Anyone else who will likely never be a home owner?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think one way to make home-ownership feasible is to really hustle and save even starting in your teens and 20's.

My hair stylist (now in her 40's) bought a condo at age 18 with her own money that she had saved from waitressing and working in hair salons. She literally saved every penny.

She came from a very poor immigrant family. (Her mom was a house-cleaner, and her dad had a disability.)

So I still think it can be done. She worked so hard in her teens, but it paid off! She's been able to trade up and now lives in a beautiful townhouse in a desirable neighborhood in Moco.

Good for her, but you understand that the whole point of this thread is that a hairstylist today could not afford that condo, right? Have you not followed the news? Whatever someone could afford in 2020, they can now afford about half of that in 2022. There’s been a completely unprecedented spike in housings costs that no one could have predicted or planned for.

But people have also been saying that home prices are pretty sure to fall to late 2019 - early 2020 numbers so while they may not be able to afford what they could then with the low interest rates, they may be able to afford more than they can right now.

It’s crazy talk that we have doubled the money supply, the cost of everything has gone up, including wages, but somehow housing will be an outlier and is going to fall 30%.

Inflation is responsible for the huge price increases.

And even more so, for this area, all the people who paid cash, over asking, and with the financial security to waive inspections.

We weren’t in the position to buy in 2020 but it didn’t matter. We need financing and are using a VA loan. We couldn’t compete with the pandemic buyers - it was all cash, over asking, waived inspection offers who got the contract. The people who benefited from low interest rates were those who refinanced. People who wanted to buy with financing got nothing. Now we can buy - for $300,000 more and high interest rates. As always, those who had more benefited the most.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We didn't buy our first home until we were in the mid-thirties, but took quite a few years of saving $$$ to get there. This was about 10 years ago. Since then, we've been able to buy four additional homes as investment properties. The trick? As our income grew over 10 years, we kept our spending habits more or less the same as 10 years ago, so we've had 6x growth in saving over the year. Takes strong discipline, being handy helps (fixing things in the house ourselves and doing most of car maintenance self also.....w/both cars being 15+ yrs old)

You can do it, discipline and trading off current consumption for future consumption.

Best of luck!

Your trick? Buying at the bottom of a crash and then hoarding properties. You’re not that smart. My worst financial decision was being born too late to do what you did. Those of us who are born later and did the right thing and worked hard to save for a down payment are getting screwed because the cost of housing has artificially increased over the last two years far faster than we can save. It is utterly unprecedented and you are in no position to give advice.

Amen.

No. Your generation had access to the lowest interest rates in history. You couldn’t afford bc you wanted to enter the property ladder without compromise. Buy further out, buy smaller, buy a condo, buy in a lower cost of living area, build equity, enjoy appreciation, sell and enjoy a tax free profit and climb the ladder. I’ll never forget my first real estate agent. She bought in Capitol Hill 40 years ago. She said no one would even come to their house. Now she owns a boss home in a prime location. But it did not come easy.

How would I have afforded to buy a property while in school and making no income? What about people who graduated in say 2019 and needed to work a few years to save up for a down payment? You don’t make any sense. The cost of housing right now in every corner of America is vastly less affordable than it was just a year ago. Not everyone was in a position to buy last year or before that, and even if they could it was very hard to “win” a bidding war.

We're supposed to cry because 24 year olds can't buy right now? There's been a 2-year blip of homes being either overly priced, high interest rates, or both. Just ride it out and you'll be in a great position to buy in 6-18 months.

This - if you truly graduated in 219 why are you complaining? I bought a condo in my late 20s and yes, I got lucky with the appreciation and that is what started me on the property ladder. But yeah, I had to save and get on the right track for 6ish years after graduating to do that.

Now, if you’re actually in your early 30s or something complaining, that’s on you.

This is basically the Republican mindset in a nutshell: if you are struggling financially, it is because you are loser or stupid, or both. That makes it easy not to care.

I never even implied that anyone who doesn’t own a home is a loser or stupid. I responded to a post talking about someone who graduated from college a few years ago and is complaining they can’t break into the market. Neither could I at that age! But for people who are a bit older and lamenting the market over the last few years, it could be a different story. I do hear a lot of excuses and refusal to compromise from friends who still rent. They want everything just the way they want it if they’re going to buy and at some point you just have to do it if you ever want to realize any gains.

You wrote, "if you’re actually in your early 30s or something complaining, that’s on you." Sure, maybe the people are too demanding. But you have no way of knowing that. Just easier to sweep aside the complaints that recognize that there might be things that have benefited you making it harder for someone else. That is the core of the Republican outlook.

Sure. I have no way of knowing everyone’s specific situation. What I do know is that for people who have a lower income there are many programs available in this area to help with first-time homeownership. Yes, it’s a tough market. Yes, it’s not easy in general. But there are a lot of options available and I am certainly not going to believe that for the majority of people it isn’t possible eventually if you want it.

I’m not sure exactly what you think the problem actually is or how I am benefitting from anything or made anything harder for anyone else as a millennial who owns exactly one property myself.

Right, you are assuming that there is some program available for people. I'm curious what experience you have with those programs in recent times. And I'm not being resentful. I am a Gen Xer with a high income and nice house. I am just amazed that people assume that there is a way even though they have no direct experience and lots of people say otherwise.

I personally used a Fannie Mae first time homebuyer 3.5% down conventional loan. It involves taking a one day long course and filing certain additional documents with the mortgage. But that’s only the tip of the iceberg. I looked into many programs through Arlington County, DC (NACA as previously mentioned), etc. My neighbor who is a teacher used a program through Arlington County. There are a lot if you do a simple google search.

https://www.arlingtonva.us/Government/Programs/Housing/Get-Help/Home-Ownership

I am not sure why you are discounting my experiences or assuming I am just making things up.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We didn't buy our first home until we were in the mid-thirties, but took quite a few years of saving $$$ to get there. This was about 10 years ago. Since then, we've been able to buy four additional homes as investment properties. The trick? As our income grew over 10 years, we kept our spending habits more or less the same as 10 years ago, so we've had 6x growth in saving over the year. Takes strong discipline, being handy helps (fixing things in the house ourselves and doing most of car maintenance self also.....w/both cars being 15+ yrs old)

You can do it, discipline and trading off current consumption for future consumption.

Best of luck!

Your trick? Buying at the bottom of a crash and then hoarding properties. You’re not that smart. My worst financial decision was being born too late to do what you did. Those of us who are born later and did the right thing and worked hard to save for a down payment are getting screwed because the cost of housing has artificially increased over the last two years far faster than we can save. It is utterly unprecedented and you are in no position to give advice.

Amen.

No. Your generation had access to the lowest interest rates in history. You couldn’t afford bc you wanted to enter the property ladder without compromise. Buy further out, buy smaller, buy a condo, buy in a lower cost of living area, build equity, enjoy appreciation, sell and enjoy a tax free profit and climb the ladder. I’ll never forget my first real estate agent. She bought in Capitol Hill 40 years ago. She said no one would even come to their house. Now she owns a boss home in a prime location. But it did not come easy.

How would I have afforded to buy a property while in school and making no income? What about people who graduated in say 2019 and needed to work a few years to save up for a down payment? You don’t make any sense. The cost of housing right now in every corner of America is vastly less affordable than it was just a year ago. Not everyone was in a position to buy last year or before that, and even if they could it was very hard to “win” a bidding war.

We're supposed to cry because 24 year olds can't buy right now? There's been a 2-year blip of homes being either overly priced, high interest rates, or both. Just ride it out and you'll be in a great position to buy in 6-18 months.

This - if you truly graduated in 219 why are you complaining? I bought a condo in my late 20s and yes, I got lucky with the appreciation and that is what started me on the property ladder. But yeah, I had to save and get on the right track for 6ish years after graduating to do that.

Now, if you’re actually in your early 30s or something complaining, that’s on you.

This is basically the Republican mindset in a nutshell: if you are struggling financially, it is because you are loser or stupid, or both. That makes it easy not to care.

I never even implied that anyone who doesn’t own a home is a loser or stupid. I responded to a post talking about someone who graduated from college a few years ago and is complaining they can’t break into the market. Neither could I at that age! But for people who are a bit older and lamenting the market over the last few years, it could be a different story. I do hear a lot of excuses and refusal to compromise from friends who still rent. They want everything just the way they want it if they’re going to buy and at some point you just have to do it if you ever want to realize any gains.

You wrote, "if you’re actually in your early 30s or something complaining, that’s on you." Sure, maybe the people are too demanding. But you have no way of knowing that. Just easier to sweep aside the complaints that recognize that there might be things that have benefited you making it harder for someone else. That is the core of the Republican outlook.

Sure. I have no way of knowing everyone’s specific situation. What I do know is that for people who have a lower income there are many programs available in this area to help with first-time homeownership. Yes, it’s a tough market. Yes, it’s not easy in general. But there are a lot of options available and I am certainly not going to believe that for the majority of people it isn’t possible eventually if you want it.

I’m not sure exactly what you think the problem actually is or how I am benefitting from anything or made anything harder for anyone else as a millennial who owns exactly one property myself.

Right, you are assuming that there is some program available for people. I'm curious what experience you have with those programs in recent times. And I'm not being resentful. I am a Gen Xer with a high income and nice house. I am just amazed that people assume that there is a way even though they have no direct experience and lots of people say otherwise.

I personally used a Fannie Mae first time homebuyer 3.5% down conventional loan. It involves taking a one day long course and filing certain additional documents with the mortgage. But that’s only the tip of the iceberg. I looked into many programs through Arlington County, DC (NACA as previously mentioned), etc. My neighbor who is a teacher used a program through Arlington County. There are a lot if you do a simple google search.

https://www.arlingtonva.us/Government/Programs/Housing/Get-Help/Home-Ownership

I am not sure why you are discounting my experiences or assuming I am just making things up.

Correction: it was 3% down (I confused it with an FHA loan which I also looked into). Now, these are low down payment/mortgage programs which isn’t the whole picture. But it removes or assists in one barrier. Of course the other barrier is the market and rising prices/interest rates. But observing the market in my area, it seems to be cooling off and there are some decent prices to be had.

All I am saying is there is never going to a “perfect” time to buy but I do not have a high income for this area nor do most of my friends/neighbors/colleagues who are homeowners and have used a variety of methods: FHA loans, VA loans, sacrificed location/space/cosmetic appearance, built “sweat equity.” None of us went into it thinking our first home purchase was going to be our perfect forever home.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think one way to make home-ownership feasible is to really hustle and save even starting in your teens and 20's.

My hair stylist (now in her 40's) bought a condo at age 18 with her own money that she had saved from waitressing and working in hair salons. She literally saved every penny.

She came from a very poor immigrant family. (Her mom was a house-cleaner, and her dad had a disability.)

So I still think it can be done. She worked so hard in her teens, but it paid off! She's been able to trade up and now lives in a beautiful townhouse in a desirable neighborhood in Moco.

Good for her, but you understand that the whole point of this thread is that a hairstylist today could not afford that condo, right? Have you not followed the news? Whatever someone could afford in 2020, they can now afford about half of that in 2022. There’s been a completely unprecedented spike in housings costs that no one could have predicted or planned for.

But people have also been saying that home prices are pretty sure to fall to late 2019 - early 2020 numbers so while they may not be able to afford what they could then with the low interest rates, they may be able to afford more than they can right now.

It’s crazy talk that we have doubled the money supply, the cost of everything has gone up, including wages, but somehow housing will be an outlier and is going to fall 30%.

Inflation is responsible for the huge price increases.

Housing IS an outlier - it is up WAY more than the general rate of inflation. Especially in relation to wages.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think one way to make home-ownership feasible is to really hustle and save even starting in your teens and 20's.

My hair stylist (now in her 40's) bought a condo at age 18 with her own money that she had saved from waitressing and working in hair salons. She literally saved every penny.

She came from a very poor immigrant family. (Her mom was a house-cleaner, and her dad had a disability.)

So I still think it can be done. She worked so hard in her teens, but it paid off! She's been able to trade up and now lives in a beautiful townhouse in a desirable neighborhood in Moco.

Good for her, but you understand that the whole point of this thread is that a hairstylist today could not afford that condo, right? Have you not followed the news? Whatever someone could afford in 2020, they can now afford about half of that in 2022. There’s been a completely unprecedented spike in housings costs that no one could have predicted or planned for.

But people have also been saying that home prices are pretty sure to fall to late 2019 - early 2020 numbers so while they may not be able to afford what they could then with the low interest rates, they may be able to afford more than they can right now.

It’s crazy talk that we have doubled the money supply, the cost of everything has gone up, including wages, but somehow housing will be an outlier and is going to fall 30%.

Inflation is responsible for the huge price increases.

Housing IS an outlier - it is up WAY more than the general rate of inflation. Especially in relation to wages.

Because rich people outbid each other with all cash offers and waived inspections (because they could afford any repairs) during the pandemic. Did anyone who needed a loan get a house they wanted while interest rates were low?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think one way to make home-ownership feasible is to really hustle and save even starting in your teens and 20's.

My hair stylist (now in her 40's) bought a condo at age 18 with her own money that she had saved from waitressing and working in hair salons. She literally saved every penny.

She came from a very poor immigrant family. (Her mom was a house-cleaner, and her dad had a disability.)

So I still think it can be done. She worked so hard in her teens, but it paid off! She's been able to trade up and now lives in a beautiful townhouse in a desirable neighborhood in Moco.

Good for her, but you understand that the whole point of this thread is that a hairstylist today could not afford that condo, right? Have you not followed the news? Whatever someone could afford in 2020, they can now afford about half of that in 2022. There’s been a completely unprecedented spike in housings costs that no one could have predicted or planned for.

But people have also been saying that home prices are pretty sure to fall to late 2019 - early 2020 numbers so while they may not be able to afford what they could then with the low interest rates, they may be able to afford more than they can right now.

It’s crazy talk that we have doubled the money supply, the cost of everything has gone up, including wages, but somehow housing will be an outlier and is going to fall 30%.

Inflation is responsible for the huge price increases.

Housing IS an outlier - it is up WAY more than the general rate of inflation. Especially in relation to wages.

Food is up 250%. Housing isn’t an outlier.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think one way to make home-ownership feasible is to really hustle and save even starting in your teens and 20's.

My hair stylist (now in her 40's) bought a condo at age 18 with her own money that she had saved from waitressing and working in hair salons. She literally saved every penny.

She came from a very poor immigrant family. (Her mom was a house-cleaner, and her dad had a disability.)

So I still think it can be done. She worked so hard in her teens, but it paid off! She's been able to trade up and now lives in a beautiful townhouse in a desirable neighborhood in Moco.

Good for her, but you understand that the whole point of this thread is that a hairstylist today could not afford that condo, right? Have you not followed the news? Whatever someone could afford in 2020, they can now afford about half of that in 2022. There’s been a completely unprecedented spike in housings costs that no one could have predicted or planned for.

But people have also been saying that home prices are pretty sure to fall to late 2019 - early 2020 numbers so while they may not be able to afford what they could then with the low interest rates, they may be able to afford more than they can right now.

It’s crazy talk that we have doubled the money supply, the cost of everything has gone up, including wages, but somehow housing will be an outlier and is going to fall 30%.

Inflation is responsible for the huge price increases.

Housing IS an outlier - it is up WAY more than the general rate of inflation. Especially in relation to wages.

Because rich people outbid each other with all cash offers and waived inspections (because they could afford any repairs) during the pandemic. Did anyone who needed a loan get a house they wanted while interest rates were low?

Not true. “All cash offers” are almost always mortgaged at the back end. With interest rates so low, it would be dumb to pay cash. Which is why demand completely evaporated now that rates are so much higher. It’s not that hard, people.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think one way to make home-ownership feasible is to really hustle and save even starting in your teens and 20's.

My hair stylist (now in her 40's) bought a condo at age 18 with her own money that she had saved from waitressing and working in hair salons. She literally saved every penny.

She came from a very poor immigrant family. (Her mom was a house-cleaner, and her dad had a disability.)

So I still think it can be done. She worked so hard in her teens, but it paid off! She's been able to trade up and now lives in a beautiful townhouse in a desirable neighborhood in Moco.

Good for her, but you understand that the whole point of this thread is that a hairstylist today could not afford that condo, right? Have you not followed the news? Whatever someone could afford in 2020, they can now afford about half of that in 2022. There’s been a completely unprecedented spike in housings costs that no one could have predicted or planned for.

But people have also been saying that home prices are pretty sure to fall to late 2019 - early 2020 numbers so while they may not be able to afford what they could then with the low interest rates, they may be able to afford more than they can right now.

It’s crazy talk that we have doubled the money supply, the cost of everything has gone up, including wages, but somehow housing will be an outlier and is going to fall 30%.

Inflation is responsible for the huge price increases.

Housing IS an outlier - it is up WAY more than the general rate of inflation. Especially in relation to wages.

Food is up 250%. Housing isn’t an outlier.

You’re way off and pulled that number out of your butt. It’s more like 13.5%. https://www.bls.gov/opub/ted/2022/prices-for-food-at-home-up-13-5-percent-for-year-ended-august-2022.htm

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think one way to make home-ownership feasible is to really hustle and save even starting in your teens and 20's.

My hair stylist (now in her 40's) bought a condo at age 18 with her own money that she had saved from waitressing and working in hair salons. She literally saved every penny.

She came from a very poor immigrant family. (Her mom was a house-cleaner, and her dad had a disability.)

So I still think it can be done. She worked so hard in her teens, but it paid off! She's been able to trade up and now lives in a beautiful townhouse in a desirable neighborhood in Moco.

Good for her, but you understand that the whole point of this thread is that a hairstylist today could not afford that condo, right? Have you not followed the news? Whatever someone could afford in 2020, they can now afford about half of that in 2022. There’s been a completely unprecedented spike in housings costs that no one could have predicted or planned for.

But people have also been saying that home prices are pretty sure to fall to late 2019 - early 2020 numbers so while they may not be able to afford what they could then with the low interest rates, they may be able to afford more than they can right now.

It’s crazy talk that we have doubled the money supply, the cost of everything has gone up, including wages, but somehow housing will be an outlier and is going to fall 30%.

Inflation is responsible for the huge price increases.

Housing IS an outlier - it is up WAY more than the general rate of inflation. Especially in relation to wages.

Because rich people outbid each other with all cash offers and waived inspections (because they could afford any repairs) during the pandemic. Did anyone who needed a loan get a house they wanted while interest rates were low?

Not true. “All cash offers” are almost always mortgaged at the back end. With interest rates so low, it would be dumb to pay cash. Which is why demand completely evaporated now that rates are so much higher. It’s not that hard, people.

They paid cash to get the contract THEN later financed. People who needed a loan couldn’t get contracts. People who already had homes and got contracts would with their all cash offers were the ones to benefit. The rich get richer…

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think one way to make home-ownership feasible is to really hustle and save even starting in your teens and 20's.

My hair stylist (now in her 40's) bought a condo at age 18 with her own money that she had saved from waitressing and working in hair salons. She literally saved every penny.

She came from a very poor immigrant family. (Her mom was a house-cleaner, and her dad had a disability.)

So I still think it can be done. She worked so hard in her teens, but it paid off! She's been able to trade up and now lives in a beautiful townhouse in a desirable neighborhood in Moco.

Good for her, but you understand that the whole point of this thread is that a hairstylist today could not afford that condo, right? Have you not followed the news? Whatever someone could afford in 2020, they can now afford about half of that in 2022. There’s been a completely unprecedented spike in housings costs that no one could have predicted or planned for.

But people have also been saying that home prices are pretty sure to fall to late 2019 - early 2020 numbers so while they may not be able to afford what they could then with the low interest rates, they may be able to afford more than they can right now.

It’s crazy talk that we have doubled the money supply, the cost of everything has gone up, including wages, but somehow housing will be an outlier and is going to fall 30%.

Inflation is responsible for the huge price increases.

Housing IS an outlier - it is up WAY more than the general rate of inflation. Especially in relation to wages.

Because rich people outbid each other with all cash offers and waived inspections (because they could afford any repairs) during the pandemic. Did anyone who needed a loan get a house they wanted while interest rates were low?

Not true. “All cash offers” are almost always mortgaged at the back end. With interest rates so low, it would be dumb to pay cash. Which is why demand completely evaporated now that rates are so much higher. It’s not that hard, people.

This. Realtors were pushing loan products that looked like cash offers to the sellers, then the buyers would refinance after closing. This was a relic of the extreme bidding war days and rarely happens today.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think one way to make home-ownership feasible is to really hustle and save even starting in your teens and 20's.

My hair stylist (now in her 40's) bought a condo at age 18 with her own money that she had saved from waitressing and working in hair salons. She literally saved every penny.

She came from a very poor immigrant family. (Her mom was a house-cleaner, and her dad had a disability.)

So I still think it can be done. She worked so hard in her teens, but it paid off! She's been able to trade up and now lives in a beautiful townhouse in a desirable neighborhood in Moco.

Good for her, but you understand that the whole point of this thread is that a hairstylist today could not afford that condo, right? Have you not followed the news? Whatever someone could afford in 2020, they can now afford about half of that in 2022. There’s been a completely unprecedented spike in housings costs that no one could have predicted or planned for.

But people have also been saying that home prices are pretty sure to fall to late 2019 - early 2020 numbers so while they may not be able to afford what they could then with the low interest rates, they may be able to afford more than they can right now.

It’s crazy talk that we have doubled the money supply, the cost of everything has gone up, including wages, but somehow housing will be an outlier and is going to fall 30%.

Inflation is responsible for the huge price increases.

Housing IS an outlier - it is up WAY more than the general rate of inflation. Especially in relation to wages.

Because rich people outbid each other with all cash offers and waived inspections (because they could afford any repairs) during the pandemic. Did anyone who needed a loan get a house they wanted while interest rates were low?

Not true. “All cash offers” are almost always mortgaged at the back end. With interest rates so low, it would be dumb to pay cash. Which is why demand completely evaporated now that rates are so much higher. It’s not that hard, people.

This. Realtors were pushing loan products that looked like cash offers to the sellers, then the buyers would refinance after closing. This was a relic of the extreme bidding war days and rarely happens today.

How do you two not understand that this is a position only the wealthiest, cash-rich people have? No one who needed a normal loan with 20% or less down had a winning contract.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think one way to make home-ownership feasible is to really hustle and save even starting in your teens and 20's.

My hair stylist (now in her 40's) bought a condo at age 18 with her own money that she had saved from waitressing and working in hair salons. She literally saved every penny.

She came from a very poor immigrant family. (Her mom was a house-cleaner, and her dad had a disability.)

So I still think it can be done. She worked so hard in her teens, but it paid off! She's been able to trade up and now lives in a beautiful townhouse in a desirable neighborhood in Moco.

Good for her, but you understand that the whole point of this thread is that a hairstylist today could not afford that condo, right? Have you not followed the news? Whatever someone could afford in 2020, they can now afford about half of that in 2022. There’s been a completely unprecedented spike in housings costs that no one could have predicted or planned for.

But people have also been saying that home prices are pretty sure to fall to late 2019 - early 2020 numbers so while they may not be able to afford what they could then with the low interest rates, they may be able to afford more than they can right now.

It’s crazy talk that we have doubled the money supply, the cost of everything has gone up, including wages, but somehow housing will be an outlier and is going to fall 30%.

Inflation is responsible for the huge price increases.

Housing IS an outlier - it is up WAY more than the general rate of inflation. Especially in relation to wages.

Because rich people outbid each other with all cash offers and waived inspections (because they could afford any repairs) during the pandemic. Did anyone who needed a loan get a house they wanted while interest rates were low?

Not true. “All cash offers” are almost always mortgaged at the back end. With interest rates so low, it would be dumb to pay cash. Which is why demand completely evaporated now that rates are so much higher. It’s not that hard, people.

This. Realtors were pushing loan products that looked like cash offers to the sellers, then the buyers would refinance after closing. This was a relic of the extreme bidding war days and rarely happens today.

How do you two not understand that this is a position only the wealthiest, cash-rich people have? No one who needed a normal loan with 20% or less down had a winning contract.

I think there's some confusion here. What we're saying is that many of the buyers winning the bidding wars with cash offers didn't have the cash themselves. They worked with the lenders (recommended by their realtors) who set them up with loan products to borrow the money at an exorbitantly high interest rate. They used this borrowed money to make a cash offer. Then once they purchased the home, they refinanced to pay back the short-term loan. It cost the buyer a lot to get this short-term loan, but it was the only way to win the bidding wars that required a cash offer.

These days, buyers don't need to enter bidding wars with cash offers to get the house. So they're not using these very expensive loan products that enable them to make an offer that looks like a cash offer to the seller. The amount of buyers who "paid cash" is much lower than it seemed because they didn't really have the cash themselves so they refinanced as soon as they closed.

I hope this helps explain a little more.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think one way to make home-ownership feasible is to really hustle and save even starting in your teens and 20's.

My hair stylist (now in her 40's) bought a condo at age 18 with her own money that she had saved from waitressing and working in hair salons. She literally saved every penny.

She came from a very poor immigrant family. (Her mom was a house-cleaner, and her dad had a disability.)

So I still think it can be done. She worked so hard in her teens, but it paid off! She's been able to trade up and now lives in a beautiful townhouse in a desirable neighborhood in Moco.

Good for her, but you understand that the whole point of this thread is that a hairstylist today could not afford that condo, right? Have you not followed the news? Whatever someone could afford in 2020, they can now afford about half of that in 2022. There’s been a completely unprecedented spike in housings costs that no one could have predicted or planned for.

But people have also been saying that home prices are pretty sure to fall to late 2019 - early 2020 numbers so while they may not be able to afford what they could then with the low interest rates, they may be able to afford more than they can right now.

It’s crazy talk that we have doubled the money supply, the cost of everything has gone up, including wages, but somehow housing will be an outlier and is going to fall 30%.

Inflation is responsible for the huge price increases.

Housing IS an outlier - it is up WAY more than the general rate of inflation. Especially in relation to wages.

Because rich people outbid each other with all cash offers and waived inspections (because they could afford any repairs) during the pandemic. Did anyone who needed a loan get a house they wanted while interest rates were low?

Not true. “All cash offers” are almost always mortgaged at the back end. With interest rates so low, it would be dumb to pay cash. Which is why demand completely evaporated now that rates are so much higher. It’s not that hard, people.

This. Realtors were pushing loan products that looked like cash offers to the sellers, then the buyers would refinance after closing. This was a relic of the extreme bidding war days and rarely happens today.

How do you two not understand that this is a position only the wealthiest, cash-rich people have? No one who needed a normal loan with 20% or less down had a winning contract.

I think there's some confusion here. What we're saying is that many of the buyers winning the bidding wars with cash offers didn't have the cash themselves. They worked with the lenders (recommended by their realtors) who set them up with loan products to borrow the money at an exorbitantly high interest rate. They used this borrowed money to make a cash offer. Then once they purchased the home, they refinanced to pay back the short-term loan. It cost the buyer a lot to get this short-term loan, but it was the only way to win the bidding wars that required a cash offer.

These days, buyers don't need to enter bidding wars with cash offers to get the house. So they're not using these very expensive loan products that enable them to make an offer that looks like a cash offer to the seller. The amount of buyers who "paid cash" is much lower than it seemed because they didn't really have the cash themselves so they refinanced as soon as they closed.

I hope this helps explain a little more.

It does, but it doesn’t negate my point that only the most wealthy could do that. Because 1) they could qualify for those crazy loans and 2) they were waiving inspections because they could afford any repairs no matter how big . People who needed conventional loans with typical down payments are not the people who benefited from low interest rates. People who already owned home refinanced. Same story as always: those who need it least, benefitted the most. Yet multiple posters here saying it was dumb not to buy with record low interest rates. Myopic.

[Anonymous]

Anonymous wrote:
I think there's some confusion here. What we're saying is that many of the buyers winning the bidding wars with cash offers didn't have the cash themselves. They worked with the lenders (recommended by their realtors) who set them up with loan products to borrow the money at an exorbitantly high interest rate. They used this borrowed money to make a cash offer. Then once they purchased the home, they refinanced to pay back the short-term loan. It cost the buyer a lot to get this short-term loan, but it was the only way to win the bidding wars that required a cash offer.

These days, buyers don't need to enter bidding wars with cash offers to get the house. So they're not using these very expensive loan products that enable them to make an offer that looks like a cash offer to the seller. The amount of buyers who "paid cash" is much lower than it seemed because they didn't really have the cash themselves so they refinanced as soon as they closed.

I hope this helps explain a little more.

It's actually less complicated than this. Most of the "all cash" buyers are simply people who waived the financing contingency with the expectation that their conventional/jumbo loan would be ready in advance of the closing. It's a bit of a risk because if the loan is delayed, then the sellers could technically sue them for specific performance (i.e., requiring them to pay the entire cost of the house in cash). But the reality is that most sellers won't actually pursue that because they don't want the house to be in limbo as the litigation plays out.

In other words, most "all cash" buyers aren't "all cash" at all.

[Anonymous]

Can't an actual cash offer close almost immediately? A buyer planning to use a mortgage who waives the financing contingency will still need time to actually get the mortgage. That seems like a big difference.