"Good" Job and I still cannot afford a house

While I concede housing has never been more expensive, it has never been easier to extract value from your home: Airbnb, house hacking, finding roommates. If you cannot afford a house by yourself, get some roommates or Airbnb it. We stayed at a house recently which was the families primary home but they rented it out occasionally on Airbnb and spent the week at grandmas. If you live in a place where housing is unaffordable, roommates and Airbnb is an option

As a Gen Zer just getting started in the "real world", I do understand the narrative my generation and millennials have about "boomers ruining the economics for our generation". To be fair, real estate is not cheap by any means, and it's hard to have a decent home and a family on a single, average income. It scares me just thinking about it.

But I also realize that complaining about the past isn't going to fix the future. I also feel that my generation has kind of been "coddled" into thinking we're entitled to living in a 4,000 sq ft mansion on the rich side of town just because we grew up in one. Hardly anyone is interested or willing to buy a fixer-upper house, because no one has the skill or initiative to put a little bit of sweat equity into a home--or at least clean it up a little bit.

I've come to accept that if I want a home while I'm still in my 20's, I'm going to have to accept it won't be a dream home mansion. Likely there will be things I don't like about my first home, and definitely I'll have to put a lot of work into increasing its value & livability. I realize I'm not guaranteed anything, and boomers don't care about helping us out. So screw them, I'm gonna pull myself up by my bootstraps like they keep saying I can't do.

What you do is keep saving towards the biggest downpayment you can muster. Look for the best interesting on your savings, and diversify it. Look over your monthly budget carefully. What can you cut? What can you reduce? You buy with that minimum 20% down and there is no mortgage insurance as part of your payment. Also look for good first time buyer programs at the federal, state and county levels.
But here is the real point. Things change over time. I didn't get into real estate until I was in my early 40s. A decade later we'd bought four places, the 2nd, 3rd and 4th with cash (why get a mortgage and double-pay over 30 years?) I'd also add that purchasing a rental property is a great investment, one of the houses was just that for 5 years, then sold at a profit.

I owned a screen printing company, a successful biz, but not wild & crazy cash cow. It's a matter of planning, luck, market timing, looking for an opportunity, doing your homework, and having a partner/spouse where there is trust and friendship as well as the romantic stuff. I will add that luck, and a positive attitude are key. I am also grateful to the powers that be, such as I understand them. Over and out. Enuff blabbing!

If you're married to that 28%, it ain't gonna happen. I lived in fear the first 15 years of my mortgage. Making sacrifices isn't just a catch phrase.
Old cars, no new clothes, no Starbucks Venti-whatevers, eat in, no Disney+, no +, staycations.

that is the worst advice you can possibly give. The transaction costs can be reduced if you are smart, but the transaction costs are MINIMAL compared to money wasted with rent.

5 years of rent at 1000 dollars per month is 60k. Instead of that 60k being in your own HOME EQUITY, it goes right to your landlords pocket.

It's the difference between investing in an asset that you can resell (likely for a profit) and flushing your money down the toilet.

You can be completely opposed to the modern financial landscape and still be "prowork".

Work is one of the few things in life that can provide meaning and fulfillment, along with family, community, and religion. I would not put work at the top of that heirachy, but it's still important. Money makes things a lot easier but as they say you can't buy happiness.

This one gets it ^

If houses are too expensive or dumps that cost too much, that means you'll make money if you get one now and sell in a couple years. See how that works? (Yes, we were 'under water' in 08, we just sat it out. Much better than throwing rent away.)

My wife and I make combined 140k, we live in a Texas suburb (that we don’t like) and bought 4 years ago. We would have a hard time affording the same house if we had to buy it now with price increase and interest rates. The monthly cost would be roughly $750-$800 higher.

I think there are many like me, don’t love the house or where we live but can’t afford to sell. This will keep the inventory low across the country, especially for those that got in during the pandemic low interest rates.

Here is another problem, 5 people out of 20 on our street own and the rest are rentals. There is a neighborhood 2 miles away with 200 3/2 and 2/2 houses. All rentals.

Don't listen to BS advice borrow what they will lend you and cut back on crap you don't need. In UK that would be 4 x salary. That's 320, even at 3 x its 240. Would buy fa over here so stop moaning

Or live in a small dump in a crap area

Of course you are not buying anywhere as its a fake post but someone more normal than you might be reading this

People in their 20's cannot afford NOT to buy a house. How long are you going to waste your money with rent? You never see that money ever again.

Making monthly payments toward a mortgage is putting equity in your home. Renting is only going to hold you back financially. It should be the goal of every person in their 20's to buy a home as soon as it's financially and logistically feasible. Is it going to be a mansion? No. But, everyone can use a bit of humility.

Renting can be superior if the rent is cheap. My wife and I rented for 5 years before we bought (we’re both 29 now). Rent was < 1200/month and allowed us to save stacks while having zero maintenance costs. Rather than mess with moving up house, we just waited until we could buy a home we can raise a family in.

If I was single and 28, I would be renting with a roommate. That’s just how it is these days. Nothing wrong with that.

Houses don't grow on trees, they grow from trees. ;)

Seriously, even us Boomers usually weren't in a situation to buy a house by ourselves at 28.

I bought a 2 bedroom split layout condo at 23 and rented the other room out to afford it.

My first house was at your age, but combined incomes with my wife.

FYI interest rates were higher than they currently are.

How are you getting 60k in home equity? Do you have a 0% loan? Especially at today's interest rates, you're getting minimal equity during the first 5 years of ownership. You're also paying more than you were for rent. Market rents are rarely enough to cover the monthly payment on a brand new mortgage for the same property. It's worse when you include maintenance costs.

This is assuming an apples to apples comparison, i.e., you simply elect to buy what you would otherwise have rented. If you buy a one-bedroom condo as a young person, you CAN come out ahead over renting. But what if you get a new job in another city? What if you have kids in 3 years? If you have to sell within five years of buying, you're very likely to be losing money vs. renting.

You could keep the condo as a landlord, but that's a ton of work, and you may need the equity for your next home. Also, a major risk of owning a condo long term is that it is essentially unheard of for condo association's to adequately fund their reserves. That means that even if your mortgage payment is locked in, the HOA can get out of control as the building ages. You may also get hit with special assessments in the tens of thousands of dollars. You will also have to pay more on the upkeep of the unit itself.

Alternatively, you can try to buy a starter home as an alternative to renting an apartment. The problem is then you're paying WAY more per month than you were before, and you're doing it for square footage that you don't need yet. People convince themselves that this is okay because they're "investing," but it's really just consuming. The stock market far outpaces the appreciation of real property, and the house itself actually depreciates.

To the OP.

You make 80k a year which is similar to what i was making when i bought my first house with my wife in the southeast about 6 years ago now. I made 70k and she made 40k. We were the same age as you are now. We saved up about 100k over the course of 2 years by eating very cheaply and limiting expensive outings. Of course we had no kids at the time.

We purchased a $400k home with 20% down. 3500 sqft in the suburbs. This was doable because we had dual income and home prices had not exploded yet. For reference our house rose in value from 400 to about 480 over the course of 3 years before the pandemic shot it up to 700.

I can understand how it seems unfair right now. I thought it was bad when i was looking but it is definitely worse now. The only thing i would say is that once you have the home it will be easier finding your second home as you will have built equity.

Good luck! Know that it is possible even for millenials. But you will not be getting the same insane deals that your parents or grandparents got (though looking at inflation, home values for most of the country have not really beat the market over the course of 30ish years in terms of an investment)

People don't understand that.

Keep renting at the low low and invest the rest.

Buy if you:

1. Find a good investment property and are ready to "do the dirty work" to repair and rent out etc

2. Absolutely want to live in one place for 5-10 years minimum.

3. Have a family and want to put down roots

Deed-restrict your property that it can only be purchased as the buyer's homestead.

'make 80k a year. After taxes and elective contribution, I get $1,950 a paycheck every 2 weeks. So for 10 of 12 months, that means $3,900 in take home pay.

Your take home pay is only 58% of your gross. So your taxes and ELECTIVE contributions take 42%.

Simple solution: Do not make such a large elective contribution....

....or keep living with your parents *shrug*

You did this to yourself.

Alan

Loads of homes in the midwest fit that price range... boomers created the cities millennials want to move to... go do what they did and move to a cheaper city and make it desirable. There isn't a housing crisis.. there is a crisis of people being entitled to think they can live in whatever city they want affordably. Some cities didn't plan for that and are now over priced... if you can't afford it move and that will eventually decrease demand and cause the market in that market to drop making it affordable again.

I am a millennial didn't come from money yet own a home. I moved where people didn't want to... waited 5 years now people want to. I'd be willing to move again to another city or neighborhood and do it again. Look inward I bet your requirements are: has to be this city or that city. must have at least 1 million residents and must be near good schools etc.