"Good" Job and I still cannot afford a house

am i the odd one out wrote:

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.

800 dude wrote:

not the point wrote:

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.

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.

Runningart2004 wrote:

real winner wrote:

I am 28 and 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. Based on boomer-era finanical advice, 28% should be spent on a mortgage. That's $1,092 MAXIMUM. Reverse-engineer that, and even with a full 20% down, that's around a $170k house.

I live in a town of 25k in the midwest. There are 67 houses for sale. 2 are technically in my budget. One is completely torn up for a full reno on the inside. The other is 800 sq ft foreclosure with no garage door.

If you are older than me, and you EVER wonder why so many people my age and younger are "antiwork", or "soy leftists", or rent their childhood bedroom from their parents (like me), or don't go to college, or whatever f***ing problem you have with them, THIS IS WHY. The math is impossible. It's not going to get better. Somehow, it's going to get mathematically more difficult to afford a house, every year, forever, and no one is ever going to step in and fix it on a state, national, political, or investment level.

'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

real winner wrote:

am i the odd one out wrote:

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.

I don't want a 400p sq foot mansion. Hope you don't hurt your arm patting yourself on the back so hard. You sound like a goody two-shoes conservative debate lord.

bannnnned i got wrote:

Ex L wrote:

You can afford a house between $250-300k. As your income rises , your payment stays the same, so your situation will improve after a struggle.
Still not many good choices for you, I presume.

The Fed is trying to push home prices down by raising interest rates.
But supply is still an issue. And there are still cash buyers who don’t care about rates.

I understand why you would stay in your parent’s home.
I don’t understand how this makes you anti work.

Young people with positive attitudes will get ahead of you and have that nice house you’ll never have if you give up hope.

this is the asinine bullsh*t right here.....problem is that where i live its like 500k for a 1970s trailer, or maybe that one got sold. 250-300k was like 10yrs ago.

"get married", me and my wife combine for 96k, 1a little over 100k with overtime and bonuses.

sorry that isnt enough to get a piece of sh*t fixer upper listed for 678k. for a while there i was hoping jamin was right and the housing would crash, but not in my town. for a few weeks this summer things were dropping 10k a week then fall came and flatlined, and now spring they are coming back up.....like wtf? so many are 20-30s hipster douchebags who also drive around a 75k sprinter van....like where do all these people get their money and not have to have a job?

bannned i got wrote:

Well i dont want a 900k house, back in the 08 crash houses dropped down to 180-200, but i didnt have a good job, wish but wishing doesnt do anything. If i had wealthy parents and they dropped the 40% then i could have made the mortgage, but now houses are 580 and up and at what 7% interest?

right before covid i was approved for a 480k loan but with no down payment i couldnt afford those payments, then housing just exploded. im not asking for handouts or whatever your arrogance claims, i want to have a home for my family, in the town i grew up in. And you and others are acting like i want some 2.5 million house and drive my sprinter van all over the US for my youtube channel.

no i want a 3 bed, 2bath garage, that used to be 180 and now is 580 or higher……why am i looked at as some mooch?

bannned i got wrote:

asdfghj wrote:

If you make a $100K in a place where a lousy house costs $678K, you need to move.

Well i was born and raised in buena vista co, why should i have to move from my home? And to where kansas? Just so i can afford to “own” a home.

why am i dumb and worthless cause rich people decided my hometown was “cheap” for them and ruined the housing for the locals? I commute and hour for work as it is. So the so called experts on here is i need to move and get a new job. Will me and my wife get jobs in say west virginia or kansas that we make 100k? No we will only make 45-50, and be in the same boat but im some sh*thole location

and for the moran who thinks im trying to get a house on portland, your way off. I would never want to live anywhere on the left coast. But go ahead and check my town and see for yourself, so many 3rd and 4th homes for rich people, or they buy a house and turn it into airbnb and there are even less places to live.

learn 2 math wrote:

800 dude wrote:

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 are bad at math. you still have to pay interest if you take out a loan later. if you take out a 30 year mortgage in the year 2000 you'd have a 60k head start over someone taking out a 30 year mortgage in 2025. the 60k head start might be 40k equity and 20k interest, but you'd have to pay that 20k in interest no matter what.

real winner wrote:

I am 28 and 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. Based on boomer-era finanical advice, 28% should be spent on a mortgage. That's $1,092 MAXIMUM. Reverse-engineer that, and even with a full 20% down, that's around a $170k house.

I live in a town of 25k in the midwest. There are 67 houses for sale. 2 are technically in my budget. One is completely torn up for a full reno on the inside. The other is 800 sq ft foreclosure with no garage door.

If you are older than me, and you EVER wonder why so many people my age and younger are "antiwork", or "soy leftists", or rent their childhood bedroom from their parents (like me), or don't go to college, or whatever f***ing problem you have with them, THIS IS WHY. The math is impossible. It's not going to get better. Somehow, it's going to get mathematically more difficult to afford a house, every year, forever, and no one is ever going to step in and fix it on a state, national, political, or investment level.

comedyreIieff wrote:

real winner wrote:

I am 28 and 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. Based on boomer-era finanical advice, 28% should be spent on a mortgage. That's $1,092 MAXIMUM. Reverse-engineer that, and even with a full 20% down, that's around a $170k house.

I live in a town of 25k in the midwest. There are 67 houses for sale. 2 are technically in my budget. One is completely torn up for a full reno on the inside. The other is 800 sq ft foreclosure with no garage door.

If you are older than me, and you EVER wonder why so many people my age and younger are "antiwork", or "soy leftists", or rent their childhood bedroom from their parents (like me), or don't go to college, or whatever f***ing problem you have with them, THIS IS WHY. The math is impossible. It's not going to get better. Somehow, it's going to get mathematically more difficult to afford a house, every year, forever, and no one is ever going to step in and fix it on a state, national, political, or investment level.

You are obviously having a lot of voluntary deductions if you are only taking home 58.5% of your income. Your take home pay after taxes should be $5,100 give or take depending on which midwestern state you live in. You are intentionally understating your income (likely because you are try to max out your 401K, which is a good thing). That max out is considered outside of the 28% recommendation. You can realistically afford about $1,500 a month. Or a $230k house. Don’t worry, I couldn’t afford every house on the market either when I bought my first house at 27. Now that I am 47, there are few houses in my town that I can’t afford. You are at an age where you can wait for a good buying opportunity. A good time is coming up. A lot of houses have sat all winter, and with unemployment ticking up, there will be some desperate sellers forced to slash their price. Be patient.