Reply to If you are house poor, do you regret it?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]NP here.  Years ago, we bought a smallish house on a reasonable lot in a moderately close in suburb.  Our mortgage payment was a bit more than one of my paychecks; things were tight.

[b]Fast forward 20 years.  [/b]

My salary has tripled.  The house payment has gone up, but by about $200 dollars (taxes).  The mortgage is about 1/2 of one paycheck.

Oh, and the house has appreciated while we paid down the mortgage.

Now, we were paying nearly the same in rent when we bought the house, so for the down payment (10%) + the same cash flow, we have gone from 25K in cash (down payment) to 550K in equity.[/quote]

:roll: [/quote]

I dont understand the point of the PP’s paragraph. Everyone builds equity over 20 years...[/quote]

I believe the point may have been that house poor is a temporary thing.[/quote]

If your salary triples, or increases considerably, but that's not the case for lots of people. [/quote]

PP here.  The point was it is temporary.  As for the tripling salary, that was both career growth and inflation.  While inflation was low for the last 20 years, there was some.   Inflation with no career growth means a 50% increase in the last 20 years.  That means (without refinancing), the effective cost of housing will drop.

And you will build up equity.

Most people do somewhat better than inflation.  As an example, if you started in the gov't 20 years ago as a GS 9, you would be making about 40K.  Today, you would probably be a GS 13 or 14 step 10.  That puts you between 125K and 150K.     If you are living is a house you could afford at 40K (or you and your spouse could afford at 80K) 20 years ago, you are comfortable today.

If you are a big-law associate, I would not want to be house poor, as there is an 80% these are your high earning years.[/quote]

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