What if you just don't buy a home? - aka. "Housing market is dogshit" general

[DDBCAE CBAADCBE]

Home Owner Master Race

 

[Realistic Elephant]

I would say in a lot of markets it's just too expensive to buy right now, especially with a major correction coming. Remember, it's not really yours until you pay off the mortgage, so getting into a bad loan will cost you...people learned that the hard way back in the late 2000's.

 

[Mister Mint]

Buying a home is tough, for sure, but I was a bit surprised that it wasn't as tough as I had always thought. Check your local housing authority and they might have programs for first time home buyers that reduce or entirely take care of your down payment for you among other things.
It's more work than renting, but at least I know what I'm paying for a monthly payment for the next 30 years and don't have to worry about it going up (unless there's a massive spike in taxes, which is entirely possible).
I wish I tried a little harder to buy a house earlier.

 

[DamnWolves!]

But let's say you had the 100k upfront, do you still shoot for a house 500k house or do you drop the 100k down payment on a cheaper house and pay off the difference quickly?

Depends on your beliefs on the housing market in the long term. I think it's a good bet. Mortgage debt is some of the cheapest debt you could have; I wouldn't worry about that part of things. Since 2008, the banks won't generally let you get a mortgage you can't handle, and that includes stuff like paying your bills, your taxes, you other debts, etc. Look up "total debt service" for more on that.

One thing to keep in mind is that markets are very efficient at finding their level--if investing in housing were significantly more profitable than investing in, say, index funds, housing prices would increase to compensate until similar levels of risk return similar levels of yield.

A bigger house is also more to take care of. You may want a "starter home" for that reason alone.

How much land? In suburbs and stuff I've always figured it's just middle-class people's version of a trailer park since you don't actually own the land, you just have a plot in a bigger subdivision.

Subdivisions are already owned by developers. You probably want a good $2M to buy some acreage outside of the developing area, but that land is being increasingly inventoried by developers for 10,15,20 years into the future. Buying rural land and expecting to make it rich is like buying any other commodity; gold, onions, oil, hogs... it may or may not be valuable in 20 years. The more likely that it will be valuable, the higher the premium you'll pay--again, there are people who do this for a living and they are very good at their jobs. You don't know more than they do, but you may get luckier than they do.

Remember, it's not really yours until you pay off the mortgage, so getting into a bad loan will cost you...

Untrue. You sign up for the risks and the benefits--if your house goes up in value, you can bank that appreciation. The issue is when people get underwater on their mortgage (they have less equity than they owe, due to rising interest rates or lower housing costs), they walk away. Walking away is fine if you're a nigger who bought a $750,000 house with 0% down and prime-1 introductory rates like they were doing in 2007, but banks don't do that anymore--walking away will mean you lose your down payment to the fees associated with defaulting, and good fuckin luck trying to find someone who will rent to you after defaulting.

 

[Save the Loli]

Unfortunately we live in an unjust world where property tax is a thing that exists and nobody has been tarred & feathered for it...

Wyoming looks pretty based on tax. Third lowest property tax in the country, no state income tax, and 4% state sales tax (toward the lower end) so unlike other states with no income tax you don't get rekt with sales tax instead.

 

[Realistic Elephant]

Untrue. You sign up for the risks and the benefits--if your house goes up in value, you can bank that appreciation. The issue is when people get underwater on their mortgage (they have less equity than they owe, due to rising interest rates or lower housing costs), they walk away. Walking away is fine if you're a nigger who bought a $750,000 house with 0% down and prime-1 introductory rates like they were doing in 2007, but banks don't do that anymore--walking away will mean you lose your down payment to the fees associated with defaulting, and good fuckin luck trying to find someone who will rent to you after defaulting.

Right, that's what I was getting at - buying at a market top or buying more house than you can afford because you think you can get ahead through appreciation is a recipe for disaster. Sort of like using an FHA loan to buy a house you really can't afford because the down payment is so small. Or my favorite, falsifying your loan application.

 

[NoReturn]

Subdivisions are already owned by developers. You probably want a good $2M to buy some acreage outside of the developing area, but that land is being increasingly inventoried by developers for 10,15,20 years into the future. Buying rural land and expecting to make it rich is like buying any other commodity; gold, onions, oil, hogs... it may or may not be valuable in 20 years. The more likely that it will be valuable, the higher the premium you'll pay--again, there are people who do this for a living and they are very good at their jobs. You don't know more than they do, but you may get luckier than they do.

Right, that's what I was getting at - buying at a market top or buying more house than you can afford because you think you can get ahead through appreciation is a recipe for disaster. Sort of like using an FHA loan to buy a house you really can't afford because the down payment is so small. Or my favorite, falsifying your loan application.

So much of this seems like buying homes and land as an investment. It's gotten to the point that something that sounds like you "aren't asking much" (i.e. a plot of land with a livable home on it) is actually asking quite a lot.

Wyoming looks pretty based on tax. Third lowest property tax in the country, no state income tax, and 4% state sales tax (toward the lower end) so unlike other states with no income tax you don't get rekt with sales tax instead.

I worry that the same thing that happened to Colorado will happen to Wyoming. To wit: Influx of Californians.

 

[Ebony Way]

Yeah, well, the interest is like 40% of the cost of a mortgage, so your "quick and dirty calculations" are off by like 60% after adding everything else in.

Not really useful information at that point.

Fair enough.

 

[Flea Man Marbles]

I've been convinced for a LONG time ( pretty much since I turned 18 ) that I will never outright own a home or even land. It just costs too much, taxes cost too much, upkeep costs too much, and I simply don't have the capital to buy it. My only option would be to stake out a piece somewhere out of the way or inhospitable, which is rapidly becoming more and more of a pipe dream as our world grows smaller. Housing has always been prohibitively expensive and that will sadly never change.

 

[moonman1488]

Buying a home is tough, for sure, but I was a bit surprised that it wasn't as tough as I had always thought. Check your local housing authority and they might have programs for first time home buyers that reduce or entirely take care of your down payment for you among other things.
It's more work than renting, but at least I know what I'm paying for a monthly payment for the next 30 years and don't have to worry about it going up (unless there's a massive spike in taxes, which is entirely possible).
I wish I tried a little harder to buy a house earlier.

If you do one of those no down payment home loans you get raped by mortgage insurance and you’ll be paying off interest for years before you even get to the principal (more so than a conventional loan). I’m not sure if that’s better or worse than just getting a rental that you’re only tied to for a year at a time while you save money.

I've been convinced for a LONG time ( pretty much since I turned 18 ) that I will never outright own a home or even land. It just costs too much, taxes cost too much, upkeep costs too much, and I simply don't have the capital to buy it. My only option would be to stake out a piece somewhere out of the way or inhospitable, which is rapidly becoming more and more of a pipe dream as our world grows smaller. Housing has always been prohibitively expensive and that will sadly never change.

buy a plot of land and park an RV on it.

 

[Kujo Jotaro]

The housing market is genuinely depressing. Was speaking to a coworker the other day who is nearing 40, she told me she was looking at buying a new home worth $250,000, I asked her how much she had payed off of her current home's mortgage, she said after her down payment she owed 90,000 and 12 years later she had brought it down to 70,000. 20,000 over 12 years, she makes $35,000 a year after taxes and I know for a fact her husband hadn't had a job over the last year and a half. She saw no problem with entrenching herself in so much debt, even complained about people buying houses before looking at them.

These are the type of people you have to bid against, and its why I've basically decided I will never own a home.

 

[DamnWolves!]

Was speaking to a coworker the other day who is nearing 40, she told me she was looking at buying a new home worth $250,000, I asked her how much she had payed off of her current home's mortgage, she said after her down payment she owed 90,000 and 12 years later she had brought it down to 70,000. 20,000 over 12 years, she makes $35,000 a year

WTF, that's either like a 45 year mortgage, or she's getting absolutely reamed at like an 11% interest rate on a 25 year mortgage. Is she a convicted felon or something? Did she go to a payday loan place for a mortgage?

So you know, you can afford a decent house even at the pleb-tier salary of $35k a year. Using the average gross debt service ratio of 28% or less, you can afford up to an $815/mo mortgage payment, which calculates out to just under a $210,000 home at today's average rates, and it'll be paid off in 25 years. Double that if you're married and dual income. Remember, if your life is on the right track, you're never going to earn less money than you do today... it'll probably only get easier to pay it off in the future.

By the way, never go longer than 25 years if you can afford it. The amount of additional buying power you get between 25 and, say, 35 years is miniscule. The only thing that will shrink is your payment, and even then, not by much because of the additional interest you'll be paying--in the end, you're spending a lot more than you need to.

 

[albert the programmer]

Is not owning a home the same as eating bugs in a pod? If anything, I’d love to know what housing markets are like in different countries around the globe.

 

[Kujo Jotaro]

WTF, that's either like a 45 year mortgage, or she's getting absolutely reamed at like an 11% interest rate on a 25 year mortgage. Is she a convicted felon or something? Did she go to a payday loan place for a mortgage?

Spoiler: PL

No, as far as I know she's not a felon, nor is her husband. I have no clue how long her loan was, didn't ask I was just shocked by the figures she spit out. These are literally the type's of people buying homes right now, let me give you another coworker as an example. First time home buyer, has 4 kids(all very young) with her boyfriend, she gets payed less than the other coworker but has the same title, her boyfriend has never held a steady job and his only form of income is dealing weed on the side. She got approved for a loan this summer and bought a house around 200,000. Now I'm no banker, but I would never in a million years give someone like this a loan. How are you supposed to compete when everyone around you has no fear of debt? These people inflate housing prices to an exorbitant amount.

Remember, if your life is on the right track, you're never going to earn less money than you do today... it'll probably only get easier to pay it off in the future.

No offense(seriously not trying to be rude), but I don't think boomer logic is applicable to the world we live in today. I've done everything right, went to community college, payed off my miniscule amount of student debt immediately, lived at home all through college, didn't get a meme degree, found a decent job straight out of school with almost guaranteed steady wage increases, and yet now I'm looking at losing said job because of Brandon's mandates. You could say "well that's just an extraordinary event you have to live your life" but every year since I've graduated from college has been chock full of extraordinary events, and the future doesn't look to be void of them either. If I lose this job it's going to take me half a decade to get my footing in another field and start making close to the wages I earn now.

I'm literally the boss of people decades older than me, many twice my age or more, all of them are mired in debt to (in my opinion) an extraordinary degree. I don't live in some ghetto area, I don't live in a high crime area, the people I work with are not criminals( outside of minor bar fights and such), at worst you could call some of them white trash, yet everyone around me is a debt slave to the T. I watched my parents struggle to pay bills all through middle and highschool because one of them suffered major medical conditions, and I grew up in the wake of the 2008 financial crisis constantly hearing about student loans and how debt was a trap. So forgive me if I have no interest in participating in bankers debt schemes.

 

[Overly Serious]

I've just caught up on this thread so my responses will be a little scattershot. But I will say what I always say in these sorts of threads which is: There are good times to buy a house and bad times to buy a house; but the bad times have to be very bad before they're worse than not buying a house at all.

There is an equation. You add up how much you are likely to be paying in rent per year.

Then you look at how many years of paying rent equals the value of a similar house to the one you are renting.

That's the quick and dirty calculation.

To make it less quick and dirty, adjust for inflation per year and interest rates, add rates and repairs estimates for the mortgaged house, and assume rents go up a bit every 3 years.

Also factor in that once you pay off the mortgage you only have to pay for rates and repairs.

There are meta factors beyond the money also. To list a few, there's the lack of mobility once you are a home owner. Buying or selling houses is expensive so you need to expect you'll be there for some years if you buy. Renting gives more freedom to move around for work, relationships, family. On the home owning side, there's a social status and security attached to owning your own home. If you want to get married it's kind of nice to have that in your back pocket before you propose. There are risks you don't face if only renting - if the place suddenly starts sinking into the ground, turns out to have damp rot or whatever, that's the landlord's problem more than it is yours. Anyway, not trying to make an exhaustive list in favour of one or the other - just saying to OP to factor in all these non-money considerations.

I see these comments more as cope than anything else.

Mainly because the cost of purchasing a house is so far out of reach for most young people.

It is certainly not easy. And I go back and forth on the "my fault vs. society's fault" on personal success. But I think people's expectations are off on how long it takes. The one thing I know is that I didn't get anywhere in life until I stopped placing responsibility for my circumstances on outside factors and saying: "if it wasn't for _____ my life would be different" all the time. I think with planning, work attitude and a realistic expectation that you might have to compromise (live with family, house share, give up take out) and that you're working towards a goal two or three years away, you should be able to get a deposit together. That is the hardest part for most of us. Initial mortgage payments are usually not that much more than rent like for like.

I think the neets have the right idea. Never leave home and inherit the family home when your parents die.

After a couple of generations though, you have nothing. And people live to their nineties now.

Typically what you do is use the trailer as the nucleus of your house and build out from it until it reaches full size. The most traditional approach is for this process to ultimately result in the original trailer being completely demolished and replaced over time. But it's becoming more popular to give your decor a bit of a quirky personalized touch by leaving parts of the trailer nucleus in-place and incorporating it into your design. For example you could have the half-wall between your kitchen and dining room actually be the original outer wall of the trailer, cut down. Some people also like to do things like subtly marking out the original outline of the trailer by having the floor's parquet or tile slightly change orientation along a certain line.

That's so cool. Like a snail or a nautilus. I've never heard of this and find it really neat.

I have to ask you guys with home buying experience, does this scale? Obviously if you have 30k for a down payment you have to be looking at houses upwards of 5x that investment because nothing cheaper exists. But let's say you had the 100k upfront, do you still shoot for a house 500k house or do you drop the 100k down payment on a cheaper house and pay off the difference quickly?

I've always found the scaling people do on their down payments to be pretty crazy. Is there any financial benefit or is it people just trying to get the absolute best house they can?

So firstly, the conventional wisdom of buy a house 4.5x your annual salary is grounded in the historical norm of average house price being 4.5x average salary. Obviously that varies with time. For most of the modern era in the USA it's stayed near that but just before the big sub-prime market crash it had risen to 8x. Know where it was a few months back? 7.5x.

So that needed to be put out there before addressing your question. It ain't 5x right now, but it may come down again. As to the actual question? It's up to you but the more you borrow and the longer you take paying it off, the more you'll pay in interest to the bank. Living within your means is a good principle for most of us. If you're wondering whether the extra you pay in interest will be offset by a greater gain in house price rises over time... I wouldn't think so. There's probably a switch over point where it would be but I suspect just intuitively it's lower than you're thinking. Luxury houses don't overvalue as much as normal houses, I think (someone correct me if I'm wrong).

Buying a home is tough, for sure, but I was a bit surprised that it wasn't as tough as I had always thought. Check your local housing authority and they might have programs for first time home buyers that reduce or entirely take care of your down payment for you among other things.
It's more work than renting, but at least I know what I'm paying for a monthly payment for the next 30 years and don't have to worry about it going up (unless there's a massive spike in taxes, which is entirely possible).
I wish I tried a little harder to buy a house earlier.

Amen to that. I would likely be in a far better position today if I had worked to buy a house earlier. Definitely check out what government programs there are, but be wary. If you can possibly buy without one that's almost certainly better for you and definitely don't do what some people do which is use it to simply buy a more expensive home than they originally would. That's just piling risk on your head you don't want if you end up living beyond your means.

You don't know more than they do, but you may get luckier than they do.

First thing you've said in this thread I disagree with. Not that you're incorrect factually, but that this should never be said without a big wrapper around it saying: "Do you think you should be gambling with $50-100,000?"

Right, that's what I was getting at - buying at a market top or buying more house than you can afford because you think you can get ahead through appreciation is a recipe for disaster. Sort of like using an FHA loan to buy a house you really can't afford because the down payment is so small. Or my favorite, falsifying your loan application.

<<Inserts Big Short clip of the mortgage brokers in the bar and the dude who filled out his mortgage application in the name of his dog>>

WTF, that's either like a 45 year mortgage, or she's getting absolutely reamed at like an 11% interest rate on a 25 year mortgage. Is she a convicted felon or something? Did she go to a payday loan place for a mortgage?

Perhaps she has an Interest Only mortgage. There could be a massive balloon payment awaiting her that she is hoping to offset by house appreciation (or just not thinking about).

 

[Cybertonia]

Home prices are dumb since it's a market that's driven almost entirely by female hormones and impulsive young people trying to make decisions while usually having a grandbaby-crazy mother in law breathing down their neck. They'll pay whatever cause they're in a hurry and are all swept up in the moment.

But there's also no shame in renting forever. Sometimes I think people forget the single biggest advantage of renting - limitation of liability.

People cheap the fuck out on all kinds of shit when it comes to home repairs. Like it's legitimately horrifying and it's the reason I personally stopped trying to buy my own home - when the time came that I started snooping around in utility closets with a flashlight, I would always find some shit where the homeowner tried to play amateur plumber or amateur electrician because they were being a cheapass and decided to go to youtube trade school instead of calling a professional, which then caused all kinds of damage they would then try to hide. I don't want anything to do with that kind of fuckery. It's something about owning a house that turns people into the biggest fucking penny pinchers imaginable, like they'll do absolutely anything to save a dollar on home repair no matter how much damage it causes or how unsafe it makes things.

 

[tehpope]

Ok, fair point, that was a bad example. So, here's this instead:
View attachment 2882003
This one has no land at all.

At that price point, just get a mobile home and some land in a moible home friendly state for taxes.

 

[The-Patriarchy]

Two things to consider- in most states, a first time buyer can qualify for an FHA loan, which means you only need to put down 10% - but this will mean higher payments, with a fee tacked on for Private Mortgage Insurance tacked on until your equity rached 20% of the original loan through a combination of payments to principal and increase in appraised value. Mortgage insurance is usually something like 100-200 dollars a month depending on how big the loan is and it protects the BANK against you defaulting, but does nothing for you- so that's money down the drain. You can leverage FHA to get into a house you otherwise couldn't, but be aware that you'll want to refinance or at least get rid of that mortgage insurance as soon as you can.

The other thing to consider are property taxes. In some states, your property tax payment may be about the same as your mortgage payment- and unless you local municipality gives you a lot of value for you tax dollar (hint the answer is almost always NO). This doesn't automatically make buying a bad decision as areas with high property tax also tend to have the highest increase in sale value over time- so you tend to cover the losses in the long run even though it can make the monthly payments brutal. It's just something to consider in the math, so I highly recommend moving to a state with low property taxes and establishing yourself with good income (easier these days since so many jobs are remote now) before diving in. If I had more flexibility like that when I bought my house, I probably would not have stayed in the state I'm in- but I was still years away from being in a position to be a full-time remote worker at the time so it wasn't as much of an option.

 

[Snakebottom]

I don’t understand why you yanks don’t all own homes, property is dirt cheap over there compared to here. I assume it’s to do with your property taxes which seems a bit of a rinse as a concept.

The biggest barrier other than the deposit here in the UK is having enough for the stamp duty which you have to pay up front. Best thing about the pandemic was they lifted that to keep the market afloat, so I bought a place and saved myself £20k. Doubt I’d have been able to buy without that before I hit 40. It’s a great feeling to be paying less than I was in rent to some landlord towards the mortgage for my own thing I can either die in or sell and make money on, if you can do it then do it ASAP.

 

[DamnWolves!]

You could say "well that's just an extraordinary event you have to live your life" but every year since I've graduated from college has been chock full of extraordinary events, and the future doesn't look to be void of them either.

Chin up, bro. You can't live your life like you're already doomed to failure--there's a name for that, and it's "learned helplessness". The niggers have mastered it and the kikes pretend to have it, while actually controlling everything that matters.

Remember, you only get one go around. It's not like you can "test this build" and then make your real character later on. Give it your best go, make sure you make it count, and maybe we'll be in the same foxhole when the race war hits.

So forgive me if I have no interest in participating in bankers debt schemes.

Do you want a house or do you want to BTFO the Jewish plutocracy? Life's too short, man.

First thing you've said in this thread I disagree with. Not that you're incorrect factually, but that this should never be said without a big wrapper around it saying: "Do you think you should be gambling with $50-100,000?"

@Overly Serious can't directly quote you for some reason. Depends on how much you make, honestly. I appreciate that the average person makes less than $100k a year, but perhaps those people should reconsider a housing-based get rich quick scheme. Slight PL, but the average house in my area is something like $475,000, and a house you'd want to live in is closer to $1M. I don't see housing as a big gamble; not with our existing immigration policy. Obviously, neither does Blackrock, given they're buying all the supply. If you want a house to live in, now is a pretty good time to buy one in my opinion.

I'll remind you that you'd be stupidly house-rich now, even if you'd bought a home at 2007's high-point.

But there's also no shame in renting forever.

There may be no shame in it, but there's also little to no benefit. Of the over-50 people you know now, who is doing better; the people who bought their own house, or the people who are perpetual renters? 9/10, it'll be the home buyers, even if they live under identical income conditions.