Home buying thread

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Daidraco

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Younger generations have every right to bitch. Bank regulations werent anywhere near as stringent on my parents generation as they are today. Never mind that small town banks only communicated with a small set of entities for decades before the internet. My parents had dozens of home loans in the 90's through manipulation and deceit. Thats just not even remotely possible today. That isnt to say people cant "make it" in the rental business. Its just the leg up that boomers have on the younger generation is like comparing a mole hill to a mountain. My parents are old and really just want to enjoy traveling. But their newest loans are from 2018 and 2019. The rent that those places have increased to in the last year, compared to what the mortgage payment on those houses are - laughable at how much money they are making.
 
Borzak

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A fair number want to buy a better house in a better location than their parents own right now, first job after a degree. No telling how long their parents took to get there.

Even in my old generation I knew a friend that his whole life revolved around having a better job and better house in a better location than his dad. He got a degree and then maybe a masters I can't remember. I thought his dad had a great job and he got it right after getting out of the Navy after VietnIam. He had one coworker. Every two years his employer gave him a new nice truck (without graphic ID on it just a nice truck) and basically was his own boss. The amount of times he would say "I don't want to end up like my dad". I think he said that because his dads coworker/part time boss lived across the street and her daughter which eventually had to have breast reduction thought it was beneath her to go out with him. Probably was.

My grandmother rented my great grandmothers house after she died. It worked well for a while. Then the women went batshit crazy and started tearing up shit. Just like I say about the 2A and how it will depend hevily on where you live and the DA same with renting. She didn't file anything. She called the Sheriff one day and said throw her ass out, so that's what they did and left it all on the yard and my grandmother told her she was calling someone to haul it to the dump and it was gone by the end of the day. Of course that was about 10 years ago but still worked better than more metro areas I'm guessing.
 
T

Tide27

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OU Ariakas said:
I get where you are coming from, but where I think we disagree is someone stating that the "dream of homeownership is dead for Gen Z and on." It most assuredly is not, and I put the blame on their parents for shielding them from the realities of what life is like when you start out on your own. I try to educate new/young people gently on those realities with varying levels of success, but it is usually subsumed by their disgust/horror at the idea of having to live around "poor" people (i.e. - middle aged blue collar families). No one I knew lived alone unless it was in a tiny ass one bedroom apartment that they spent over half their take home on because "they just couldn't stand living with other people." The first house I bought (3 bed, 2 bath) was co-purchased with @LiquidDeath and we had roommates the entire time we lived there until we both got married.
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There are far too many variables these days to make blanket assertions when it comes to home ownership.

Location is a huge one. While the idea of a co-ownership worked in your specific case, I'd wager it would be a very bad idea in a majority of situations. Timing is also a major factor.

I left the Army in 2004 and there were apartments in my area for as low as $250 for a single bedroom. After I finished college in 08, those same apartments were now $850+. There was a time where you could move out on your own, and still live meager while saving for a home. Those days are over.

This was also a time where you could find starter homes for $50k-$80k, and eventually you could set your eyes on a much nicer home in the $125k-$150k range. Those days are also now over. Houses are selling way above appraisal, so unless you have a spare $20k-$50k+ on top of your down payment, a bank won't finance you.

I ran into the same situation here recently. We found a house for $150k. We had an extra $25k saved and just offered $175k so we could finally stop searching...and we were outbid and the house sold for $210k. My family literally couldn't get in a cheap home because we were always outbid, so the only option we had was a new build...and they don't make cheap new builds anymore.

The cheapest new build option that we could get was $270k. I wanted to spend $150kish for a home and was willing to settle for not having a nice home while we saved for what we wanted, but that wasn't possible. Now we are in a $300k+ home, because the way the loans were set up, the bank wouldn't finance anything above appraisal.

My son is in college now, and there is no way in he'll he will be able to afford a home. Apartments are so fucking expensive now that there is no opportunity to save additional money, as just rent and bills wipe out roommates now. The avg 1 bedroom apartment now is over $1.2k.

TLDR..

The young people now have been fucked over, I understand their plight.
 
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Jysin

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Khane said:
If it's going to be a primary residence you can just take a loan from your 401k with no penalty can't you?
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This option bothers me. My company's 401k also caps $50k towards primary residence. This $50k figure hasn't changed in well over a decade+. That doesn't even come close to cover a 20% deposit of today's median US house price. It needs updating.
 
Sanrith Descartes

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I think there might be some revisionist history going on, or maybe you have just forgotten how it worked for previous generations. Lots of boomers didn't just whip out the checkbook on their first home purchase. The down payment was always the big hurdle. Their parents helped with it, many times as a wedding gift.

The same with the next generation. First homes nearly always have been bought with help from the 'rents. It's 100% correct that if you are living on your own as a renter that saving for the first purchase is brutally hard and takes living a meager lifestyle. But even then, it usually requires help on the down. Even FHA at 3.5% with today's prices is a big chunk with closing costs added in.
 
TJT

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It isn't too much of a chore to save for even 20% (and 20% was not required anyway) down when home prices are $100k-$200k like they were through most of the 10s. When I bought my first house I was making like $70k alone. Something you can earn while hustling at Olive Garden without too much trouble. Nevermind a couple that doesn't have any kids yet.

Meanwhile you will still be pulling that kind of money but the housing targets are now like $250k-$400k depending on area. It's just far out of reach for multiple reasons.

The same shitty apartment I lived in in 2015 before I bought my house is $1500 a month if you rented it today. When I lived there it was $650 or something. That same house that was $180k is $400k now.

The hill got a fuck of a lot steeper. Doesn't mean that someone still can't climb it.
 
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Borzak

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My parents lived in a garage apartment when my sister was born. When I was born 7 years later they had a 1400 sq. foot house. When I was 5 they moved to an almost 2,000 square foot house on an acre and lived there till Dad retired. So bought a new home in 1976 which wasn't exactly great for interest rates. Their first house part of the down payment was sweat equity. They had to finish painting it and other things. Of course they refinance the house when rates dropped and took a big hit in 1981ish when the petrochemical industry fell apart but it picked back up severa years later. That same time Houston and Baton Rouge nearly rolled up the sidewalks. For a long time a lot of houses in Houston were just empty because people lost them and nobody could buy them and you changed careers you moved out of state.

By the time he was 45 he was making well over $100k a year but early on he didn't make a lot. I think mom told me she mostly cooked cornish hens because they could afford to eat them at $1/each.

I'm not sure but I have a feeling a lot of poeple don't know how much their parents made at whatever age. I always have since we were in business together. Also I've seen the check deposits from the 60's and the saving accounts numbers. Receipts for a money orders to pay back my moms sister which loaned them money to move to town for a new job. Couple of bucks a week till paid off.
 
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Gravel

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The flip side to this is that there will be a massive wealth transfer when the boomers die off. Yeah, their kids have no money right now, but all that accumulated wealth that people hate on the boomers for isn't just going to vaporize when they die.

Yeah, not everyone has boomer parents that have a large net worth. But we've always had the haves and have nots.

The only sticking point will be that people who get, say, a $200k inheritance, are probably also in debt to their eyeballs from overextending themselves the last 3 years. So a lot of that inheritance will go to paying off uber eats and concerts that they couldn't afford. Will the younger Gen X and Millennials take their parents house as a gift to get a leg up, or squander it like they have everything else?

Oh, and I also want to point out that wasn't there a survey that something like half of kids under 30 live with their parents? You talk about saving up for a down payment, well, if you've got essentially no living expenses, you should be able to do that in a year even with the shittiest of paying jobs. That is, if you're actually gainfully employed and not just a bum.

And on the topic of living better than your parents, I want to say we lived with my grandmother for 2 years when I was growing up, then shared a townhouse with my aunt and her husband and 3 kids for another 2-3 years. It wasn't until after that where we were able to move out on our own into a condo that was less than 1000 sqft. Where we lived until I was 18 and moved out. Meanwhile kids want to move into a 2k sqft house as their "starter home."
 
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Lanx

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Gravel said:
The flip side to this is that there will be a massive wealth transfer when the boomers die off. Yeah, their kids have no money right now, but all that accumulated wealth that people hate on the boomers for isn't just going to vaporize when they die.
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yea, sounds like these millenials will just treat that wealth transfer as a lottery and blow it all
 
TJT

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Gravel said:
The flip side to this is that there will be a massive wealth transfer when the boomers die off. Yeah, their kids have no money right now, but all that accumulated wealth that people hate on the boomers for isn't just going to vaporize when they die.

Yeah, not everyone has boomer parents that have a large net worth. But we've always had the haves and have nots.

The only sticking point will be that people who get, say, a $200k inheritance, are probably also in debt to their eyeballs from overextending themselves the last 3 years. So a lot of that inheritance will go to paying off uber eats and concerts that they couldn't afford. Will the younger Gen X and Millennials take their parents house as a gift to get a leg up, or squander it like they have everything else?

Oh, and I also want to point out that wasn't there a survey that something like half of kids under 30 live with their parents? You talk about saving up for a down payment, well, if you've got essentially no living expenses, you should be able to do that in a year even with the shittiest of paying jobs. That is, if you're actually gainfully employed and not just a bum.

And on the topic of living better than your parents, I want to say we lived with my grandmother for 2 years when I was growing up, then shared a townhouse with my aunt and her husband and 3 kids for another 2-3 years. It wasn't until after that where we were able to move out on our own into a condo that was less than 1000 sqft. Where we lived until I was 18 and moved out. Meanwhile kids want to move into a 2k sqft house as their "starter home."
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I have two siblings who have never really had good jobs living at our childhood home. With their boyfriends and multiple kids. They don't pay rent or utilities and are both over 30 years old. Somehow they are still broke and my Mom just doesn't have the heart to kick her grandkids to the curb. So they continue leeching off of her. So I believe it. They maintain smalltown bartender jobs.
 
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OU Ariakas

OU Ariakas

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Tide27 said:
There are far too many variables these days to make blanket assertions when it comes to home ownership.

Location is a huge one. While the idea of a co-ownership worked in your specific case, I'd wager it would be a very bad idea in a majority of situations. Timing is also a major factor.

I left the Army in 2004 and there were apartments in my area for as low as $250 for a single bedroom. After I finished college in 08, those same apartments were now $850+. There was a time where you could move out on your own, and still live meager while saving for a home. Those days are over.

This was also a time where you could find starter homes for $50k-$80k, and eventually you could set your eyes on a much nicer home in the $125k-$150k range. Those days are also now over. Houses are selling way above appraisal, so unless you have a spare $20k-$50k+ on top of your down payment, a bank won't finance you.

I ran into the same situation here recently. We found a house for $150k. We had an extra $25k saved and just offered $175k so we could finally stop searching...and we were outbid and the house sold for $210k. My family literally couldn't get in a cheap home because we were always outbid, so the only option we had was a new build...and they don't make cheap new builds anymore.

The cheapest new build option that we could get was $270k. I wanted to spend $150kish for a home and was willing to settle for not having a nice home while we saved for what we wanted, but that wasn't possible. Now we are in a $300k+ home, because the way the loans were set up, the bank wouldn't finance anything above appraisal.

My son is in college now, and there is no way in he'll he will be able to afford a home. Apartments are so fucking expensive now that there is no opportunity to save additional money, as just rent and bills wipe out roommates now. The avg 1 bedroom apartment now is over $1.2k.

TLDR..

The young people now have been fucked over, I understand their plight.
Click to expand...

I don't recommend co-ownership to anyone; our situation was different because we were both young professionals that grew up lower class/poor (not poverty thought) and both decided very early on that we would work to never have financial issues.

Now, you are correct about location, but then you don't even list the general area that you are talking about with your son. You talk about these houses for your family but then do not list the number of people and what you think is required of a home for your family. I am not contending that you can buy the same amount of house for the same price now, I am emphatically saying that homeownership is within the reach of everyone that truly wants it. Secondly, you only mention a 1 bedroom apartment for him.... when was this ever a fucking option if you were not rich? Hell, my roommate in college WAS part of a rich family and he still had roommates because his parents would not let him go insane with their money. Also, I never grew up in neighborhoods where young families and older families were on the same street in the same houses. The expectation was your first house was either a longer commute in a decent area or a shorter commute in a sketchier area.

Finally, I fucking despise this attitude of thinking that the younger generations are fucked. Even saying it here means that parents are probably subtly signaling it to their kids. I have four that I flat out refuse to even entertain those thoughts with because it can only hurt their life. I am teaching them resilience, to rely on their brothers and their family, but most of all that things in life worth having are not easy and take hard work. The idea that any of them will live alone before they are established in their careers is fucking asinine.
 
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fred sanford

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Gravel said:
Will the younger Gen X and Millennials take their parents house as a gift to get a leg up, or squander it like they have everything else?
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I'll go with the later. I watch a lot of Caleb Hammer financial audits and just about every knucklehead on there ups their lifestyle as soon as they get a raise or better paying job. They leave all their debt going at minimum payments and upgrade cars, shopping, everything. Then when the job doesn't pan out they're f'ed. The current mentality is still 'good times' spend spend spend when we're heading into bad times. It's especially bad on a generation who doesn't get taught much of anything about debt.
 
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Khane

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The younger generations know more about debt than any generation preceding them. Especially more than their parents, who sent them off to get any degree being offered at outrageous University prices.

They get taught about debt bud, just not in a productive, parental way.
 
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TJT

TJT

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OU Ariakas said:
I don't recommend co-ownership to anyone; our situation was different because we were both young professionals that grew up lower class/poor (not poverty thought) and both decided very early on that we would work to never have financial issues.

Now, you are correct about location, but then you don't even list the general area that you are talking about with your son. You talk about these houses for your family but then do not list the number of people and what you think is required of a home for your family. I am not contending that you can buy the same amount of house for the same price now, I am emphatically saying that homeownership is within the reach of everyone that truly wants it. Secondly, you only mention a 1 bedroom apartment for him.... when was this ever a fucking option if you were not rich? Hell, my roommate in college WAS part of a rich family and he still had roommates because his parents would not let him go insane with their money. Also, I never grew up in neighborhoods where young families and older families were on the same street in the same houses. The expectation was your first house was either a longer commute in a decent area or a shorter commute in a sketchier area.

Finally, I fucking despise this attitude of thinking that the younger generations are fucked. Even saying it here means that parents are probably subtly signaling it to their kids. I have four that I flat out refuse to even entertain those thoughts with because it can only hurt their life. I am teaching them resilience, to rely on their brothers and their family, but most of all that things in life worth having are not easy and take hard work. The idea that any of them will live alone before they are established in their careers is fucking asinine.
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While I generally agree I think there's more to it.

I work in tech as a software engineer. I make good money. I hire lots of entry level software engineers now who are starting right where I did over a decade ago. These guys get objectively less money than when I started working. My first SWE job was for $55k in 2013. Today we hire for $65k-$75k generally. We have no shortage of applicants.

That salary does not get you where it got me over a decade ago. The hill they are climbing is simply steeper and sucks more all around. Cold hard reality.
 
Khane

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Millenials grew up, professionally, during a very strange time in this country. I am technically a Millenial, at 41, and I assume a large portion of this forum are also Millenials.

We had literally the dumbest crop of parents ever produced because the job loyalty, pensioner American Dream taught to them was decaying while "Everyone must go to college no matter what" and trade skills being seen as sub par careers was on the rise. And everything we were taught was flat out wrong.

But we also got an actual reset button in 2008, that for those intelligent enough to take advantage of, was a springboard to success no other generation has ever had.

And the kids produced by our generation have the benefit of the cynicism we all learned. I think those kids are financially smarter, and more savvy than any generation preceding them, but they really are dealing with fallout from their failure grandparents.
 
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OU Ariakas

OU Ariakas

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TJT said:
While I generally agree I think there's more to it.

I work in tech as a software engineer. I make good money. I hire lots of entry level software engineers now who are starting right where I did over a decade ago. These guys get objectively less money than when I started working. My first SWE job was for $55k in 2013. Today we hire for $65k-$75k generally. We have no shortage of applicants.

That salary does not get you where it got me over a decade ago. The hill they are climbing is simply steeper and sucks more all around. Cold hard reality.
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Did you go to college? What age were you when you started making $55k? Did you have any student loans that had to be paid back?

I only say that because an 18 year old out of high school can go start at Costco or Aldi starting at $18 an hour and, if they just show up and work hard, will be at $20 before a year is over. If they were willing to get their hands dirty they could go start at $20+ changing oil at any automotive shop and be at $55k doing specialty work within 2 years. Hell, they could start any of these jobs part time at SIXTEEN and have a leg up.
 
Sanrith Descartes

Sanrith Descartes

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Khane said:
The younger generations know more about debt than any generation preceding them. Especially more than their parents, who sent them off to get any degree being offered at outrageous University prices.

They get taught about debt bud, just not in a productive, parental way.
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This might be changing in some parts of the country. My daughter took a financial literacy class in high school this year. An entire year of interest rates, mortgages, credit cards, very basic info on retirement accounts, even more basic info on stocks/bonds/CDs etc. The class literally beat into their heads how shitty it is to pay interest for things and use credit cards. Study/Test questions were literal examples of poor people getting screwed.
"Shaniqua buys a refrigerator at the rent to own store. The fridge costs $500. She puts a $100 down payment and pays 24 equal payments of $45 a month. She also pays 3 late payments of $75 each (not shitting you, this was a part of the question). How much does she pay for the fridge once she pays it off?"
My daughter mentioned she ended up paying almost triple the cost of the fridge in the problem and how bad it was. I told her she just learned a very valuable life lesson.

So at least Florida is trying to beat into the kids how fucked up paying interest is.
 
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Khane

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OU Ariakas said:
Did you go to college? What age were you when you started making $55k? Did you have any student loans that had to be paid back?

I only say that because an 18 year old out of high school can go start at Costco or Aldi starting at $18 an hour and, if they just show up and work hard, will be at $20 before a year is over. If they were willing to get their hands dirty they could go start at $20+ changing oil at any automotive shop and be at $55k doing specialty work within 2 years. Hell, they could start any of these jobs part time at SIXTEEN and have a leg up.
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Well they can, but they're probably never gonna get much further than that. Reality for boomers was you could do exactly that sort of thing, out of high school, in a huge swath of manufacturing jobs, and then work your way up over the course of 40 years, while contributing to a pension. You could also buy the house, with the lawn and the picket fence reliably.

But that was basically the perfect storm and they are the only generation that has, legitimately, been able to just bootstrap in low entry barrier professions. No other generation has ever seen loyalty to a company and hard work actually pay off to that degree. Their own kids saw all those jobs dry up, get off shored, and all those factory towns become desolate wastelands.
 
TJT

TJT

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OU Ariakas said:
Did you go to college? What age were you when you started making $55k? Did you have any student loans that had to be paid back?

I only say that because an 18 year old out of high school can go start at Costco or Aldi starting at $18 an hour and, if they just show up and work hard, will be at $20 before a year is over. If they were willing to get their hands dirty they could go start at $20+ changing oil at any automotive shop and be at $55k doing specialty work within 2 years. Hell, they could start any of these jobs part time at SIXTEEN and have a leg up.
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I had no college debt. I spent 6 years in the army so I didn't have to pay for university. I was 25 when I started making $55k and I had no debt. I drove a total beater and did for many many years.

I was in an advantageous position because of this. If I started at $65k in 2024 with this same advantage it would take me years longer to have enough of a downpayment for a comparable and now ~$400k house to buy.
 
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