How are people affording these crazy home prices?

[wind gypsy]

A lot of people are going into this with reckless abandon. I'm just waiting on the crash like in 2008 so I can swoop up a new house for cheap.

I'm no nostradamus but there seems to be a fair chance you'll be waiting a while.

 

[CorbLand]

I am just curious if this idea that a house is a financial investment and creates great returns concept is correlated with the size and cost increases.

I just know that for me and many I talk with my age, it has been taught to us that you buy a house as an investment and to live in and its in that order. So many go out and buy the biggest house they can afford because the return on them is generally higher. Granted, I do live in an area that most have more kids than the national average.

 

[Reburn]

Born in '85. There are lots of different scenarios but I would say in general the jist has always been more "get some equity for your $ rather than giving it all away with rent" rather than buying a house for an investment.

That said, it was common for many friends and family around me starting at college age to consider the first home purchase being one that could become a rental property in the future.

Fixed it for you
That said, it was common for many friends and family around me starting at college age to consider the first home purchase being one that could become a property to fall back to after a divorce......


I'm an 81'.
Same mentality though.

 

[Dos Perros]

From a Pew Research article:

“The wealth gap between upper-income and lower- and middle-income families has grown wider this century. Upper-income families were the only income tier able to build on their wealth from 2001 to 2016, adding 33% at the median. On the other hand, middle-income families saw their median net worth shrink by 20% and lower-income families experienced a loss of 45%. As of 2016, upper-income families had 7.4 times as much wealth as middle-income families and 75 times as much wealth as lower-income families. These ratios are up from 3.4 and 28 in 1983, respectively.”

You need to scroll down a bit to get past the section on income to the net worth discussion.

1. Trends in income and wealth inequality

Barely 10 years past the end of the Great Recession in 2009, the U.S. economy is doing well on several fronts. The labor market is on a job-creating

www.pewresearch.org

Helpful link, thank you.

I was mistaken, upper income tier has grown by 33% since 1971, while lower income tier has grown by 16%. Understanding social program spending has increased dramatically in this time frame I think it's an overall success.

 

[txjustin]

A lot of people are going into this with reckless abandon. I'm just waiting on the crash like in 2008 so I can swoop up a new house for cheap.

Don’t hold your breath. Also, real estate is HIGHLY localized.


Sent from my iPhone using Tapatalk

 

[cottonant]

Don’t hold your breath is right. We live in a world of academic theories not in accordance with the laws of nature. Actions have reactions. We’ve heard it all of our lives but very, very, very few seem to understand this, or care.

The first totally legal Fed Gov PPP scam alone, with many businesses thriving during Covid getting 100’s of thousands and millions of so-called loans that did not have to be paid back – i.e. free government $$$ added to future generations debt - had a huge impact on real property prices.

 

[Weldor]

All I can say is the last couple of years, sales around my area have stalled. I think Californians ran out of money LOL.

 

[Hnthrdr]

All I can say is the last couple of years, sales around my area have stalled. I think Californians ran out of money LOL.

Chain reactions, peoples houses are sitting on the market longer. The bidding wars are over and they aren’t getting those 21/22 gains. Lots of jobs went back to in person, tighter job market, all this stuff has led to tighter housing market. Air bnb bubble is definitely there builders and speculators may have over played their hands some

 

[cottonant]

The real estate market has definitely changed - and anything is possible - but a crash to pre-Covid prices in the real estate and/or stock market would nullify the great Fed currency devaluation reset. So – It’s really hard to imagine their not stepping in to prevent this.

The SPX currently at 6040 would have to go below the 2/17/20 pre-Covid high of 3393 i.e. a 43.8% drop. These types of pullbacks occurred after 2000 & again after 2008 so a possibility for sure. But, still not holding my breath.

 

[Wrench]

If you are military or your 1st degree of kindred is, you should seriously consider looking at navy Federal credit union. Pmi ends at 5% and you can buy your rate down for almost nothing and not have to refi.

 

[GSPHUNTER]

Easy, we bought 44 years ago. Actually we got a rental 12 years ago on a short sale, got a great prices.

 

[flathead#2]

We bought current house about 5-6 years ago. In that time the price
has doubled. I could not afford this house if I had to buy it now.
House is paid for and I'm ready to retire, sell and take 50% from the
sale of the house and pay cash for something cheaper and invest
the rest.
Wife and son dont want to move, so there's that.
But it has been a good investment I guess.

 

[aftriathlete]

If you are military or your 1st degree of kindred is, you should seriously consider looking at navy Federal credit union. Pmi ends at 5% and you can buy your rate down for almost nothing and not have to refi.

Can you explain a little more? I see some basic info on NFCU site but not the kind of info you seem to have.

Current Mortgage Rates & Options

Explore today's mortgage rates and compare home loan options. When you’re ready to apply, call Navy Federal at 1-877-573-2324 and get pre-approved for a home loan today!

www.navyfederal.org

I’m military, currently starting to look for a house with my VA loan.

 

[bradmacmt]

Easy, we bought 44 years ago. Actually we got a rental 12 years ago on a short sale, got a great prices.

So helpful to the the younger guys here...

 

[Wrench]

Can you explain a little more? I see some basic info on NFCU site but not the kind of info you seem to have.

Current Mortgage Rates & Options

Explore today's mortgage rates and compare home loan options. When you’re ready to apply, call Navy Federal at 1-877-573-2324 and get pre-approved for a home loan today!

www.navyfederal.org

I’m military, currently starting to look for a house with my VA loan.

Mortgages: Get Preapproved for a Home Loan

Explore competitive rates on Navy Federal Credit Union mortgage loans and learn more about available options for making your dream home a reality. Get pre-approved for a home loan today!

www.navyfederal.org

Look at the bottom of the page. It costs $250.00 to buy into the lower rate.

 

[aftriathlete]

Mortgages: Get Preapproved for a Home Loan

Explore competitive rates on Navy Federal Credit Union mortgage loans and learn more about available options for making your dream home a reality. Get pre-approved for a home loan today!

www.navyfederal.org

Look at the bottom of the page. It costs $250.00 to buy into the lower rate.

Ah, I see, VA loans aren’t eligible but a few different types of loans are.

 

[z987k]

Mortgages: Get Preapproved for a Home Loan

Explore competitive rates on Navy Federal Credit Union mortgage loans and learn more about available options for making your dream home a reality. Get pre-approved for a home loan today!

www.navyfederal.org

Look at the bottom of the page. It costs $250.00 to buy into the lower rate.

That's not buying points. It's a low cost refi. IF rates go down in the next 6 months.

 

[Wrench]

That's not buying points. It's a low cost refi. IF rates go down in the next 6 months.

Correct.

 

[Hnthrdr]

If you are military or your 1st degree of kindred is, you should seriously consider looking at navy Federal credit union. Pmi ends at 5% and you can buy your rate down for almost nothing and not have to refi.

That’s a great deal for starting out. Love my VA loan they are fantastic, probably one of the best benefits of service

 

[Hnthrdr]

Where are you looking? My advice is choose location over everything. Especially as the markets tighten, and potentially in 10-15 years a bunch of boomer croak location will be the difference between having an assets and a liability. Focus on areas with high rental potential or space limited like it’s not feasible for them to build a bunch of tract homes in 10 years and devalue existing properties

Can you explain a little more? I see some basic info on NFCU site but not the kind of info you seem to have.

Current Mortgage Rates & Options

Explore today's mortgage rates and compare home loan options. When you’re ready to apply, call Navy Federal at 1-877-573-2324 and get pre-approved for a home loan today!

www.navyfederal.org

I’m military, currently starting to look for a house with my VA loan.