41–50 of 72 posts
Earlier quoted context omitted.
Right, new owners who just bet N times their yearly salary that the music won't stop in the next 15-30 years. The demographic pyramid is inverting, interest rates have been falling but are now hitting 0, and the asset-owning bloc is falling below 50% of the electorate. Any one of these could stop the music, but all three are happening.
There is an infinite supply of money to purchase a fixed supply of these assets.
$1M is a $4000/m mortgage requiring a $12000/m income or $140k salary. That seems doable for some professions. If you are on the fence of buying a home, right now would be a good time to do it. Because they aren't getting cheaper and with this announcement they will almost certainly rise to meet this new, looser qualification.
That depends on having 20% down, or $200,000 in cash. That would take most people quite a while to save up unless they've been working long enough (say decades), and without it you'd have to take on private mortgage insurance which would shoot the price up even more, at least for a few years. But even assuming one had 20% down, with a rough tax calculation of 30%, that $140k salary comes out to $98,000 annually post-…
> That's not a situation I would be comfortable with. If it takes a whole 50% of my post-tax income to fund my home, I'd be terrified of any kind of interruption to my employment (like a personal accident, recession, or pandemic; these things aren't as unlikely as we like to believe). If you mean $140k post-tax I'd be more inclined to see a $1M house as doable
Here in London a significant proportion of the population are doing just that. Hence why it's called a housing crisis.
Earlier quoted context omitted.
Agree. But also, those borrowers are soon-to-be owners.
Right, new owners who just bet N times their yearly salary that the music won't stop in the next 15-30 years. The demographic pyramid is inverting, interest rates have been falling but are now hitting 0, and the asset-owning bloc is falling below 50% of the electorate. Any one of these could stop the music, but all three are happening.
Earlier quoted context omitted.
I could not downvote this faster. Ridiculous and wrong. Shameful advice. I be curious know your age, income, and net worth to see how out of touch you are. Do not take this advice and debt at this ratio. - take home is gross income not net like taxes or health insurance. It also doesn’t factor in retirement even - mortgage estimate is wrong - does not factor property taxes - Just open an affordability calculator or m…
I've been planning to buy a house in the near future with my partner, and this comment has a great breakdown of information useful to anybody starting the process. I agree with you that the other poster's numbers are wildly unrealistic. Since you seem pretty informed, do you have any resources on how to get well-informed enough to take the plunge and buy a house?
Don't get me wrong I'm not saying the 3% or less you can technically get away with are a good idea. I'm just saying, in this market having a hard rule of 20% down doesn't make a lot of sense to me. Do the math on your finances and what seems to make sense in your area. I'm certain the market is different where you are from where I am, there's a lot of nuance.
A $1 million loan on a 30 year term at 3% interest ($4200/mo) is totally different from say 5% (5300/mo) or 8% (7300/mo) interest. It’s strange to me that the principal of the loan is the basis for the policy rather than the monthly payments. If interest rates hit a 30 year high to match our 30 year high in inflation, the share of Americans who can afford a million dollar loan will be a tiny tiny fraction of what it…
If they keep rates low, inflation will explode, and buying a house now will be an excellent investment. If they spike rates to fight inflation, like in the late 70s, buying a house now will be a terrible investment. That's why it's a lever of power: it can go both ways.
Can also be titled "Prices Soar as Fannie Mae, Freddie Mac to Back Home Loans of Nearly $1M"
Or "Prices Were Already Soaring Despite Fannie Mae, Freddie Mac Not Backing Home Loans of Nearly $1M" I don't know how wannabe first time home owners are going to catch a break.
They will buy in the other 97% of counties where million-dollar loans do not require subsidy. Most states do not contain even a single county that qualifies for the higher Fannie/Freddie limits. Notably, this includes Texas, Illinois, and Georgia. There are entire major metro areas where one can work in tech and buy a house for well under $500k.
For example, Atlanta is home to engineering offices for Google, Microsoft, Spotify, and Mailchimp/Intuit and sports a median home value of $349k. This is comfortably affordable to a person making less than $100k.
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The market will not be allowed to correct. That was the lesson of 2008. The only endgame here comes after the end of dollar dominance.
What did they do to prop up the market in 08? What would that policy intervention look like today?
Literally the banks couldn’t afford to foreclose on the homes secured by toxic loan and tax payer funds went to foreclosing on tax payers.
If the banks were in trouble again, government would bail them out again with tax payer money to the detriment of tax payers. Just like the government did last time they would sweep people under the rug by removing them from unemployment numbers and pretending they never existed.
$1M is a $4000/m mortgage requiring a $12000/m income or $140k salary. That seems doable for some professions. If you are on the fence of buying a home, right now would be a good time to do it. Because they aren't getting cheaper and with this announcement they will almost certainly rise to meet this new, looser qualification.
I could not downvote this faster. Ridiculous and wrong. Shameful advice. I be curious know your age, income, and net worth to see how out of touch you are. Do not take this advice and debt at this ratio. - take home is gross income not net like taxes or health insurance. It also doesn’t factor in retirement even - mortgage estimate is wrong - does not factor property taxes - Just open an affordability calculator or m…
- Upkeep. Houses require work (example - re-painting every 10-15 years can be >$15-$20k.)
- Special assessments (city, county, special district) that come up because other people vote for them. (example: Seattle can vary $150->$1k some years)
- Homeowners insurance, flood insurance, earthquake insurance, if relevant. (example: Seattle - $800 + $600 + $1400 / yr)
- Hidden costs that are not obvious (example - in King County, WA new homes have a sewer connection charge ~$18k that is paid off over like 15 years.)
Earlier quoted context omitted.
The only thing I can think of is a reintroduction of something like Shotgun Shacks, somewhere in between trailer parks and suburbs. Something like Boxabls, Tiny homes and container homes.
Builders can rake in more cash building mini-mansions. County commissioners are totally on board with that. Our county has a massive homeless population while new housing developments start at 350k. There's been one new apartment complex in the last 25 years.
$1M is a $4000/m mortgage requiring a $12000/m income or $140k salary. That seems doable for some professions. If you are on the fence of buying a home, right now would be a good time to do it. Because they aren't getting cheaper and with this announcement they will almost certainly rise to meet this new, looser qualification.
I could not downvote this faster. Ridiculous and wrong. Shameful advice. I be curious know your age, income, and net worth to see how out of touch you are. Do not take this advice and debt at this ratio. - take home is gross income not net like taxes or health insurance. It also doesn’t factor in retirement even - mortgage estimate is wrong - does not factor property taxes - Just open an affordability calculator or m…
Chill out with the insults.