I knew mortgage rates made a huge difference in payments.....but.....

[DLgal]

I don't know how people can afford to rent anymore.

They make enough money to be able to do so?

In my world, $2000/month for rent is cheap. That is less than what we were paying in 2004 for our tiny apartment down here. The house we rent now goes for $4000 market rate (that's what our neighbors next door are paying for a smaller version of our model). We got a great deal by locking in a lower rate and signing a long term lease, so we pay $3300 right now. Even still, that's only around a quarter of our take home pay. Buying would cost us almost half our take home pay, so renting is obviously the cheaper option here.

I don't know how people can afford to buy! Almost every new build in our area STARTS at $700k and those are attached 2 bedroom condos/townhomes. For a 3 or 4 bedroom home...$950K-$1.5M is the average.

But yet, houses sell out immediately for over asking price and often for CASH. People must have more money than we do. That's just how it always is.

 

[tvguy]

They make enough money to be able to do so?

In my world, $2000/month for rent is cheap. That is less than what we were paying in 2004 for our tiny apartment down here. The house we rent now goes for $4000 market rate (that's what our neighbors next door are paying for a smaller version of our model). We got a great deal by locking in a lower rate and signing a long term lease, so we pay $3300 right now. Even still, that's only around a quarter of our take home pay. Buying would cost us almost half our take home pay, so renting is obviously the cheaper option here.

I don't know how people can afford to buy! Almost every new build in our area STARTS at $700k and those are attached 2 bedroom condos/townhomes. For a 3 or 4 bedroom home...$950K-$1.5M is the average.

But yet, houses sell out immediately for over asking price and often for CASH. People must have more money than we do. That's just how it always is.

Yes, a full one third of all home sales here are cash. It continues because people apparently can afford to buy, and will only end when they can't afford to buy.

 

[supersnoop]

My SIL lives outside indianapolis, it’s practically free.

I've been looking at housing prices near some of the colleges that my kid is considering. There are some places where houses are under $20,000. I can't imagine anything that cheap. It really is all about location.

 

[DisneyHardin]

I live in a fairly low COL area, but rents around us are going up up up. We live in a 2300 sq ft house that we pay $1150/month mortgage on (that includes the escrow for taxes and insurance) and around the corner from us they just built some "luxury" apartments that rent for $1500-$2000/month.

 

[Hiitsme]

Be careful. I remember the crash in 08 and 09.

 

[butterscotchcollins]

I shopped around for a mortgage a LOT to lock in a low rate for the house we just bought because I wasn’t willing to be penalized a few hundred dollars a month for missing the low rate window of the past year. It’s our first home, we ended up going almost 30k over ask because we were outbid on 3 other properties before it and were tired of playing games. We’re happy with our decision and the way things shook out but it does hurt a bit to think that if we had done this a year ago before the market exploded we could’ve gotten the same house for probably $60k less. It is what it is - it’s $400 more a month for the mortgage + taxes than we currently pay for rent so it’s not a question of being able to afford it, we are just millennials with bad luck.

 

[tvguy]

Be careful. I remember the crash in 08 and 09.

If you lock in an under 3 percent 30 year mortgage, you are pretty much crash proof.

 

[dina444444]

In the Austin suburbs, homes are selling the day they're listed with multiple offers up to 40% over asking price. It's CRAZY!

And people are likely paying cash.

 

[Skywalker3]

First time I bought house , late 1990s, I think the rate was near 8%, Parents never had a mortgage. Built their only house themselves in 1960. We bought in 2008 here, and I think was near 5 or over 5%, can't remember. Refinanced to 15 years in 2010 at 4%. Sure considered doing another refi at these awesome rates now, but we only have about a year left to go! so we'll just stick it out. It's amazing what mortgages used to be though in the 70s and 80s compared to now.

 

[holden]

We just got 3% on a jumbo loan. I thought that was pretty good.

 

[LeslieLou]

We refied our primary home at 2.2% and bought a vacation home at 2.85%. It’s like they’re giving mortgages away. That low rate certainly makes a difference in how much house is affordable

I do worry about my kids being able to afford a house. Ive considered, given we will likely inherit at least one home, doing something for both of my children to reduce their cost for their first home. Maybe either pay their down payment or “sell” the home at a much lower than market value cost or something

 

[Lilsia]

We sold my grandmother's home last year right before she died for $220,000. She had it built in 1988 for around $80,000. It was not worth the $220,000 but people where lining up to try to out bid. I feel bad for those buying now. In a few years when it is a buyer's market again, they will be upside down and won't be able to sell their homes for that. Rent is crazy high where I live. Most 2 bdrms are more then my mortgage. We built our home 8 years ago and paid $218,000, we can easily sell it for $340,000.

 

[barkley]

Be careful. I remember the crash in 08 and 09.

If you lock in an under 3 percent 30 year mortgage, you are pretty much crash proof.

i think some of the people that bought during the selling frenzy prior to that crash would disagree about it being 'crash proof' no matter how great an interest rate they could have gotten (even with historic lows like now)-the neighborhood i lived in was selling homes for more than 3x their original built new purchase prices (6 years earlier)-those same homes, despite the current housing frenzy in that area are still not up to the prices they sold for in '06 and '07. at this point anyone who bought during that period of time, even if prices come up to what they bought for-will still be looking at a net loss once their selling costs are factored in.

 

[tvguy]

i think some of the people that bought during the selling frenzy prior to that crash would disagree about it being 'crash proof' no matter how great an interest rate they could have gotten (even with historic lows like now)-the neighborhood i lived in was selling homes for more than 3x their original built new purchase prices (6 years earlier)-those same homes, despite the current housing frenzy in that area are still not up to the prices they sold for in '06 and '07. at this point anyone who bought during that period of time, even if prices come up to what they bought for-will still be looking at a net loss once their selling costs are factored in.

They're money ahead most likely. How much would they have paid in rent for 13 years? They had a place to live.

 

[Buzzsgramma]

Our daughter sold her condo in southwest burbs of Chicago last Nov. in 8 days,cash.....Been looking for the last few years in N.C. around Asheville...the prices are so high now and the houses are sold with multiply bids in days....

 

[pigletto]

If you lock in an under 3 percent 30 year mortgage, you are pretty much crash proof.

In Canada the overwhelming majority of us have mortgages that are renegotiated every five years . So while I might have locked in at 3%, you are at the mercy of the going rate at the five year renewal. That’s why I mentioned in my earlier post that I worry for all these people who are taking out huge mortgages and HELOCs at these very low rates. I suspect when rates go up it will become very apparent how over leveraged Canadians are.

 

[bcwife76]

In Canada the overwhelming majority of us have mortgages that are renegotiated every five years . So while I might have locked in at 3%, you are at the mercy of the going rate at the five year renewal. That’s why I mentioned in my earlier post that I worry for all these people who are taking out huge mortgages and HELOCs at these very low rates. I suspect when rates go up it will become very apparent how over leveraged Canadians are.

Couldn't agree more! Mortgages are very different in Canada than in the US.

When my husband and I stopped renting a year after we got married, we bought a condo in a suburb of Vancouver. I think our rate was around 5.65%? This was 2005. Sold our condo 3 years later for $70,000 more than we paid, got a townhouse a bit further from downtown again, this time our mortgage rate hovered just below 4%. Sold our townhouse (at a loss, for $15,000 less than we paid for it) at the end of 2011 and bought our current house. We now live almost an hour from downtown (suits me fine, I have no need for the downtown area). Our mortgage was 2.15%. Paid it off in 2016 when my father died and I received a hefy inheritance. Our neighbours 3 doors down just sold their house last week (they have the same exact floor plan as ours). They moved in after us so I'm not sure what they paid, but if we got their $1.3million asking price, that is 2 1/2 times what we paid for our house 9 years ago....... Like I said, we are mortgage free. But where are we going to go? My husband already has a 45+ minute commute, he doesn't want any longer than that (and that's Covid commute with so many people now working from home, before it was an hour each way at least). Plus, kids in school, close and walkable. So yeah....staying put for now lol

 

[ruadisneyfan2]

If you lock in an under 3 percent 30 year mortgage, you are pretty much crash proof.

Unless you need to sell. Then you're at the mercy of market. People who pay these high prices might be under water when they try to sell.

 

[tvguy]

Unless you need to sell. Then you're at the mercy of market. People who pay these high prices might be under water when they try to sell.

Like I said though, you had a place to live for a period of time. My former neighbor had to do a short sale and become renters. But when they figured out how much money they didn't lose while renting, they actually ended up money ahead.

 

[barkley]

Like I said though, you had a place to live for a period of time. My former neighbor had to do a short sale and become renters. But when they figured out how much money they didn't lose while renting, they actually ended up money ahead.

they ended up ahead on the short sale or while they were renters?