Housing Affordability

What several of us have been saying:

Great time to be a landlord…but I feel for the millennials.

Yep and once rent goes up it stays up,

which makes it even HARDER for young people to save for the down payment.

I’ve been to almost a dozen weddings for couples in their 20’s over the last few years and they all figured out how to buy a house or condo. Even single people figure it out by living at home with their parents for a year and saving their money, getting a roommate, getting a second job, etc.

Dont disagree with you at all…there is a renter class now.

Not everyone wants to own a home, some people are happy or better off renting. Also if someone can’t keep their credit score high enough, come up with a reasonable down payment and other basic qualifications to obtain a mortgage it’s doubtful they can handle the responsibility of home ownership. Those people paid for my landlord buddy’s summer home in Wisconsin and the trip with his family to Disney World every year.

IT doesn’t matter what they do,…whatever it is will be their fault to you. They don’t have a problem making the rent payment. And…there are a LOT of younger people coming out of college with a large student loan debt…and before you give the lecture on personal responsibility, considering that there are trillions of dollars in student loans, it’s more common to have some debt than it is to get out debt free. AND…they are supposed to have an “emergency fund” for, well…emergencies. THEN they have to come up with a down payment on a house that is severely overpriced (IMO). So instead of getting a house in their 20’s or early 30’s, they have to put it off to their 40’s. Of course, instead of an emergency fund, they could use that money as a down payment, but then if they hit hard times, folks like you will give them the personal responsibility speech about how they were dumb to spend their emergency fund.

You want it both ways, you blamed the banks for giving loans to irresponsible people who didn’t repay their loan and lost their house, but now you want banks to lend to irresponsible people. Like I said above, not everyone is cut out to be a homeowner.

You should read the book Griftopia. While you sum up what happened in 2008 by blaming poor people, this book spends pages in a very readable format about all the steps involved in the process. But they couldn’t find anything where banks were forced to make those loans.

But, in this thread, you are encouraging those loans.

Going forward banks should only lend to well qualified borrowers, something you seem to be against today. An above average credit score, at least a year or two in the same job and 20% down would prevent another real estate meltdown. Like I’ve said several times here, not everyone wants to be a homeowner or is cut out to own a home.

A good example of how owning a home builds wealth is my neighbor that recently moved to Florida, he walked away from his home here with $430,000 cash, bought a condo a few blocks from the beach for $300,000 cash and has $130,000 to live off for a few years until he has to tap his IRA. A renter will have nothing and will be paying rent until they die.

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I didn’t see anything here where KC enouraged those loans. He is just commenting how how much more difficult it is to buy a home these days.

By making people actually qualify for loans.

It is a function of price. People who may have qualified for loan at formerly lower home prices do not qualify for a loan at higher prices. Thus, home ownership is more out of reach. That does not mean one is advocating giving loans to those who can not afford them, only that the idea of purchasing a home for such people is more of a pipe dream these days.

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I went back and re-read the thread.
You are correct, KC has not made that accusation here, but he has in the past.

He hadn’t offered a solution, but he seems to be obsessed with saving for the down payment needed while paying rent. I offered ways to save for a down payment but he ignored them.

Prices are what they are, it’s supply and demand. With interest rates almost doubling home prices should come down some, but then you have higher interest rates.

Most people I know bought a starter home for a price they could afford and as their income increased and they built equity in their home they’d buy a bigger better home. With the exception of the most expensive areas there are reasonably priced homes available, but a lit of people want to start in a move up home.

I knew a lot of real estate investors that were quite wealthy that went under. It had to do with being way over-leveraged and no reserves. No one forced them to take out all those loans…

Me too.
Our broker for our first house was super honest and would not sell us any kind of funky loan.
We referred several people to him, one of our friends called his office and one of the other brokers who worked under his umbrella tried to “snake” his business. We told him and he just said that in his business you have to deal with a lot of snakes, but he refused to become one of them

Yes, we have the fun situation right now of banks telling people they can’t qualify for a loan with $850 monthly payments, so they must continue to pay $1,650 each month for rent.