Americans need to be richer than ever to buy their first home • Hacker News Board

Re: Americans need to be richer than ever to buy their first home

#41

Post by 908B64B197 » Sat, Mar 04, 2023, 6:36 PM UTC

legitster wrote: post #12

I think this is only half of the story. There are still lots of affordable houses - in parts of the country that no one wants to live anymore. The value of my sibling's property in Illinois has barely kept up with inflation. So I think some of the national statistics about house prices vs number of units are a bit misleading. We're increasingly paying a premium because we are increasingly concentrating where we want…

> in parts of the country that no one wants to live anymore. The value of my sibling's property in Illinois has barely kept up with inflation.

It reminds me of some politician in the south whining about people leaving the state (to get to the coast). And he wished silicon valley would "come to real America to create jobs here too".

Of course, as you guessed it, it was one of the deep red states and we all can guess why people were leaving.

Re: Americans need to be richer than ever to buy their first home

#42

Post by lotsoweiners » Sat, Mar 04, 2023, 6:39 PM UTC

ReptileMan wrote: post #23

blue039 wrote: post #2

[flagged]

Isn't the real problem that there are too few desirable places for people to be - state capitals and mega cities urban cores - everybody tries to cram there. So you actually have to fix the demand problem. The phrase "flyover states" is an early precursor of the current problem. I don't know how - all of the solutions I can think about are bad, but you actually have to convince people that there are other places wort…

One of the problems is that people from Cali, New York, etc have left those states and started competing and jacking up prices in the “flyover states”. I live in Phoenix which was reasonably affordable before Covid but has now gotten ridiculous. Similar things have happened in Utah, Idaho, Montana, the cheaper parts of Texas etc. At some point this may continue and change pricing in the other still cheap states.

Re: Americans need to be richer than ever to buy their first home

#43

Post by rg111 » Sat, Mar 04, 2023, 6:46 PM UTC

bryanlarsen wrote: post #38

tayo42 wrote: post #10

This is something I hope the government can step in and help with. Maybe really low/no interest loans for first time home buyers so they can at least get into the market. Maybe that exists? Income limits need to account for up to date salaries. I'm not rich or wealthy just because I had a couple years of making 250k. I still have loans and im still burning up cash on renting. Taxes take away a ton of that income. Som…

> Maybe really low/no interest loans for first time home buyers so they can at least get into the market. These sort of "fixes" make the problem worse rather than better. By making it easier for people to buy high priced houses, it increases demand for high priced houses, and increases house prices.

Exactly what happened with college education expenses in the US.

Re: Americans need to be richer than ever to buy their first home

#44

Post by twelve40 » Sat, Mar 04, 2023, 6:50 PM UTC

tayo42 wrote: post #18

legitster wrote: post #15

Earlier quoted context omitted.

> Maybe really low/no interest loans for first time home buyers so they can at least get into the market. These already exist. There are downpayment assistance programs that go as low as 0% down. We ourselves took advantage of FHA loans twice to buy homes. If anything, they exacerbate the problem by throwing cheap money at a supply problem.

> downpayment assistance programs that go as low as 0% down. I never understood these, you still have to make payments on the total loan though? 0% on a million dollar loan at 6% is a ton of money to pay every month. on top of taxes and expenses of owning a home.

it's obviously a huge help for people who can't easily fork out $200k in cash after tax for a downpayment. Which is only the majority of the population, even in the richest metros (e.g. SFBay has most families making less than $120k/year).

As to addressing the recently raised interest rate or not flooding the demand side with cheaper loans, I have no idea how to tackle all the evil in the world at once, but this particular form of help clearly addresses the barrier to entry in form of a downpayment, which is real.

Re: Americans need to be richer than ever to buy their first home

#45

Post by legitster » Sat, Mar 04, 2023, 6:51 PM UTC

BenFranklin100 wrote: post #27

legitster wrote: post #12

I think this is only half of the story. There are still lots of affordable houses - in parts of the country that no one wants to live anymore. The value of my sibling's property in Illinois has barely kept up with inflation. So I think some of the national statistics about house prices vs number of units are a bit misleading. We're increasingly paying a premium because we are increasingly concentrating where we want…

People go where the jobs are. That’s increasingly in urban areas. It’s also where amenities like good hospitals and schools are located.

One of the most eye opening books on this topic was "Order without Design" by Alain Bertaud.

Essentially, cities exist entirely as job markets - where individuals make tradeoffs to handle geographic constraints.

It will be interesting to see if the WFH shift changes this dynamic.

Re: Americans need to be richer than ever to buy their first home

#46

Post by legitster » Sat, Mar 04, 2023, 7:02 PM UTC

tayo42 wrote: post #25

legitster wrote: post #22

Earlier quoted context omitted.

You only pay the higher percentage on the amount of loan principle below 20%. So for 80% of our loan the interest rate is 2.25%, and then a few points on top of that for what we still own below the 20%. Still a screaming deal - but a lot of restrictions on how big of a loan you can get and what kind of property you can buy with it.

ill dig into this. thanks! see theres a reason to rant on the comment section haha

Haha! Once in a million!

The advice I give all my friends - talk to a decent loan officer as soon as possible. Perhaps even years before you think you are ready!

The amount of knowledge you will get by Googling these topics is like looking through a straw. But a professional can lay out a bunch of options you never would have known you had.

Re: Americans need to be richer than ever to buy their first home

#47

Post by [deleted] » Sat, Mar 04, 2023, 7:04 PM UTC

tayo42 wrote: post #13

howlin wrote: post #11

Earlier quoted context omitted.

> Maybe really low/no interest loans for first time home buyers so they can at least get into the market. One big reason homes are priced so high in places like the USA is because home loans are already government subsidized. When people think of what they can afford, they look at their net monthly mortgage payment less the income tax break. And prices seem to rise to meet whatever monthly payment buyers can afford.

> because home loans are already government subsidized. Are they? Maybe Im more ignorant then I thought? Im still stuck looking at high intrest loans as a first time buyer who works in tech though?

[deleted]

Re: Americans need to be richer than ever to buy their first home

#48

Post by blue039 » Sat, Mar 04, 2023, 7:14 PM UTC

legitster wrote: post #9

blue039 wrote: post #2

[flagged]

This is such a common misconception that Blackrock has a webpage on their website dedicated to clearing it up: https://www.blackrock.com/corporate/newsroom/setting-the-rec...

[flagged]

Re: Americans need to be richer than ever to buy their first home

#49

Post by Overtonwindow » Sat, Mar 04, 2023, 7:14 PM UTC

It seems the true, deciding factor is good credit and able to pay your bills. You still only need to put down closing cost, and the federal government will cosign your loan. I don't understand this idea that only the wealthy can have homes. Perhaps it is that some people want certain homes, in certain locations, and can't afford them. That's not a problem, indicative of the market, they just can't afford it.

Re: Americans need to be richer than ever to buy their first home

#50

Post by blue039 » Sat, Mar 04, 2023, 7:15 PM UTC

legitster wrote: post #28

emptysongglass wrote: post #20

Earlier quoted context omitted.

I don't see how this helps the narrative. You'd expect they would. This is like cigarette companies putting out memos defending cigarettes as less-harmful.

"McDonalds sells cocaine to children!" McDonalds: "No we don't." "Ha! That's just what they would say". The ridiculous thing about this set of accusations is that Blackrock is a passive investment management firm. They don't make any more intentional investment decisions than, like, a typical bank.

Their ESG score tells me otherwise. They can single handedly destroy a company or industry with this score. They control trillions in investment capital. They have seats in the largest governments.

You are either legitimately shilling for your employer or watch/read one of the several DOZEN news organizations they own. You need to wake up. The giant, along with it's daemon Aladdin, control the majority of money flow on the planet.