Reply to Anyone else who will likely never be a home owner?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]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.[/quote]

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.[/quote]

[b]But people have also been saying that home prices are pretty sure to fall to late 2019 - early 2020 numbers[/b] 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. [/quote]

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.  [/quote]

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

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? [/quote]

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.[/quote]

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.[/quote]

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. [/quote]

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.[/quote]

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. [/quote]

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