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

[Anonymous]

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

And salaries have increased along with home prices. Anyone who makes decent decisions when young can get on the property ladder somewhere decent in this country. Stop complaining and pointing fingers and take responsibility.

[Anonymous]

Anonymous wrote:It’s an equity game. We make about the same as you, and bought our home for 1.4. However we had 800k in equity from 2 previous homes. Gotta start somewhere.

NP. This is true, but I think we have to admit there is a huge element of luck.

How many people on this board have shared that “move up” housing has gone up in price significantly faster than their “starter” home and now they are stuck. I’ve seen so many posts of people who wished they had stretched a little bit more so they didn’t have to move. With transactional costs so high and so much of mortgage going to interest, it’s just a lot harder to get on and move up the property ladder these days.

I totally realize I lucked out being able to buy a first home in 2012 and then moved closer-in to a walkable SFH in a good school district inside the beltway in 2018. Refi’d to 2.75% during COVID.

Like OP my family has a 300k HHI and mortgage is about $3,900 (so in line with their budget). But not only could I not afford our current home, even our outside the beltway starter townhouse we bought 13 years ago would be a stretch.

I’m not sure what the best advice is because the housing situation around here really sucks. If I was just starting out in this area and didn’t have a big downpayment I’d seriously consider leaving. Even rents aren’t cheap. DH and I have realized we likely need to save to help our kids buy their first homes in addition to 529s.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

And salaries have increased along with home prices. Anyone who makes decent decisions when young can get on the property ladder somewhere decent in this country. Stop complaining and pointing fingers and take responsibility.

Let's take 1998 as the baseline since you said "late 90s." Between 1998 and 2022, the real median income in DC moved from about $59K to $111K. That's about an 88% increase, which is a lot.

But during the same period, median housing prices went from $105K to $370K. That's a 252% increase.

To answer OP's question, the answer is and will always be "generational wealth" in the majority of cases, even if you define generational wealth as simply "no student loan debt"

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

And salaries have increased along with home prices. Anyone who makes decent decisions when young can get on the property ladder somewhere decent in this country. Stop complaining and pointing fingers and take responsibility.

There are literally numerous economic studies showing that incomes have not remotely kept pace with housing prices (not to mention things like childcare, groceries, etc.) keep going up.

I’m an older millennial who managed to get on the property ladder in 2012. Yes my DH and I have worked hard to move up to our current home and fix it up. But admitting that we had it easier than people starting out today doesn’t negate that.

Both things can be true — people who made good decisions and made sacrifices along the way have benefitted from property value increases and also younger people today do not have these same opportunities. Telling them to just live a little more frugally or work a little harder isn’t going to help.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

And salaries have increased along with home prices. Anyone who makes decent decisions when young can get on the property ladder somewhere decent in this country. Stop complaining and pointing fingers and take responsibility.

Let's take 1998 as the baseline since you said "late 90s." Between 1998 and 2022, the real median income in DC moved from about $59K to $111K. That's about an 88% increase, which is a lot.

But during the same period, median housing prices went from $105K to $370K. That's a 252% increase.

To answer OP's question, the answer is and will always be "generational wealth" in the majority of cases, even if you define generational wealth as simply "no student loan debt"

You don’t have to live in DMV. There are beautiful houses with decent public schools in suburban Detroit that you can afford. You chose not to make an optimal financial decision and instead complained about others’ good fortune.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

And salaries have increased along with home prices. Anyone who makes decent decisions when young can get on the property ladder somewhere decent in this country. Stop complaining and pointing fingers and take responsibility.

There are literally numerous economic studies showing that incomes have not remotely kept pace with housing prices (not to mention things like childcare, groceries, etc.) keep going up.

I’m an older millennial who managed to get on the property ladder in 2012. Yes my DH and I have worked hard to move up to our current home and fix it up. But admitting that we had it easier than people starting out today doesn’t negate that.

Both things can be true — people who made good decisions and made sacrifices along the way have benefitted from property value increases and also younger people today do not have these same opportunities. Telling them to just live a little more frugally or work a little harder isn’t going to help.

It would help at the margins. What would help is leaving HCOL regions. There are jobs in Cleveland and Las Vegas, I’m sure you can hack it there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

And salaries have increased along with home prices. Anyone who makes decent decisions when young can get on the property ladder somewhere decent in this country. Stop complaining and pointing fingers and take responsibility.

Let's take 1998 as the baseline since you said "late 90s." Between 1998 and 2022, the real median income in DC moved from about $59K to $111K. That's about an 88% increase, which is a lot.

But during the same period, median housing prices went from $105K to $370K. That's a 252% increase.

To answer OP's question, the answer is and will always be "generational wealth" in the majority of cases, even if you define generational wealth as simply "no student loan debt"

Thank you! Housing, college tuition, and health insurance costs have far outpaced wages in the entire country for a long time. You used to be able to afford a SFH in most places in the DC suburbs, including desirable neighborhoods like Arlington and Bethesda, on one GS 12 salary in the early 1980s. With current mortgage rates and prices, two GS 12s (making around $200-$250 combined) would have to move to places like Woodbridge or Wheaton to afford a SFH, and they’d be house poor if they bought one because the mortgage on a $500,000 to $600,000 in those neighborhoods would run around $4,000+ with current interest rates.

Some people on here have no clue what they’re talking about.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

And salaries have increased along with home prices. Anyone who makes decent decisions when young can get on the property ladder somewhere decent in this country. Stop complaining and pointing fingers and take responsibility.

Let's take 1998 as the baseline since you said "late 90s." Between 1998 and 2022, the real median income in DC moved from about $59K to $111K. That's about an 88% increase, which is a lot.

But during the same period, median housing prices went from $105K to $370K. That's a 252% increase.

To answer OP's question, the answer is and will always be "generational wealth" in the majority of cases, even if you define generational wealth as simply "no student loan debt"

Thank you! Housing, college tuition, and health insurance costs have far outpaced wages in the entire country for a long time. You used to be able to afford a SFH in most places in the DC suburbs, including desirable neighborhoods like Arlington and Bethesda, on one GS 12 salary in the early 1980s. With current mortgage rates and prices, two GS 12s (making around $200-$250 combined) would have to move to places like Woodbridge or Wheaton to afford a SFH, and they’d be house poor if they bought one because the mortgage on a $500,000 to $600,000 in those neighborhoods would run around $4,000+ with current interest rates.

Some people on here have no clue what they’re talking about.

I think the people who can afford houses others want know what they’re talking about, as evidenced by their making good decisions.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

And salaries have increased along with home prices. Anyone who makes decent decisions when young can get on the property ladder somewhere decent in this country. Stop complaining and pointing fingers and take responsibility.

Let's take 1998 as the baseline since you said "late 90s." Between 1998 and 2022, the real median income in DC moved from about $59K to $111K. That's about an 88% increase, which is a lot.

But during the same period, median housing prices went from $105K to $370K. That's a 252% increase.

To answer OP's question, the answer is and will always be "generational wealth" in the majority of cases, even if you define generational wealth as simply "no student loan debt"

You don’t have to live in DMV. There are beautiful houses with decent public schools in suburban Detroit that you can afford. You chose not to make an optimal financial decision and instead complained about others’ good fortune.

Love these people that give anecdotes about how they did it in DC and when presented with evidence of how things have changed in DC go “Well, you choose to live in DC!”

[Anonymous]

I don't think anyone that bought in the DC area in the 90s imagined this area would explode in wealth, RE prices, and population the way that it has.

[Anonymous]

Anonymous wrote:Family helps with down payment. That’s how. Family helps with child care.

Nope, not me, not mine. We did all on our own. You can read the story above where the OP just goes on and on with insults because they are unwilling to put in hard work and compromise.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s an equity game. We make about the same as you, and bought our home for 1.4. However we had 800k in equity from 2 previous homes. Gotta start somewhere.

NP. This is true, but I think we have to admit there is a huge element of luck.

How many people on this board have shared that “move up” housing has gone up in price significantly faster than their “starter” home and now they are stuck. I’ve seen so many posts of people who wished they had stretched a little bit more so they didn’t have to move. With transactional costs so high and so much of mortgage going to interest, it’s just a lot harder to get on and move up the property ladder these days.

I totally realize I lucked out being able to buy a first home in 2012 and then moved closer-in to a walkable SFH in a good school district inside the beltway in 2018. Refi’d to 2.75% during COVID.

Like OP my family has a 300k HHI and mortgage is about $3,900 (so in line with their budget). But not only could I not afford our current home, even our outside the beltway starter townhouse we bought 13 years ago would be a stretch.

I’m not sure what the best advice is because the housing situation around here really sucks. If I was just starting out in this area and didn’t have a big downpayment I’d seriously consider leaving. Even rents aren’t cheap. DH and I have realized we likely need to save to help our kids buy their first homes in addition to 529s.

My strategy here is to suggest that my children move somewhere that is not the DMV area or other very expensive large city. My sister just bought a gorgeous new build the size of my $1M 1990s house for $400K in a city most of you would scoff at, but she loves.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The only way for a $300,000 down payment to magically appear for most people is if they win a lottery.

Who needs a 300k down payment for a first house? Answer. Nobody.

+1

Take a loan from your 401 to cover the 5% down.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The only way for a $300,000 down payment to magically appear for most people is if they win a lottery.

Who needs a 300k down payment for a first house? Answer. Nobody.

+1

Take a loan from your 401 to cover the 5% down.

We put 10% down and took a loan from my 401(k) to do so. You pay yourself back with interest so it's not too different from investing in an average market. Now would be a good time to do that.