Gad! House buying today

[newbury]

Just read some headlines:

Americans say it’s the worst time ever to buy a home​

and

Mortgage rates top 7%

When I was buying my first home (1978) we would have loved a 7% mortgage.

We survived.

 

[2515R Dude]

It is a great time to buy real estate!

 

[jyoutz]

One of my sons is buying a house at 3.9%. It’s a VA loan.

 

[goeduck]

Our first house was in the early 80s. I think interest rates were north of 13 or 14%. Makes a big difference.

 

[jyoutz]

My first house in 1987 was a mortgage at 10%

 

[newbury]

It is a great time to buy real estate!

Not quite yet, wait some more for the bottom to fall out.
I might yet get my square mile of earths surface.
So far I've only about 2 square kilometers.
That house I bought in '78 was at about 12% interest, VA, adjustable.
When getting the loan they went into great detail about the annual ceiling on rate RISE limits (something like no more than 1.24%/yr IIRC) and about ROTFL when I asked about if there was a floor on the rate. We road it down to about 4% before we refinanced.
Still complaining to my wife that she wouldn't agree to mortgage our properties again when rates hit 2.7% in January of 2021. Now she finally sees my wisdom.

 

[Hay Dude]

Just read some headlines:

and

When I was buying my first home (1978) we would have loved a 7% mortgage.

We survived.

Interest rates are very high, but the real reason it’s the worst time to buy a home is because of the inflation of the cost of homes.

Just a few years ago, the average wage earner could qualify to buy a starter home in 35 states. Today, they can only qualify to buy a home in only 12 states.

There’s other reasons than high cost of homes and high interest rates. Homeowners insurance is at all time highs. Utility/energy costs are at all time highs.

 

[paulsharvey]

Yes, it's the combination of skyrocketing prices (which was livable with low intrest rates) mixed with the high intrest rates.

The average new home is $411,000; a 4% intrest, 3.5% down, at 3%=is only $1730/month before property taxes and insurance;

now; $411,000 @ 7%=$2910

Now; the hidden part; the taxes and insurance; that's gonna be close to directly tied to purchase price; Excpet; all our homestead tax breaks; which come off the top; so you get $50,000 off the appraised value, and then pay about 1.8% of the remaining appraised value per year;

What that kills you on; a $150,000 home, your taxes were like $1,800/year; but a $500,000 home. that's gonna be $8100/year.

We are in the realm of a new purchase of an average home being $2910+541.50+300=$3755 per month

10 years ago; we probably were $150,000k home; $790/month+$100 in insurance; and $150 in taxes=$1040;

So; a average home is 3.6 x the cost per month as 10 years ago.... How's your pay check compare to that? If we assume you got 3% per year, each year for last 10 years; we are at like a 35% increase in pay vs 360% increase in cost of new housing.


Edit: that probably extreme, 10 years ago was 2014; so that $150,000 should have actually been $178,000.

 

[Hay Dude]

But “wages are keeping up with inflation”.
I saw that on TV!!!!!

 

[buckeyefarmer]

But “wages are keeping up with inflation”.
I saw that on TV!!!!!

My son hasn't had a raise in 3 yrs, I told him his salary just went down 25%....