Serious question: How many of you young working people-around 30 or so-

[old mark]

can afford to buy a house?

My wife and I were talking about this yesterday - seems like not many young people we know are making a decent living, and housing prices are still too inflated (our house has incresased in value over 25% from when we first bought it-we would not have been able to buy it if we were shopping today.)

How are you doing it - or are you doing it at all?

We have a modest 90 year old brick end of row house that is now in the over $80,000 range, which is actually ridiculous.

m

[Statistical]

1. One thing is to consider interest rates.

$80K at 5% and $65K at 7% are roughly the same payment.

The only way we could buy our home is ultra low interest rates. However although we are above water the analyst in me says home prices will not be able to rise much over next decade. As interest rates (and they WILL rise) the same home gets more expensive (in terms of payments) which means even after the economy recovers housing has very little upside (unless we see significant wage growth).


However I agree housing prices are still to higher or more correctly wages are still too low. We had a decade where GDP rose 28% wages should have rose 28% but they rose 4%. If wages were 20% higher today the housing prices would be more justified.

[iris27]

2. We are lucky in that we have both managed to stay employed full-time, though

I am barely making $25k a year. But we bought a house in early 2007, after prices had started to come down but before they completely tanked. $95k for an 800 sq. ft., 2 bed/1 bath "starter" home which is plenty for us. We were approved to be able to buy a house half again as expensive, but we wanted a payment low enough that we could still make it on one income if we had to.

The house I grew up in, same size/layout/type of neighborhood (slightly ghetto but usually nothing worse than a stolen stereo or a tagged stop sign), cost my parents $30k in 1981.

Edited to add: We are 28 and 27. And I don't know that we would be able to afford even this much if we had a child or two. Affording either daycare or the loss of one income would put us right at the "absolutely no spending beyond essentials" line...the extra costs of additional food, clothes, diapers, etc. would probably push us over that edge. No big deal here since neither of us wants kids, but I'm sure there are many who DO want kids and have found themselves in a similar situation.

[old mark]

7. That's what we did - bought LESS than what we could have, and

we have always been happy that we were so smart - my wife became disabled about 2 months after we moved in, has not been able to work since. Our interest rate is high, but we got a 30 year fixed rate and rental homes on our block are several hundred dollar more per month than our mortgage payment is. We will pay it all off sometime this year, too.
We still have much more room than we needed, have gradually managed to fill it all up with junk, like books, etc.

m

[proudohioan]

11. Smart move on your part....

purchasing a house with payments that could be maintained on one income.

[old mark]

32. The real reason was, the other house we looked at - for a lot more money -

had a double lot with huge trees. It looked great, but we would have had to cut all that grass and clean up all those leaves, and I hate cutting grass, and I did feel uncomfortable being maxed out on the payment, so we looked a bit further.
We bought this one from the owner without a realtor.
(If you do this, GET A LAWYER to look over the deal and make sure both sides are doing right...we had a problem that was resolved with our seller, but it took some yelling and legal pressure to get him to finally give up the deed.)

m

[Maine-ah]

38. in 1977 my parents bought 3 acres, built a huge house for 30k

beautiful salt box and about 2k sq feet. I paid 85k for 1k sq ft and 1 acre in 2001.I was 27.

[Tailormyst]

3. I am 39, I can't

My fiancée is 56 and owns his home that he bought 20+ years ago on a blue collar salary. Could he buy the same home now? Could he buy any home on his salary that has been repeatedly cut while cost of living rises in the state of Mass? Not a chance in hell.

I would guess buying a home is out of the reach of most working class families, at least around here.

80,000 might buy you a shed on a 12X12 square of land here.

[old mark]

10. My brother lives in Nattick and I could not afford his garage.nt

[Tailormyst]

29. I believe it!

[ProgressiveProfessor]

4. All of my kids have

Not all in swanky neighborhoods but their own places. 2 did it as singles

[bigwillq]

5. Nope

Still living with family.

[sandnsea]

6. What a deal! Where is your house?

I haven't seen a house for $80,000 in about 15 years. Modest homes from the 40s - 60s are back down to $135,000 around here and boy are we grateful for that. But modest income folks still can't afford them. And LOTS of houses that sold for $185,000 - $215,000, just 2 years ago, are now drowning.

[old mark]

8. We live right outside of Reading, PA - about 3 houses outside the city line.

Houses in the city are even less money, but taxes there are higher for fewer services...You can still get a great old brick 3 story row house for under $50,000, some much less than that depending on the location and size - some are tiny.

Allentown PA also still has some great values, as does this whole area generally - it is a nice place to retire if you don't mind a little snow at times.

m

[proudohioan]

13. Come to NE Ohio, you'll find a ton of them well under $100,000...

of course finding a job is another story.....

:)

[HughBeaumont]

24. She ain't lying.

I bought my house 11 years ago (fixed, of course; none of that ARM/Alt-A mess), when the interest rates were favorable and the home was 108,000. It was a steal and we got lucky. No major job loss absence (I was laid off for 5 months in 2001 . . . the FIRST Bewsh recession) sullied anything, yet we're still having trouble saving money because of the basement waterproofing we had to finance. That, and our wages simply aren't keeping up with the cost of living.

Yeah, you'll find lots of homes even in good areas for 100-140k. Jobs . . . ehhhhhh not so much.

[proudohioan]

9. I have often wondered the same thing.....

We bought our first home in 1985 for the "ridiculous" price of $64,000. I was 23 years old at the time, and my husband was all of 27. There was no time that we worried about making our mortgage payments, even when I quit work to stay home with our young children.

I wonder at the sanity of the train of thought that "housing prices must stabilize/increase" when wages are stagnant/declining....... IMO, housing prices need to drop to where an average 30 something can comfortably afford monthly payments and the maintenance that goes along with homeownership. The average home price in most areas does not match with the average wages to support that home price.

:shrug:

[sandnsea]

16. I would have thought that outrageous in 1985

Homes were selling for $40,000 or less in 1985 in Montana, we bought our 3 bedroom with basement for $50,000 in 1990 in Missoula. Houses were never cheap there either, although everything is cheaper than California. Our rent was around $400 in 1985 and we had a very difficult time making that payment, whether we both were working or not because child care always took such a big chunk of my income.

[proudohioan]

22. $64,000 was pretty standard in Denver.....

however, my grandparents in Akron thought that $64,000 was outrageous as well.

Hence the reason I now live in Cleveland; MUCH lower cost of living here than in Denver!

[JoDog]

12. Heck no

I'm 33, and there is no way I can afford a house on my own. I make around 33 grand a year as a professional writer. A huge chunk of my income is still going to pay off my student loans. The property values and rents in the area where I work are inflated. In fact, I have to commute about an hour each way just to find someplace I can afford to live.

[havocmom]

14. fewer and fewer can afford rent

Wages need to catch up or prices need to reflect wages, not some pipe dream about real estate values

edited for typo (of into or)

[proudohioan]

23. Thank you!!!

[HillbillyBob]

15. We are 53 and 48, we were not able to buy until

3 yrs ago due to continual jobs being outsourced and downsized, then I was disabled.
We found a good sized house on 8 7/8 acres for 75@5.18% fixed.
It was abandoned, It is actually larger than what we need, but we have elder relatives that will not be able to afford a nursing home so the extra bedrooms and baths will be handy for that reason. Needs lots of work and the purchase was about 1/2 what we qualified for under an apr, but we insisted on fixed rate and wanted to be able to afford it if god forbid something happened to partner or his income, and our payments are less than half what rent in Greensboro was for a much smaller house on a city lot in a borderline neighborhood. We could no longer afford the rent. I would love to pay it off early as I have been hiv+ for almost 28yrs and I doubt that I will live to see it paid off..then again I have been told at least 5x that I have less than 6mos.

We had to repair credit too or we might have been able to buy sooner, but not by much.
I know we are hand to mouth and have wondered for years how folks with kids manage.

[old mark]

31. bob, my wife has HepC, was told she had 5 years to live.This October

that will have been 11 years ago. We had to wait and search and fight for a mortgage, but we got a fixed rate that covered all our costs, too...A higher rate but we pay over $100 a month less for our mortgage than we did for rent at our last place. The people on eother side of our house rent, and both pay at least $200 a month more than our mortgage payment. We will be paying it all off this year due to some very good fortune, and we are retired/disabled so we pay no local taxes and get a break on property tax.

All the best, my friend.

mark

[X_Digger]

17. Not responsibly, no.

We'd have to take on a payment that's a much larger percentage of our income than rent is. We've been renting the same house for 10 years, and because the rent has remained the same, we couldn't afford the same amount of house / land anywhere within an hour of where we are.

[OneTenthofOnePercent]

18. 25 (Ohio)... me and my wife are making ends meet.

Unfortunately, we bought our house LITERALLY like 1 month before the shit hit the fan in 2008 (FHA programs).
Nice little 2 bdrm cape cod house where we hope to start a family - turn the upstairs into a large kids room.
It was/is a little bit underwater after the housing crash... but we've made some updates & remodelling too.
Hopefully our updates offset the decline in value. ??

[Jennicut]

19. I am 34 now but bought a house at 26. It was not easy, and we live in Connecticut, not a cheap place

to live. It was a very small house, just a little cape. We got it at $135,000. But it was in good condition, new roof and new furnace and a nice size backyard. It is on a main street but I like the neighborhood. The northeast and northwest of CT have better house prices then central CT and the shoreline. However, this was in 2002. Right now, it would be really tough in this economy. I love my house though and really like the mortgage payment...a fixed mortgage payment!

[cbdo2007]

20. I bought a house 8 years ago just out of college at age 24. Had to save up

about 6 months first.

Then, wife and I got married 5 years ago and stayed there for 3 more years.

Just sold that house last summer and lived with family until we could find our new house. Found it and bought twice as much house as we moved out of. I'm 32 now and she's 30. We're doing just fine. Our neighborhood is full of young couples.

I guess it depends on the kind of house you have and getting some equity and then moving up. Just after wife and I got married she was under the impression we'd be able to afford a house bigger than any of our parents live in. I told her to think about where our parents lived when they were 30 years old, not where they live now.

That's what sh*tty houses are for is for young couples to live in while they get out of debt, build up some equity, start their family, get established in career, etc. THEN you move up to a bigger house in your early-mid 40's. Don't get ahead of yourselves. Just focus on getting out of debt and building up equity. Start your family if you're looking to do that and then move up to a bigger house in 5-10 years.

[apples and oranges]

21. I haven't seen anyone that age group buying homes since 2006-07

I knew some really young 20s people who bought homes before everything crashed. No down payments or anything required! I don't think it'll ever be that easy again to acquire property.

[petronius]

25. I'm 38 and I couldn't - not in the place I want to be, anyway

However, our salaries would allow us to buy something reasonable in the majority of the country...

[Godhumor]

26. I bought last year at the age of 32

I'm lucky enough to have a good job, and, since we live in Buffalo, the prices aren't outrageous.

[Soylent Brice]

27. 30 yrs old here. can't afford a home and i make pretty damn good money.

[cbdo2007]

28. How much do you pay for rent each month?

And what part of the country?

I'm just curious as I think a lot of this depends on the part of the country people are in, and many times its cheaper to buy than to rent.

[Soylent Brice]

30. $1,200 in suburban Cincinnati.

our credit is shot due to medical bills so we can get approved for a home loan.

in this are it is much cheaper to buy than to rent, but we can't buy.

[cbdo2007]

33. Have you tried finding a lender that does "manual underwriting"?

If you have a good, steady income and have proof that you have a history of paying your normal bills on time, there are some mortagage companies out there who will do "manual underwriting" on home loans for people with bad/no credit. Especially if they see you are paying a lot now for renting and you even are lowering your payment for the mortgage, that may help sway them that you are responsible (rather than you taking advantage and wanting way more than you pay now, that may lead to some red flags).

I know the mention of Dave Ramsey around here can be scary, but he talks a lot about this on his show and I think even his preferred mortgage company Churchill Mortgage (sp?) does manual underwriting. You may find others on the Google also.

Good luck to you!

[old mark]

37. We went through a bankruptcy-as long as it is discharged, you may not have

as much trouble as people think - We even financed our closing costs and part of our downpayment in the mortgage - we paid more in the interest rate for this, but we are still well below what we paid in rent 14 years ago, and several hundred per month less than renters on this block pay.

If you cas save ANY money to put as a down payment you can usually talk something up -they don't make any money NOT lending it.

Good luck.

m

[TwilightGardener]

34. I was 30 when I bought my first house a decade ago--

it was $54,000--1100 sq ft, little fenced in yard, three bedrooms, ONE bath, little one car garage. I think young people's expectations have changed--many would never buy the house we bought. I know many of my husband's coworkers bought "starter" homes that were newer, nicer and much more expensive than even our second and third homes. Three car garages, professional landscaping, big foyers, the works.

[NeedleCast]

35. I think the area you're talking about makes a big difference

I live inside the D.C. beltway and could probably not afford the mortgage on a 30 year old townhouse in any sort of area I'd want to live in. My salary is in the 70K range. In my immediate area, a 30-50 year old town house costs 250,000 and modern, high-end condos can go for 350,000. My folks, on the other hand, just bought a 2,400 square foot hosue on an acre (corner) lot in the suburbs of Austin, Texas, for about 160,000.

The house I rent in Falls Church is about 1,600 square feet and is 60 years old. It sits on a big lot. The house was recently appraised at about 160,000 and the land it sits on at 180,000 (not unusual in my area for older houses on big lots to have lot values that are higher than the house value).

My girlfriend lives in the Baltimore suburbs and owns a three bedroom row house with finished basement at about 1,800 square feet. Her mortgage is about 1,200/mo. If her row house moved an hour south into the D.C. beltway, it would double in value.

[old mark]

36. I wonder how much farther the housing prices will fall - maybe some of you can

buy in the next few years - it does beat the hell out of renting.

m

[PassingFair]

39. The two-story, brick bungalow that my parents bought in 1971 for $21,000...

Was just sold by my mother for $18,000.

Lots of affordable housing in Detroit,
if you don't mind a little B&E every
now and then.

[WilmywoodNCparalegal]

40. My BF and I just bought a house

near the beach (not beach front but only about 6 miles from it). He's 35, I'm 38. Our credit is not super but not bad. We got a 0 down loan through our credit union.

Prices have really come down to earth around coastal southeastern NC and property taxes are low as well (however, the much higher homeowner insurance rates compensate for that). We found a great home, only 3 years old.

We have no down payment and the sellers will pay closing costs. They are asking for about $57,000 less than the tax assessed value. We offered about $3000 than asking price, because it was such a good deal.

We make decent incomes, but really right now the main concern (for our credit union, at least) is that our jobs are stable (which they are).