SERIOUSLY - how are people affording these $1Mil+ homes with $8,000+ monthly mortgages!?

[Anonymous]

Anonymous wrote:We bought a house in 1998 for 350K right before housing prices went up. We lived below our means for awhile. We stayed in the house until 2020 and had enough equity/savings to make large down payment on $2 million house. Our house is now worth around $3 million. Also, our HHI is higher than 300K.

You also bought a house while the rest of us were in middle school. So maybe bow out of this?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP: The answer is mostly that people have family help by giving them money for the down payment. Yes, there are some outliers of people that make a lot of money, but I fully believe that the people affording these houses you mention are able to do so primarily because they have family help.

I have to say that I feel for you, OP, as we're in a similar situation. We're in a TH in MoCo that we're rapidly outgrowing, and are looking at SFHs in the better school clusters, and they are all expensive.

I really think this is something that people who don't know how to live frugally tell themselves. Meanwhile they spend their 20s going to bachelor(ette) parties in Mexico and the Caribbean, spending tons at brunches, happy hours and going out, living in expensive luxury apartments, buying fancy tech, etc. It's easy to fritter away the money as a single person, but then you hit your 30s with little to nothing in the bank and panic. And you don't know who to live frugally because you're so used to spending freely.

I know no one like the people you describe but I do know lots of first gen immigrants and citizens who grew up middle class or lower middle class, and who get no financial help from their parents/families. Almost everyone I know who is in a $1M+ home received/received financial help from parents for either the down payment or from a family trust. I had no idea for a long time. Now it’s just so easy to figure out once you get to know a couple well. OP, don’t feel bad because generational wealth is a very real thing and a huge advantage, but few people want to acknowledge it. On here, I’ve noticed that people are very defensive / insecure about it being called out as an advantage, and will attack anyone who brings it up. I live in an upscale DC neighborhood where a lot of people’s jobs/ employment history do not match their lifestyle.

It isn’t fair but it is true and I’m not ashamed to admit that without my parents’ and my ILs’ help, my DH and I would never have been able to afford to buy the $1.5M house we bought in Bethesda in 2015. They helped us massively with the down payment. I am extremely grateful for that and since that time our HHI has increased significantly which has allowed us to repay a portion of that “loan”. All of that being said, given the high interest rates today and overall price increases even with our parents’ help we would not have been able to purchase the same home today.

[Anonymous]

$4000 budget is too small for $300k hi. It's not that you can't afford it. You just don't want to pay for it.

[Anonymous]

Anonymous wrote:$4000 budget is too small for $300k hi. It's not that you can't afford it. You just don't want to pay for it.

OP mentioned having 2 small kids. Assuming that $300k income
Comes from two salaries (no stay at home parent), then they also need to pay for two kids daycare in addition to two kids college savings. Plus it’s always possible that one of them could lose their job for awhile. If those assumptions are true, $4k PITI seems prudent.

I will note that we have a higher income than OP but a $4 PITI because we bought less than what we could afford (though still very nice) with the benefit of low interest rates, 5 years ago. I’m a fed, and very likely to lose my job, and I can still sleep at night - very, very glad that we didn’t stretch.

[Anonymous]

We had parental help with the down payment.

And we plan to help our own kids with their down payments in the future. I have read a lot about this in personal finance -- how it's becoming more and more common.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Bunch of millenials moaning they can't suddenly afford luxe housing the second they want one after 15 years of renting in trendy areas. There's plenty of affordable starter places on the market. Sorry you think life owes you a mansion.

People just have too high of expectations. What was considered a typical middle class house in the suburbs 50 years ago is now considered a dump. People are now demanding significant square footage in prime locations. If you can't hang, buy a place in cow country like everyone else.

WTF? Those middle class “dumps” are still a million freaking dollars anywhere within an hour of a job in the DMV. Middle class salaries don’t allow today’s middle class workers to even consider buying anything remotely close to their job if they they work in DC. God forbid they consider the schools.

The question of whether they think they’re too good for the housing stock is a straw man. Stop gaslighting the youngsters.

Oh please, only losers focus on problems and not solutions. You have a really weak mindset and it's unlikely you will be successful. I know it's hard to believe, but most people in this area live far outside the beltway and drive in rush hour just like everyone else. But since you obviously have a shitty salary, maybe you should move to some country bumpkin area.

Lame troll is lame. Go back to shilling your get rich quick schemes on youtube and let the grown ups talk.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Bunch of millenials moaning they can't suddenly afford luxe housing the second they want one after 15 years of renting in trendy areas. There's plenty of affordable starter places on the market. Sorry you think life owes you a mansion.

People just have too high of expectations. What was considered a typical middle class house in the suburbs 50 years ago is now considered a dump. People are now demanding significant square footage in prime locations. If you can't hang, buy a place in cow country like everyone else.

WTF? Those middle class “dumps” are still a million freaking dollars anywhere within an hour of a job in the DMV. Middle class salaries don’t allow today’s middle class workers to even consider buying anything remotely close to their job if they they work in DC. God forbid they consider the schools.

The question of whether they think they’re too good for the housing stock is a straw man. Stop gaslighting the youngsters.

Oh please, only losers focus on problems and not solutions. You have a really weak mindset and it's unlikely you will be successful. I know it's hard to believe, but most people in this area live far outside the beltway and drive in rush hour just like everyone else. But since you obviously have a shitty salary, maybe you should move to some country bumpkin area.

Lame troll is lame. Go back to shilling your get rich quick schemes on youtube and let the grown ups talk.

Your broke ass can't afford a house and you're accusing buy and hold investors of get rich quick schemes. GTFO

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Bunch of millenials moaning they can't suddenly afford luxe housing the second they want one after 15 years of renting in trendy areas. There's plenty of affordable starter places on the market. Sorry you think life owes you a mansion.

People just have too high of expectations. What was considered a typical middle class house in the suburbs 50 years ago is now considered a dump. People are now demanding significant square footage in prime locations. If you can't hang, buy a place in cow country like everyone else.

WTF? Those middle class “dumps” are still a million freaking dollars anywhere within an hour of a job in the DMV. Middle class salaries don’t allow today’s middle class workers to even consider buying anything remotely close to their job if they they work in DC. God forbid they consider the schools.

The question of whether they think they’re too good for the housing stock is a straw man. Stop gaslighting the youngsters.

Oh please, only losers focus on problems and not solutions. You have a really weak mindset and it's unlikely you will be successful. I know it's hard to believe, but most people in this area live far outside the beltway and drive in rush hour just like everyone else. But since you obviously have a shitty salary, maybe you should move to some country bumpkin area.

Lame troll is lame. Go back to shilling your get rich quick schemes on youtube and let the grown ups talk.

Your broke ass can't afford a house and you're accusing buy and hold investors of get rich quick schemes. GTFO

Go tell your buddies on r/wallstreetbets about your prowess, no one here cares. Or better, go do your homework.

[Anonymous]

Our next door house fell out of contract during financing. It seems, lenders have become strict with appraisal and qualification.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Want what I had...Hmm. Bought a house in a NJ town that was the butt of mainstream music (Bruce Springsteen wrote an entire album dedicated to escaping places like this) when I was 24. It was so small the developer had to build it up sideways so the front door opened up directly to the back of someone else's house. Continued to upgrade as my job allowed. Economic activity in NYC fueled a bit of property value/economic boom to the entire area, to the point most people couldn't afford it any longer. Exactly the same thing happened to this area. Would I, starting at 24 over again, be able to afford a 'nice' starter home in a desirable area? No. But I didn't live in a great area back then either. I just had a decade or two of forced savings on top of the typical millenial first time buyer.

This is exactly what I was talking about. You played on easy mode and you think everyone else is doing the same 40+ years later.

Let's play a game. Tell me your job title and employer when you bought that house. Let's see what that salary is today and what you could afford.

I have no idea what point you are trying to make here. I lived in shitholes and built equity instead of living in luxury and a fun lifestyle. I didn't move to a desirable, high priced area and expect too end housing which many people here want it all immediately. There was nothing easy about it

[Anonymous]

Anonymous wrote:

Anonymous wrote:$4000 budget is too small for $300k hi. It's not that you can't afford it. You just don't want to pay for it.

OP mentioned having 2 small kids. Assuming that $300k income
Comes from two salaries (no stay at home parent), then they also need to pay for two kids daycare in addition to two kids college savings. Plus it’s always possible that one of them could lose their job for awhile. If those assumptions are true, $4k PITI seems prudent.

I will note that we have a higher income than OP but a $4 PITI because we bought less than what we could afford (though still very nice) with the benefit of low interest rates, 5 years ago. I’m a fed, and very likely to lose my job, and I can still sleep at night - very, very glad that we didn’t stretch.

This -- our mortgage is about 3k, which is due to buying pre-2020 with a 3% mortgage rate. Our HHI at that time was about 250k, and we really felt maxes out with a $3,300 mortgage payment + 2 daycares, which were about 4k. Now that both kids are in public ES, we are finally saving. Our house was 660k, and our downpayment was a combo of our savings and major parental help.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We bought a house in 1998 for 350K right before housing prices went up. We lived below our means for awhile. We stayed in the house until 2020 and had enough equity/savings to make large down payment on $2 million house. Our house is now worth around $3 million. Also, our HHI is higher than 300K.

You also bought a house while the rest of us were in middle school. So maybe bow out of this?

Maybe stop being a whiny little baby?

[Anonymous]

Anonymous wrote:

Anonymous wrote:$4000 budget is too small for $300k hi. It's not that you can't afford it. You just don't want to pay for it.

OP mentioned having 2 small kids. Assuming that $300k income
Comes from two salaries (no stay at home parent), then they also need to pay for two kids daycare in addition to two kids college savings. Plus it’s always possible that one of them could lose their job for awhile. If those assumptions are true, $4k PITI seems prudent.

I will note that we have a higher income than OP but a $4 PITI because we bought less than what we could afford (though still very nice) with the benefit of low interest rates, 5 years ago. I’m a fed, and very likely to lose my job, and I can still sleep at night - very, very glad that we didn’t stretch.

OP can buy a nice townhouse with her $4000 PITI. She can probably even buy a small decent SFH in a decent area with that. It won't be a million dollar 5000sq ft home, but my first home was 1500 sq ft and DH and I managed just fine with two elementary-aged children there. Our mortgage 10 years ago was $2600 and the house cost $550K. The same house is worth about $700K right now and even with current interest rates, OP could probably afford it. It was in a decent part of Fairfax County with good but not great schools (but zoned to a good high school). We only moved because we wanted a bigger yard and that particular area was too dense to have any large lots in our price range.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Want what I had...Hmm. Bought a house in a NJ town that was the butt of mainstream music (Bruce Springsteen wrote an entire album dedicated to escaping places like this) when I was 24. It was so small the developer had to build it up sideways so the front door opened up directly to the back of someone else's house. Continued to upgrade as my job allowed. Economic activity in NYC fueled a bit of property value/economic boom to the entire area, to the point most people couldn't afford it any longer. Exactly the same thing happened to this area. Would I, starting at 24 over again, be able to afford a 'nice' starter home in a desirable area? No. But I didn't live in a great area back then either. I just had a decade or two of forced savings on top of the typical millenial first time buyer.

This is exactly what I was talking about. You played on easy mode and you think everyone else is doing the same 40+ years later.

Let's play a game. Tell me your job title and employer when you bought that house. Let's see what that salary is today and what you could afford.

I have no idea what point you are trying to make here. I lived in shitholes and built equity instead of living in luxury and a fun lifestyle. I didn't move to a desirable, high priced area and expect too end housing which many people here want it all immediately. There was nothing easy about it

You have no idea what point PP was making because you’re painfully stupid. A 30-something couple wanting a modest 3 bedroom house within an hour of their jobs and in an adequate school district =/= living a luxurious, fun lifestyle. There are significantly more people competing for the exact same resources than when you were young.

Here is a simple point: you built equity in houses you considered shitholes back in the day. Those same houses are what the youngins CANNOT AFFORD today, and guess what? They’re even SHITTIER than when you lived there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$4000 budget is too small for $300k hi. It's not that you can't afford it. You just don't want to pay for it.

OP mentioned having 2 small kids. Assuming that $300k income
Comes from two salaries (no stay at home parent), then they also need to pay for two kids daycare in addition to two kids college savings. Plus it’s always possible that one of them could lose their job for awhile. If those assumptions are true, $4k PITI seems prudent.

I will note that we have a higher income than OP but a $4 PITI because we bought less than what we could afford (though still very nice) with the benefit of low interest rates, 5 years ago. I’m a fed, and very likely to lose my job, and I can still sleep at night - very, very glad that we didn’t stretch.

OP can buy a nice townhouse with her $4000 PITI. She can probably even buy a small decent SFH in a decent area with that. It won't be a million dollar 5000sq ft home, but my first home was 1500 sq ft and DH and I managed just fine with two elementary-aged children there. Our mortgage 10 years ago was $2600 and the house cost $550K. The same house is worth about $700K right now and even with current interest rates, OP could probably afford it. It was in a decent part of Fairfax County with good but not great schools (but zoned to a good high school). We only moved because we wanted a bigger yard and that particular area was too dense to have any large lots in our price range.

I want to add that we made a total of $165K with 2 kids in daycare and a $400/month student loan payment with that $2500 mortgage so I definitely think OP is wise wanting to do $4K payment but she can easily find a decent house for that much. It won't be the McMansion that she wants, but she doesn't need a McMansion. She'll be just fine in a 2000 sq ft 3BR/2BA outdated home that she can fix up over time.