo rents is a pretty good cap rate, and the AirBNBer seemed a little sus . . . their site shows about 30 active listings in my town of 500,000 so that's pretty unicorn-y, plus the single bathroom thing.
posted by Heywood Mogroot III at 12:10 PM on August 17, 2023 [1 favorite]
$160k for a duplex w/ $1800/mo rents is a pretty good cap rate, and the AirBNBer seemed a little sus . . . their site shows about 30 active listings in my town of 500,000 so that's pretty unicorn-y, plus the single bathroom thing.
posted by Heywood Mogroot III at 12:10 PM on August 17, 2023 [1 favorite]
I don’t know if it does, Jeanne - an applicant wouldn’t be able to qualify for a mortgage based on future possible rental income from boarders.
posted by Selena777 at 12:24 PM on August 17, 2023
posted by Selena777 at 12:24 PM on August 17, 2023
then I lived in Iowa for six years thinking "I can afford a place, but I don't want to live here."
Ouch, it's me except I actually bought the place in Iowa knowing I don't want to be here long term...
posted by jason_steakums at 12:28 PM on August 17, 2023 [1 favorite]
Ouch, it's me except I actually bought the place in Iowa knowing I don't want to be here long term...
posted by jason_steakums at 12:28 PM on August 17, 2023 [1 favorite]
Are there not FHA loans anymore? Or are sellers simply not accepting FHA buyers anymore? We went FHA on our first home, and it really made a difference for us.
posted by Thorzdad at 12:44 PM on August 17, 2023 [1 favorite]
posted by Thorzdad at 12:44 PM on August 17, 2023 [1 favorite]
The subtitle on the article ("And It's Not Thanks to Their Parents") made me laugh, as an elder millennial who finally had saved enough money to buy a condo in the city I love...and then had to spend it all buying a house for my parent. I'm glad I could do it, because it needed doing, but still.
Though to be fair, the seed money for those savings came from the insurance payout after my other parent died quite young. So, you know, I guess technically in the long run my parent DID help me buy a home, but definitely not the way this article means.
posted by We put our faith in Blast Hardcheese at 12:50 PM on August 17, 2023 [10 favorites]
Though to be fair, the seed money for those savings came from the insurance payout after my other parent died quite young. So, you know, I guess technically in the long run my parent DID help me buy a home, but definitely not the way this article means.
posted by We put our faith in Blast Hardcheese at 12:50 PM on August 17, 2023 [10 favorites]
Housing is a human right.
Everyone deserves to have permanent, stable housing regardless of their year of birth or economic circumstance.
posted by splitpeasoup at 12:51 PM on August 17, 2023 [22 favorites]
Everyone deserves to have permanent, stable housing regardless of their year of birth or economic circumstance.
posted by splitpeasoup at 12:51 PM on August 17, 2023 [22 favorites]
Just had a millennial friend couple buy their first home and I strongly suspect they are doing the "hope we can refinance in a few years at lower rates" dance. And that was literally the cheapest property in a less desirable town as close to where they work as it could be. He's a tradesman and she's good at home decorating and art - so I think they make the best of it - he's already salvaged a few building materials from jobs he works on to make repairs of the place. But without a parent helping them with the deposit I have no idea on many young couples even start. The house is so small I doubt they even have space for an AirBnB side gig.
(as Gen Z'ers - charitably a zillennial if you think that's a thing - we're trying to help them out - they have helped us out a lot with our kids and a few other things, and depending on our work bonus's this year we're going to try and pay a mortgage month for them)
posted by inflatablekiwi at 12:51 PM on August 17, 2023
(as Gen Z'ers - charitably a zillennial if you think that's a thing - we're trying to help them out - they have helped us out a lot with our kids and a few other things, and depending on our work bonus's this year we're going to try and pay a mortgage month for them)
posted by inflatablekiwi at 12:51 PM on August 17, 2023
Gen X'er coming in mainly to say I was here, and that I have a theater background and as such I completely gave up on the idea of home ownership a long time ago.
posted by EmpressCallipygos at 12:55 PM on August 17, 2023 [7 favorites]
posted by EmpressCallipygos at 12:55 PM on August 17, 2023 [7 favorites]
(I meant Gen X, Xennial above - apparently I don't know my X and Zs today and missed the edit window)
posted by inflatablekiwi at 12:58 PM on August 17, 2023 [1 favorite]
posted by inflatablekiwi at 12:58 PM on August 17, 2023 [1 favorite]
It just doesn't feel like there's a reliable route to home ownership anymore. Most people are struggling to make ends meet and can't easily save for a down payment (and meanwhile investors keep buying properties to rent out, driving up both the house prices and rent, so the goal keeps slipping further and further away).
My partner bought our house several years ago, when prices were low. And they qualified for a program where the city outright gave them a 10% down payment (all they had to do was live in the house for at least 5 years before renting it out). And thanks to scholarships and cars handed down to us by relatives, we don't have student loan debt or car payments. All those variables came together for us, so we're homeowners now. But it's not a strategy we could just recommend to someone else. It's probably not even a strategy that would work for us today--similar houses are selling for 2-3x as much now and my salary hasn't increased by anywhere near that.
It seems like most of our friends who have bought houses did so under equally hard-to-repeat circumstances--there's usually some combination of luck and generational wealth. It's never just skipping the Starbucks and avocado toast to save up.
posted by threecolorable at 1:01 PM on August 17, 2023 [7 favorites]
My partner bought our house several years ago, when prices were low. And they qualified for a program where the city outright gave them a 10% down payment (all they had to do was live in the house for at least 5 years before renting it out). And thanks to scholarships and cars handed down to us by relatives, we don't have student loan debt or car payments. All those variables came together for us, so we're homeowners now. But it's not a strategy we could just recommend to someone else. It's probably not even a strategy that would work for us today--similar houses are selling for 2-3x as much now and my salary hasn't increased by anywhere near that.
It seems like most of our friends who have bought houses did so under equally hard-to-repeat circumstances--there's usually some combination of luck and generational wealth. It's never just skipping the Starbucks and avocado toast to save up.
posted by threecolorable at 1:01 PM on August 17, 2023 [7 favorites]
If homeownership means having to share my room with strangers from AirB&B just to keep my mortgage paid, I'm going to continue to rent.
I wouldn't prefer this option either, unless it was a shorter-term plan with a clear end date. But that's easy for me to say since I'm not in a position where that feels like the only option, and I'm not going to second-guess someone who took the best option they could figure out.
Fewer than one in five millennials received gifts from family and friends to help with their down payments,
This detail surprised me, since I have seen this so often. Mostly people don't talk about it, to the point that I suspect it is underreported in the survey as well.
I'm Gen-X, so not the subject of the FPP. But like others above, I could not afford my current house on my salary if I was buying from scratch today with 20% down and current interest rates. We own a house because we had equity from a previous house, as well as a modest inheritance, not because we are smarter or harder-working or anything like that. It's luck in terms of historical moments, and in the form of intergenerational wealth transfer.
posted by Dip Flash at 1:07 PM on August 17, 2023 [3 favorites]
I wouldn't prefer this option either, unless it was a shorter-term plan with a clear end date. But that's easy for me to say since I'm not in a position where that feels like the only option, and I'm not going to second-guess someone who took the best option they could figure out.
Fewer than one in five millennials received gifts from family and friends to help with their down payments,
This detail surprised me, since I have seen this so often. Mostly people don't talk about it, to the point that I suspect it is underreported in the survey as well.
I'm Gen-X, so not the subject of the FPP. But like others above, I could not afford my current house on my salary if I was buying from scratch today with 20% down and current interest rates. We own a house because we had equity from a previous house, as well as a modest inheritance, not because we are smarter or harder-working or anything like that. It's luck in terms of historical moments, and in the form of intergenerational wealth transfer.
posted by Dip Flash at 1:07 PM on August 17, 2023 [3 favorites]
1985 here, putting an offer on my hopeful first house today or tomorrow. I make a good amount of money (software) and don't have other meaningful debt, but... I live in Seattle, so pour one out. I think we'd be another several years away from even starting this process if my (tiny, non-unicorn) startup hadn't been bought. No inherited wealth from my family or my spouse's ("Fewer than one in five millennials received gifts from family and friends to help with their down payments" indeed), supported my formerly-arts-focused spouse through a career change that coincided with the pandemic, etc.
It stinks to pay triple the per-square-foot price that would be expected in less-expensive metro areas, but it's a wild market here. During the years of low interest rates, I was frozen out in previous attempts to purchase by competing buyers who came with all-cash offers, $100-$250k over the list price, and all contingencies waived. Many of these same places were getting flipped after a year or two, with little to no improvement, for $100k over the previous list price. It's an intensely frustrating environment for people who are hoping to settle down and actually live in the one house they own.
We're upper-middle economic tier for the country, and middle economic tier for Seattle, but even as we attempt to buy something that — on paper — is clearly within budget, it's hard not to feel like we'll be house-poor somehow. I can't imagine how anyone of my generation (or younger) in a less-than-excellent financial position will ever manage to own a home with confidence, and that's heartbreaking for a city that's struggling to create more high-density and affordable rental housing.
posted by cyranix at 1:11 PM on August 17, 2023 [3 favorites]
It stinks to pay triple the per-square-foot price that would be expected in less-expensive metro areas, but it's a wild market here. During the years of low interest rates, I was frozen out in previous attempts to purchase by competing buyers who came with all-cash offers, $100-$250k over the list price, and all contingencies waived. Many of these same places were getting flipped after a year or two, with little to no improvement, for $100k over the previous list price. It's an intensely frustrating environment for people who are hoping to settle down and actually live in the one house they own.
We're upper-middle economic tier for the country, and middle economic tier for Seattle, but even as we attempt to buy something that — on paper — is clearly within budget, it's hard not to feel like we'll be house-poor somehow. I can't imagine how anyone of my generation (or younger) in a less-than-excellent financial position will ever manage to own a home with confidence, and that's heartbreaking for a city that's struggling to create more high-density and affordable rental housing.
posted by cyranix at 1:11 PM on August 17, 2023 [3 favorites]
>hard-to-repeat circumstances
Swiss-cheese model of home ownership
posted by Heywood Mogroot III at 1:13 PM on August 17, 2023 [1 favorite]
Swiss-cheese model of home ownership
posted by Heywood Mogroot III at 1:13 PM on August 17, 2023 [1 favorite]
I did the math and to buy my house, which I bought in 2010, you would need twice the monthly payment to afford the mortgage payment, taxes + insurance. From 1700 a month to 3400 a month. Its the same house.
posted by MisantropicPainforest at 1:15 PM on August 17, 2023 [1 favorite]
posted by MisantropicPainforest at 1:15 PM on August 17, 2023 [1 favorite]
It's not even the same house, it's older now, unless you've been renovating constantly.
posted by tiny frying pan at 1:18 PM on August 17, 2023 [5 favorites]
posted by tiny frying pan at 1:18 PM on August 17, 2023 [5 favorites]
I meant Gen X, Xennial above
Maybe you're timeless!
posted by Abehammerb Lincoln at 1:27 PM on August 17, 2023 [3 favorites]
Maybe you're timeless!
posted by Abehammerb Lincoln at 1:27 PM on August 17, 2023 [3 favorites]
I live in Seattle, so pour one out.
It is crazy here. I lucked out and bought the dip after the 2008 crash. I really cannot imagine what kinds of salaries are required to live here now. It would require two salaries for the most modest house, unless the breadwinner is a doctor or lawyer.
I cannot afford to live anywhere else in the city, so I'm effectively forced to stay where I am or leave Seattle entirely. I will be paying a mortgage into my 70s, whether or not I have a job.
posted by They sucked his brains out! at 1:30 PM on August 17, 2023 [1 favorite]
It is crazy here. I lucked out and bought the dip after the 2008 crash. I really cannot imagine what kinds of salaries are required to live here now. It would require two salaries for the most modest house, unless the breadwinner is a doctor or lawyer.
I cannot afford to live anywhere else in the city, so I'm effectively forced to stay where I am or leave Seattle entirely. I will be paying a mortgage into my 70s, whether or not I have a job.
posted by They sucked his brains out! at 1:30 PM on August 17, 2023 [1 favorite]
Here's one to whip your head around. In the early 80s when I was a kid, my dad told me, "Just make your age." If you were 40 and made $40k a year, you'd be able to own a house!
I made much more than $40k at 40 (I've been incredibly lucky due to my skills lining up with tech needs AND being a tall white man), but I sure as shit couldn't afford a house.
Deregulation has been so good for America! [/sarcasmfilter]
posted by Abehammerb Lincoln at 1:31 PM on August 17, 2023 [6 favorites]
I made much more than $40k at 40 (I've been incredibly lucky due to my skills lining up with tech needs AND being a tall white man), but I sure as shit couldn't afford a house.
Deregulation has been so good for America! [/sarcasmfilter]
posted by Abehammerb Lincoln at 1:31 PM on August 17, 2023 [6 favorites]
~Building equity could be the key to wealth,
~...this is such a fantastical idea from the position of my life I can't even
Boomer here. Building equity is such a trap/gimmick. IME, it only works for you if A) You stay in one house long enough to pay it off, or get real close to paying it off, and/or B) Market prices for existing homes skyrocket to where you can make enough from selling your home to be able to pay-off your current mortgage and still have the downpayment for your next one.
Because of life/work/family/etc. I’ve been in three different homes over my adulthood, and have never really reaped the supposed benefits of “building equity.”
posted by Thorzdad at 1:34 PM on August 17, 2023 [2 favorites]
~...this is such a fantastical idea from the position of my life I can't even
Boomer here. Building equity is such a trap/gimmick. IME, it only works for you if A) You stay in one house long enough to pay it off, or get real close to paying it off, and/or B) Market prices for existing homes skyrocket to where you can make enough from selling your home to be able to pay-off your current mortgage and still have the downpayment for your next one.
Because of life/work/family/etc. I’ve been in three different homes over my adulthood, and have never really reaped the supposed benefits of “building equity.”
posted by Thorzdad at 1:34 PM on August 17, 2023 [2 favorites]
Opposite note, WaPo: ‘Unluckiest generation’ falters in boomer-dominated market for homes
I'm never going to own a home, but that's fine. I live alone and always will be alone and don't need that much space, and I don't want to live 4 hours away from literally everything so I can afford a house.
posted by jenfullmoon at 1:38 PM on August 17, 2023 [1 favorite]
I'm never going to own a home, but that's fine. I live alone and always will be alone and don't need that much space, and I don't want to live 4 hours away from literally everything so I can afford a house.
posted by jenfullmoon at 1:38 PM on August 17, 2023 [1 favorite]
I own a condo and don't think of it as equity. It'll be nice if I get anything out if I do move (not that I'm going to given I got in with a 3.5% interest rate in 2020).
What I do have is an incredible savings over what renting half my current space would cost. I'm paying $1400/month, a one bedroom close to work starts at $1600 for half the space.
So there's a hell of a lot of money that I get to sock away which someone trying to buy now can't, even if they do get a place.
posted by Slackermagee at 1:51 PM on August 17, 2023 [6 favorites]
What I do have is an incredible savings over what renting half my current space would cost. I'm paying $1400/month, a one bedroom close to work starts at $1600 for half the space.
So there's a hell of a lot of money that I get to sock away which someone trying to buy now can't, even if they do get a place.
posted by Slackermagee at 1:51 PM on August 17, 2023 [6 favorites]
>Its the same house.
Interest rates dropped 5% -> 3% 2010-2021 tho, which doubled the price. Then we get the Fed whammy of 2022-23, which is militating against making housing more affordable since it is locking up existing supply (owners with low rates can't move) and thereby boosting home prices, giving LLs a stronger whip-hand on rents.
https://fred.stlouisfed.org/graph/?g=17W7m
I guess we should just offer fixed 5% home mortgages for everyone forever and not monkey with this interest rate, since it is like tickling the demon core.
posted by Heywood Mogroot III at 1:58 PM on August 17, 2023 [1 favorite]
Interest rates dropped 5% -> 3% 2010-2021 tho, which doubled the price. Then we get the Fed whammy of 2022-23, which is militating against making housing more affordable since it is locking up existing supply (owners with low rates can't move) and thereby boosting home prices, giving LLs a stronger whip-hand on rents.
https://fred.stlouisfed.org/graph/?g=17W7m
I guess we should just offer fixed 5% home mortgages for everyone forever and not monkey with this interest rate, since it is like tickling the demon core.
posted by Heywood Mogroot III at 1:58 PM on August 17, 2023 [1 favorite]
I'm never going to own a home, but that's fine
Having your money in the market instead of a house is not a clearly wrong financial choice. The problem is the current bloodsucking rental market that means you may not be seeing even upfront savings from renting, meaning no margin to put away.
I am extremely lucky to be in a rent-stabilized apartment. But even though I'm a lawyer and currently have a salary probably in the top 10% of NYC individual incomes (definitely not top 5%) and have a bit of margin to put away, I find it hard to imagine owning an apartment here. Having been raised amongst renters, I lack the inner compulsion to buy as a symbol of adulthood or whatever, so I have no enthusiasm to stretch to own a place that I don't really like, and...you aren't getting anything anyone really likes (which doesn't mean "fancy" but does mean "some aesthetic appeal, a convenient neighborhood, and a dishwasher"), even in a one-bed, in Manhattan for under $1m. Probably more.
posted by praemunire at 2:01 PM on August 17, 2023 [6 favorites]
Having your money in the market instead of a house is not a clearly wrong financial choice. The problem is the current bloodsucking rental market that means you may not be seeing even upfront savings from renting, meaning no margin to put away.
I am extremely lucky to be in a rent-stabilized apartment. But even though I'm a lawyer and currently have a salary probably in the top 10% of NYC individual incomes (definitely not top 5%) and have a bit of margin to put away, I find it hard to imagine owning an apartment here. Having been raised amongst renters, I lack the inner compulsion to buy as a symbol of adulthood or whatever, so I have no enthusiasm to stretch to own a place that I don't really like, and...you aren't getting anything anyone really likes (which doesn't mean "fancy" but does mean "some aesthetic appeal, a convenient neighborhood, and a dishwasher"), even in a one-bed, in Manhattan for under $1m. Probably more.
posted by praemunire at 2:01 PM on August 17, 2023 [6 favorites]
I'm not going to say where I live lest the hordes descend and RIP our housing market, but:
I bought my first house at 40 for $220K in a boring-ass and relatively inconvenient neighborhood with 3% down at 3.5% interest. My monthly payment is about $1350 which is comfortable. In a little bit more time I can get rid of PMI and that'll knock $130 a month off my payment.
It's a small house and it's old and a bit janky in some places and needs some work, but nothing major. I've gone from "I guess I'll sell it in a few years and buy something else" to "I will hold onto this property for grim death."
If I bought the same place today my monthly payment would be at least $500 more a month. Interest rates, man.
I look at places like Seattle and I just don't get it.
posted by rhymedirective at 2:02 PM on August 17, 2023 [5 favorites]
I bought my first house at 40 for $220K in a boring-ass and relatively inconvenient neighborhood with 3% down at 3.5% interest. My monthly payment is about $1350 which is comfortable. In a little bit more time I can get rid of PMI and that'll knock $130 a month off my payment.
It's a small house and it's old and a bit janky in some places and needs some work, but nothing major. I've gone from "I guess I'll sell it in a few years and buy something else" to "I will hold onto this property for grim death."
If I bought the same place today my monthly payment would be at least $500 more a month. Interest rates, man.
I look at places like Seattle and I just don't get it.
posted by rhymedirective at 2:02 PM on August 17, 2023 [5 favorites]
we bought a nightmare house that needed almost every utility gutted and replaced in a rural town and we still had to bid over asking, and this was in 2018. We only got there with some help from family in money, but more help in family with assistance in performing major repairs. That's not really a sustainable model. That said, gains in wages since the pandemic and pauses in student loans allowed us to actually accrue saving and work on paying down our mortgage more quickly.
The flip side is we live like scavenging raccoons and still buy most of our stuff outside of food second hand and barely enjoy luxuries. Turns out years of living on the edge of poverty makes you really cagey with spending on things you don't absolutely need.
posted by Ferreous at 2:03 PM on August 17, 2023 [4 favorites]
The flip side is we live like scavenging raccoons and still buy most of our stuff outside of food second hand and barely enjoy luxuries. Turns out years of living on the edge of poverty makes you really cagey with spending on things you don't absolutely need.
posted by Ferreous at 2:03 PM on August 17, 2023 [4 favorites]
My boomer parents were locked out of home ownership in the early eighties by sky high interest rates (like, 13% or more for a 30 yr fixed). After their divorce, my dad finally bought a home with his new wife in his late 40’s. My mom bought into a co-op about a decade later.
My wife and I were lucky enough to buy in our late 30’s and our timing was pretty good, but it required us to buy a fixer in very, very rough part of South LA.
When you see what you can really afford it’s usually very sobering. I have even occasionally regretted some of my pseudo-boho life choices.
Argh. I know there’s so much pain and frustration our there and I really have nothing to say that doesn’t sound idiotic.
posted by ducky l'orange at 2:06 PM on August 17, 2023 [2 favorites]
My wife and I were lucky enough to buy in our late 30’s and our timing was pretty good, but it required us to buy a fixer in very, very rough part of South LA.
When you see what you can really afford it’s usually very sobering. I have even occasionally regretted some of my pseudo-boho life choices.
Argh. I know there’s so much pain and frustration our there and I really have nothing to say that doesn’t sound idiotic.
posted by ducky l'orange at 2:06 PM on August 17, 2023 [2 favorites]
*Laughs in autistic transgender despair* I'm slowly pulling out of my latest grief, burnout, and bigotry fuelled slump, so there's decent odds I'm not going to live in my car again. But owning a home seems like one of those things that only applies to other, more normal people. Like security and not having laws passed against you in a coordinated fashion by a major political party. At this point my retirement plan is none, inheritance, plague or dying in a ditch of natural causes or the war, cultural or literal.
posted by Jacen at 2:11 PM on August 17, 2023 [13 favorites]
posted by Jacen at 2:11 PM on August 17, 2023 [13 favorites]
Elder millennial here. I was happy renting forever. Never really looked seriously into purchasing real estate. Didn't want the responsibility. Then in the mid 2010s our awesome landlord decided to sell her place and we didn't want to roll the dice with a new landlord or to try our luck again in the horrendous Toronto rental market. So we reluctantly engaged in an incredibly stressful house search (pretty much every house in the area we were looking at was selling above asking through a bidding war), and paid what we thought were outrageous mid 2010s prices for a house further from the core than we wanted to be, but still easily commutable to my downtown job. I was almost certain that we had overpaid for our home but I wasn't terribly concerned as our plan was to live there long term and I felt we could ride out any short term depreciation over the next 10-20 years.
Since then home prices have appreciated by a factor between 2-3 depending on where in Toronto you are. Rent has also doubled.
I still am grateful for that landlord for choosing to sell when they did.
I try not to think about where our children will live when they're grown up and want to be independent.
posted by sid at 2:12 PM on August 17, 2023 [3 favorites]
Since then home prices have appreciated by a factor between 2-3 depending on where in Toronto you are. Rent has also doubled.
I still am grateful for that landlord for choosing to sell when they did.
I try not to think about where our children will live when they're grown up and want to be independent.
posted by sid at 2:12 PM on August 17, 2023 [3 favorites]
The weird thing for me is the one-room studio (280sqft) in Tokyo I was renting in the late 90s for ¥110,000/~$900 (depending on the yen) is now listed for ¥85,000/$600.
https://fred.stlouisfed.org/graph/?g=17We1
flat demographics + deflation + tons of supply (the building is in that shot) I guess
posted by Heywood Mogroot III at 2:18 PM on August 17, 2023 [4 favorites]
https://fred.stlouisfed.org/graph/?g=17We1
flat demographics + deflation + tons of supply (the building is in that shot) I guess
posted by Heywood Mogroot III at 2:18 PM on August 17, 2023 [4 favorites]
Homeownership is right for our lifestyle, and we’re fortunate that as DINKs with above average but not high salaries living in a low COL area, it’s quite doable for us. But imagining us in the exact same careers wanting to buy a home (a HOUSE?!?! Lolol) in, say… Chicago? Inconceivable.
posted by obfuscation at 2:28 PM on August 17, 2023 [2 favorites]
posted by obfuscation at 2:28 PM on August 17, 2023 [2 favorites]
If homeownership means having to share my room with strangers from AirB&B just to keep my mortgage paid, I'm going to continue to rent.
That's reasonable, although I can also see if I needed to live with roommates, having more control over the property itself and having them be short term stays (so less long term potential for drama) would also have it's appeal.
I also like not having to move every time I have a lease renewal because the landlord is jacking up the rent. The only time that didn't happen to us was when we had a landlord who lived on a different continent. He was friends with the HOA president (it was a very small building), so we had a nice balance of not in our business but responsive to issues as mediated by the guy onsite. If the pandemic hadn't hit, we may have rented there for years; although that may also not have worked out. The place flooded literally right after we moved and he decided to sell after getting it fixed. We moved because it was a cave, so the shine wore off during lockdown.
We could only afford to buy and move because of the pause in student loans letting us save up enough for a down payment. We had a small gift from family to help with the down payment that wound up not being necessary. They didn't want it back so we used it for furniture instead. Remote work let one of us replace a job lost because of Covid real fast (with a pay bump), so that helped as well. So yeah. We own because of Covid. It both enabled and motivated us.
posted by ghost phoneme at 2:49 PM on August 17, 2023 [2 favorites]
That's reasonable, although I can also see if I needed to live with roommates, having more control over the property itself and having them be short term stays (so less long term potential for drama) would also have it's appeal.
I also like not having to move every time I have a lease renewal because the landlord is jacking up the rent. The only time that didn't happen to us was when we had a landlord who lived on a different continent. He was friends with the HOA president (it was a very small building), so we had a nice balance of not in our business but responsive to issues as mediated by the guy onsite. If the pandemic hadn't hit, we may have rented there for years; although that may also not have worked out. The place flooded literally right after we moved and he decided to sell after getting it fixed. We moved because it was a cave, so the shine wore off during lockdown.
We could only afford to buy and move because of the pause in student loans letting us save up enough for a down payment. We had a small gift from family to help with the down payment that wound up not being necessary. They didn't want it back so we used it for furniture instead. Remote work let one of us replace a job lost because of Covid real fast (with a pay bump), so that helped as well. So yeah. We own because of Covid. It both enabled and motivated us.
posted by ghost phoneme at 2:49 PM on August 17, 2023 [2 favorites]
I admit I didn’t save up either.
This spring right at tax return season I quit a job where I had six weeks of saved vacation to cash out and got a signing bonus at my new company so I went from zero to 5% down payment in a few weeks. I’d have never saved it up gradually, and it took a long time to set up this windfall.
I’m just not sure it’s enough. I’m told you can negotiate with the seller for money to fix things but that doesn’t sound real.
posted by The Monster at the End of this Thread at 3:38 PM on August 17, 2023 [2 favorites]
This spring right at tax return season I quit a job where I had six weeks of saved vacation to cash out and got a signing bonus at my new company so I went from zero to 5% down payment in a few weeks. I’d have never saved it up gradually, and it took a long time to set up this windfall.
I’m just not sure it’s enough. I’m told you can negotiate with the seller for money to fix things but that doesn’t sound real.
posted by The Monster at the End of this Thread at 3:38 PM on August 17, 2023 [2 favorites]
We are a couple of late Gen-Xers who finally bought our first house almost exactly a year ago. We bought a house so we would have a place to live for the next 20 years that will then be paid off when we retire. Period. "Equity" and "property values" are these nightmares the Xers 10 years older than us are completely obsessed with. We just wanted a nice place to live that we could afford. We are paying much less on our mortgage than we could ever hope to pay in the Atlanta rental market, and that amount will not go up. That's it. That's what we wanted.
Also, it's really cool not to share walls or floor/ceiling with anyone and to be able to put nail holes in the walls.
posted by hydropsyche at 3:42 PM on August 17, 2023 [14 favorites]
Also, it's really cool not to share walls or floor/ceiling with anyone and to be able to put nail holes in the walls.
posted by hydropsyche at 3:42 PM on August 17, 2023 [14 favorites]
I guess we should just offer fixed 5% home mortgages for everyone forever and not monkey with this interest rate, since it is like tickling the demon core.
The interest rate on my second house was a tick over 8%. And that was a good deal. Back then, a 10% interest rate wasn’t unheard of.
One of the bigger quiet damages Trump inflicted was pushing the Fed to, basically, give money away. Everyone got used to free money really quick, and didn’t seem to give a fuck about the repercussions. And here we are today. Still, hearing people bitch about 5% interest rates is kind of humorous.
posted by Thorzdad at 4:00 PM on August 17, 2023 [4 favorites]
The interest rate on my second house was a tick over 8%. And that was a good deal. Back then, a 10% interest rate wasn’t unheard of.
One of the bigger quiet damages Trump inflicted was pushing the Fed to, basically, give money away. Everyone got used to free money really quick, and didn’t seem to give a fuck about the repercussions. And here we are today. Still, hearing people bitch about 5% interest rates is kind of humorous.
posted by Thorzdad at 4:00 PM on August 17, 2023 [4 favorites]
I have tons of nails in my rental walls! These things are all dependent on so many factors, area, price points, circumstance.
posted by tiny frying pan at 4:00 PM on August 17, 2023
posted by tiny frying pan at 4:00 PM on August 17, 2023
I'm right in the middle of Gen X--turned 51 this year--and I had the bad luck of repeatedly buying a house, losing a job, needing to move to find work, and having to sell the house much early than I planned. Almost broke even the first two time I did that, but the third time I bought for $175k and sold for $152k in the housing crash of 2010. That was...bad. Bought again for the fourth time in 2020, thanks to a small inheritance and low interest rates. Then the housing market immediately took off in my area (southwest Houston suburbs) so that three years later the house is appraising for 50% more than we paid for it. Now I'm sitting on tons of equity and have a low-ish rate HELOC to help us out if we're in a bind, so the financial situation is looking better and better, but all because my grandmother died at just the right time that we inherited a downpayment when rates were low and prices were somewhat reasonable. If she had held on another year, we'd probably be renting forever. If I tried to buy this same house now, just three years later, with the same downpayment, the mortgage would be $1200 more per month. We couldn't come close to paying that. Looking at Zillow, I'm not sure there's anything at all we could buy anywhere near here. We'd also be hard pressed to pay current rent prices. So, while I'm glad we have this house, and we're never ever ever selling it and losing the 3% rate, I'm very aware that it's all luck. We've had bad luck and we've had good luck, and none of it has had anything to do with how hard I was willing to work.
posted by Pater Aletheias at 4:02 PM on August 17, 2023 [12 favorites]
posted by Pater Aletheias at 4:02 PM on August 17, 2023 [12 favorites]
One of the bigger quiet damages Trump inflicted was pushing the Fed to, basically, give money away.
Ultralow interest rates basically go back to the Great Recession.
posted by praemunire at 4:29 PM on August 17, 2023 [4 favorites]
Ultralow interest rates basically go back to the Great Recession.
posted by praemunire at 4:29 PM on August 17, 2023 [4 favorites]
Equity" and "property values" are these nightmares the Xers 10 years older than us are completely obsessed with
We here a lot in the UK about how if you don't see your house as an investment then equity or the value of your house going up doesn't matter. However when you go to refinance/remortgage after your first few years of ownership it can make a massive difference to payments or length of mortgage if your owned share of the house takes you into a bracket where you qualify for lower interest rates.
posted by biffa at 4:45 PM on August 17, 2023 [1 favorite]
We here a lot in the UK about how if you don't see your house as an investment then equity or the value of your house going up doesn't matter. However when you go to refinance/remortgage after your first few years of ownership it can make a massive difference to payments or length of mortgage if your owned share of the house takes you into a bracket where you qualify for lower interest rates.
posted by biffa at 4:45 PM on August 17, 2023 [1 favorite]
>was pushing the Fed to, basically, give money away.
https://fred.stlouisfed.org/graph/?g=17WwO actually shows Trump faced a monotonically rising Fed Funds rate until 2019 . . . things got a little squirrelly in 4Q18 so the Fed backed off then:
https://fred.stlouisfed.org/graph/?g=17Wx6 (S&P 500 since 2018)
posted by Heywood Mogroot III at 4:49 PM on August 17, 2023 [1 favorite]
https://fred.stlouisfed.org/graph/?g=17WwO actually shows Trump faced a monotonically rising Fed Funds rate until 2019 . . . things got a little squirrelly in 4Q18 so the Fed backed off then:
https://fred.stlouisfed.org/graph/?g=17Wx6 (S&P 500 since 2018)
posted by Heywood Mogroot III at 4:49 PM on August 17, 2023 [1 favorite]
We here a lot in the UK about how if you don't see your house as an investment then equity or the value of your house going up doesn't matter. However when you go to refinance/remortgage after your first few years of ownership it can make a massive difference to payments or length of mortgage if your owned share of the house takes you into a bracket where you qualify for lower interest rates.
Even if you aren't seeing the house as an investment and ignore the ups and downs in market value while you live there, any equity and appreciation ends up mattering when you, or your heirs, eventually sell it.
posted by Dip Flash at 5:00 PM on August 17, 2023 [3 favorites]
Even if you aren't seeing the house as an investment and ignore the ups and downs in market value while you live there, any equity and appreciation ends up mattering when you, or your heirs, eventually sell it.
posted by Dip Flash at 5:00 PM on August 17, 2023 [3 favorites]
We here a lot in the UK about how if you don't see your house as an investment then equity or the value of your house going up doesn't matter.
The problem is this: the money tied up in your down payment (and evaporated away in closing costs) is money that is not being invested elsewhere. Most people have a ridiculously large part of their net worth tied up in their homes. Having that much of their assets returning little to nothing, and in an illiquid form to boot, isn't tenable long-term. (It might be if everyone could stay in their homes until they die--but they don't.) So you have to have some concern for appreciation, even if you don't like thinking of your home as a lottery ticket.
It's a horrible, misbegotten mechanism, it is.
posted by praemunire at 5:04 PM on August 17, 2023 [2 favorites]
The problem is this: the money tied up in your down payment (and evaporated away in closing costs) is money that is not being invested elsewhere. Most people have a ridiculously large part of their net worth tied up in their homes. Having that much of their assets returning little to nothing, and in an illiquid form to boot, isn't tenable long-term. (It might be if everyone could stay in their homes until they die--but they don't.) So you have to have some concern for appreciation, even if you don't like thinking of your home as a lottery ticket.
It's a horrible, misbegotten mechanism, it is.
posted by praemunire at 5:04 PM on August 17, 2023 [2 favorites]
Mrs. Fedora and I now own a house! Brand new construction in a great location, with a 0.5% variable interest home loan. All we had to do was live in Japan and take advantage of the fact that the country's real estate bubble burst thirty years ago and the ramifications can still be felt.
posted by DoctorFedora at 6:04 PM on August 17, 2023 [14 favorites]
posted by DoctorFedora at 6:04 PM on August 17, 2023 [14 favorites]
Remember: For the past 25 years of my adult life, I had been paying rent. That was money I spent every month for a place to live that I knew I would never see again. Now, I spend money every month on my mortgage for a place to live that is less than the amount I used to spend on my rent. In all likelihood, I will see some of that money again in one way or another, but even if I don't, my life is better than it was before I bought the house because my mortgage is significant less than rent was.
posted by hydropsyche at 6:07 PM on August 17, 2023 [17 favorites]
posted by hydropsyche at 6:07 PM on August 17, 2023 [17 favorites]
One of the bigger quiet damages Trump inflicted was pushing the Fed to, basically, give money away. Everyone got used to free money really quick, and didn’t seem to give a fuck about the repercussions. And here we are today. Still, hearing people bitch about 5% interest rates is kind of humorous.
This is one thing that Trump isn't really responsible for. Ultralow interest rates started after the great recession and were seen in many many jurisdictions including (AFAIK) all rich countries. They had been trending down for decades before the recession too.
And all the pundits, smart money, etc. said rates would remain very low for the foreseeable future. When we bought our home in the mid 2010s we modeled what our budget would look like at various interest rates. Our model maxed out at 5%. Because that was the outside case that we contemplated at the time. And that was pretty much unthinkable. Many smart, careful people whom I consulted during that period said that I was crazy to ensure we could make the payments at 5%, and that I could stretch our budget much more.
posted by sid at 6:21 PM on August 17, 2023 [2 favorites]
This is one thing that Trump isn't really responsible for. Ultralow interest rates started after the great recession and were seen in many many jurisdictions including (AFAIK) all rich countries. They had been trending down for decades before the recession too.
And all the pundits, smart money, etc. said rates would remain very low for the foreseeable future. When we bought our home in the mid 2010s we modeled what our budget would look like at various interest rates. Our model maxed out at 5%. Because that was the outside case that we contemplated at the time. And that was pretty much unthinkable. Many smart, careful people whom I consulted during that period said that I was crazy to ensure we could make the payments at 5%, and that I could stretch our budget much more.
posted by sid at 6:21 PM on August 17, 2023 [2 favorites]
Housing is a human right.
Everyone deserves to have permanent, stable housing regardless of their year of birth or economic circumstance.
Until we have Universal healthcare and a real retirement system, housing will never be more than a hedge against dying penniless on the street.
posted by 922257033c4a0f3cecdbd819a46d626999d1af4a at 7:02 PM on August 17, 2023 [2 favorites]
Everyone deserves to have permanent, stable housing regardless of their year of birth or economic circumstance.
Until we have Universal healthcare and a real retirement system, housing will never be more than a hedge against dying penniless on the street.
posted by 922257033c4a0f3cecdbd819a46d626999d1af4a at 7:02 PM on August 17, 2023 [2 favorites]
but even if I don't, my life is better than it was before I bought the house because my mortgage is significant less than rent was.
This is dangerously incomplete thinking.
No one should buy a home until you understand this.
You cannot compare rent payments and mortgage as if they were apples and oranges. I am not even talking about responsibility for repairs, taxes, etc.
Whatever money you put into a mortgage--down payment, closing costs, improvements--is money you are not putting into another investment. If your house appreciates more slowly than, e.g., the S&P 500, you are losing the difference on that investment. That is an effective cost to you of your mortgage, even if no one is presenting you with an explicit bill.
How can you tell which will do better? It's the future, you can't know for sure. Historically, the S&P 500 beats housing in most areas. Lately, there have definitely been a number of areas where that has not proven true. But you cannot run the numbers and pretend that it just doesn't matter. You have to think it through. You are taking on an opportunity cost when you make a down payment. I would've, in the long run, done worse buying a house in Detroit in 2006 than doing what I did, which was start investing in a lifecycle index fund. This is a big part of why those rent vs. mortgage calculators don't come out in favor of mortgage virtually always, even if usually you would pay out of pocket less to mortgage than to rent the same space.
(Yes, yes, I get it, there are many other concerns implicated in buying vs. renting, financial (tax especially) and otherwise, you needn't recite them, you can't know the future with certainty, I am not categorically against buying, it's just people purport to run the numbers without seeming to get this. It's not just speculative. You're investing a big chunk of your net worth in a fairly illiquid asset. If it doesn't grow the way you need it to, you're hosed.)
posted by praemunire at 7:15 PM on August 17, 2023 [4 favorites]
This is dangerously incomplete thinking.
No one should buy a home until you understand this.
You cannot compare rent payments and mortgage as if they were apples and oranges. I am not even talking about responsibility for repairs, taxes, etc.
Whatever money you put into a mortgage--down payment, closing costs, improvements--is money you are not putting into another investment. If your house appreciates more slowly than, e.g., the S&P 500, you are losing the difference on that investment. That is an effective cost to you of your mortgage, even if no one is presenting you with an explicit bill.
How can you tell which will do better? It's the future, you can't know for sure. Historically, the S&P 500 beats housing in most areas. Lately, there have definitely been a number of areas where that has not proven true. But you cannot run the numbers and pretend that it just doesn't matter. You have to think it through. You are taking on an opportunity cost when you make a down payment. I would've, in the long run, done worse buying a house in Detroit in 2006 than doing what I did, which was start investing in a lifecycle index fund. This is a big part of why those rent vs. mortgage calculators don't come out in favor of mortgage virtually always, even if usually you would pay out of pocket less to mortgage than to rent the same space.
(Yes, yes, I get it, there are many other concerns implicated in buying vs. renting, financial (tax especially) and otherwise, you needn't recite them, you can't know the future with certainty, I am not categorically against buying, it's just people purport to run the numbers without seeming to get this. It's not just speculative. You're investing a big chunk of your net worth in a fairly illiquid asset. If it doesn't grow the way you need it to, you're hosed.)
posted by praemunire at 7:15 PM on August 17, 2023 [4 favorites]
Many smart, careful people whom I consulted during that period said that I was crazy to ensure we could make the payments at 5%
Note that Americans most commonly take out a fixed-interest 30-year mortgage. They do not face the frequent resets of Canadian mortgages, which would give me the heebie-jeebies.
posted by praemunire at 7:17 PM on August 17, 2023 [4 favorites]
Note that Americans most commonly take out a fixed-interest 30-year mortgage. They do not face the frequent resets of Canadian mortgages, which would give me the heebie-jeebies.
posted by praemunire at 7:17 PM on August 17, 2023 [4 favorites]
So, while I'm glad we have this house, and we're never ever ever selling it and losing the 3% rate, I'm very aware that it's all luck.
I was reading something recently in the Dallas paper about how new construction is cheaper than existing housing stock right now because nobody who has a low-interest mortgage is willing to sell unless they absolutely have to. Paywall blockers (archive.is & 12 foot ladder) are down for me but anyone who wants to check it out can have a go here.
posted by gentlyepigrams at 7:21 PM on August 17, 2023 [1 favorite]
I was reading something recently in the Dallas paper about how new construction is cheaper than existing housing stock right now because nobody who has a low-interest mortgage is willing to sell unless they absolutely have to. Paywall blockers (archive.is & 12 foot ladder) are down for me but anyone who wants to check it out can have a go here.
posted by gentlyepigrams at 7:21 PM on August 17, 2023 [1 favorite]
Many builders are also focusing on smaller, less expensive products to curb affordability challenges. In 2014, only 41% of home construction starts in the Dallas-Fort Worth area were on lots smaller than 60 feet wide. As of June, that segment has grown to more than 66% of the market, according to Residential Strategies.Interesting.
posted by Heywood Mogroot III at 7:26 PM on August 17, 2023 [1 favorite]
Now, I spend money every month on my mortgage for a place to live that is less than the amount I used to spend on my rent. In all likelihood, I will see some of that money again in one way or another, but even if I don't, my life is better than it was before I bought the house because my mortgage is significant less than rent was.
With home ownership, there's really two parallel decision tracks. One is about dollars and cents (like those rent vs buy calculators) -- which option is financially smarter over a given timeframe. It sounds like you knocked that one out of the ballpark.
The other is about lifestyle, trading off between the flexibility and also insecurity of renting vs the stability but also locked-in nature of owning.
Personally I've done both, and liked each at different points in time separately from the question of which was better financially. Before we moved here, we were renting and it was the right choice. We were in a place we didn't love and wanted to be able to move easily. In hindsight, buying would have been slightly better financially, but feeling stuck there would have been terrible. I'm happy owning now, but eventually I'll want to be be back in an apartment or condo where someone else takes care of exterior maintenance.
Whatever money you put into a mortgage--down payment, closing costs, improvements--is money you are not putting into another investment. If your house appreciates more slowly than, e.g., the S&P 500, you are losing the difference on that investment.
Mmm, sort of? The downpayment (or full price if you paid cash) is something that you've tied up vs having in the market. But for monthly costs, it isn't a choice between a $2k mortgage and a $2k investment in the S&P), it's a choice between the mortgage (plus maintenance, etc) vs some amount of rent. If there is a big difference between the two, that could be invested, but the base monthly cost of mortgage or rent is going to be spent regardless. (What people really argue about is the value of buying a house with cash vs leveraging with a mortgage, but if you are in that situation you are way ahead of most people financially anyway and whatever you pick you are probably going to be ok.)
posted by Dip Flash at 7:29 PM on August 17, 2023 [9 favorites]
With home ownership, there's really two parallel decision tracks. One is about dollars and cents (like those rent vs buy calculators) -- which option is financially smarter over a given timeframe. It sounds like you knocked that one out of the ballpark.
The other is about lifestyle, trading off between the flexibility and also insecurity of renting vs the stability but also locked-in nature of owning.
Personally I've done both, and liked each at different points in time separately from the question of which was better financially. Before we moved here, we were renting and it was the right choice. We were in a place we didn't love and wanted to be able to move easily. In hindsight, buying would have been slightly better financially, but feeling stuck there would have been terrible. I'm happy owning now, but eventually I'll want to be be back in an apartment or condo where someone else takes care of exterior maintenance.
Whatever money you put into a mortgage--down payment, closing costs, improvements--is money you are not putting into another investment. If your house appreciates more slowly than, e.g., the S&P 500, you are losing the difference on that investment.
Mmm, sort of? The downpayment (or full price if you paid cash) is something that you've tied up vs having in the market. But for monthly costs, it isn't a choice between a $2k mortgage and a $2k investment in the S&P), it's a choice between the mortgage (plus maintenance, etc) vs some amount of rent. If there is a big difference between the two, that could be invested, but the base monthly cost of mortgage or rent is going to be spent regardless. (What people really argue about is the value of buying a house with cash vs leveraging with a mortgage, but if you are in that situation you are way ahead of most people financially anyway and whatever you pick you are probably going to be ok.)
posted by Dip Flash at 7:29 PM on August 17, 2023 [9 favorites]
>give me the heebie-jeebies
getting hit with a 7% rate now would cost me $10,000/yr extra, and that's around the national average I guess. In Oz and the UK they're calling this the "Mortgage Cliff".
Not the biggest fan of MMT but sure seems to me that if we wanted to "fight inflation" more fairly we could just like you know instead raise income taxes across the board, like 2X the FICA rate or something.
posted by Heywood Mogroot III at 7:35 PM on August 17, 2023
getting hit with a 7% rate now would cost me $10,000/yr extra, and that's around the national average I guess. In Oz and the UK they're calling this the "Mortgage Cliff".
Not the biggest fan of MMT but sure seems to me that if we wanted to "fight inflation" more fairly we could just like you know instead raise income taxes across the board, like 2X the FICA rate or something.
posted by Heywood Mogroot III at 7:35 PM on August 17, 2023
Historically, the S&P 500 beats housing in most areas.
Just to play devil's advocate here, but we're not comparing apples to apples, since real estate is almost always leveraged, while most retail investors are not. It's typical to pay 20% down and borrow 80%.
So what you're comparing, is, putting down $100,000 for a house and borrowing $400,000, and looking at the appreciation of the $500,000 asset over 10 years, less interest payments made.
And compare that to investing $100,000 in the S&P 500 and watching its appreciation over 10 years.
You can see that it's not a straightforward comparison, but if the S&P500 offers real returns of 10% ($100k x 0.1 = $10,000 per year) then you'd only need real estate to offer real returns of 2% per year ($500k x 0.02 = $10,000) to be competitive.
There's also the benefit that your primary place of residence is (mostly) exempt from capital gains tax, which the S&P500 share portfolio most certainly has to pay.
I'm a believer in perfect markets anyway (heh) and personally, I purchased an inner city apartment and lived in it for 8 years then sold it for $100k profit tax free. Calculating my theoretical returns of buying vs renting was easy - I sold my entire stock portfolio to afford the deposit for that apartment, so I could calculate what my final stock portfolio would have been otherwise if I had just continued accumulating that mix of shares. In the end it was mostly break-even, there wouldn't have been much difference between buying and renting.
posted by xdvesper at 8:06 PM on August 17, 2023 [9 favorites]
Just to play devil's advocate here, but we're not comparing apples to apples, since real estate is almost always leveraged, while most retail investors are not. It's typical to pay 20% down and borrow 80%.
So what you're comparing, is, putting down $100,000 for a house and borrowing $400,000, and looking at the appreciation of the $500,000 asset over 10 years, less interest payments made.
And compare that to investing $100,000 in the S&P 500 and watching its appreciation over 10 years.
You can see that it's not a straightforward comparison, but if the S&P500 offers real returns of 10% ($100k x 0.1 = $10,000 per year) then you'd only need real estate to offer real returns of 2% per year ($500k x 0.02 = $10,000) to be competitive.
There's also the benefit that your primary place of residence is (mostly) exempt from capital gains tax, which the S&P500 share portfolio most certainly has to pay.
I'm a believer in perfect markets anyway (heh) and personally, I purchased an inner city apartment and lived in it for 8 years then sold it for $100k profit tax free. Calculating my theoretical returns of buying vs renting was easy - I sold my entire stock portfolio to afford the deposit for that apartment, so I could calculate what my final stock portfolio would have been otherwise if I had just continued accumulating that mix of shares. In the end it was mostly break-even, there wouldn't have been much difference between buying and renting.
posted by xdvesper at 8:06 PM on August 17, 2023 [9 favorites]
This is dangerously incomplete thinking.
No one should buy a home until you understand this.
~very reasonable and sensible explanation~
This is heavily dependent on jurisdiction. Torontonians who did this analysis and decided sensibly against buying basically all got screwed over the last 20 years.
Rent has gone up ridiculously, and rentals are very difficult to find. Almost as bad as buying a house. If your landlord kicks you out, it's a mad scramble. Now your kids may have to change schools and not see their friends, and you're almost guaranteed to be paying higher rent for a crappier place.
I also know very few people who are disciplined enough to invest the difference between rental cost + homeownership costs. Most people can barely scrape together a down payment.
I think what your explanation also glosses over is that housing is typically a leveraged investment. So if you put 10k down on a 100k house and it appreciates by 10%, you have essentially doubled your initial investment (i.e. increased it by 100%). Of course, the inverse is also true, but if you have no plans to move then you can ride out house price corrections. You could borrow money to buy stocks, but the index is typically much more volatile than home prices, and the interest rate on that loan is going to be higher. In Canada, we also have a capital gains tax exemption on one's principal residence.
If you're living in a place that will continue to grow in population (i.e. not at risk for a long term housing crash), and you can afford it even after modeling economic shocks (loss of income, rising interest rates, big repairs, etc.), and you plan to live in your house for at least 10ish years, IMO home ownership is probably in your best interests.
posted by sid at 8:20 PM on August 17, 2023 [4 favorites]
No one should buy a home until you understand this.
~very reasonable and sensible explanation~
This is heavily dependent on jurisdiction. Torontonians who did this analysis and decided sensibly against buying basically all got screwed over the last 20 years.
Rent has gone up ridiculously, and rentals are very difficult to find. Almost as bad as buying a house. If your landlord kicks you out, it's a mad scramble. Now your kids may have to change schools and not see their friends, and you're almost guaranteed to be paying higher rent for a crappier place.
I also know very few people who are disciplined enough to invest the difference between rental cost + homeownership costs. Most people can barely scrape together a down payment.
I think what your explanation also glosses over is that housing is typically a leveraged investment. So if you put 10k down on a 100k house and it appreciates by 10%, you have essentially doubled your initial investment (i.e. increased it by 100%). Of course, the inverse is also true, but if you have no plans to move then you can ride out house price corrections. You could borrow money to buy stocks, but the index is typically much more volatile than home prices, and the interest rate on that loan is going to be higher. In Canada, we also have a capital gains tax exemption on one's principal residence.
If you're living in a place that will continue to grow in population (i.e. not at risk for a long term housing crash), and you can afford it even after modeling economic shocks (loss of income, rising interest rates, big repairs, etc.), and you plan to live in your house for at least 10ish years, IMO home ownership is probably in your best interests.
posted by sid at 8:20 PM on August 17, 2023 [4 favorites]
I’m an early Xer and I didn’t have my own home until I was 49.
posted by matildaben at 9:15 PM on August 17, 2023
posted by matildaben at 9:15 PM on August 17, 2023
It might be if everyone could stay in their homes until they die--but they don't
Can you explain this one? Because this seems like the biggest benefit of home ownership - that just at the point when your income will be significantly reduced with age, your costs will go down as you'll only have to pay the taxes on your house instead of a rent payment. I don't understand why you wouldn't stay in your home until you die. That's certainly my plan.
posted by corb at 9:52 PM on August 17, 2023 [4 favorites]
Can you explain this one? Because this seems like the biggest benefit of home ownership - that just at the point when your income will be significantly reduced with age, your costs will go down as you'll only have to pay the taxes on your house instead of a rent payment. I don't understand why you wouldn't stay in your home until you die. That's certainly my plan.
posted by corb at 9:52 PM on August 17, 2023 [4 favorites]
I don't understand why you wouldn't stay in your home until you die. That's certainly my plan.
The percentage of people who can stay in their homes until they die is not anywhere near 100%
Just some things I have seen from my experience:
1. Inability to live at home because of failing health - they end up living out the rest of their years in an assisted care facility
2. Move to be closer to family - sometimes in a different country altogether
3. For a younger person - sometimes your career or love takes you to another city
4. You have a larger family than you expected, so you need to get a larger house
5. You end up with a smaller family than you expected, so you need to get a smaller house
6. Home gets destroyed by some disaster, which seems to happen with increasing frequency as our climate goes haywire (Maui most recently)
posted by xdvesper at 10:32 PM on August 17, 2023 [6 favorites]
The percentage of people who can stay in their homes until they die is not anywhere near 100%
Just some things I have seen from my experience:
1. Inability to live at home because of failing health - they end up living out the rest of their years in an assisted care facility
2. Move to be closer to family - sometimes in a different country altogether
3. For a younger person - sometimes your career or love takes you to another city
4. You have a larger family than you expected, so you need to get a larger house
5. You end up with a smaller family than you expected, so you need to get a smaller house
6. Home gets destroyed by some disaster, which seems to happen with increasing frequency as our climate goes haywire (Maui most recently)
posted by xdvesper at 10:32 PM on August 17, 2023 [6 favorites]
The problem is this: the money tied up in your down payment (and evaporated away in closing costs) is money that is not being invested elsewhere. Most people have a ridiculously large part of their net worth tied up in their homes. Having that much of their assets returning little to nothing, and in an illiquid form to boot, isn't tenable long-term. (It might be if everyone could stay in their homes until they die--but they don't.) So you have to have some concern for appreciation, even if you don't like thinking of your home as a lottery ticket.
For most of us, the alternative isn't some kind of investment fund, it's rent. Better to have your "net worth" tied up in a house than to not have any at all.
I'm a millennial in the UK, with no realistic prospect of home ownership. Anecdotally, most of my social circle do now own homes, but the vast, vast majority of them have a dead relative or living but incredibly wealthy and generous relative to thank. A couple got fantastic deals on right-to-buy because they'd been in council housing for a few years (council housing which is in incredibly short supply relative to demand - wonder why that could be...)
posted by Dysk at 3:36 AM on August 18, 2023 [7 favorites]
For most of us, the alternative isn't some kind of investment fund, it's rent. Better to have your "net worth" tied up in a house than to not have any at all.
I'm a millennial in the UK, with no realistic prospect of home ownership. Anecdotally, most of my social circle do now own homes, but the vast, vast majority of them have a dead relative or living but incredibly wealthy and generous relative to thank. A couple got fantastic deals on right-to-buy because they'd been in council housing for a few years (council housing which is in incredibly short supply relative to demand - wonder why that could be...)
posted by Dysk at 3:36 AM on August 18, 2023 [7 favorites]
Whatever money you put into a mortgage--down payment, closing costs, improvements--is money you are not putting into another investment. If your house appreciates more slowly than, e.g., the S&P 500, you are losing the difference on that investment. That is an effective cost to you of your mortgage, even if no one is presenting you with an explicit bill.
The real irony of being lectured here on how I'm doing my life wrong is that the difference between how much we were paying in rent a year ago and how much we're now paying for our mortgage is so much money that we can actually consider putting money into the S&Pwhatever now, when we previously had no extra money to spare for such things because so much of our income was going to rent, and the occasional tiny increases in salary were in no way keeping up with the annual increases in rent. With a fixed mortgage, it suddenly matters a lot less that my salary won't increase again until the Republicans fear the results of another election so much that they give raises to state employees. And I'll even have a little left over to invest in the S&Pwhatever.
posted by hydropsyche at 3:58 AM on August 18, 2023 [11 favorites]
The real irony of being lectured here on how I'm doing my life wrong is that the difference between how much we were paying in rent a year ago and how much we're now paying for our mortgage is so much money that we can actually consider putting money into the S&Pwhatever now, when we previously had no extra money to spare for such things because so much of our income was going to rent, and the occasional tiny increases in salary were in no way keeping up with the annual increases in rent. With a fixed mortgage, it suddenly matters a lot less that my salary won't increase again until the Republicans fear the results of another election so much that they give raises to state employees. And I'll even have a little left over to invest in the S&Pwhatever.
posted by hydropsyche at 3:58 AM on August 18, 2023 [11 favorites]
One thing I don't see mentioned much is the need for LARGE home repairs, like a new roof. Saving an extra $200 or whatever it is on rent would have to go into savings for me (providing little benefit) and likely not covering huge repairs like a $20,000 roof.
The other thing that is super great about renting is, the roof, the flooded basement, etc...not your problem. I know this is landlord dependent. You can also flee a changed neighborhood, change of job location, etc much easier.
I figure with how shaky retirement will be for me in general, float like a butterfly is a better strategy. And like many conclude these days, there is no financial way I wouldn't ruin myself if I bought a house. It's simply out of reach.
For years I was frustrated about it, now glad I didn't even try. For those for whom it is still possible, I wish you well!
posted by tiny frying pan at 4:53 AM on August 18, 2023 [2 favorites]
The other thing that is super great about renting is, the roof, the flooded basement, etc...not your problem. I know this is landlord dependent. You can also flee a changed neighborhood, change of job location, etc much easier.
I figure with how shaky retirement will be for me in general, float like a butterfly is a better strategy. And like many conclude these days, there is no financial way I wouldn't ruin myself if I bought a house. It's simply out of reach.
For years I was frustrated about it, now glad I didn't even try. For those for whom it is still possible, I wish you well!
posted by tiny frying pan at 4:53 AM on August 18, 2023 [2 favorites]
Fewer than one in five millennials received gifts from family and friends to help with their down payments,
I’m an Xer. I bought a house, at age 43, in a desirable location in a perennially hot market in very early, pre-Covid 2020. I would have stayed in my (beloved) rental forever (I’d lived there for almost 16 years and hosted at least a couple MetaFilter meetups there by the time I moved out), but I could not afford it, or more specifically: I could not afford all the work it would have required immediately. So I bought a house a couple miles away in extremely lucky circumstances (the house was under market value, the owner was is a big hurry to sell) aided by the extremely lucky circumstance of having a parent willing to help with a down payment and another with a real estate brokers license who essentially donated their time. Without all of these, I would not own a home, maybe ever, and certainly not my home, which is the best thing that’s happened to me over the last five years. And I say this as someone who still still misses her stupid, tiny, dumpy rental all the time.
Homeownership: land of contrasts
posted by thivaia at 5:10 AM on August 18, 2023 [6 favorites]
I’m an Xer. I bought a house, at age 43, in a desirable location in a perennially hot market in very early, pre-Covid 2020. I would have stayed in my (beloved) rental forever (I’d lived there for almost 16 years and hosted at least a couple MetaFilter meetups there by the time I moved out), but I could not afford it, or more specifically: I could not afford all the work it would have required immediately. So I bought a house a couple miles away in extremely lucky circumstances (the house was under market value, the owner was is a big hurry to sell) aided by the extremely lucky circumstance of having a parent willing to help with a down payment and another with a real estate brokers license who essentially donated their time. Without all of these, I would not own a home, maybe ever, and certainly not my home, which is the best thing that’s happened to me over the last five years. And I say this as someone who still still misses her stupid, tiny, dumpy rental all the time.
Homeownership: land of contrasts
posted by thivaia at 5:10 AM on August 18, 2023 [6 favorites]
corb, just to expand on staying in your home until you die -- disability is a huge issue. Many homes, like mine, are not really set up for aging in place. My front door is half a flight of stairs up from the ground; there are no main floor bedrooms or bathrooms; doorways are too narrow to accommodate a wheelchair; bathrooms are too small to accommodate a walker; the lighting probably also sucks. The one thing we have going for us is a grocery store we don't have to drive to. But overall, realistically, we won't be able to die here unless we die much younger than one usually hopes to do. If you plan to age in place, I hope that you have given (or do give) some thought to these issues in buying and/or remodeling your home.
My parents sold their house and moved to a retirement community when they were in their early sixties, and it was a very good thing. Not only is the physical infrastructure far more suitable for my mother's physical abilities (she uses both a walker and a motorized scooter to get around), the existence of a dining hall vastly improves her situation socially -- especially now that she is a widow. In their previous location she had zero friends and she would have been someone the fire department had to check on periodically. In her current home, she eats with others five nights a week. This in no way scales and should not be taken as general advice: it is insanely expensive to live like this. In some sense that's what my parents saved for all their lives.
posted by eirias at 5:14 AM on August 18, 2023 [5 favorites]
My parents sold their house and moved to a retirement community when they were in their early sixties, and it was a very good thing. Not only is the physical infrastructure far more suitable for my mother's physical abilities (she uses both a walker and a motorized scooter to get around), the existence of a dining hall vastly improves her situation socially -- especially now that she is a widow. In their previous location she had zero friends and she would have been someone the fire department had to check on periodically. In her current home, she eats with others five nights a week. This in no way scales and should not be taken as general advice: it is insanely expensive to live like this. In some sense that's what my parents saved for all their lives.
posted by eirias at 5:14 AM on August 18, 2023 [5 favorites]
I love our home and hope to live out our lives there, but that is very dependent on neither of us having significant declines in our mobility. Our entire first floor is garage, and all the living space is up a flight of stairs. Having to sell our home and purchase a similar but accessible one would dramatically alter our financial situation.
posted by obfuscation at 5:55 AM on August 18, 2023 [2 favorites]
posted by obfuscation at 5:55 AM on August 18, 2023 [2 favorites]
The percentage of people who can stay in their homes until they die is not anywhere near 100%
One of the "nice" things about being 80, having a paid-off house you bought 40 years old, and needing to go into assisted living, is that you can sell the house to help pay for the assisted living.
I also get the intellectual exercise of housing as an investment, returns, and is it better to buy something or take the money and invest it and rent, but most people are really bad at saving and investing and a house kind of forces them to in that locks up a significant percentage of your net work in a (hopefully appreciating) asset. I mean, look at 401k balance stats sometime and tell me that doesn't worry you.
posted by rhymedirective at 6:27 AM on August 18, 2023 [3 favorites]
One of the "nice" things about being 80, having a paid-off house you bought 40 years old, and needing to go into assisted living, is that you can sell the house to help pay for the assisted living.
I also get the intellectual exercise of housing as an investment, returns, and is it better to buy something or take the money and invest it and rent, but most people are really bad at saving and investing and a house kind of forces them to in that locks up a significant percentage of your net work in a (hopefully appreciating) asset. I mean, look at 401k balance stats sometime and tell me that doesn't worry you.
posted by rhymedirective at 6:27 AM on August 18, 2023 [3 favorites]
The other thing that is super great about renting is, the roof, the flooded basement, etc...not your problem.
Every landlord I've dealt with has made shit like this my problem. Maybe they take care of it eventually with the threat of legal action, but when I lived in states without strong renter protections things like the basement flooding because of tree roots infiltrating the sewer line became my problem because "we found hair in the tree roots, which means it was you fault, therefore you have to pay the bill"
posted by Ferreous at 6:55 AM on August 18, 2023 [8 favorites]
Every landlord I've dealt with has made shit like this my problem. Maybe they take care of it eventually with the threat of legal action, but when I lived in states without strong renter protections things like the basement flooding because of tree roots infiltrating the sewer line became my problem because "we found hair in the tree roots, which means it was you fault, therefore you have to pay the bill"
posted by Ferreous at 6:55 AM on August 18, 2023 [8 favorites]
Damn, that sucks, Ferreous.
posted by tiny frying pan at 6:57 AM on August 18, 2023
posted by tiny frying pan at 6:57 AM on August 18, 2023
(A reminder to read any lease carefully and know what it says, it's your only defense against the landlord being bonkers)
posted by tiny frying pan at 6:59 AM on August 18, 2023 [1 favorite]
posted by tiny frying pan at 6:59 AM on August 18, 2023 [1 favorite]
tbf leases mean basically nothing when you live in places that don't have strong mechanisms to protect renters. If you don't have money or resources to get lawyers to fight your landlords they can do what they want. Even if you do fight them and win they can make your life miserable in a million small ways. We spent 4 years of our adult lives renting in Indiana and all of them were terrible because that's a state that hates its citizens, you can't even withhold rent for repairs.
posted by Ferreous at 7:07 AM on August 18, 2023 [9 favorites]
posted by Ferreous at 7:07 AM on August 18, 2023 [9 favorites]
If it doesn't grow the way you need it to, you're hosed.
I mean, no, because YOU STILL HAVE A PLACE TO LIVE. If you're really on a margin, income-wise, a house can be the difference between really struggling and getting by okay, and I think that's what a lot of people mean by "this is a good investment."
Think about some regular ass person who does not make a big time tech salary, and it took them 20ish years and some bad/good luck (hi) to drum up 100K or so in savings. Yes, you can sink that money into an investment. BUT, the thing is, no matter what you do with your money, you need a place to live in.
Rent basically only goes up, unless you tank your quality of life or massively relocate. Income basically NEVER goes up. Every year that you rent you have Less money to kick into investments on a monthly basis. (Which is how most people invest, if they do. Which mostly, they do not. Because most people do not know how, and have no one to teach them.)
If you have a shithead landlord (are there other kinds? questionable) then sometimes your rent goes up so much that you literally can't stay, so then you have to move, which is also expensive AF, and there's a big cash outlay that, again, you cannot invest. Just completely lost money, spent, gone, no return.
If you own your home the largest recurring expense in your life is at worst, fixed, and at best, GETS LOWER when you refinance.
Then oh no look, you're about to retire, but your retirement isn't as well funded as it could be. Good thing you now own your house outright, or have refinanced enough that you can afford it on your very fixed income. Because you need a place to goddamn live.
IS that hosed? I don't think it is. It's certainly way less hosed than almost all of us will be.
posted by We put our faith in Blast Hardcheese at 7:43 AM on August 18, 2023 [15 favorites]
I mean, no, because YOU STILL HAVE A PLACE TO LIVE. If you're really on a margin, income-wise, a house can be the difference between really struggling and getting by okay, and I think that's what a lot of people mean by "this is a good investment."
Think about some regular ass person who does not make a big time tech salary, and it took them 20ish years and some bad/good luck (hi) to drum up 100K or so in savings. Yes, you can sink that money into an investment. BUT, the thing is, no matter what you do with your money, you need a place to live in.
Rent basically only goes up, unless you tank your quality of life or massively relocate. Income basically NEVER goes up. Every year that you rent you have Less money to kick into investments on a monthly basis. (Which is how most people invest, if they do. Which mostly, they do not. Because most people do not know how, and have no one to teach them.)
If you have a shithead landlord (are there other kinds? questionable) then sometimes your rent goes up so much that you literally can't stay, so then you have to move, which is also expensive AF, and there's a big cash outlay that, again, you cannot invest. Just completely lost money, spent, gone, no return.
If you own your home the largest recurring expense in your life is at worst, fixed, and at best, GETS LOWER when you refinance.
Then oh no look, you're about to retire, but your retirement isn't as well funded as it could be. Good thing you now own your house outright, or have refinanced enough that you can afford it on your very fixed income. Because you need a place to goddamn live.
IS that hosed? I don't think it is. It's certainly way less hosed than almost all of us will be.
posted by We put our faith in Blast Hardcheese at 7:43 AM on August 18, 2023 [15 favorites]
Mao was wrong about a lot of things but I think if you were to take some of his philosophy about landlords and apply it to institutions like Blackstone I don't think it would be so bad
posted by paimapi at 8:25 AM on August 18, 2023 [1 favorite]
posted by paimapi at 8:25 AM on August 18, 2023 [1 favorite]
just to expand on staying in your home until you die -- disability is a huge issue. Many homes, like mine, are not really set up for aging in place.
Ahhh, gotcha. Culturally for me there's a lot more assumption of multigenerational living, so I assumed at some point my parents would be moving in with me, and discussed that with the real estate agent as a reason for extra bedrooms; we were only really shown relatively accessible houses that had bedrooms on both the first and second floors, but that may have been because we had a really good real estate agent. I'm anticipating (and have discussed with my kid) that as I age I'll move down from the master to the smaller downstairs bedroom and she'll move into it.
In terms of renting though - I want to draw your attention to a fact that I was bemoaning with some attorneys the other night, which is that filing litigation against your landlord is not a protected class under the fair housing act. So if your future landlord wants to discriminate against you on the basis that you've filed a complaint against a previous landlord, they can - and many do. A tenant attorney I was talking to said that's part of the advice they always give their clients, that they may need to consider the likelihood of being blacklisted after filing a successful claim. So it doesn't matter as much what the law is if you can't enforce it.
posted by corb at 9:28 AM on August 18, 2023 [6 favorites]
Ahhh, gotcha. Culturally for me there's a lot more assumption of multigenerational living, so I assumed at some point my parents would be moving in with me, and discussed that with the real estate agent as a reason for extra bedrooms; we were only really shown relatively accessible houses that had bedrooms on both the first and second floors, but that may have been because we had a really good real estate agent. I'm anticipating (and have discussed with my kid) that as I age I'll move down from the master to the smaller downstairs bedroom and she'll move into it.
In terms of renting though - I want to draw your attention to a fact that I was bemoaning with some attorneys the other night, which is that filing litigation against your landlord is not a protected class under the fair housing act. So if your future landlord wants to discriminate against you on the basis that you've filed a complaint against a previous landlord, they can - and many do. A tenant attorney I was talking to said that's part of the advice they always give their clients, that they may need to consider the likelihood of being blacklisted after filing a successful claim. So it doesn't matter as much what the law is if you can't enforce it.
posted by corb at 9:28 AM on August 18, 2023 [6 favorites]
Every landlord I've dealt with has made shit like this my problem. Maybe they take care of it eventually with the threat of legal action, but when I lived in states without strong renter protections things like the basement flooding because of tree roots infiltrating the sewer line became my problem because "we found hair in the tree roots, which means it was you fault, therefore you have to pay the bill"
I live in a province with an OK tenancy act, but the mechanisms to enforce it are weak. So that means many renters have to pay for their own repairs and pest control (my neighbour just dropped a couple grand on her apartment). We have little to no recourse when we're forced out of our homes under false pretenses. A landlord here recently murdered their tenants because they complained about a lack of proper maintenance.
posted by Stoof at 9:33 AM on August 18, 2023 [2 favorites]
I live in a province with an OK tenancy act, but the mechanisms to enforce it are weak. So that means many renters have to pay for their own repairs and pest control (my neighbour just dropped a couple grand on her apartment). We have little to no recourse when we're forced out of our homes under false pretenses. A landlord here recently murdered their tenants because they complained about a lack of proper maintenance.
posted by Stoof at 9:33 AM on August 18, 2023 [2 favorites]
I live in a province with an OK tenancy act, but the mechanisms to enforce it are weak. So that means many renters have to pay for their own repairs and pest control (my neighbour just dropped a couple grand on her apartment). We have little to no recourse when we're forced out of our homes under false pretenses. A landlord here recently murdered their tenants because they complained about a lack of proper maintenance.
Yeah, and when tenants are literally outbidding each other to get into your rental, it's pretty easy for landlords to skirt or outright ignore rules. Many LLs are also feeling the pressure of higher interest rates and this is motivating lots of illegitimated 'renovictions' and 'I need to evict you because my mother in law is moving in' to get around rent control.
posted by sid at 9:50 AM on August 18, 2023 [2 favorites]
Not fixing my housing costs in place by buying a home during the peak of the pandemic will turn out to be the greatest failure of my life, one that I will pay for until I am dead, when rapacious landlords have finished squeezing every last drop of blood from me.
There is simply no recovery from this catastrophe, brought on by excessive fear of coronavirus and an inability to commit to a place for life.
Life can be like that.
posted by Hollywood Upstairs Medical College at 10:20 AM on August 18, 2023 [3 favorites]
There is simply no recovery from this catastrophe, brought on by excessive fear of coronavirus and an inability to commit to a place for life.
Life can be like that.
posted by Hollywood Upstairs Medical College at 10:20 AM on August 18, 2023 [3 favorites]
I had *completely* given up on buying a house until I married up and my in-laws were like "here's a $60k gift for a down payment on a house". Like I seriously have no idea how the *majority* of millenials can afford a house without lucking into some kind of relationship with a boomer who will bestow some of their wealth upon you.
posted by dis_integration at 10:45 AM on August 18, 2023 [3 favorites]
posted by dis_integration at 10:45 AM on August 18, 2023 [3 favorites]
It is crazy here. I lucked out and bought the dip after the 2008 crash. I really cannot imagine what kinds of salaries are required to live here now. It would require two salaries for the most modest house, unless the breadwinner is a doctor or lawyer.
Yeah in my circles of acquaintance there are two huge wealth divides:
-Did you marry young and stay married?
-Did you keep your job in 08/09?
People who could answer yes to both of these are basically set; they used their uninterrupted double incomes to buy dirt cheap houses in 08/09 and now stand to make significant money off those houses. People who could answer yes to only one of them are in the middle; they aren't sitting quite as pretty as the first group but they gained ground pretty fast. Maybe they bought a place on their 09 salary, maybe they just had enough years of dual income to eventually pull off something like security.
If you (like me) answered no to both questions, then maybe, MAYBE, just now, in your 40s, you are no longer living absolutely paycheck to paycheck.
posted by We put our faith in Blast Hardcheese at 1:00 PM on August 18, 2023 [3 favorites]
Yeah in my circles of acquaintance there are two huge wealth divides:
-Did you marry young and stay married?
-Did you keep your job in 08/09?
People who could answer yes to both of these are basically set; they used their uninterrupted double incomes to buy dirt cheap houses in 08/09 and now stand to make significant money off those houses. People who could answer yes to only one of them are in the middle; they aren't sitting quite as pretty as the first group but they gained ground pretty fast. Maybe they bought a place on their 09 salary, maybe they just had enough years of dual income to eventually pull off something like security.
If you (like me) answered no to both questions, then maybe, MAYBE, just now, in your 40s, you are no longer living absolutely paycheck to paycheck.
posted by We put our faith in Blast Hardcheese at 1:00 PM on August 18, 2023 [3 favorites]
(Obviously there are outliers too, people who were born wealthy or married wealth, or in the other direction people who had some massive health issue or personal tragedy that cratered their finances. But for the majority of my cohort, if I look at where/how they live today, I can guess their answers to those two questions pretty accurately.)
posted by We put our faith in Blast Hardcheese at 1:04 PM on August 18, 2023 [1 favorite]
posted by We put our faith in Blast Hardcheese at 1:04 PM on August 18, 2023 [1 favorite]
corb, I think you are also in NC, right? I'm in Wake County and my family is from NC. For sure in rural/Southern suburban areas there is a culture of staying in one place. Drive down any road outside a major urban area and you'll see little one-story brick houses with old cars, boats, barns, etc. where it's clear the same people have been there 40-50 years or more. As much as I was tempted to leave due to politics and jobs, I didn't, and I think if you can manage to stay in one place and near other non-hated family, it can be great. Many more support options when you're broke. You also see a lot of wheelchair ramps and backfitting for seniors - ranch style baby!
As far as houses, I rented in the 80s and 90s, when rents here were equal to or below mortgages, especially with a roommate. I bought a $189k house (fixer-upper) in 2000 but lost it in a 2010 divorce. Eventually my current wife and I bought a $290k home at age 43, but we had to cobble together the down payment. Now my house has a ZEstimate of $640k which is ridiculous. Even with two professional jobs, that would be out of reach based on where we were 10 years ago. So it's getting worse for new people. We did not have help from anyone, or any generational leg up (that includes college), but it took until mid 30s to get to a first, very jacked-up house.
Also the current rents here are *much* higher than a 2013 mortgage on a pretty large and nice house. Yet downtown Raleigh is nothing but new apartments at stupid rates:
2 BR, 2 BA high-rise apt. (1000 sf) = $2,465/mo.
5 BR, 3 BA house on small lot (2750 sf) = $1,700/mo.
We really need strong regulations against AirBnB, stronger support for mixed housing (NIMBY control), and a tax code that discourages companies or people from owning multiple dwellings beyond a limit. So 1 house + vacation house for a lucky person, or 1 house + 1 rental. We shouldn't let single companies own, say, 3 apartment complexes in 3 states IMO. Or the Yankee transplant lady next door to my brother owns like 30 houses in Raleigh.
It all depends so much on region, urban/rural, personal and family situation, kids/no kids, job type, disability/age needs, structure type, etc. There's no correct answer.
Some apartment considerations:
* You may end up moving a lot. As a kid we moved almost every year when rents went up. Lots of lost time and effort that you don't worry about with a house. Also my childhood memories are a mess; at one point I counted and I think ... 14 moves by age 18? Or maybe it was 18 moves.
* Landlord quality matters a lot.
* Great if you don't want or need roots, or if you have a perma-apartment somehow.
* Deposits often get yanked back for minor reasons. If you have kids or a pet, you ain't gettin' that deposit back.
* Fancy-free in the city?
Some house stuff:
* New stock vs. old stock is hugely important when thinking about repair and upkeep.
* Don't buy any yard-having or single-family home without understanding the HUGE, HUGE amount of effort you will need to expend, or pay someone else to expend:
** AC unit $10k, broken sewer line under house $30k, broken fresh water pipe $10k, any visit by a repairperson $150 before they do anything. And roof, power washing, moving, landscaping, toilets, appliances, HOA, foundation sinking, pests, etc.
** This is your new hobby! You will be in Lowes'/Home Depot every other weekend forever. It's kind of fun though.
* IMO don't do it unless you want to live in it, bond with it, love it, and be there for a while. I don't think of it as an investment; it's about a stable beacon for friends and relatives, and not being at the beck and call of PrivateEquityRenterCo. I mean, I can sell it for twice what I paid, but all the other houses cost that much too!
* You will accumulate stuff to fill the space and hobby #2 will become "Kondo cleanouts".
* If it's bigger than your rental, you have to pay to fill it up with furniture, trash cans, art, etc. etc. More stuff.
Hopefully this makes some renters feel less left out.
posted by caviar2d2 at 1:26 PM on August 18, 2023 [6 favorites]
As far as houses, I rented in the 80s and 90s, when rents here were equal to or below mortgages, especially with a roommate. I bought a $189k house (fixer-upper) in 2000 but lost it in a 2010 divorce. Eventually my current wife and I bought a $290k home at age 43, but we had to cobble together the down payment. Now my house has a ZEstimate of $640k which is ridiculous. Even with two professional jobs, that would be out of reach based on where we were 10 years ago. So it's getting worse for new people. We did not have help from anyone, or any generational leg up (that includes college), but it took until mid 30s to get to a first, very jacked-up house.
Also the current rents here are *much* higher than a 2013 mortgage on a pretty large and nice house. Yet downtown Raleigh is nothing but new apartments at stupid rates:
2 BR, 2 BA high-rise apt. (1000 sf) = $2,465/mo.
5 BR, 3 BA house on small lot (2750 sf) = $1,700/mo.
We really need strong regulations against AirBnB, stronger support for mixed housing (NIMBY control), and a tax code that discourages companies or people from owning multiple dwellings beyond a limit. So 1 house + vacation house for a lucky person, or 1 house + 1 rental. We shouldn't let single companies own, say, 3 apartment complexes in 3 states IMO. Or the Yankee transplant lady next door to my brother owns like 30 houses in Raleigh.
It all depends so much on region, urban/rural, personal and family situation, kids/no kids, job type, disability/age needs, structure type, etc. There's no correct answer.
Some apartment considerations:
* You may end up moving a lot. As a kid we moved almost every year when rents went up. Lots of lost time and effort that you don't worry about with a house. Also my childhood memories are a mess; at one point I counted and I think ... 14 moves by age 18? Or maybe it was 18 moves.
* Landlord quality matters a lot.
* Great if you don't want or need roots, or if you have a perma-apartment somehow.
* Deposits often get yanked back for minor reasons. If you have kids or a pet, you ain't gettin' that deposit back.
* Fancy-free in the city?
Some house stuff:
* New stock vs. old stock is hugely important when thinking about repair and upkeep.
* Don't buy any yard-having or single-family home without understanding the HUGE, HUGE amount of effort you will need to expend, or pay someone else to expend:
** AC unit $10k, broken sewer line under house $30k, broken fresh water pipe $10k, any visit by a repairperson $150 before they do anything. And roof, power washing, moving, landscaping, toilets, appliances, HOA, foundation sinking, pests, etc.
** This is your new hobby! You will be in Lowes'/Home Depot every other weekend forever. It's kind of fun though.
* IMO don't do it unless you want to live in it, bond with it, love it, and be there for a while. I don't think of it as an investment; it's about a stable beacon for friends and relatives, and not being at the beck and call of PrivateEquityRenterCo. I mean, I can sell it for twice what I paid, but all the other houses cost that much too!
* You will accumulate stuff to fill the space and hobby #2 will become "Kondo cleanouts".
* If it's bigger than your rental, you have to pay to fill it up with furniture, trash cans, art, etc. etc. More stuff.
Hopefully this makes some renters feel less left out.
posted by caviar2d2 at 1:26 PM on August 18, 2023 [6 favorites]
I’m in due diligence for a house right now but just got the news that it needs a $9,000 roof and $9,000 worth of plumbing work, and $15,000 worth of HVAC in a couple of years.
As a home owner, these numbers seem weird to me, like the roof is way too low and the AC way too high. $9k worth of plumbing work is a large amount too, but far less than a full repipe of the home. It's like in the uncanny middle, too much for a job or two and too little for the entire job.
** AC unit $10k, broken sewer line under house $30k, broken fresh water pipe $10k, any visit by a repair person $150 before they do anything
These too. Like I have had all those jobs done to my home, and those numbers are just odd.
I agree you should budget for all those costs though, because of this
chart, which shows the number of houses constructed by year. Most houses in the US are old. 50% of the houses in the US were built before 1980.
posted by The_Vegetables at 1:57 PM on August 18, 2023
As a home owner, these numbers seem weird to me, like the roof is way too low and the AC way too high. $9k worth of plumbing work is a large amount too, but far less than a full repipe of the home. It's like in the uncanny middle, too much for a job or two and too little for the entire job.
** AC unit $10k, broken sewer line under house $30k, broken fresh water pipe $10k, any visit by a repair person $150 before they do anything
These too. Like I have had all those jobs done to my home, and those numbers are just odd.
I agree you should budget for all those costs though, because of this
chart, which shows the number of houses constructed by year. Most houses in the US are old. 50% of the houses in the US were built before 1980.
posted by The_Vegetables at 1:57 PM on August 18, 2023
There's also buying into strata, which mixes aspects of rental and homeownership. Lot of people have condo horror stories but if you find one with good rules (e.g. no short term rentals period) and sound management policies and a regularly audited maintenance schedule and emergency fund it can be really fucking nice. I'm just saying there is a range of options between "single family dwelling you own so you will have a plumber on speed-dial and be on a first name basis with cashiers at home depot" and "the landlord is personally unloading cages of rats and cockroaches in the basement and pounding never-patched holes in the walls with sledgehammers to do 'repairs' in order to get people to move out so they can flip the units and jack the rent."
posted by seanmpuckett at 2:00 PM on August 18, 2023 [2 favorites]
posted by seanmpuckett at 2:00 PM on August 18, 2023 [2 favorites]
The weird thing for me is the one-room studio (280sqft) in Tokyo I was renting in the late 90s for ¥110,000/~$900 (depending on the yen) is now listed for ¥85,000/$600. [...]
flat demographics + deflation + tons of supply (the building is in that shot) I guess
Some interesting reading on Tokyo:
posted by Gerald Bostock at 2:44 PM on August 18, 2023
flat demographics + deflation + tons of supply (the building is in that shot) I guess
Some interesting reading on Tokyo:
- How Tokyo built its way to abundant housing
- Doomed to depreciate: The limited life span of a Japanese home explained
posted by Gerald Bostock at 2:44 PM on August 18, 2023
Veg, The itemized plumbing estimate included $4600 for a water heater. I told them to stuff that. I might let them replace the PRV but the rest I’ll do myself. I’ve probably designed $50M worth of water and sewer treatment facilities in the last eight years. I should be able to figure out a toilet.
My agent pried $8500 out of the seller today so I’m going to DIY a bunch of plumbing, replace the worst of three air conditioners, patch the roof where it actually leaks, and try to move and put at least six months of mortgage payments behind me before I start anything big.
I have grave misgivings about this whole thing but I’ll give it a shot.
posted by The Monster at the End of this Thread at 6:32 PM on August 18, 2023 [2 favorites]
My agent pried $8500 out of the seller today so I’m going to DIY a bunch of plumbing, replace the worst of three air conditioners, patch the roof where it actually leaks, and try to move and put at least six months of mortgage payments behind me before I start anything big.
I have grave misgivings about this whole thing but I’ll give it a shot.
posted by The Monster at the End of this Thread at 6:32 PM on August 18, 2023 [2 favorites]
** AC unit $10k, broken sewer line under house $30k, broken fresh water pipe $10k, any visit by a repair person $150 before they do anything
These too. Like I have had all those jobs done to my home, and those numbers are just odd.
Weird thing to focus on in this thread, but ... AC is for indoor and outdoor unit plus ductwork on a house built in 1965, just before new building codes were enacted.
Sewer line involved iron pipe underneath a concrete slab underneath a finished basement, so basically sheeting the whole downstairs, ripping up the carpet and floor in the basement rec room, jackhammering/cutting out a long concrete trench running 20+ feet, replacing pipe, new flooring, and just for fun, doing the same for another section of pipe running 50+ feet from the house to the street, completely underneath the driveway the entire way :-)
posted by caviar2d2 at 6:08 AM on August 19, 2023 [3 favorites]
These too. Like I have had all those jobs done to my home, and those numbers are just odd.
Weird thing to focus on in this thread, but ... AC is for indoor and outdoor unit plus ductwork on a house built in 1965, just before new building codes were enacted.
Sewer line involved iron pipe underneath a concrete slab underneath a finished basement, so basically sheeting the whole downstairs, ripping up the carpet and floor in the basement rec room, jackhammering/cutting out a long concrete trench running 20+ feet, replacing pipe, new flooring, and just for fun, doing the same for another section of pipe running 50+ feet from the house to the street, completely underneath the driveway the entire way :-)
posted by caviar2d2 at 6:08 AM on August 19, 2023 [3 favorites]
Weird thing to focus on in this thread, but ... AC is for indoor and outdoor unit plus ductwork on a house built in 1965, just before new building codes were enacted.
Not to quibble with anybody's numbers or justifications here, but this kind of thing, so much, is what gets people into trouble buying houses. You're signing a blank check and you just don't know how much you're going to be paying for major repairs like that, or how soon. I bought a pretty old house (111 years old when I bought it), and in the 5 years I've owned it, I've had to put in about $50k of repairs so far (on a house that was about $430k on closing). I won't itemize it here, but some of it was expected... and some was very much not.
I was okay through all of it because I am far enough along in my career to be able to absorb these kinds of hits, but somebody just starting out and stretching themselves to get into their first house, is in a lot more vulnerable position.
And that's basically everybody who bought a house in the last 10 years, if they got an adjustable rate mortgage. I'm quite surprised that it isn't being talked about more openly, but that's going to be an absolute bloodbath in a couple of years. That will be a hit of many thousands of dollars a year, every year, which won't even be going towards fixing a single fucking thing.
posted by notoriety public at 8:16 AM on August 19, 2023 [1 favorite]
Not to quibble with anybody's numbers or justifications here, but this kind of thing, so much, is what gets people into trouble buying houses. You're signing a blank check and you just don't know how much you're going to be paying for major repairs like that, or how soon. I bought a pretty old house (111 years old when I bought it), and in the 5 years I've owned it, I've had to put in about $50k of repairs so far (on a house that was about $430k on closing). I won't itemize it here, but some of it was expected... and some was very much not.
I was okay through all of it because I am far enough along in my career to be able to absorb these kinds of hits, but somebody just starting out and stretching themselves to get into their first house, is in a lot more vulnerable position.
And that's basically everybody who bought a house in the last 10 years, if they got an adjustable rate mortgage. I'm quite surprised that it isn't being talked about more openly, but that's going to be an absolute bloodbath in a couple of years. That will be a hit of many thousands of dollars a year, every year, which won't even be going towards fixing a single fucking thing.
posted by notoriety public at 8:16 AM on August 19, 2023 [1 favorite]
We bought a brick ranch so we can die here in our 80s, just like the previous owner did. We followed our home inspector around and asked a lot of questions. He gave us both the official report and his off the record opinion about things. Our house is in good shape.
And we didn't get an adjustable rate mortgage because we were paying attention in 2007. Ye gods. I can't believe those are still a thing.
But also I feel like there is definitely some regional and socioeconomic class crosstalk on amounts folks spend on housing or home repairs and whether renting or buying makes more sense and what retirement looks like. For clarity, I'm a state employee in Georgia, not a tech worker in Silicon Valley.
posted by hydropsyche at 9:27 AM on August 19, 2023
And we didn't get an adjustable rate mortgage because we were paying attention in 2007. Ye gods. I can't believe those are still a thing.
But also I feel like there is definitely some regional and socioeconomic class crosstalk on amounts folks spend on housing or home repairs and whether renting or buying makes more sense and what retirement looks like. For clarity, I'm a state employee in Georgia, not a tech worker in Silicon Valley.
posted by hydropsyche at 9:27 AM on August 19, 2023
like the roof is way too low and the AC way too high
I *just* got a roof done, and recently got a quote for replacing my electric furnace with a heat pump. About 20k each, for a data point. (Fancy variable-speed heat pump though, doesn't have to be quite that much)
I feel pretty lucky that on one income, we bought in '12. No down payment, or we would never have been able to. I'm not too worried about the investment value, because like someone else said, it's just about having a place to live with a predictable price that won't keep going up without bound. I'm also fortunate that except for the house, I'm debt-free, so my only real financial strategic decision is how much extra to pay off the house early vs. saving another way vs. having available cash for the unforseen.
But if we had not been able to buy the house in '12, we probably would have missed the chance forever (or at least it looks like that's unlikely to change)
posted by ctmf at 5:18 PM on August 19, 2023 [1 favorite]
I *just* got a roof done, and recently got a quote for replacing my electric furnace with a heat pump. About 20k each, for a data point. (Fancy variable-speed heat pump though, doesn't have to be quite that much)
I feel pretty lucky that on one income, we bought in '12. No down payment, or we would never have been able to. I'm not too worried about the investment value, because like someone else said, it's just about having a place to live with a predictable price that won't keep going up without bound. I'm also fortunate that except for the house, I'm debt-free, so my only real financial strategic decision is how much extra to pay off the house early vs. saving another way vs. having available cash for the unforseen.
But if we had not been able to buy the house in '12, we probably would have missed the chance forever (or at least it looks like that's unlikely to change)
posted by ctmf at 5:18 PM on August 19, 2023 [1 favorite]
I *just* got a roof done, and recently got a quote for replacing my electric furnace with a heat pump. About 20k each, for a data point. (Fancy variable-speed heat pump though, doesn't have to be quite that much)
$20k must be the new generic roof cost. I recently got an informal quote (informal since I don't need to do it this year, but it's getting closer and closer so I had a guy out to look at it) and it was just under $20k.
posted by Dip Flash at 6:52 PM on August 19, 2023 [1 favorite]
$20k must be the new generic roof cost. I recently got an informal quote (informal since I don't need to do it this year, but it's getting closer and closer so I had a guy out to look at it) and it was just under $20k.
posted by Dip Flash at 6:52 PM on August 19, 2023 [1 favorite]
Thinking about the roof costs, it's not even all that much more, adjusted for inflation and considering the difference in size, than I paid for a roof in around 2006. That one kind of sucked, though. It hit when we were new homeowners with very little savings, so I paid for the roof by selling a beloved vehicle. It was a very adult thing to do, and I don't regret making the smart, adult decision, but I do miss that vehicle even so.
posted by Dip Flash at 7:14 AM on August 20, 2023
posted by Dip Flash at 7:14 AM on August 20, 2023
So some things I'm learning in terms of home repair is that there are some things that are more expensive because no one knows how to do them themselves anymore, and so the market will bear much higher costs for repairs.
So for example. My partner's toilet was leaking. They called a plumber. The plumber quoted them 800$ to fix the issue, and 1200$ to replace the toilet. We couldn't pay that and wound up having a friend tell us what to do - which ultimately wound up being tightening I believe the lock ring, which was a pain in the ass and required either specialized tools or two people helping, but took about fifteen minutes. but was absolutely not 800$ worth of work. But the market would bear it, because few people have the skills to do it themselves.
Similarly, I got a quote for putting in some vinyl plank flooring, which I *already own*. The quote was somewhere around 30K. But it's also something that isn't particularly *hard*, and it's something that some of my friends did themselves in a couple of days. It's kind of mind boggling to me that something that takes about a week is equivalent to more than the salary I've ever received for half a year. But most people aren't sure how to do it themselves and so the market will bear it.
So like - yes, home repairs are really expensive, but *also* I'm not sure they have to be?
(I did, by the way, just recently get a roof quote for 20K so yeah I'm sure that's just What Roofs Are Now)
posted by corb at 9:37 AM on August 20, 2023 [2 favorites]
So for example. My partner's toilet was leaking. They called a plumber. The plumber quoted them 800$ to fix the issue, and 1200$ to replace the toilet. We couldn't pay that and wound up having a friend tell us what to do - which ultimately wound up being tightening I believe the lock ring, which was a pain in the ass and required either specialized tools or two people helping, but took about fifteen minutes. but was absolutely not 800$ worth of work. But the market would bear it, because few people have the skills to do it themselves.
Similarly, I got a quote for putting in some vinyl plank flooring, which I *already own*. The quote was somewhere around 30K. But it's also something that isn't particularly *hard*, and it's something that some of my friends did themselves in a couple of days. It's kind of mind boggling to me that something that takes about a week is equivalent to more than the salary I've ever received for half a year. But most people aren't sure how to do it themselves and so the market will bear it.
So like - yes, home repairs are really expensive, but *also* I'm not sure they have to be?
(I did, by the way, just recently get a roof quote for 20K so yeah I'm sure that's just What Roofs Are Now)
posted by corb at 9:37 AM on August 20, 2023 [2 favorites]
I'm also guessing roof costs tie into the wildly over elaborate roof lines of modern houses. A simple gable roof is worlds easier to do than the Frankenstein construction of new builds roof lines.
posted by Ferreous at 10:14 AM on August 20, 2023 [1 favorite]
posted by Ferreous at 10:14 AM on August 20, 2023 [1 favorite]
I'm also guessing roof costs tie into the wildly over elaborate roof lines of modern houses. A simple gable roof is worlds easier to do than the Frankenstein construction of new builds roof lines.
I got quoted about 16K for a roof on one of those simple gable houses tho. I think it's only cheaper than the 20K being reported here because the house is just that tiny.
posted by We put our faith in Blast Hardcheese at 1:34 PM on August 21, 2023
I got quoted about 16K for a roof on one of those simple gable houses tho. I think it's only cheaper than the 20K being reported here because the house is just that tiny.
posted by We put our faith in Blast Hardcheese at 1:34 PM on August 21, 2023
These roof costs are just wild for me. We got our roof done in 2018 for I think $8k Canadian. Possibly less. And usually everything is more expensive here.
posted by sid at 6:22 AM on August 27, 2023
posted by sid at 6:22 AM on August 27, 2023
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posted by Heywood Mogroot III at 10:55 AM on August 17, 2023 [18 favorites]