House expensive and job no pay enough.
$$$$?!?
A 7% interest rate doesn’t help
We bought in 2020 and have a 2.875% rate on our mortgage. We only put 10% down and had PMI but the broker was all, “you can refinance to get rid of that”.
I asked him when in the world we’d ever be able to refinance at or below that rate? He had nothing to say to that.
Just FYI there are stipulations to removing PMI from a mortgage but refinancing usually isn’t one of them. Each situation is unique though. FHA and VA loans are different, etc.
As the house value increases with the market you can refinance to a new lender with greater equity eliminating the need for PMI.
We bought ours in 2022 at a 4.15% rate with only 5% down and since I dealt with a local lender, got a conventional loan with no PMI. Thank God. The PMI was my biggest worry, but we were very fortunate.
Also found a house for under $300k, but it was built in 1952 and we’re a little in the boonies. We have a Walmart nearby and some fast food, but that’s it. We both work 20 miles away in the much larger town. And then we’re about an hour or so (depending on traffic) from a major city. So we had to make some concessions in order to even get a house. Though I love being in a small quiet neighborhood and being able to live away from the bustle of a larger town, but it does have drawbacks.
The biggest knock on our house is that it’s a townhome but I’ve successfully disbanded the HOA so that’s no longer an issue.
Ours is actually bigger than a lot of single family homes in the area, we’re 5ish minutes from downtown St. Paul, we’re on an end so only one attached neighbor, and best of all we’re on a dead end sleepy little street overlooking the Mississippi.
Actually it’s the view that sold us on the property.
While true, I would point out that the low mortgage rates that increased housing prices — low mortgage rates permit people to borrow more and tends to drive up prices — in the decade-and-a-half before 2022 was unusual for the US. Prior to about 2008, interest rates were at or higher than they are today.
Here’s a graph of the 30-year fixed-rate mortgage rate:
https://fred.stlouisfed.org/series/MORTGAGE30US
Here’s the Case-Shiller Home Price Index. This measures same-home prices — that it, it attempts to factor out changes in types of home being built, so new homes being larger won’t drive it up.
https://fred.stlouisfed.org/series/CSUSHPISA
It’s not adjusted for inflation, though.
Here’s an inflation-adjusted graph:
https://www.longtermtrends.net/home-price-vs-inflation/
Between about 2011 and 2022, the real price of a given house rose rapidly in a low mortgage rate environment. In 2022, mortgage rates returned to something that’s more historically-normal.
I expect that to sell a house in this environment, a homeowner will probably have to cut what they’re asking.
Now combine them both and do average monthly payment.
Even with higher prices, lower interest rates mean lower monthly costs
I had two houses at that interest rate in the 2000’s. The wage to house price was still reasonable then. Made $40k, paid $88k for a 3/2 in middle class suburban Tampa. I’m making 30% more now but houses are 400% more.
Not on top of the wild overvaluation.
Because of the increasing gap between wages and property values?
Given interest rates’ impact on the housing market, Trump has repeatedly demandedthat the Fed lower them. “You have cost the USA a fortune and continue to do so,” Trump told the central bank’s chair, Jerome Powell, in a handwritten note.
But Powell and other Fed officials argue that Trump’s tariffs have created ongoing economic uncertainty, especially around prices. Some consumers say they’ve already seen prices rise, and cutting rates risks fueling more inflation.
“It’s a risk we feel. As the people who are supposed to keep stable prices, we need to manage that risk,” Powell told the US Senate last month.
Bangup job so far, Powell you asshole. I’d like to see how your mindset changes after spending a few years working a crap job for $35K a year.
Not saying Trump isn’t also a colossal d-bag; but Powell’s entitled ass does not get a pass from me.
Because home ownership is increasingly becoming a trap? Gee, lemme save up a high 5 digit sum of money over the course of a decade so i can afford to BUY IN to a ridiculous sum of debt that, even if its paid off eventually, will be taken away to cover medical debt in old age! All to prop up infinite growth in property values to prop up a stock market.
oh we know why, it’s not a mystery to anyone who talks to the average american worker. we are criminally underpaid for our labor and it gets worse the younger the generation is. millennials are more poor their than their parents’ generation, and gen z will likely end up poorer than millennials.
See also: why hip-hop sucks in '96.
It’s the money-ey-ey-ey
wattt
Homes are fucking expensive. I couldn’t afford to buy a house in most markets at current prices. I have no idea how people are able to buy homes today.
Even my neighbor down the street…1st home for him, wife, and 2 year old kid. He tried to sell because he didn’t understand how property taxes worked. The previous owner of 30 years payed 1.5K a year. He bought the home and was hit with a 15K tax bill. He couldn’t afford it and thought his bill would also be 1.5K. The closing agent and real estate agent didn’t explain anything to him. They were just happy to collect commission and fees on a very expensive house.
Ah, a Californian
This doesn’t make sense to me.
In my state the bank pays the property taxes. Its included in the monthly mortgage and goes into an escrow account for taxes.
I guess the rules vary by state.
The bank usually pays taxes and Insurance from the escrow account. You pay into escrow every month. If insurance goes up, so does the amount you pay into escrow
That is only if your mortgage was written that way. I don’t know if mortgages are “usually” written that way, but only my first mortgage had an escrow account.
Escrow isn’t a requirement. The only requirement is that you pay your taxes and insurance whether you have someone else doing it or do it yourself.
What varies from place to place is how property taxes are calculated. Many places “lock you in” to a rate when you buy and only reassess when the property changes hands. In my state, the rate just increases by 3% every year regardless of whether you sell or not so nobody is hit with a big surprise bill.
Some places cap property tax increases per year, or even have a flat rate based on purchase price (or appraisal?) that never goes up… until you sell the house to someone new. Then the tax gets recalculated based on the current value of the house. So if the price of the house went up 10x in those 30 years, the tax is going to be 10x higher. It’s actually beneficial to the taxpayer IMO to have a consistent predictable tax that doesn’t go up over time if your neighborhood gets gentrified or whatever and home prices skyrocket.
That part makes more sense. In my state the tax on the house goes up. It’s not locked like that.
I feel like it’s an oversight to not calculate the new tax rate and include it as cost to the buyer.
The bank losses out on the loan if you foreclose on it. They make money on the interest not the sale.
The only one who makes out on a bad sale like that is the realtor.
capitalism. there. article done.
A house is a huge liability. If i lose my job, what do i do about the debt? It’s the job market uncertainty that i fear more than the current pay levels, tbh.
House is an asset. Mortgage is a liability. Having one without the other is now a dream.
Probably the same reason megacorporatins are turning in record profit, year over year, and a very few people have increased their income by several billions of dollars, but that’s just a guess. 💁
Don’t forget about the corporations that are buying as many houses a quick as possible (faster than a person who will have a mortgage can) and at a higher price than what a person can/will pay becaue they are using them as investments.
Absolutely!
Actually the report that came out recently (the one that found institutional real estate investors buying something like 27% of all available homes) made an important note: most of the companies buying these homes are so-called “mom n pop” landlords who own < 5 houses
So it’s actually corporations AND fucking boomers.
People aren’t paid enough. The rich have too large a portion of the resources.
Eat the rich. Bury their collaborators.
Stop the food waste. Collaborators can be eaten too.
The worst part is that I am getting paid a salary I could have only dreamed about years ago, and yet I still can’t afford anything with how drastically everything went up in price.
Wages in general have gone up a little bit, but it’s crazy to me that I’m earning more than 5x as much as I used to 25 years ago and feel like my buying power has not noticeably improved at all. I’m still stuck living in crappy apartments because that is all I can afford.
Exactly! My partner and I together make over $100,000 a year and finally we are just barely comfortable. All of our bills get paid and even though the budget is tight, we still have a little money and decent credit. I could put a $1,000 guitar on credit and pay that off no problem, but there’s no way we could get a house.
Maybe if our wages doubled then we could find something further out in the sticks. Hopefully by that time more companies allow full remote work because I already lose an hour or more a day traveling.
Companies demanding return to office is such a twist of the knife. It’s a pay cut, making someone spend an hour or two commuting without paying them for it. But the boss doesn’t care
Maintenance, gas, car insurance, more expensive food, tolls, parking, and time. It’s a massive paycut for many people when you really think about it.
Bury them where? I can’t afford a plot of land :(
Ocean it is
Bring back the Commons; fertilize with rich bodies.
I fucking wonder. Maybe I can ask Grok.
Grok: “It’s the Joos. Heil Hitler!”
So, after last week, I guess that’s heil Grok?
…Grokler?
Mecha Grokler
I’d wager that Elno changes Grok’s name to something similar in the coming months.
