2008 was rough, a lot of people lost their house, their income, etc. Even if you could afford a house, good luck getting a mortgage (let's not forget that mortgages were ground zero for the financial crash).
That’s a very American individualist way to look at that. If you have siblings you could trust, you can all go in on a property or house. Or if you have financially literate friends you can trust, that’s also a good option. I have friends that split up an $800,000 home for a few years. They had issues but squashed them and they all reaped the rewards when houses went up. Sold for 1.3M and they split the profit.
@@joseocampo6754 I like that idea but it would be extremely hard to accomplish. Most people don't have friends that will do this. It's not that they'd go and rip off their friends, it's that their friends wouldn't trust themselves to keep something like that in order.
I’m in Ohio and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quiet mediocre neighbourhoods. Then you’ve got Better, average sized homes in nicer neighbourhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
I wholeheartedly concur; I'm 60 years old, just retired, and have about $1,250,000 in non-retirement assets. Compared to the whole value of my portfolio during the last three years, I have no debt and a very little amount of money in retirement accounts. To be completely honest, the information provided by invt-advisors can only be ignored but not neglected. Simply undertake research to choose a trustworthy one.
How can I participate in this? I sincerely aspire to establish a secure financlal future and am eager to participate. Who is the driving force behind your success?
22years ago, when I first started working on a union shop I was making less than $18 at San Jose California! I was lived with parents and they gave me half of the down payment for my house ! My income was gradually increasing every year, 2 years ago we decided to pay off the mortgage ! Here we go ! Huge weight off the shoulders !
Asking a real estate agent whether you should buy a home right now is like to asking an alcoholic whether they think you should have a drink lol. Homes in my neighborhood that cost around $450k in sales in 2019 are now going for $800 to $950k. Every seller in my neighborhood is currently making a $350k profit. Simply unreal. In all honesty, deflation is what we require. The only other option is for many people to go bankrupt, which would also be bad for the economy. That is the only way to return to normal.
Home prices will come down eventually, but for now; its best to offset some of your real estate investments and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes. If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Personally, I can connect to that. When I began working with Colleen Rose Mccaffery a fiduciary financial counsellor, my advantages were certain. In these circumstances, I would always advise getting professional help so they can steer you through choppy markets and just give you indicators and strategies for knowing when to enter and exit the market.
But home prices are also being driven up by demand, the higher cost of materials in new construction and labor rates. Some areas could see a deflation of 40% like SF/Seattle/LA/Portland, but in areas where people are flocking to because of the overall low cost of living, I don't see any deflation at all. The south is on fire.
At some point we need to eliminate investors from buying up homes as assets and inflating the housing market superficially. It's ridiculous that there is no way for me to buy a home or even a town home unless I marry someone (and even then it will likely be a stretch). Something has to change systematically.
To add to this and I know some people may call me xenophobic but I don’t think non-citizens, foreign companies or foreign governments should be able to buy land or property in the US.
@@TrapHouseZombie Nah, that's not xenophobic at all because it is about protecting the interests of US citizens. Prioritizing our ability to build wealth does not constitute prejudice towards foreigners. Foreign investors are having a drastic negative impact on our opportunity for home ownership and are vacuuming money from our citizens through rent. Any human with more than 4 brain cells would understand that is a problem.
@@TrapHouseZombie Agreed. People should look into the U.S.’ acquisition of Hawaii. That nation made the fatal mistake of allowing non-citizens to buy property in Hawaii. One sugar cane mogul amassed so much of the land that he declared himself the majority owner of Hawaii, starved out the queen from her palace, and forced her to sign over the islands to him. He then contacted the U.S. government and negotiated the annexation of his new country, so long as they made him the state’s governor after annexation. We must learn from history. That’s not xenophobic, it’s wise.
Great news! If we emulate the great depression the government back then hired loads of unemployed people to build highways and roads. That's part of why our highway network is so extensive.
What’s great is that Transportation is only 2% of the budget costs (I learned that today). It’s like 19% Social Security > 17% Health > then something else > all the war defense machine > Medicare like 15% > employment insurance > debt interest payments (*only* the interest, not capital) was 8% > transportation 2%! > …
@@tonypajamas610 Which normally would be fine, but the way things have shaped out through legislation and overall cultural morality shifts, it was never going to work. Women working in mass means basic infrastructure jobs pay nothing due to overwhelming supply of men lining up for it, and women overwhelmingly line up for office work. So thanks to the principles of supply and demand, too many men are available to work the 'dirty' jobs which use to let you buy a home, but now barely (or sometimes wont) let you live alone, but not provide for a wife and kids.
Conclusion: affording a house with the average American salary is impossible without a windfall inheritance. A feel good story for the ages. What a time to be alive, boys.
@@ryan215553 Skills eh, i work in cyber security and in the city i still cant afford a house. Whats the point of having a good job, inflation screwed us out of a house 1,000%. I wish i had this job 5 years ago, then i would be in a really good spot.
Look at using an FHA 3.5% down payment. Or think about joining the U.S. military. they have a home loan benefit where it's 0% down. I have used both of those programs. Those programs are what allowed me to get into real estate with very little money down I now own multiple properties
Rent is cheaper if you do two things. One is not to live downtown in a major city. Live in a suburb or away from the downtown area. The second thing is to have roommates. It's not fun, but the more roommates you have, the cheaper your rent will be. If you want the luxury of living alone, you'll pay a premium for that living arrangement. Obviously, don't live in a luxury apartment either, that's going to be expensive.
In Europe the energy prices double the mortgage fee. So we can use 1/6 rule for average yearly wage of 14K and average apartment is 280k. So you pay off the loan in 120 years.
No crap. Whenever men cannot provide for a stay at home wife on average, society is doomed to fail. The answer cannot be undone in our lifetimes, but women being 51% of the US workforce is not helping things.
To my own research In USA, individuals living in cars due to partial homelessness result from a complex interplay of factors. High housing costs relative to income, stagnant wages, and income inequality drive this issue. Job loss, weak social support, medical expenses, evictions, and lack of affordable housing also contribute, while systemic problems and inadequate policies further perpetuate the phenomenon.
Considering the present situation, diversifying by shifting investments from real estate to financial markets or gold is recommended, despite potential future home price drops. Given prevailing mortgage rates and economic uncertainty, this move is prudent, particularly due to stricter mortgage regulations. Seeking advice from a knowledgeable independent financial advisor is advisable for those seeking guidance.
I've remained in touch with a financial analyst since the start of my business. Amid today's dynamic market, the key difficulty is pinpointing the right time to buy or sell when dealing with trending stocks - a seemingly simple task but challenging in reality. My portfolio has grown by more than 5 figures within just a year, and i have entrusted my advisor with the task of determining entry and exit points.
Could you guide me on how to get in touch with your advisor? My funds are being eroded by inflation, and I'm seeking a more lucrative investment strategy to effectively utilize them.
'Melissa Terri Swayne is the coach that guides me, you probably might have come across her before I found her through a Newsweek report. She's quite known in her field, look-her up.
Thank you for the information. I conducted my own research on google and your advisor appears to be highly skilled and knowledgeable. I've sent her an email and arranged a phone call.
I really feel sorry for young single guys. I bought my first condo at 25 for $50,000 which was roughly my annual salary back then. My payment was around $300 a month if I remember right. I lived in it for three years and then rented it out and bought a single family home. My son who is now 25 makes around $100,000 a year and that same condo is now $300,000.
That's a bit of the issue too. Instead of selling a property back into the market it's now only a rental. Now multiply that by thousands of times over and have large companies doing the same but on a enterprise scale, you have what happens today. Not much available homes. Just a lot of places to rent. And nothing ends up being affordable.
hey on the bright side if you lived in canada it would be closer to 1000000. you should check out what 1000000 gets you around the world, in canada it will literally get you a shed.
@@beevie4081 in rural bc 1000000 gets you a couple acres 10 years ago it got you a mountian. the house i grew up in in the kootneys sold for 20000 in 2004 its over 650000 now
I had $330k cash, 811 credit score, $0 debt, 100% on time payments for 9+ years of credit on 12+ accounts, paid off 2 cars… but 3 loan people said I wouldn’t be approved because I had a job gap 😂😂😂.. I quit my job voluntarily to go back to school and get a better job. Now I got the “high paying” job but home prices skyrocketed as well as interest rates. So back to not being able to afford a home. But somehow it’s ok for me to pay $1,900 in rent. My friends pay $800 to $1,400 in mortgages 😂😂 what a joke.
@SpartanG, I live in a high COL area on the coast and decent sized regular townhouses cost like 250k-300k in my area. That is affordable on a regular person's salary (for the area) even with the crazy spike in housing process. If the OP can afford $1900 rent then he can afford the mortgage on a 300k townhouse. If a person buys a 300k townhouse with 20% down, the monthly mortgage payment is only ~$1600.
Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
This is why same sex folks keep pushing to legalize same sex marriage. It's not about love. It's about tax savings, health care, and the business side of it.
Even if you have no other debts, the 30% gross income for rent is absurd if you also pay for insurance, retirement plans, and state tax. So that $4166 a month looks less like $3490 and more like $2000. Now add debts and emergency savings and this paints a very different lifestyle.
@@KevinHammond1 my comment is referring to those who ARE debt free still not meeting the 30% rule for housing. And just saying “don’t have debts, scrub” isn’t realistic or helpful.
@@BluesJayPrince I would have said loser, but tomato tomato. The point here is statistically there are certain habits that keep losers like you down. You proved this point by refuting the very simple and actually helpful information he was giving you in a more negative way. If you are debt free and STILL can't pay rent, you need to get educated and hustle. That's the point.
Well, in a lot of places less than $1000/mo. is basically either roommate territory only. Although, if you live in a small semi-rural apartment or a small town or city then you might be able to get that low. Most apartments I can find are more like $1.2-1.5k Although, trailer-homes are also an option. I have been able to find cheaper places, but only since I am willing to move to whatever the cheapest city with jobs is.
My wife and I are 28 and we recently bought a home in northern California. We make combined about $120,000. There was no way we would have been able to afford anything if we didn’t get help from both of our parents. My family allowed us to live rent free on their property for a few years so we could save, and my wife’s family gave us her inheritance money early so we could make the down payment. We ended up buying a small 2 bed 1 bath in a small town for $460,000. In 2011, this same house was sold for $125,000! I honestly don’t know how others in our income bracket can afford anything anymore. We are so fortunate we both have family to help. It’s sickening and unsustainable…
I'm glad it worked out for you and having great parents help! Prices are high everywhere but didn't realize how high it is in California. My wife and I bought a home for $364,000 (2.66% on a 30 year conventional mortgage) in 2021 on a 2 acre property and a 4 bed/3 bath full brick ranch home (2400 sq. ft) with 2.5 attached garage in Michigan making a combined $170,000. Didn't realize how much more house you get in the midwest than CA.
@@sonicmoj1 You really don't pay for the house anymore but the land it's on. Hypothetically California is a more "desirable" place to live, but it doesn't mean the houses are any better. You can get way more in a less desirable state.
My husband and I had 30% saved of the house we could afford by salary back in 2019 ( around a 220k house). Had 757 credit score built in two years. Had been employed for 3 years in our current jobs, and got rejected because "we only had one income each" so we were considered high risk by Wells Fargo (our biggest mistake was choosing WF) 2023 , that same house we wanted to buy went from 220k to 498k in Nashville. We feel so cheated... And honestly depressed. Good luck to everyone trying to buy a house, my best wishes to you sincerely 🙏
@@grappler555or a lot it’s blow to be hit by that… maybe they thought all of them would say the same. But yes, rule of thumb, for ANYTHING: shop for an item in more than one store, see which one offers the better price. Applies to mortgages and loans too. That said, what the hell, what do they expect… for people to work and then work some more? I understand that some people NEED to have two jobs (and a good idea to clear up debt quicker) but this is downright entitlement from Wells Fargo and the financial system in general: they want people to wake up, eat, work, then work some more and then some, sleep, repeat. For the ones with the money. To the couple: don’t mind it, continue saving money, maybe buy T-bills or anything guaranteed to hedge inflation while the rates are high if that’s your tune, wait later on for rates to go down (if they ever go really). The best peace of mind in the end is spending *considerably* less than what you make, sometimes I see for example $100K or $200K in savings as many many years of my $500 a month rent (yeah, that cheap I have found, and it’s Canadian monopoly funny money even). Losing the job with many years of rent saved is completely opposite to losing it with not even one day extra of oxygen because all that money got used in a mortgage downpayment.
@@RustyPancake53 Yes, AKA the states that people want to live in. No one is chomping at the bit to live in Mississippi or Kentucky, or most of the red states for that matter, because they're well known to just.... suck.
Something that wasn't mentioned in this video is that gross income is not your take home income. So when you're budgeting what you can afford by following these rules, you need to be looking at your take home income. For example, if you are within that $80k salary tier, you make $6667/mo and about $4667 of that will be take home after taxes, health insurance, and depending on any 401k contributions. Now look at the 28% rule and that gives you a theoretical maximum affordable mortgage payment of $1867. That leaves you with $2800 for EVERYTHING else in your life for the month (other debts, groceries, auto expenditures). Just keep that in mind.
I love how everything is based on gross income like if you’re actually earring that amount monthly after tax your left with way less than that so take another 30% off your real income after tax for rent that’s a more realistic perspective
I'll never understand this either. What's so hard about actually calculating that? Take home pay is the real number youre working with. THP usually equals your paycheck after fed taxes, ss, insurance & dental, retirement......after all that? That's when people calculate their living expenses. But I know people who barley contribute to their 401k bc they went all in on owning a home. I can't argue with that strategy if their home appreciated 30% in two years, while retirement accts were lucky to get 3%. Over the long run, I think people who took on that kind of strategy are very exposed.
@@NoNo-ng9sl VERY exposed and they will all be losing their shit when markets do a repeat.. But if they dont lose their home and or never move then they will still be worse off when they are older
@LamaKING21 I wish there was an in depth analysis on this and have yet to see any youtube channel talk about it. During the pandemic, people borrowed on their 401s. Many did so to place down-payments on mortgages. Something that as a standard and rule of thumb was always frowned upon by financnce experts--Don't borrow from your retirement to use as a down-payment. Under the idea that he 401 loans steer away market gains. So much to unpack. But what was the avg amount people borrowed? Aprroximitley, how many homes were bought under this strategy? How much is still owed? This very much all feels like a house of cards.
@@NoNo-ng9sl So much to unpack but jesus... Dude you and I would get along so fucking well. This is the shit I keep scouring the internet for and my gf thinks its insane that I go in all this depth then theres everyone else whos oblivious to whats going on. Deadass would love talking to you more man.
@@LamaKING21 Yeah, there's metrics I tried diving into before. 2 years ago I tried scouring online for any news that reported these figures. TD, Schwab, Fidelity, Merril Lynch....none of them released these figures. How much is still owed? How much was tied to the mortgages? If and when we hit unemployment, how will people pay this back into their accts? No one's reported on this. It's not included in any debt data since they're not traditional credit loans.
For salary earners, be aware that this is a grossly oversimplified scenario. For one thing, you can't get a mortgage on an investment property without at least 25% down payment. Two, it's easy to see comps for house purchase prices, but it takes a lot of research to understand the comps on rent prices. The trick is to find a place where renting is more expensive than buying, but those places are less common because of this very type of scenario. Three, you have to remember that rent number he's using is supposed to be net income, not gross. So you have to think about costs for taxes, insurance, maintenance and vacancy when you're researching investments. All that said, real estate investing is a good tool for wealth accumulation. But it isn't foolproof.
Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Personally, I can connect to that. When I began working with "Colleen Janie Towe’’ a fiduciary financial counsellor, my advantages were certain. In these circumstances, I would always advise getting professional help so they can steer you through choppy markets and just give you indicators and strategies for knowing when to enter and exit the market. Long story short, its been 2years now and I’ve gained over $850k following guidance from my investment adviser.
@@rogerwheelers4322 Same thought when I read the comments from people. as if it's that easy! You can't give what you don't have. That's why as many as who go into the market with little to no knowledge will continue to feel the full downsides of stocks when it happens. I personally need some guide with regards to my portfolio. How can I reach Collen Janie Towe?
@@TJHooper123 not sure what you mean by that. I’m paying rent that’s definitely above the US median, and I’ve been able to save up halfway to my goal of a down payment in just 7 months. Not very impossible if people are financially responsible.
@@TJHooper123 okay, so going back to my original response to the comment: if you poll people who ARE saving for a down payment you will notice that they have quite a bit in their accounts. It’s not like people who don’t have any plans financially are just sitting around with a bunch of money. Usually if you have that much saved up, it’s for a reason and it’s because they have the ability to. That’s the point of my comment. Not saying that everyone should have that much money, in case that’s what you thought I meant.
I was a law student during the fallout of the mortgage crisis. I did some work with the local Legal Aid group who held seminars for people facing foreclosure. Overwhelmingly, the reason folks could no longer make their payments were: 1) divorce 2) medical bills, or 3) lost hours at work. I know home ownership already seems out of reach for most people, but try to leave yourself a buffer because life happens.
We got our house in 2020 with a 3% interest rate. My wife now keeps saying that we need a bigger house. I'm like, if we bought our current house with today's interest rates, we wouldn't be able to afford it!! There's no shot in us upgrading anytime soon. Unless I can get her back to work ;).
Lol I’m literally in the same boat. I just got a new job making 30% more than I was making. And still wouldn’t sell to buy a bigger house yet. I own a multi and a single house. I make about 150k by myself now in my area that’s really good and she just can’t keep a job so guess Im back to square one. I wish these rates would go back down. I’d totally buy another multi property and then stack up!
Well, how much is your house worth? I sold my house last week at a huge profit which is going to help. Then, I'm going to accept the high interest rate until I can refinance
Cronyism is what he's talking about. If a large Corp is working hand in glove with the government or working top down to enforce nonfiduciary scores such as DEI and ESG then it's just socialism with an extra step. This country is not capitalist. Remember the founders fought a revolution over a 3% tea tax. Look at how we are rammed in our ass daily.
I've just shared this video with my kids because of all the video's I've watched on this subject, you combine rent and housing with clear and concise explanations of the numbers without the extraneous ramblings of other RUclips presenters. Excellent work.
Property taxes are increasing at an alarming rate and should be considered class Warfare in certain areas. Also keep in mind that if you improve the appearance or your home and property or simply put in a new bathroom or kitchen, you will be paying MORE in property taxes when the assessor comes around. Strange how home owners are penalized for improving their neighborhood. Home ownership in the USA is yet another bait and switch. Backwards!
@@arashalphonso Also true. Inflation cycle of hell. The system as it stands opposes the very idea of the self made man/woman in this country. There is simply no way the American working class can compete with and/or reasonably cope with the continued fallout from absolute and abject greed from the 1%
Yeah I feel sorry for all these people who's homes have doubled in value in 5 years...real class warfare. Why don't you sell your house and relieve yourself od this burden by moving into an apartment.
The impending sense of doom that I have just kept on getting worse as you so expertly explained how I will never have a big house. Great production value, and great video!
That's what they want and expect you to do. Things will continue to get worse and worse because none of them are incentivized to make anything better for the rest of us.
Times have changed. I bought my first home (100 year old farmhouse) in 1994 for $87K. Paid off my mortgage in 15 years. We've moved twice and now live in a $480,000 home simply due to value of real estate going up over the years. We've never had to put more money into the house. The sale of our previous house always paid for the new home. Homes in my area go for over $350K for starter homes. It's difficult to find a home under $300K that doesn't need a lot of work. We have friends that bought a $270K ranch but it needs a new roof, A/C, Furnace, Septic tank, electrical, etc.
There are definitely misaligned incentives for housing supply to reach demand. Using housing as a vehicle for wealth was a pretty shortsighted move for the post-WWII US government.
Even well outside Seattle, houses are twice that. Houses under $600k need significant work. So I guess a starter home is $6-700k. Inside Seattle or the wealthier eastside, single family homes are over $1M. My rent is $2500 for a 2bdrm apartment, a mortgage would be like $4-5000+. I would also like to eat... It doesn't seem sustainable if only VPs at Google can buy a house...
I've learned that most people with big houses or expensive vehicles can't afford them. They are most certainly living above their means and are barely getting by
My takeaway here is I'm renting for life. No that's not your fault, thank you for making this, genuinely, I mean it. This has a lot of info and helped me gain some perspective I had my hopes up, but now with the reality hitting hard, I believe it's better for me to accept my position and focus my efforts elsewhere. Also, seeing that the "Renting" segment is the most replayed part of the video says something
Well according to the 2022 average man's income under 40, most single men likely can't even afford rent on a single income rofl Roommate life for most. Huge reason why marriage rates are in the gutter right now because men just can't plain provide anymore
But then ask yourself how your finances will look like when you are pensioner. Will you still be able to afford every now and then increasing rent? With inevitable healthcare costs rising with age too? If you don't look that far in the future and try not to think about that ignore my questions. Either way, good luck, genuinely and honestly, hoping you will make it work somehow.
@sLim88CPC If they can't afford to buy a house, what is there to consider? There comes a point where you have to admit when something is out of your ability to influence, and right now 'can I ever own a home' is one of those things for the majority of Americans. It's going to take something in the system break a la 2008 and/or major legislative pressure to bring prices down to where the average person can even aspire to owning a home they didn't inherit. It is MORE responsible to admit when something is just a pipe dream and focus that energy towards something attainable than to keep trying to reach 1970s version of 'being an adult.'
I am in the same boat and that’s why I went to the extreme. I currently live out of my car by choice. I am building up my credit, paying off my debt and saving as much as I can. My monthly expenses are around $600 and everything else goes to my pockets. My dad offered to let me stay with him for $600 a month but i’m not even going to do that because I want to build up my financials as quickly as possible. I refuse to be a rent slave for the rest of my life. I’m going to rough it in my car for the next 5 years and hopefully I’ll have enough saved to afford a small house with a little yard for myself.
The scary part is the inflation we are suffering from is from the effects of government spending back during the beginning of the plandemic, we are still due for way more hurt with how the current regime has been spending. I wouldn't be surprised if getting a house would require multiple couples to afford it
Eh, not true. Just means you need to work harder for what you want. 9 years ago when my wife and I got married, I was making $21,444.80 a year. In the first 3 years we had 2 kids. Fast fwd to today and I’m making 10x where we started and growing by the year, and we’re not even 30 yet. My wife never had to work and is homeschooling the kids. I come from a poor / low middle class family. It just takes wisdom, faith, patience, and discipline. You can do or achieve whatever you want.
Not true for me. Single for life and I got a house. Its 700 sq ft but being single and living alone I don't need a lot of space. I love my small house.
@@tylerroddenberry8338 That is good to hear and you aren't technically wrong, but if all men simply changed careers/skill sets to make enough money, then the country would collapse. Infrastructure pays nothing, but the supply of men is too large causing the pay to further drop to minimum wage levels. When jobs of necessity no longer let you provide for a family then we have an issue.
I never base these things on gross income because I lose like 30% on taxes 😭 Always net. And with that in mind, I can afford about $768 rent. In a city where a single bedroom apartment is at least $1200. So… time to find a good cardboard box to live in.
2:03 just going off of your numbers The median is 1900 to rent. You have to have an 80,000 a year job for 2K. Average income is more around 35 to 40 K And now you see the problem
Another important thing is check and make sure you can maintain payments even if interests increased by at least 3%. Also, don't listen to the boomers saying "back in my days interest was 15% and we had no problem, cut back on your avocado on toasts and start with something cheap upgrade later". Situation with them was sooooo completely different environment to what it is now. Their median income was $25k and their median mortgage was $50k for a very decent home with just $5k deposit and cost of living much lower and loan term was 12-15 years. Now the median income is about $50k but median mortgage is $300-400k on 25-30 years term. Their monthly repayment was about $700 even with 15% interest, yours now is $2000 with current interest rates. On top of that their loan term means they paid off their first home by 35yr old, and sell off to upgrade to their second and paid that off by 40-45 and even a third or fourth or build up investments by the time they retire. Current generation needs years to save up deposit and on track to pay off first home by 50-60yr old. Basically, you need to do your own maths and come up with your own life plan, you cannot just copy your parent or grandparents.
Why would interest increase? I have a 30 year and interest and payments stayed the same. Bought a 4 unit rental in 2017. The only thing that increased was Property tax. Fucking Red states taking all my money
Ya, everything is like that now. My dad went to Harvard in the mid 50s. The tuition was $500 per year when the median household income was $4000 a year. Everything in this country is becoming financially untenable.
I've paid over 300k in rent since high school but mortgage lenders say I can't afford a mortgage that is lower than my rent which I have never been late on in my life. Been saving for a house, everyone says no. USA is such a scam
This very much doesn’t apply to CA where rent is over $4,500/mo for a 2B2Ba. Mortgage typically costs $6,300/mo. So household salaries have to be above $350K. Good times.
I was so proud that I finally got a job making 90k a year in California. Then I started studying what it will take for me to get a house or a car and it's just depressing.
As one of the other commenters noted, a standard mortgage payment is fixed whereas rents can go up (or down). Typically your salary rises over your career, so your ratio is likely to improve. Also need to account for the mortgage interest deduction. I pay close to $22k interest per year and get back c. $5.5k. Where I live in Virginia that covers my property taxes and a good chunk of my insurance.
Building wealth involves developing good habits like regularly putting money away in intervals for solid investments. Instead of trying to predict and prognosticate the stability of the market and precisely when the change is going to happen, a better strategy is simply having a portfolio that’s well prepared for any eventually, that’s how some folks' been averaging 150K every 7week these past 4months according to Bloomberg.
The US-Stock Mrkt had been on it’s longest bull-run in history, so the mass hysteria and panic is relatable considering we’re not accustomed to such troubled mrkts, but there are avenues lurking around if you know where to look. My husband and I are retiring this year with over $7,000,000 in tax deferred investments. up until 3 years ago we were 100% in the S&P. During bear markets we had a perfect plan. We got an investment manager in our corner and didn’t look at our portfolio for nearly a year.
One thing I don't get is why a lot of these rules account for gross income. The taxes vary drastically and houses are usually more expensive in places where taxes are also high. How much you spend should be based on how much you get in hand.
Was thinking the same thing, Gross income doesn't mean much when it comes to how much you can afford since your actual take home income is the money you actually make. Still an informative video non the less.
I think people can easily think, "I make $100k per year," rather than "I make $72k per year". That feels sadder. There's also mortgage interest deductions on federal income tax, so that offsets it a bit.
As a 23 year old making $16/hour, living on my own, and struggling to find work with better pay, this video doesn’t exactly instill confidence in my future… :(
When I was looking for a house I created a spreadsheet that calculated my in pocket money after all expenses. I was honestly shocked that the mortgage broker, real estate agents and anyone else I talked about this with didn't have something similar. My spreadsheet was made in a few minutes and is messy but if I sat down for an hour I could probably make it really nice (maybe i should and sell it). What I hate about this whole home buying thing is the whole thing. The purchasing of a home is just the very first part, which is already a mess. Next is homestead taxes and taxes in general. My home increased by 100% in 4 years which means my taxes also went up. Home insurance is insane right now as well. Maintenance costs if an older home. Natural disasters such as the freezes in Texas. General maintenance, upgrades, cost of living, energy charges fluctuating. All these things and more add insane amounts of financial burderns and stress.
None of this stuff is communicated to you BEFORE the home buying process by the way. It can be very confusing to do this on your own and costs money to get help. Sometimes you get lucky and your real-estate agent or loan provider/broker may have some of the "after your buy" tips, but from what I have been told, that is rare.
One of my vehicles is 8 years old and the other is a 23-year-old truck with 400k miles on it. On the road I look poor. But by saving there I'm able to keep up payments on my farms, which is my priority.
I’m glad you used Raleigh, NC as one of your examples because my dad just doesn’t understand how insane rent is. He bought his house in 2001 and is golden. I live in a box and pay essentially 1400 a month. Raleigh, NC is one of the fastest growing cities in the entire US and in the past 15 years has gone from one of the lowest cost of living cities to an expensive one. It’s insane and we can all thank Ronald Regan and the greedy billionaires for this.
I only make $60k, and right now it's so hard to even imagine I'd be able to afford a home by myself alone. Without a partner. Problem is, rent is also going up as well. Hope by the time I think I'm ready to buy a house, my HYSA would've grown enough for a down payment. I just don't think the 3x your salary works in this housing market anymore, wish I could say it did. I can't even find a house that's 3x my income.
veryone feels your pain and I make over 6 figures a year but buying right now isn't an option between prices of 400K and up and the high interest rates
I understand this fully. I live in Miami, everything is hell right now. I've been looking to purchase, but my monthly payment will $3000 minimum, all included. It looks awful and I would prefer to wait, but the problem is rents can easily go beyond that for a worse place.
It's pretty much been like this for most of recorded history. It's why Sherlock Holmes met Dr. John Watson as a prospective roommate for his apartment. I mean, of course, it happened for narrativium... but the explanation was that neither man could live alone on his income, and they were upper-middle class.
Making money is action, saving money is behavior and Growing money is Knowledge. The first step to gaining weaIth is to outIine your goaIs, with the heIp of a financiaI pIanner and following through with best ideas, you will attain weaIth in no time & enjoy the benefits of managing your finance.
I am fortunate I made great decisions that changed my finances (gained over 1M in 2yrs) with help of my financiaI planner. Got my 3rd house in Iast week, and will retire next year.
Income being 3x your gross income requirement is essentially required for most large rent establishments here in the Phoenix Metro area. Doesn’t help that it’s already difficult to find a decent 1bd/ba for under $1500 these days.
I don't know why people try so hard to live in giant cities and rent wasting money. I live in a suburb of a larger city in a house i pay mortgage on and it's way cheaper than even renting in the city.
@@eagle25311 it’s all perspective though and depends on where you want the box you live in to be close to. Some people don’t like activities, being close to venues, airports for travel, etc where living far out or in a small town makes sense for them. For me, I’m willing to sacrifice having a bigger, detached box to live in so I can be 15/30 minutes max from all the above places mentioned. It varies on your version of ‘living rich’. I’ve seen people that can’t travel or attend fun events and things because they live too far out or are ‘house poor’, and so renting to me in the city center makes the most sense for more happiness.
@@eagle25311 Some larger cities with good public transportation allows you to skip the car payments and fees. It doesn't justify NYC being incredibly expensive (while entire blocks are sitting empty), although I suspect prices are more sensible outside Manhattan. At the same time, working in a place like NYC allows you to just constantly max out your 401k because the pay has to match the cost of living
@@eagle25311 the main thing for me is i basically grew up here and have a good paying job with a ton of benefits. Its kinda hard letting that go. But if i ever fond myself struggling financially because of cost of living I’ll probably leave.
Saving up 30% seems totally crazy. I put 5% down in 2020 and got rid of PMI 2 years later after the value went up $140k. If I would have waited till I had saved up 30%, I would still be in my parents’ basement and would own $40-$50k less in equity. The market conditions are much different now than they were then, but it shows that the standard advice isn’t always the best.
true, but you’re right that timing is super important. 2020 was a great time to buy, but regardless only putting 5% down is a huge risk. you never know when an unexpected event could occur. real estate is a great way to build wealth, but it really isn’t always the best decision.
To clarify, politely, you did not get rid of PMI. Rising valuation of your home did. And like Humphrey points out regarding financial investments, there's no guarantee the value of homes will always rise "up and and to the right"... At least as fast as they did over the last two years. In short, you were fortuitous in timing, purchasing just before the biggest two-year rise in valuations in US housing history.
@@spliffbooth If you want to be anal about definitions like that, I’ll respond in kind and clarify that I did get rid of PMI, as I asked for it to be removed and got a new appraisal in order to qualify for removing it, but sure it was possible because of lucky timing. I never said it applies to everyone, just said that saving up that much isn’t always the best choice.
But this isnt a zero sum game that pmi is constant but so are greedy landlords. Better to have a consistent risk than a person determining. 5% is fine for down payment.
I'm looking to retire and would like to relocate from Canada to a warmer climate, but home prices are ridiculously high and mortgage rates are skyrocketing (currently over 7%). Should I put my extra money into stocks and wait for a housing crash, or should I go ahead and buy a house anyway?
@@jivizwang There are numerous ways to generate high yields during a crisis, but such trades should be carried out under the supervision of a financial advisor.
Since the markets are currently in a frenzy, this is the ideal time to monitor them, learn more about them, and seize any opportunities that may present themselves. This is what my mentor "EMILY LOUISA BAHR" taught me. Her intuitive sense of how, why, and what will happen next is based on years of experience watching dozens of market cycles.
@@marylattimer The immediate top priority for everyone should be to secure their financial future through diligent saving and investing. I really need some guidance, can this financial coach assist me in these difficult times, and why do you have such high regard for them?
@@andreaswalter4 Some knowledge can be assessed statistically. But in the real world, we just don't. That's too difficult. We prefer uncomplicated stories that are frequently horribly deceptive. The quickest way to feel rich, in my mentor's opinion, is to make a sizable investment in high-quality stocks.
@@marylattimer She had a very professional website, and since I have no doubt that people are good at picking things up through imitation, I left her a message after noticing that. The information on Emily's qualifications, educational background, and profile impressed me greatly. She appears to be extremely knowledgeable. She is a fiduciary, which means she will act in my best interests. So I made an appointment with her.
Biggest self-deletion motivation I've seen in a long time. As a 22yr old, it's amazing to realize "life" is over before it even really began, since there's no point.
FWIW, buying a house of your own doesn't need to be a goal in life. You just need some kind of shelter and if you find friends and partners to live with, that cost is greatly reduced. People are even buying houses with friends, not just spouses. My ex bought a house with a mutual friend after we broke up. You just need something akin to a prenup if things go south.
i just bought more gold and silver few minutes ago. Tying up money due to an apocalyptic stock market crash is also not a smart move. Life is a risk and it's better to take risks than to do nothing, you can't always expect to make huge profits all the time, people have so many opinions about a recession/depression. In just 5 months my portfolio grew by $300,000 in gross profit, the main thing is to expand your portfolio and you will see amazing results by investing smartly.
Nobody knows anything you need to create your own process, manage risk and stick to the plan, through thick or thin while also continuously learning from mistakes and improving.
@@fresnaygermain8180 I concur. That's precisely why I rely on my investment decisions being directed by an investment coach. They possess a unique set of skills that enables them to take both long and short positions, using risk to their advantage for potential upside while simultaneously hedging against market downturns. With their proprietary analysis and insider information, it's nearly impossible not to achieve outstanding returns. Personally, I've been utilizing the expertise of my investment coach for over two years and have generated more than $2.8 million in profits.
@@belobelonce35 Sounds great. I could really use the expertise of an advisor, i just can’t find while I’m away for work in canada for another year. My portfolio has been stagnant.... Who’s the person guiding you can I get a phone number?
The adviser I'm in touch with is "Julia Ann Finnicum", she works with Merrill, Pierce, Smith incorporated and interviewed on CNBC Television. You can use something else. for me her strategy works hence my result. she provides entry and exit point for the securities I focus on.
@@belobelonce35 Thank you for sharing this. I took the time to Google the individual you mentioned, and after reviewing her resume, it is evident that she is a seasoned professional. I have reached out to her and am eagerly awaiting her response.
I've been thinking about this for a while, and I will probably pull the trigger when interest rates are still high. In times of lower interest rates, every offer for housing in my area went to the investors who could pay cash or offer the highest bid, significantly over asking. If I buy at high-interest rates at least the competition for good properties will be substantially lower. Then refinance when rates are lower, around 3-4%.
Personally, the only issue I see with this plan is the amortization schedule. At the beginning of the mortgage, so little is going to the principal. Every time you refinance, it resets that schedule so you're back at square one. Yes, you have a lower monthly payment, but you're not really making progress.
@@superrogue17 Valid point, but I guess for me owning a decent property and gaining equity at a bad price is better than being priced out and never being able to. (Hawaii)
@@sayitasis8326 yeah my coworker did this, said he’s gonna be struggling for a bit but hoping a couple years down the road he can hit a lower rate and refi
I bought my house with 10% down and was paying PMI, then 3 years later, I had them reevaluate my home and because it rose by a certain %, they removed my PMI. …they saved me a few $100 each month. Also, if you can barely buy a home, get a roommate to help pay part of the mortgage for a few years til you can comfortable afford paying on your own without struggling.
Yes, PMI will get you into a home. particularly if you have good credit since the rate is highly dependent on your credit rating. The overall cost to me was like some high quality living room furniture. Forgoing that, I got into a home when I otherwise never would be able to.
@theAppleWizz Yeah, they only save 5k a year for a house that 150k. They could have used that 5k or barrow 10k and paid pmi for a few years. By the time they had 30k. They needed 40k, so 10k more. That was their perfect opportunity! Then, the pandemic happened. Now they need 60k plus the payments are still going be more than it was 10 years ago with pmi at 5-10k down. I kind of feel bad because they are doing what some of these financial gurus say. About being debt free and only buying a house if you can afford a 20% down-payment. It's more sad than stupid. We have been told all debt is bad debt. Fortunately, I could see the math in 2012 and took the risk.
There is something very wrong with this country if people with the average median salary working full-time can't afford to put a roof over their head. Back in the 80s my father was a mail man and we had a 3 bedroom house in CT and my mom was able to stay home when we were very young and went back to work at a retail job when we started school. We weren't loaded, things were a little tight at times but it was doable. It's not remotely doable at all for anyone now and it's fucked up.
Love your videos. I appreciate that you are making it more clear for people who are looking to rent or take out a loan. I see some creators “doing the math” and telling family with 80k a year that they can afford 400k house. They aren’t taking in income taxes, social sec, 401k etc, health insurance, etc. it might get views but it isn’t helping people.
That’s what’s always confused me too. If you have those other things coming out of your check (which you really should), another 30% on a house when you still likely have to pay a car payment, for gas, for tolls (in some cities), for food and don’t get me started on the cost of raising children. It’s best to get it down to not more than 25% in case the property value increases dramatically or you have to come out of pocket to pay for any emergencies. Plus, in this market people are getting laid off left and right, so I really would be more cautious until we see what’s going to happen this year with the economy.
I’m a military physician and I sold my house in Southern California during the pandemic after being issued overseas…. 3 years later… I can’t afford the same house! Bananas.
I had a friend who got orders to phoenix bought a home and literally had almost $100k-200k increase on his home after only living their for only a little over a year
Before even seeing where the Craigslist ad was from I recognized this apartment complex in Sf! It’s brutal out here. $2400 for a 1bedroom. No yard space etc and it’s a walk up- 4 flights for me. So much fun w a sprained ankle and a dog 🫠
@@anavillegas6199 I just searched every Midwest state for houses 100k or less and every single one had hundreds if not thousands of options. A spot check shows that many/most states do. I’d personally stick to midsize cities and small towns and ask a realtor which neighborhoods to stay out of. A very quick check of my small town (25k) shows five houses under 85K that are easy to see are neighborhoods I’d live in (aka, the north side of town). There are likely more spread throughout that would take more checking. Get an app that will filter for price and location.
NIMBYism and underbuilding are the real reasons why housing is unaffordable. Existing homeowners prevent the building of denser housing in their neighborhoods to preserve their property values.
Hey Humphrey, one thing I'd also point out is that in HCOL tech cities, a lot of people are working for private companies. Like in public companies, a lot of the total compensation people are getting is equity, but unlike public firms, that equity often has limited liquidity and questionable value. Secondary markets aren't always an option, your company's valuation can change for the worse, and stock dilution is a very real and expected danger. So for those folks working for privately held companies in HCOL, the chance of owning a home gets even smaller!
A good amount of people would probably fit the 30-30-3 rule here in Mississippi, it's one of the few places where the housing situation hasn't become completely outrageous. I know Mississippi isn't as glamorous as NYC or LA, or as trendy as Denver or Portland, but I had the opportunity to live in all of those places and it would've just stretched me thin. For now, I own a home on the Mississippi coast, the value is increasing on it, and I'm able to save for other things. And who knows, maybe I'll move to the west coast in the future. But I like my setup now, it's actually a pretty chill place to live. Median home price is about 25O-300K, but there's plenty of housing below that price range too.
Same here in Georgia, well away from the Atlanta area of course. Most homes on the market are somewhere between $150k-300k. Anything above that is practically a mansion lol.
it is not anywhere. you need to understand modern people have very particular choices. With choices comes consequences. There are many less desirable area across the US with cost of living and property less than or about $200k. Since you said it is criminally underpaid, then how come the people want to join to be a member in "criminal" area just because it is your choice in particular? Did you hurt yourself if you move? Why don't most people move and grow other area across US than flocking to their comfort bubble?
Doing the 30/30/3 rule (house hold) on a 15 year. Stoked on it but sacrificed a lot to get here. Lived like a college student for 4 years with me and my wife saving everything for a down payment. Lived with in-laws for 2 years and banked everything.
Just FYI to some people....if your home value goes down, you are not allowed to just refinance at a lower rate later. I believe you have to pay the difference. Keep that in mind as we are at all time home prices and could face declines.
Been there, done that. Bought a home in a new build community offering NINJA, 2-1 buy down, Neamiah FHA loans in 2002. Surrounding foreclosures, short sales, and excess builder inventory put my home underwater by 2005. Remained underwater until I walked away in 2014. Being FHA, there were no forgiveness, refinance, or HARP programs available like there were to conventional loan borrowers. (For most of that time, I think new rules arose in 2012-13 where I could at least refinance, but I had pretty much thrown in the towel at that point). I don't think we're at the cusp of a collapse like 2008, but it is possible we could be looking at the start of a long multi-year gradual correction. I do not recommend buying a home at today's prices, at today's rates, with minimal down payment, and minimal emergency cash on hand.
Investing in alternative income streams that are independent of the government should be the top priority for everyone right now. especially given the global economic crisis we are currently experiencing. Stocks, gold, silver, and virtual currencies are still attractive investments at the moment.
I've been able to scale from $50K to $189k in this red season because my Financial Advisor figured out Defensive strategies which help portfolios be less vulnerable to market downturns.
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The fact that someone just had 3 bots replying to each other in order to pull off a scam ad on a video about how impossible it will be to buy houses soon truly is the perfect exampls of late stage capitalism
It's wild to me how vastly different home prices are in different markets. I live in a starter home community near Detroit, Michigan, and the housing prices in my neighborhood back in 2018 when I bought were averaging around $120,000 for a 1,000 sq. ft. bungalow. There are areas that have homes starting in the 400's, but those are on the high end of middle-class for Metro Detroit. I can't imagine trying to get my first home in a market that starts out in the 200's for a house like mine.
That is Milwaukee. Unless you want a house that's falling apart or in the ghetto. Cant touch anything decent for under 250 usually. and at 7% no fricken thank you.
i honestly hate that 20% is considered the standard downpayment, id love to know the actual mortgage statistic for how many ppl actually do 20% down payments.
I feel very fortunate that my wife and I were able to purchase our home when we did (2009). We live in central Illinois, and our house cost $154,000 at the time. Then, in 2020, we refinanced our loan, dropped our interest rate to 2.1%, and shortened the length of our loan to 15 years. It is not lost on us just how fortunate we are! Good luck to everyone who is currently trying to buy a house. I know it's rough out there at the moment.
I'll never understand why they don't do it like this. Just because on paper I make over 4k a month doesn't mean my bank sees that. I'm bringing 2.6k a month. Massive difference in what I can actually afford
The issue is 30% of income is about 1K and you will not find apartments for that price when you will find for that price is a shed in someones back yard that just has a bed and a power outlet everything else you go to go to walmart or a gym.
It makes no sense why these numbers are calculated on your gross income. There is a huge chunk of your gross income you can't spend. That's a calculation based on money that you don't have. This should be based on net income. That's the money you have and can actually spend.
I left DC metro over a year ago and moved to Charlotte. 450k here vs DC is laughable. 2016 home, 2 acres, 45 min from city Dc that would be 1990 home and needing complete renovations with a fraction of land
My house was bought a decade ago under $100k, now every single tiny one bedroom home in my neighborhood including my house are all $400k. I don't get it how are we supposed to afford a house for $400k when minimum wage is $10
My dad bought the house I grew up in back in 2006 or 2007. Since then, it has tripled in price. It's not even a great house, he bought it because it was the cheapest house he could find that was near his work and a decent school district
@@camh3958 they said they already have a house. I think the point is why is they making expensive housing but most people are not making that much money. Even this video proves the point.
@@joeblack7262 He also didn't mention his house was paid at 10$ an hour. But Cam H is correct, you aren't expected to be able to afford a house at minimum wage. Minimum wage is an entry level job, its supposed to be for student and new workers. That doesn't mean the housing market isn't completely fucked right now, since even people doing X4 the minimum wage can hardly afford current prices. I think it comes back to a failure of governments to facilitate housing project, anyways for my country of Canada. The permitting is predatory at best, the material is seriously over priced etc. Its like anything, if you flood the market with things, prices become low. cellphones used to be for the rich , now every kid in third world countries own a phone. If the gov concentrated their effort in providing cheap building materials, adjusted regulations to facilitate competition etc, the market would get an influx of houses and the prices would go down, like it has for everything historically, that has abundance.
*You’re not.* You’re basically asking “why can’t I have an AVERAGE lifestyle on MINIMUM wage??” Cause it’s the MINIMUM. Do you know what that means? The lowest. Not the average. Not comfortable to support a family on. It’s the lowest wage a company can pay any employee (like high school part time kids at McDonald’s)
My wife just I just purchased our first home in SC. Big tip, buy new construction. They have their own their lending company and can give you a better interest rate + incentives to lend with them. Also, everything is brand new and it comes with many warranties.
Yeah I like that 30/30/3 rule I hadn’t heard of a home no more than 3x your salary and I think that is good. It would probably be risky to save up too much or get too much of a mortgage where you can afford the cost but not the maintenance costs. I really hope we have a housing crash coming soon.
I think it's great that you showed how income has not kept up with the rising rents, and it's very difficult to rent on a median income especially with landlords having tge 3x rule. I've been looking for a house but the kind of house that I can afford has slowly decreased as interest rates have risen. I can basically only afford a house in the worst of neighborhoods now vs before where I could atleast make it to an ok area. I'm lucky to have the cheap mom & pop rental I have, because if I moved I wouldn't be able to save as much as I have been
Bruh, I make $100k and the 30/30/3 rule still seems unachievable in my area. Houses are so expensive :’) The msot I can afford is $300k, but the cheapest home is $350k for a janky one
@n?a you don’t know how long the OP has been making 160k nor do you know what their financials are. They could be paying down debt, not budgeting and living paycheck to paycheck. They clearly said they were waiting for interest rates to come down, so maybe they don’t have have enough yet to pay in full and they don’t want to pay a crap ton in interest. Geez chill out instead of assuming everyone is a liar.
@n?a Again you IGNORED the fact that you don’t know his circumstances. He could just recently have been making 160k you don’t know if he is paying down debt or student loans. You acting like you everything about the OPs particular situation and being judgey is just petty and makes you look silly.
Hot take: The 20% Down payment rule is now unattainable for most first time buyers in major/mid-sized cities. The best option for new home buyers in most major cities is to start with an affordable condo or townhome that they can buy with less than 5% down, live there for a few years to build equity, and then sell and use THAT money for their 20% down payment.
@@daisylavender5275 Denver here. They sell in a hot minute in our area because it is the only way to own anything for under $350k within a 45-minute drive.
@@mariaelenamontes1369 California is the problem on that one. I recently moved out here and I’ll never come back. This place is a hellhole and I can’t wait to leave. Glad I’m only here for a year for work.
@@mariaelenamontes1369 that's absurd and should decline as california's cost of living and taxes are sky high. Pretty soon you won't be able to give them away
I think the most important aspect of this has to do with it being designed (intentionally) to be applicable to anyone on the surface. This is the absolute best case scenario using these numbers. As he touched on about the regular bills we all have that are not considered housing expenses. Vehicle loans and general “healthy” debt. But let’s not forget health insurance, and retirement. That gets taken right off the top. Health insurance, if you’re lucky enough to have a portion paid by your employer, still usually has a notable cost on the employee. But what do you do, gotta have it or live with the crippling fear of medical debt. Retirement is similar. Gotta pay into it, or live with the crippling fear of having to retire as a bridge troll. I could go on and on. These are just two common examples, but they directly impact the take home. Don’t forget deductibles, co pays, and losses in your retirement. Moral of the story, there’s gonna be a massive problem when we are all old, and we don’t have equity in property, mortgage/rent that’s still being paid, and whatever fresh new hell awaits.
My biggest mistake in life was being 8 years old in 2008 and not buying property.
No your biggest mistake was not having rich parents.
@@oregonflatland lol
2008 was rough, a lot of people lost their house, their income, etc. Even if you could afford a house, good luck getting a mortgage (let's not forget that mortgages were ground zero for the financial crash).
I graduated in 08', it was a nightmare.
@d4qatoa I'm not even mad. Fair play
You're so polite describing how it is impossible for me to ever live in a house
Sounds like what needs to happen is we need to get rid of the system we're living under and try something else.
That’s a very American individualist way to look at that. If you have siblings you could trust, you can all go in on a property or house. Or if you have financially literate friends you can trust, that’s also a good option. I have friends that split up an $800,000 home for a few years. They had issues but squashed them and they all reaped the rewards when houses went up. Sold for 1.3M and they split the profit.
You can live in one, you just can't own it. At least not by yourself
@@joseocampo6754 I like that idea but it would be extremely hard to accomplish. Most people don't have friends that will do this. It's not that they'd go and rip off their friends, it's that their friends wouldn't trust themselves to keep something like that in order.
just marry a sexy doctor
I’m in Ohio and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quiet mediocre neighbourhoods. Then you’ve got Better, average sized homes in nicer neighbourhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
I wholeheartedly concur; I'm 60 years old, just retired, and have about $1,250,000 in non-retirement assets. Compared to the whole value of my portfolio during the last three years, I have no debt and a very little amount of money in retirement accounts. To be completely honest, the information provided by invt-advisors can only be ignored but not neglected. Simply undertake research to choose a trustworthy one.
How can I participate in this? I sincerely aspire to establish a secure financlal future and am eager to participate. Who is the driving force behind your success?
'Rebecca Nassar Dunne’ is the manager I use. Just research the name. You'd find necessary details to set up an appointment.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
So at 60k a year a single dude I can.....never purchase a house. Ever. Awesome
Then go back to school and get a better job.
Nice homes in Oklahoma for 150k. Buddy is a welder out there. CoL is a huge thing, but not everyone can move.
Not true. I make 65k a year I bought my house a year ago. 240k at 5%. You can do this
22years ago, when I first started working on a union shop I was making less than $18 at San Jose California! I was lived with parents and they gave me half of the down payment for my house ! My income was gradually increasing every year, 2 years ago we decided to pay off the mortgage ! Here we go ! Huge weight off the shoulders !
Right there with ya brotha. Work hard and take each day as a new opportunity.
Asking a real estate agent whether you should buy a home right now is like to asking an alcoholic whether they think you should have a drink lol. Homes in my neighborhood that cost around $450k in sales in 2019 are now going for $800 to $950k. Every seller in my neighborhood is currently making a $350k profit. Simply unreal. In all honesty, deflation is what we require. The only other option is for many people to go bankrupt, which would also be bad for the economy. That is the only way to return to normal.
Home prices will come down eventually, but for now; its best to offset some of your real estate investments and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes. If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Personally, I can connect to that. When I began working with Colleen Rose Mccaffery a fiduciary financial counsellor, my advantages were certain. In these circumstances, I would always advise getting professional help so they can steer you through choppy markets and just give you indicators and strategies for knowing when to enter and exit the market.
@@Nernst96 Colleen Rose Mccaffery maintains an online presence that can be easily found through a simple search of her name on the internet.
@@jessy830 she wouldn't happen to be related to the McCaffrey's barred for life by FINRA, would she? 😂
But home prices are also being driven up by demand, the higher cost of materials in new construction and labor rates. Some areas could see a deflation of 40% like SF/Seattle/LA/Portland, but in areas where people are flocking to because of the overall low cost of living, I don't see any deflation at all. The south is on fire.
At some point we need to eliminate investors from buying up homes as assets and inflating the housing market superficially. It's ridiculous that there is no way for me to buy a home or even a town home unless I marry someone (and even then it will likely be a stretch). Something has to change systematically.
To add to this and I know some people may call me xenophobic but I don’t think non-citizens, foreign companies or foreign governments should be able to buy land or property in the US.
@@TrapHouseZombie Nah, that's not xenophobic at all because it is about protecting the interests of US citizens. Prioritizing our ability to build wealth does not constitute prejudice towards foreigners. Foreign investors are having a drastic negative impact on our opportunity for home ownership and are vacuuming money from our citizens through rent. Any human with more than 4 brain cells would understand that is a problem.
@@TrapHouseZombie most countries don’t allow it.
@@TrapHouseZombie Agreed. People should look into the U.S.’ acquisition of Hawaii. That nation made the fatal mistake of allowing non-citizens to buy property in Hawaii. One sugar cane mogul amassed so much of the land that he declared himself the majority owner of Hawaii, starved out the queen from her palace, and forced her to sign over the islands to him. He then contacted the U.S. government and negotiated the annexation of his new country, so long as they made him the state’s governor after annexation. We must learn from history. That’s not xenophobic, it’s wise.
They wont. The only solution is force
The government needs to start building more bridges. Many of us will need them to live under when we get old 😅
Or jump off of
Great news! If we emulate the great depression the government back then hired loads of unemployed people to build highways and roads. That's part of why our highway network is so extensive.
The government needs to stop getting involved! I wouldn't trust them to build a bridge! Lol
What’s great is that Transportation is only 2% of the budget costs (I learned that today). It’s like 19% Social Security > 17% Health > then something else > all the war defense machine > Medicare like 15% > employment insurance > debt interest payments (*only* the interest, not capital) was 8% > transportation 2%! > …
Or jump off of one
What’s frustrating is a home that was 90k 5 years ago will cost me 45% of my income today
It’s 100% a scalper’s market. Not a seller’s market, a scalper’s market.
@@tonypajamas610 Which normally would be fine, but the way things have shaped out through legislation and overall cultural morality shifts, it was never going to work. Women working in mass means basic infrastructure jobs pay nothing due to overwhelming supply of men lining up for it, and women overwhelmingly line up for office work.
So thanks to the principles of supply and demand, too many men are available to work the 'dirty' jobs which use to let you buy a home, but now barely (or sometimes wont) let you live alone, but not provide for a wife and kids.
Conclusion: affording a house with the average American salary is impossible without a windfall inheritance. A feel good story for the ages. What a time to be alive, boys.
Then don’t be average , gain skills and demand money
@@ryan215553 obviously it sucks that people can’t afford houses but how can you expect to afford a commodity when you make average
Conclusion is not factual.
@@ryan215553yan doesn't understand life has a lot of luck and got an easy route. Shove off Ryan. 😊
@@ryan215553 Skills eh, i work in cyber security and in the city i still cant afford a house. Whats the point of having a good job, inflation screwed us out of a house 1,000%.
I wish i had this job 5 years ago, then i would be in a really good spot.
It's almost impossible to save for a home when renting is so high. I feel helpless
make more money do something that'll be uncomfortable to make that money
Look at using an FHA 3.5% down payment. Or think about joining the U.S. military. they have a home loan benefit where it's 0% down. I have used both of those programs. Those programs are what allowed me to get into real estate with very little money down I now own multiple properties
That’s the whole point
Choose to live somewhere cheaper and then you’d be able to save. No one is forcing you to pay high rent.
Rent is cheaper if you do two things. One is not to live downtown in a major city. Live in a suburb or away from the downtown area. The second thing is to have roommates. It's not fun, but the more roommates you have, the cheaper your rent will be. If you want the luxury of living alone, you'll pay a premium for that living arrangement. Obviously, don't live in a luxury apartment either, that's going to be expensive.
Conclusion: the vast majority of Americans are screwed.
In Europe the energy prices double the mortgage fee. So we can use 1/6 rule for average yearly wage of 14K and average apartment is 280k. So you pay off the loan in 120 years.
"the vast majority of Americans are screwed" is nothing new.
@@mikehenkes I don’t think they said it was
@@az9az9az9 sounds like a permanent rental 😅😅
No crap. Whenever men cannot provide for a stay at home wife on average, society is doomed to fail. The answer cannot be undone in our lifetimes, but women being 51% of the US workforce is not helping things.
To my own research In USA, individuals living in cars due to partial homelessness result from a complex interplay of factors. High housing costs relative to income, stagnant wages, and income inequality drive this issue. Job loss, weak social support, medical expenses, evictions, and lack of affordable housing also contribute, while systemic problems and inadequate policies further perpetuate the phenomenon.
Considering the present situation, diversifying by shifting investments from real estate to financial markets or gold is recommended, despite potential future home price drops. Given prevailing mortgage rates and economic uncertainty, this move is prudent, particularly due to stricter mortgage regulations. Seeking advice from a knowledgeable independent financial advisor is advisable for those seeking guidance.
I've remained in touch with a financial analyst since the start of my business. Amid today's dynamic market, the key difficulty is pinpointing the right time to buy or sell when dealing with trending stocks - a seemingly simple task but challenging in reality. My portfolio has grown by more than 5 figures within just a year, and i have entrusted my advisor with the task of determining entry and exit points.
Could you guide me on how to get in touch with your advisor? My funds are being eroded by inflation, and I'm seeking a more lucrative investment strategy to effectively utilize them.
'Melissa Terri Swayne is the coach that guides me, you probably might have come across her before I found her through a Newsweek report. She's quite known in her field, look-her up.
Thank you for the information. I conducted my own research on google and your advisor appears to be highly skilled and knowledgeable. I've sent her an email and arranged a phone call.
I really feel sorry for young single guys. I bought my first condo at 25 for $50,000 which was roughly my annual salary back then. My payment was around $300 a month if I remember right. I lived in it for three years and then rented it out and bought a single family home. My son who is now 25 makes around $100,000 a year and that same condo is now $300,000.
Exactly!!
That's a bit of the issue too. Instead of selling a property back into the market it's now only a rental. Now multiply that by thousands of times over and have large companies doing the same but on a enterprise scale, you have what happens today. Not much available homes. Just a lot of places to rent. And nothing ends up being affordable.
hey on the bright side if you lived in canada it would be closer to 1000000. you should check out what 1000000 gets you around the world, in canada it will literally get you a shed.
@@andrewrules231 you must mean in Toronto or Vancouver. You can get a fully functional hobby farm for that price in Canada!
@@beevie4081 in rural bc 1000000 gets you a couple acres 10 years ago it got you a mountian. the house i grew up in in the kootneys sold for 20000 in 2004 its over 650000 now
I had $330k cash, 811 credit score, $0 debt, 100% on time payments for 9+ years of credit on 12+ accounts, paid off 2 cars… but 3 loan people said I wouldn’t be approved because I had a job gap 😂😂😂.. I quit my job voluntarily to go back to school and get a better job. Now I got the “high paying” job but home prices skyrocketed as well as interest rates. So back to not being able to afford a home. But somehow it’s ok for me to pay $1,900 in rent. My friends pay $800 to $1,400 in mortgages 😂😂 what a joke.
If you can afford $1,900 in rent, you can afford a mortgage.
@@MeatballMedic Yeah, in Arkansas...
Just wrong timing should have bought house before all the covid circus now just impossible with skyrocket prices and super high interest rates
@SpartanG, I live in a high COL area on the coast and decent sized regular townhouses cost like 250k-300k in my area. That is affordable on a regular person's salary (for the area) even with the crazy spike in housing process. If the OP can afford $1900 rent then he can afford the mortgage on a 300k townhouse. If a person buys a 300k townhouse with 20% down, the monthly mortgage payment is only ~$1600.
The guys doing your loans are trash. Get someone who can do their job.
Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Impressive can you share more info?
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
All of a sudden, I'm thinking about marriage more as a business proposition than a love tale lol
Yup 😅
Agreed. Marry an educated career girl with a good work ethic.
True
Marriage is a business
This is why same sex folks keep pushing to legalize same sex marriage. It's not about love. It's about tax savings, health care, and the business side of it.
Even if you have no other debts, the 30% gross income for rent is absurd if you also pay for insurance, retirement plans, and state tax. So that $4166 a month looks less like $3490 and more like $2000. Now add debts and emergency savings and this paints a very different lifestyle.
It's simple if you stay debt free and don't buy stuff you can't afford. It's not an income issue for most, it's a spending issue.
@@KevinHammond1 my comment is referring to those who ARE debt free still not meeting the 30% rule for housing. And just saying “don’t have debts, scrub” isn’t realistic or helpful.
@@BluesJayPrince I would have said loser, but tomato tomato. The point here is statistically there are certain habits that keep losers like you down. You proved this point by refuting the very simple and actually helpful information he was giving you in a more negative way. If you are debt free and STILL can't pay rent, you need to get educated and hustle. That's the point.
Well, in a lot of places less than $1000/mo. is basically either roommate territory only. Although, if you live in a small semi-rural apartment or a small town or city then you might be able to get that low. Most apartments I can find are more like $1.2-1.5k
Although, trailer-homes are also an option.
I have been able to find cheaper places, but only since I am willing to move to whatever the cheapest city with jobs is.
@@BluesJayPrince Looks like my response was deleted or censored for some reason.
My wife and I are 28 and we recently bought a home in northern California. We make combined about $120,000. There was no way we would have been able to afford anything if we didn’t get help from both of our parents. My family allowed us to live rent free on their property for a few years so we could save, and my wife’s family gave us her inheritance money early so we could make the down payment. We ended up buying a small 2 bed 1 bath in a small town for $460,000. In 2011, this same house was sold for $125,000! I honestly don’t know how others in our income bracket can afford anything anymore. We are so fortunate we both have family to help. It’s sickening and unsustainable…
460 for a 2 bed 1 bath? 😮
@@kenjifox4264 this is why a lot of people are moving to dallas
I'm glad it worked out for you and having great parents help! Prices are high everywhere but didn't realize how high it is in California. My wife and I bought a home for $364,000 (2.66% on a 30 year conventional mortgage) in 2021 on a 2 acre property and a 4 bed/3 bath full brick ranch home (2400 sq. ft) with 2.5 attached garage in Michigan making a combined $170,000. Didn't realize how much more house you get in the midwest than CA.
@@kenjifox4264 That's inexpensive for Northern California.
@@sonicmoj1 You really don't pay for the house anymore but the land it's on. Hypothetically California is a more "desirable" place to live, but it doesn't mean the houses are any better. You can get way more in a less desirable state.
My husband and I had 30% saved of the house we could afford by salary back in 2019 ( around a 220k house).
Had 757 credit score built in two years.
Had been employed for 3 years in our current jobs, and got rejected because "we only had one income each" so we were considered high risk by Wells Fargo (our biggest mistake was choosing WF)
2023 , that same house we wanted to buy went from 220k to 498k in Nashville.
We feel so cheated... And honestly depressed.
Good luck to everyone trying to buy a house, my best wishes to you sincerely 🙏
What a crock of shit so even if you do everything right they still shaft you!
So you only tried to get a loan from 1 lender? Why didn’t you try any other lenders?
@@grappler555or a lot it’s blow to be hit by that… maybe they thought all of them would say the same. But yes, rule of thumb, for ANYTHING: shop for an item in more than one store, see which one offers the better price. Applies to mortgages and loans too.
That said, what the hell, what do they expect… for people to work and then work some more? I understand that some people NEED to have two jobs (and a good idea to clear up debt quicker) but this is downright entitlement from Wells Fargo and the financial system in general: they want people to wake up, eat, work, then work some more and then some, sleep, repeat. For the ones with the money.
To the couple: don’t mind it, continue saving money, maybe buy T-bills or anything guaranteed to hedge inflation while the rates are high if that’s your tune, wait later on for rates to go down (if they ever go really).
The best peace of mind in the end is spending *considerably* less than what you make, sometimes I see for example $100K or $200K in savings as many many years of my $500 a month rent (yeah, that cheap I have found, and it’s Canadian monopoly funny money even).
Losing the job with many years of rent saved is completely opposite to losing it with not even one day extra of oxygen because all that money got used in a mortgage downpayment.
We bought our town home in South Florida in 2019 for 255k and today 2023 it is worth 450k. Best decision I ever made.
You cheated yourself by not calling as many lenders as you could.
This was a very well made video. But also it's absolutely crushing to take in the full reality of the housing situation in America.
only the blue states
@@RustyPancake53 as a resident of a rural part of a red state, absolutely not. 😂
@@Tselel I'm just basing that off of the top 10 most affordable states to live.
Canada is even worse. You can't buy anything with average salaries unless you live in the middle of nowhere .
@@RustyPancake53 Yes, AKA the states that people want to live in. No one is chomping at the bit to live in Mississippi or Kentucky, or most of the red states for that matter, because they're well known to just.... suck.
Something that wasn't mentioned in this video is that gross income is not your take home income. So when you're budgeting what you can afford by following these rules, you need to be looking at your take home income.
For example, if you are within that $80k salary tier, you make $6667/mo and about $4667 of that will be take home after taxes, health insurance, and depending on any 401k contributions. Now look at the 28% rule and that gives you a theoretical maximum affordable mortgage payment of $1867. That leaves you with $2800 for EVERYTHING else in your life for the month (other debts, groceries, auto expenditures).
Just keep that in mind.
The lesson is that you won’t get ahead financially as a single person unless you either have roommates or a very high income.
Not the rule but something to consider.
Or live with your parents….😢
It's called investing. Rather than work for money, make your money work for you. The snowball effect will compound with time and good decisions.
Hey hey hey. You could always choose to be born into a wealthy family, specifically one who decides to spoil their kids.
@@jameshughes6078 damn if only I thought about that earlier!
I love how everything is based on gross income like if you’re actually earring that amount monthly after tax your left with way less than that so take another 30% off your real income after tax for rent that’s a more realistic perspective
I'll never understand this either. What's so hard about actually calculating that? Take home pay is the real number youre working with. THP usually equals your paycheck after fed taxes, ss, insurance & dental, retirement......after all that? That's when people calculate their living expenses. But I know people who barley contribute to their 401k bc they went all in on owning a home. I can't argue with that strategy if their home appreciated 30% in two years, while retirement accts were lucky to get 3%. Over the long run, I think people who took on that kind of strategy are very exposed.
@@NoNo-ng9sl VERY exposed and they will all be losing their shit when markets do a repeat.. But if they dont lose their home and or never move then they will still be worse off when they are older
@LamaKING21 I wish there was an in depth analysis on this and have yet to see any youtube channel talk about it. During the pandemic, people borrowed on their 401s. Many did so to place down-payments on mortgages. Something that as a standard and rule of thumb was always frowned upon by financnce experts--Don't borrow from your retirement to use as a down-payment. Under the idea that he 401 loans steer away market gains.
So much to unpack. But what was the avg amount people borrowed? Aprroximitley, how many homes were bought under this strategy? How much is still owed? This very much all feels like a house of cards.
@@NoNo-ng9sl So much to unpack but jesus... Dude you and I would get along so fucking well. This is the shit I keep scouring the internet for and my gf thinks its insane that I go in all this depth then theres everyone else whos oblivious to whats going on. Deadass would love talking to you more man.
@@LamaKING21 Yeah, there's metrics I tried diving into before. 2 years ago I tried scouring online for any news that reported these figures. TD, Schwab, Fidelity, Merril Lynch....none of them released these figures. How much is still owed? How much was tied to the mortgages? If and when we hit unemployment, how will people pay this back into their accts? No one's reported on this. It's not included in any debt data since they're not traditional credit loans.
This is the best, most down-to-earth and honest representation of home buying I've ever seen. Thank you.
For salary earners, be aware that this is a grossly oversimplified scenario. For one thing, you can't get a mortgage on an investment property without at least 25% down payment. Two, it's easy to see comps for house purchase prices, but it takes a lot of research to understand the comps on rent prices. The trick is to find a place where renting is more expensive than buying, but those places are less common because of this very type of scenario. Three, you have to remember that rent number he's using is supposed to be net income, not gross. So you have to think about costs for taxes, insurance, maintenance and vacancy when you're researching investments. All that said, real estate investing is a good tool for wealth accumulation. But it isn't foolproof.
Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Personally, I can connect to that. When I began working with "Colleen Janie Towe’’ a fiduciary financial counsellor, my advantages were certain. In these circumstances, I would always advise getting professional help so they can steer you through choppy markets and just give you indicators and strategies for knowing when to enter and exit the market. Long story short, its been 2years now and I’ve gained over $850k following guidance from my investment adviser.
@@rogerwheelers4322 Same thought when I read the comments from people. as if it's that easy! You can't give what you don't have. That's why as many as who go into the market with little to no knowledge will continue to feel the full downsides of stocks when it happens. I personally need some guide with regards to my portfolio. How can I reach Collen Janie Towe?
@@eloign7147 Exactly the point! quickly do a web check where you can connect with her, and do your research with her full names mentioned..
You should do a poll on how many of your viewers have 120k just sitting in their accounts
I'm sure if you poll people who are saving for a house/down payment, you'll notice that a lot of those people will have quite a bit in their account.
@@ryanrodriguez5293 only if they're able to live pretty much rent free while they save.
@@TJHooper123 not sure what you mean by that. I’m paying rent that’s definitely above the US median, and I’ve been able to save up halfway to my goal of a down payment in just 7 months. Not very impossible if people are financially responsible.
@@ryanrodriguez5293 not many people are in a place where they can save $100k while paying rent. Just cause you can doesn’t mean it’s doable for all
@@TJHooper123 okay, so going back to my original response to the comment: if you poll people who ARE saving for a down payment you will notice that they have quite a bit in their accounts. It’s not like people who don’t have any plans financially are just sitting around with a bunch of money. Usually if you have that much saved up, it’s for a reason and it’s because they have the ability to. That’s the point of my comment. Not saying that everyone should have that much money, in case that’s what you thought I meant.
I was a law student during the fallout of the mortgage crisis. I did some work with the local Legal Aid group who held seminars for people facing foreclosure. Overwhelmingly, the reason folks could no longer make their payments were: 1) divorce 2) medical bills, or 3) lost hours at work. I know home ownership already seems out of reach for most people, but try to leave yourself a buffer because life happens.
It's so depressing to know that even with health insurance, a trip to the er could cost my family our house.
We got our house in 2020 with a 3% interest rate. My wife now keeps saying that we need a bigger house. I'm like, if we bought our current house with today's interest rates, we wouldn't be able to afford it!! There's no shot in us upgrading anytime soon. Unless I can get her back to work ;).
Lol I’m literally in the same boat. I just got a new job making 30% more than I was making. And still wouldn’t sell to buy a bigger house yet. I own a multi and a single house. I make about 150k by myself now in my area that’s really good and she just can’t keep a job so guess Im back to square one. I wish these rates would go back down. I’d totally buy another multi property and then stack up!
LOL @ the last sentence
Well, how much is your house worth? I sold my house last week at a huge profit which is going to help. Then, I'm going to accept the high interest rate until I can refinance
I’m trying hard to feel bad for you, but just can’t. You have a home and a low interest rate.
@@PickledSharkhe didn't seem to want anyone to feel bad for him
Privatize profits, socialize losses.
This is what happens when we treat corporations like people and people like chattel.
keep complaining...nothing will change. i felt the socialism bug start to creep into my life while in undergrad, but then I grew up
Cronyism is what he's talking about.
If a large Corp is working hand in glove with the government or working top down to enforce nonfiduciary scores such as DEI and ESG then it's just socialism with an extra step.
This country is not capitalist. Remember the founders fought a revolution over a 3% tea tax. Look at how we are rammed in our ass daily.
@@Mistro07 except I don't believe in socialism. Check your assumptions.
@@Mistro07 grew up and became complacent ?
That will never work like ever.
I've just shared this video with my kids because of all the video's I've watched on this subject, you combine rent and housing with clear and concise explanations of the numbers without the extraneous ramblings of other RUclips presenters.
Excellent work.
Housing keeps going up, yet our incomes aren't.. not much, anyway. The eventual conclusion is that 99% of us will be renting from the 1%.
Not the 1% but the 0.001%. Doctors lawyers small business owners and a lot of other professionals can make $360k (1%) last time I checked.
Property taxes are increasing at an alarming rate and should be considered class Warfare in certain areas. Also keep in mind that if you improve the appearance or your home and property or simply put in a new bathroom or kitchen, you will be paying MORE in property taxes when the assessor comes around. Strange how home owners are penalized for improving their neighborhood. Home ownership in the USA is yet another bait and switch. Backwards!
Paying for someone else’s mortgage and property taxes by renting is not any better
@@arashalphonso Also true. Inflation cycle of hell. The system as it stands opposes the very idea of the self made man/woman in this country. There is simply no way the American working class can compete with and/or reasonably cope with the continued fallout from absolute and abject greed from the 1%
So sell
If we taxes income better, those who can afford property and therefor property tax would not be relied upon to fund our society but here we are
Yeah I feel sorry for all these people who's homes have doubled in value in 5 years...real class warfare. Why don't you sell your house and relieve yourself od this burden by moving into an apartment.
The impending sense of doom that I have just kept on getting worse as you so expertly explained how I will never have a big house. Great production value, and great video!
I'm a single parent, I could only afford a studio apt with my 2 kids. I'm thinking of turning to crime
You have two money eaters, yes
Leave the country, that is how that is going to work for you.
Not worth it man, find another way. Best of luck!
That's what they want and expect you to do. Things will continue to get worse and worse because none of them are incentivized to make anything better for the rest of us.
@@GrandChessboardYou think moving is free?..
Times have changed. I bought my first home (100 year old farmhouse) in 1994 for $87K. Paid off my mortgage in 15 years. We've moved twice and now live in a $480,000 home simply due to value of real estate going up over the years. We've never had to put more money into the house. The sale of our previous house always paid for the new home. Homes in my area go for over $350K for starter homes. It's difficult to find a home under $300K that doesn't need a lot of work. We have friends that bought a $270K ranch but it needs a new roof, A/C, Furnace, Septic tank, electrical, etc.
There are definitely misaligned incentives for housing supply to reach demand. Using housing as a vehicle for wealth was a pretty shortsighted move for the post-WWII US government.
Even well outside Seattle, houses are twice that. Houses under $600k need significant work. So I guess a starter home is $6-700k. Inside Seattle or the wealthier eastside, single family homes are over $1M.
My rent is $2500 for a 2bdrm apartment, a mortgage would be like $4-5000+. I would also like to eat...
It doesn't seem sustainable if only VPs at Google can buy a house...
I've learned that most people with big houses or expensive vehicles can't afford them. They are most certainly living above their means and are barely getting by
Got it. Will be relocating to my nearest bridge and buying a gym membership to shower 😂
My takeaway here is I'm renting for life.
No that's not your fault, thank you for making this, genuinely, I mean it. This has a lot of info and helped me gain some perspective
I had my hopes up, but now with the reality hitting hard, I believe it's better for me to accept my position and focus my efforts elsewhere.
Also, seeing that the "Renting" segment is the most replayed part of the video says something
Well according to the 2022 average man's income under 40, most single men likely can't even afford rent on a single income rofl
Roommate life for most. Huge reason why marriage rates are in the gutter right now because men just can't plain provide anymore
But then ask yourself how your finances will look like when you are pensioner. Will you still be able to afford every now and then increasing rent? With inevitable healthcare costs rising with age too? If you don't look that far in the future and try not to think about that ignore my questions. Either way, good luck, genuinely and honestly, hoping you will make it work somehow.
@sLim88CPC If they can't afford to buy a house, what is there to consider? There comes a point where you have to admit when something is out of your ability to influence, and right now 'can I ever own a home' is one of those things for the majority of Americans. It's going to take something in the system break a la 2008 and/or major legislative pressure to bring prices down to where the average person can even aspire to owning a home they didn't inherit.
It is MORE responsible to admit when something is just a pipe dream and focus that energy towards something attainable than to keep trying to reach 1970s version of 'being an adult.'
Consider joining or making a tenant’s union. Landlords have an extra advantage when their tenants are disorganized
I am in the same boat and that’s why I went to the extreme. I currently live out of my car by choice. I am building up my credit, paying off my debt and saving as much as I can. My monthly expenses are around $600 and everything else goes to my pockets. My dad offered to let me stay with him for $600 a month but i’m not even going to do that because I want to build up my financials as quickly as possible.
I refuse to be a rent slave for the rest of my life. I’m going to rough it in my car for the next 5 years and hopefully I’ll have enough saved to afford a small house with a little yard for myself.
You basically need to get married to buy a house. Sooner or later we’re going to see marriage business propositions on Facebook marketplace
Cherry 2000 style.
The scary part is the inflation we are suffering from is from the effects of government spending back during the beginning of the plandemic, we are still due for way more hurt with how the current regime has been spending. I wouldn't be surprised if getting a house would require multiple couples to afford it
Eh, not true. Just means you need to work harder for what you want. 9 years ago when my wife and I got married, I was making $21,444.80 a year. In the first 3 years we had 2 kids. Fast fwd to today and I’m making 10x where we started and growing by the year, and we’re not even 30 yet. My wife never had to work and is homeschooling the kids. I come from a poor / low middle class family. It just takes wisdom, faith, patience, and discipline. You can do or achieve whatever you want.
Not true for me. Single for life and I got a house. Its 700 sq ft but being single and living alone I don't need a lot of space. I love my small house.
@@tylerroddenberry8338 That is good to hear and you aren't technically wrong, but if all men simply changed careers/skill sets to make enough money, then the country would collapse. Infrastructure pays nothing, but the supply of men is too large causing the pay to further drop to minimum wage levels. When jobs of necessity no longer let you provide for a family then we have an issue.
I never base these things on gross income because I lose like 30% on taxes 😭 Always net. And with that in mind, I can afford about $768 rent. In a city where a single bedroom apartment is at least $1200. So… time to find a good cardboard box to live in.
Right? I was like was that after taxes. Cuz no way. Those numbers don't add up for me.
Lmaoo same! Let’s just say ive been at my place if work for 8 years and I make a net of less than 40K / year. I work in a production environment.
2:03 just going off of your numbers
The median is 1900 to rent. You have to have an 80,000 a year job for 2K.
Average income is more around 35 to 40 K
And now you see the problem
Another important thing is check and make sure you can maintain payments even if interests increased by at least 3%.
Also, don't listen to the boomers saying "back in my days interest was 15% and we had no problem, cut back on your avocado on toasts and start with something cheap upgrade later". Situation with them was sooooo completely different environment to what it is now. Their median income was $25k and their median mortgage was $50k for a very decent home with just $5k deposit and cost of living much lower and loan term was 12-15 years. Now the median income is about $50k but median mortgage is $300-400k on 25-30 years term. Their monthly repayment was about $700 even with 15% interest, yours now is $2000 with current interest rates. On top of that their loan term means they paid off their first home by 35yr old, and sell off to upgrade to their second and paid that off by 40-45 and even a third or fourth or build up investments by the time they retire. Current generation needs years to save up deposit and on track to pay off first home by 50-60yr old. Basically, you need to do your own maths and come up with your own life plan, you cannot just copy your parent or grandparents.
Why would interest increase? I have a 30 year and interest and payments stayed the same. Bought a 4 unit rental in 2017. The only thing that increased was Property tax. Fucking Red states taking all my money
Basically inequality has grown a tremendous amount.
@@Grushenke89 yeah way more than inflation, and wages have been stagnating since boomers were millennial age
Ya, everything is like that now. My dad went to Harvard in the mid 50s. The tuition was $500 per year when the median household income was $4000 a year. Everything in this country is becoming financially untenable.
yeah i would gladly pay 15% interest on a 50k house lol
I've paid over 300k in rent since high school but mortgage lenders say I can't afford a mortgage that is lower than my rent which I have never been late on in my life. Been saving for a house, everyone says no. USA is such a scam
This very much doesn’t apply to CA where rent is over $4,500/mo for a 2B2Ba. Mortgage typically costs $6,300/mo. So household salaries have to be above $350K. Good times.
I was so proud that I finally got a job making 90k a year in California. Then I started studying what it will take for me to get a house or a car and it's just depressing.
It's very difficult to achieve your goals on your own, take this in mind when dating
As one of the other commenters noted, a standard mortgage payment is fixed whereas rents can go up (or down). Typically your salary rises over your career, so your ratio is likely to improve.
Also need to account for the mortgage interest deduction. I pay close to $22k interest per year and get back c. $5.5k. Where I live in Virginia that covers my property taxes and a good chunk of my insurance.
Building wealth involves developing good habits like regularly putting money away in intervals for solid investments. Instead of trying to predict and prognosticate the stability of the market and precisely when the change is going to happen, a better strategy is simply having a portfolio that’s well prepared for any eventually, that’s how some folks' been averaging 150K every 7week these past 4months according to Bloomberg.
That’s crazy, I’m just doing everything wrong with my portfolio.
Same here, 75% of my portfolio is in the red and I really don’t know how long I can stomach the losses. I’m beginning to reach a breaking point.
The US-Stock Mrkt had been on it’s longest bull-run in history, so the mass hysteria and panic is relatable considering we’re not accustomed to such troubled mrkts, but there are avenues lurking around if you know where to look. My husband and I are retiring this year with over $7,000,000 in tax deferred investments. up until 3 years ago we were 100% in the S&P. During bear markets we had a perfect plan. We got an investment manager in our corner and didn’t look at our portfolio for nearly a year.
Patience patience patience. It's a cycle.... a sucky point in the cycle, but a cycle nonetheless.
Please do you mind referring me to your financial analyst?
One thing I don't get is why a lot of these rules account for gross income. The taxes vary drastically and houses are usually more expensive in places where taxes are also high. How much you spend should be based on how much you get in hand.
Was thinking the same thing, Gross income doesn't mean much when it comes to how much you can afford since your actual take home income is the money you actually make. Still an informative video non the less.
I think people can easily think, "I make $100k per year," rather than "I make $72k per year". That feels sadder.
There's also mortgage interest deductions on federal income tax, so that offsets it a bit.
As a 23 year old making $16/hour, living on my own, and struggling to find work with better pay, this video doesn’t exactly instill confidence in my future… :(
the sad thing is that that is actually decent pay all things considered, over twice as much as the gov decides you need to live.
Try the job hopping and learn as much as you can! I am sure you will make a lot of money after 2-3 years!
@@Elekeadepends where there at that's just about min in my area
When I was looking for a house I created a spreadsheet that calculated my in pocket money after all expenses. I was honestly shocked that the mortgage broker, real estate agents and anyone else I talked about this with didn't have something similar. My spreadsheet was made in a few minutes and is messy but if I sat down for an hour I could probably make it really nice (maybe i should and sell it).
What I hate about this whole home buying thing is the whole thing. The purchasing of a home is just the very first part, which is already a mess. Next is homestead taxes and taxes in general. My home increased by 100% in 4 years which means my taxes also went up. Home insurance is insane right now as well. Maintenance costs if an older home. Natural disasters such as the freezes in Texas. General maintenance, upgrades, cost of living, energy charges fluctuating. All these things and more add insane amounts of financial burderns and stress.
None of this stuff is communicated to you BEFORE the home buying process by the way. It can be very confusing to do this on your own and costs money to get help. Sometimes you get lucky and your real-estate agent or loan provider/broker may have some of the "after your buy" tips, but from what I have been told, that is rare.
"don't try to look at what your friends are doing"
Truth! Cause most of them are BROKE
That's right, you do you
Also maybe get smarter friends. People that seek status maybe aren't the best people to surround yourself with.
One of my vehicles is 8 years old and the other is a 23-year-old truck with 400k miles on it. On the road I look poor. But by saving there I'm able to keep up payments on my farms, which is my priority.
I really appreciate how you try to look at different scenarios for a wide range of folks. Thank you!
I’m glad you used Raleigh, NC as one of your examples because my dad just doesn’t understand how insane rent is. He bought his house in 2001 and is golden. I live in a box and pay essentially 1400 a month. Raleigh, NC is one of the fastest growing cities in the entire US and in the past 15 years has gone from one of the lowest cost of living cities to an expensive one. It’s insane and we can all thank Ronald Regan and the greedy billionaires for this.
I live in New Bern NC and rent is high here too. As well as houses for sale are way up
I only make $60k, and right now it's so hard to even imagine I'd be able to afford a home by myself alone. Without a partner. Problem is, rent is also going up as well. Hope by the time I think I'm ready to buy a house, my HYSA would've grown enough for a down payment. I just don't think the 3x your salary works in this housing market anymore, wish I could say it did. I can't even find a house that's 3x my income.
Rent requirements are 3 - 5 times income lol … in 2020 it would be fine but now … 😢
veryone feels your pain and I make over 6 figures a year but buying right now isn't an option between prices of 400K and up and the high interest rates
This country isn't made for single ppl anymore unfortunately. Very expensive to financially succeed without double income
I understand this fully. I live in Miami, everything is hell right now. I've been looking to purchase, but my monthly payment will $3000 minimum, all included. It looks awful and I would prefer to wait, but the problem is rents can easily go beyond that for a worse place.
It's pretty much been like this for most of recorded history. It's why Sherlock Holmes met Dr. John Watson as a prospective roommate for his apartment. I mean, of course, it happened for narrativium... but the explanation was that neither man could live alone on his income, and they were upper-middle class.
I barely see houses under $250k anymore. I don’t see how this will work unless everyone move to the middle of nowhere.
In South Carolina you can!
Guess what isn't in the middle of nowhere. My job!
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Based on this information I’ve come to the conclusion that I can only afford a doll house.
😂😂😂
I just looked up a $700 doll house set so you best be saving for that
@@RyanSimonLeon Send the link. 😂 I just hope it doesn't turn into a notorious bidding war for it. (ノಠ益ಠ)ノ彡 ┻━┻
Income being 3x your gross income requirement is essentially required for most large rent establishments here in the Phoenix Metro area. Doesn’t help that it’s already difficult to find a decent 1bd/ba for under $1500 these days.
I don't know why people try so hard to live in giant cities and rent wasting money. I live in a suburb of a larger city in a house i pay mortgage on and it's way cheaper than even renting in the city.
@@eagle25311 it’s all perspective though and depends on where you want the box you live in to be close to. Some people don’t like activities, being close to venues, airports for travel, etc where living far out or in a small town makes sense for them. For me, I’m willing to sacrifice having a bigger, detached box to live in so I can be 15/30 minutes max from all the above places mentioned. It varies on your version of ‘living rich’. I’ve seen people that can’t travel or attend fun events and things because they live too far out or are ‘house poor’, and so renting to me in the city center makes the most sense for more happiness.
@Mark Chavez I must have gotten lucky I'm 25 from city center but it's in nice suburb way nicer than living in city and cheaper
@@eagle25311
Some larger cities with good public transportation allows you to skip the car payments and fees. It doesn't justify NYC being incredibly expensive (while entire blocks are sitting empty), although I suspect prices are more sensible outside Manhattan.
At the same time, working in a place like NYC allows you to just constantly max out your 401k because the pay has to match the cost of living
@@eagle25311 the main thing for me is i basically grew up here and have a good paying job with a ton of benefits. Its kinda hard letting that go. But if i ever fond myself struggling financially because of cost of living I’ll probably leave.
As someone living in southern California, we go by the 70% rule.
Where 70% of your income goes to rent and the other 30% goes to taxes.
😂😂
Saving up 30% seems totally crazy. I put 5% down in 2020 and got rid of PMI 2 years later after the value went up $140k. If I would have waited till I had saved up 30%, I would still be in my parents’ basement and would own $40-$50k less in equity. The market conditions are much different now than they were then, but it shows that the standard advice isn’t always the best.
true, but you’re right that timing is super important. 2020 was a great time to buy, but regardless only putting 5% down is a huge risk. you never know when an unexpected event could occur. real estate is a great way to build wealth, but it really isn’t always the best decision.
Good for you! I wish so much that we hadn’t listened to that advice
To clarify, politely, you did not get rid of PMI. Rising valuation of your home did. And like Humphrey points out regarding financial investments, there's no guarantee the value of homes will always rise "up and and to the right"... At least as fast as they did over the last two years.
In short, you were fortuitous in timing, purchasing just before the biggest two-year rise in valuations in US housing history.
@@spliffbooth If you want to be anal about definitions like that, I’ll respond in kind and clarify that I did get rid of PMI, as I asked for it to be removed and got a new appraisal in order to qualify for removing it, but sure it was possible because of lucky timing. I never said it applies to everyone, just said that saving up that much isn’t always the best choice.
But this isnt a zero sum game that pmi is constant but so are greedy landlords. Better to have a consistent risk than a person determining. 5% is fine for down payment.
I'm looking to retire and would like to relocate from Canada to a warmer climate, but home prices are ridiculously high and mortgage rates are skyrocketing (currently over 7%). Should I put my extra money into stocks and wait for a housing crash, or should I go ahead and buy a house anyway?
@@jivizwang There are numerous ways to generate high yields during a crisis, but such trades should be carried out under the supervision of a financial advisor.
Since the markets are currently in a frenzy, this is the ideal time to monitor them, learn more about them, and seize any opportunities that may present themselves. This is what my mentor "EMILY LOUISA BAHR" taught me. Her intuitive sense of how, why, and what will happen next is based on years of experience watching dozens of market cycles.
@@marylattimer The immediate top priority for everyone should be to secure their financial future through diligent saving and investing. I really need some guidance, can this financial coach assist me in these difficult times, and why do you have such high regard for them?
@@andreaswalter4 Some knowledge can be assessed statistically. But in the real world, we just don't. That's too difficult. We prefer uncomplicated stories that are frequently horribly deceptive. The quickest way to feel rich, in my mentor's opinion, is to make a sizable investment in high-quality stocks.
@@marylattimer She had a very professional website, and since I have no doubt that people are good at picking things up through imitation, I left her a message after noticing that. The information on Emily's qualifications, educational background, and profile impressed me greatly. She appears to be extremely knowledgeable. She is a fiduciary, which means she will act in my best interests. So I made an appointment with her.
The 30% rule also doesn't take into consideration taxes.
This was stated when he mentioned that these are based on gross income.
or health insurance and money going into a retirement account.
Biggest self-deletion motivation I've seen in a long time. As a 22yr old, it's amazing to realize "life" is over before it even really began, since there's no point.
Suck it up buttercup and push thru it.
I'm 23 man and I feel your pain. Let's stick it out together. We're all gonna make it, it just may take more effort than previous generations.
FWIW, buying a house of your own doesn't need to be a goal in life. You just need some kind of shelter and if you find friends and partners to live with, that cost is greatly reduced. People are even buying houses with friends, not just spouses. My ex bought a house with a mutual friend after we broke up. You just need something akin to a prenup if things go south.
yes i understand too. i’m 22 as well and it’s so fucking hard to just live anymore
i just bought more gold and silver few minutes ago. Tying up money due to an apocalyptic stock market crash is also not a smart move. Life is a risk and it's better to take risks than to do nothing, you can't always expect to make huge profits all the time, people have so many opinions about a recession/depression. In just 5 months my portfolio grew by $300,000 in gross profit, the main thing is to expand your portfolio and you will see amazing results by investing smartly.
Nobody knows anything you need to create your own process, manage risk and stick to the plan, through thick or thin while also continuously learning from mistakes and improving.
@@fresnaygermain8180 I concur. That's precisely why I rely on my investment decisions being directed by an investment coach. They possess a unique set of skills that enables them to take both long and short positions, using risk to their advantage for potential upside while simultaneously hedging against market downturns. With their proprietary analysis and insider information, it's nearly impossible not to achieve outstanding returns. Personally, I've been utilizing the expertise of my investment coach for over two years and have generated more than $2.8 million in profits.
@@belobelonce35 Sounds great. I could really use the expertise of an advisor, i just can’t find while I’m away for work in canada for another year. My portfolio has been stagnant.... Who’s the person guiding you can I get a phone number?
The adviser I'm in touch with is "Julia Ann Finnicum", she works with Merrill, Pierce, Smith incorporated and interviewed on CNBC Television. You can use something else. for me her strategy works hence my result. she provides entry and exit point for the securities I focus on.
@@belobelonce35 Thank you for sharing this. I took the time to Google the individual you mentioned, and after reviewing her resume, it is evident that she is a seasoned professional. I have reached out to her and am eagerly awaiting her response.
I've been thinking about this for a while, and I will probably pull the trigger when interest rates are still high. In times of lower interest rates, every offer for housing in my area went to the investors who could pay cash or offer the highest bid, significantly over asking. If I buy at high-interest rates at least the competition for good properties will be substantially lower. Then refinance when rates are lower, around 3-4%.
makes sense, its not a one size fits all, glad you are thinking about it for yourself and coming to a conclusion!
doing that same thing here, gonna pull the trigger and buy since we're wasting money renting anyways and when interest lowers we refi.
Personally, the only issue I see with this plan is the amortization schedule. At the beginning of the mortgage, so little is going to the principal. Every time you refinance, it resets that schedule so you're back at square one. Yes, you have a lower monthly payment, but you're not really making progress.
@@superrogue17 Valid point, but I guess for me owning a decent property and gaining equity at a bad price is better than being priced out and never being able to. (Hawaii)
@@sayitasis8326 yeah my coworker did this, said he’s gonna be struggling for a bit but hoping a couple years down the road he can hit a lower rate and refi
I bought my house with 10% down and was paying PMI, then 3 years later, I had them reevaluate my home and because it rose by a certain %, they removed my PMI. …they saved me a few $100 each month. Also, if you can barely buy a home, get a roommate to help pay part of the mortgage for a few years til you can comfortable afford paying on your own without struggling.
I agree. I told people to do this 10 years, and they said no im waiting to save 20% down. Guess who got a house and who's still saving 20%.
@@chefmastermikecmm8465 lol taking years to save 20% when houses or appreciating at 6% a year in normal time is stupid
Yes, PMI will get you into a home. particularly if you have good credit since the rate is highly dependent on your credit rating. The overall cost to me was like some high quality living room furniture. Forgoing that, I got into a home when I otherwise never would be able to.
@theAppleWizz Yeah, they only save 5k a year for a house that 150k. They could have used that 5k or barrow 10k and paid pmi for a few years. By the time they had 30k. They needed 40k, so 10k more. That was their perfect opportunity! Then, the pandemic happened. Now they need 60k plus the payments are still going be more than it was 10 years ago with pmi at 5-10k down. I kind of feel bad because they are doing what some of these financial gurus say. About being debt free and only buying a house if you can afford a 20% down-payment. It's more sad than stupid. We have been told all debt is bad debt. Fortunately, I could see the math in 2012 and took the risk.
There is something very wrong with this country if people with the average median salary working full-time can't afford to put a roof over their head. Back in the 80s my father was a mail man and we had a 3 bedroom house in CT and my mom was able to stay home when we were very young and went back to work at a retail job when we started school. We weren't loaded, things were a little tight at times but it was doable. It's not remotely doable at all for anyone now and it's fucked up.
Democrats voted for open borders and now there are too many people.
Cherish the memories
Love your videos. I appreciate that you are making it more clear for people who are looking to rent or take out a loan. I see some creators “doing the math” and telling family with 80k a year that they can afford 400k house. They aren’t taking in income taxes, social sec, 401k etc, health insurance, etc. it might get views but it isn’t helping people.
That’s what’s always confused me too. If you have those other things coming out of your check (which you really should), another 30% on a house when you still likely have to pay a car payment, for gas, for tolls (in some cities), for food and don’t get me started on the cost of raising children. It’s best to get it down to not more than 25% in case the property value increases dramatically or you have to come out of pocket to pay for any emergencies. Plus, in this market people are getting laid off left and right, so I really would be more cautious until we see what’s going to happen this year with the economy.
I’m a military physician and I sold my house in Southern California during the pandemic after being issued overseas….
3 years later… I can’t afford the same house! Bananas.
I had a friend who got orders to phoenix bought a home and literally had almost $100k-200k increase on his home after only living their for only a little over a year
Before even seeing where the Craigslist ad was from I recognized this apartment complex in Sf! It’s brutal out here. $2400 for a 1bedroom. No yard space etc and it’s a walk up- 4 flights for me. So much fun w a sprained ankle and a dog 🫠
I’m so happy I was born, raised, and am content in the Midwest. Housing is not a problem around here. Everybody with a decent job can buy a house.
Where in the Midwest cause where I live (still in the Midwest) it's getting quite hard to afford one.
@@anavillegas6199 I just searched every Midwest state for houses 100k or less and every single one had hundreds if not thousands of options. A spot check shows that many/most states do. I’d personally stick to midsize cities and small towns and ask a realtor which neighborhoods to stay out of. A very quick check of my small town (25k) shows five houses under 85K that are easy to see are neighborhoods I’d live in (aka, the north side of town). There are likely more spread throughout that would take more checking. Get an app that will filter for price and location.
“You will own nothing and be happy” - Klaus Schwab
Just remember, he's the front man.
NIMBYism and underbuilding are the real reasons why housing is unaffordable. Existing homeowners prevent the building of denser housing in their neighborhoods to preserve their property values.
Hey Humphrey, one thing I'd also point out is that in HCOL tech cities, a lot of people are working for private companies. Like in public companies, a lot of the total compensation people are getting is equity, but unlike public firms, that equity often has limited liquidity and questionable value. Secondary markets aren't always an option, your company's valuation can change for the worse, and stock dilution is a very real and expected danger.
So for those folks working for privately held companies in HCOL, the chance of owning a home gets even smaller!
A good amount of people would probably fit the 30-30-3 rule here in Mississippi, it's one of the few places where the housing situation hasn't become completely outrageous. I know Mississippi isn't as glamorous as NYC or LA, or as trendy as Denver or Portland, but I had the opportunity to live in all of those places and it would've just stretched me thin. For now, I own a home on the Mississippi coast, the value is increasing on it, and I'm able to save for other things. And who knows, maybe I'll move to the west coast in the future. But I like my setup now, it's actually a pretty chill place to live. Median home price is about 25O-300K, but there's plenty of housing below that price range too.
Same here in Georgia, well away from the Atlanta area of course. Most homes on the market are somewhere between $150k-300k. Anything above that is practically a mansion lol.
also all this is showing me is we're all criminally underpaid compared to the cost of living anywhere in this country lol
it is not anywhere. you need to understand modern people have very particular choices. With choices comes consequences. There are many less desirable area across the US with cost of living and property less than or about $200k.
Since you said it is criminally underpaid, then how come the people want to join to be a member in "criminal" area just because it is your choice in particular? Did you hurt yourself if you move? Why don't most people move and grow other area across US than flocking to their comfort bubble?
30/30/3 is a super clear, super straightforward rule, love it. Thanks for the video!
I never said I can afford it, I just love the simplicity! 😂😂😂
Doing the 30/30/3 rule (house hold) on a 15 year. Stoked on it but sacrificed a lot to get here. Lived like a college student for 4 years with me and my wife saving everything for a down payment. Lived with in-laws for 2 years and banked everything.
Thats what i did too
I like how you turn living rent free with your in-laws for 2 years into a sacrifice on your part 😆
@@zacharybob4336are you kidding? Living w in laws can be a nightmare 😆
Just FYI to some people....if your home value goes down, you are not allowed to just refinance at a lower rate later. I believe you have to pay the difference. Keep that in mind as we are at all time home prices and could face declines.
Been there, done that. Bought a home in a new build community offering NINJA, 2-1 buy down, Neamiah FHA loans in 2002. Surrounding foreclosures, short sales, and excess builder inventory put my home underwater by 2005. Remained underwater until I walked away in 2014.
Being FHA, there were no forgiveness, refinance, or HARP programs available like there were to conventional loan borrowers. (For most of that time, I think new rules arose in 2012-13 where I could at least refinance, but I had pretty much thrown in the towel at that point).
I don't think we're at the cusp of a collapse like 2008, but it is possible we could be looking at the start of a long multi-year gradual correction.
I do not recommend buying a home at today's prices, at today's rates, with minimal down payment, and minimal emergency cash on hand.
Investing in alternative income streams that are independent of the government should be the top priority for everyone right now. especially given the global economic crisis we are currently experiencing. Stocks, gold, silver, and virtual currencies are still attractive investments at the moment.
I've been able to scale from $50K to $189k in this red season because my Financial Advisor figured out Defensive strategies which help portfolios be less vulnerable to market downturns.
@@IrenaDolinsek Trying times are ahead, and good personal financial management will be very important to weather the storm. It would be very a innovative suggestion to look out for Financial Advisors like " Kathleen Yanelli Carole, who can help shape up your portfolio.
@@LarsBergstrom-uh2eu Where can I find this Advisor? I have to profit from the market's decline.
@@Erinmills98 Thanks for sharing, I just looked her up online and I would say she really does have an impressive background on investing.
The fact that someone just had 3 bots replying to each other in order to pull off a scam ad on a video about how impossible it will be to buy houses soon truly is the perfect exampls of late stage capitalism
Summary...if you are making less than 100k and want a house in the next 4 years give up or marry rich... Got it
That's it
It's wild to me how vastly different home prices are in different markets. I live in a starter home community near Detroit, Michigan, and the housing prices in my neighborhood back in 2018 when I bought were averaging around $120,000 for a 1,000 sq. ft. bungalow. There are areas that have homes starting in the 400's, but those are on the high end of middle-class for Metro Detroit. I can't imagine trying to get my first home in a market that starts out in the 200's for a house like mine.
I cant even find a 1 bed condo for $500k in Southern California.
That is Milwaukee. Unless you want a house that's falling apart or in the ghetto. Cant touch anything decent for under 250 usually. and at 7% no fricken thank you.
2:50 "The median rent is $1900"
Is that per unit or per bed? If the former, then that number is inflated by the amount or 2, 3, or 4 bed apartments
My frustration level went up up and way up after watching this video.
i honestly hate that 20% is considered the standard downpayment, id love to know the actual mortgage statistic for how many ppl actually do 20% down payments.
Hate that you are required to make any down payment for a home loan. 20% is just unrealistic tho.
Tons of people put less down. 20% avoids paying pmi.
It’s very low.
Not all that hard. We did 30%. Live within your means, save for what you want and do it.
I did 15%
I feel very fortunate that my wife and I were able to purchase our home when we did (2009). We live in central Illinois, and our house cost $154,000 at the time. Then, in 2020, we refinanced our loan, dropped our interest rate to 2.1%, and shortened the length of our loan to 15 years. It is not lost on us just how fortunate we are! Good luck to everyone who is currently trying to buy a house. I know it's rough out there at the moment.
Wouldnt it make more sense to use the after-tax take home pay for the calculations instead of the gross since that is what you actually receive?
I'll never understand why they don't do it like this. Just because on paper I make over 4k a month doesn't mean my bank sees that. I'm bringing 2.6k a month. Massive difference in what I can actually afford
That makes to much sense and would probably just bing out more hopelessness in a video. 😅
The issue is 30% of income is about 1K and you will not find apartments for that price when you will find for that price is a shed in someones back yard that just has a bed and a power outlet everything else you go to go to walmart or a gym.
It makes no sense why these numbers are calculated on your gross income. There is a huge chunk of your gross income you can't spend. That's a calculation based on money that you don't have. This should be based on net income. That's the money you have and can actually spend.
I left DC metro over a year ago and moved to Charlotte. 450k here vs DC is laughable.
2016 home, 2 acres, 45 min from city
Dc that would be 1990 home and needing complete renovations with a fraction of land
My house was bought a decade ago under $100k, now every single tiny one bedroom home in my neighborhood including my house are all $400k. I don't get it how are we supposed to afford a house for $400k when minimum wage is $10
You don't buy a home on minimum wage. You rent with friends or strangers until you find a way to increase income and save.
My dad bought the house I grew up in back in 2006 or 2007. Since then, it has tripled in price. It's not even a great house, he bought it because it was the cheapest house he could find that was near his work and a decent school district
@@camh3958 they said they already have a house. I think the point is why is they making expensive housing but most people are not making that much money. Even this video proves the point.
@@joeblack7262 He also didn't mention his house was paid at 10$ an hour. But Cam H is correct, you aren't expected to be able to afford a house at minimum wage. Minimum wage is an entry level job, its supposed to be for student and new workers. That doesn't mean the housing market isn't completely fucked right now, since even people doing X4 the minimum wage can hardly afford current prices. I think it comes back to a failure of governments to facilitate housing project, anyways for my country of Canada. The permitting is predatory at best, the material is seriously over priced etc. Its like anything, if you flood the market with things, prices become low. cellphones used to be for the rich , now every kid in third world countries own a phone. If the gov concentrated their effort in providing cheap building materials, adjusted regulations to facilitate competition etc, the market would get an influx of houses and the prices would go down, like it has for everything historically, that has abundance.
*You’re not.* You’re basically asking “why can’t I have an AVERAGE lifestyle on MINIMUM wage??”
Cause it’s the MINIMUM. Do you know what that means? The lowest. Not the average. Not comfortable to support a family on. It’s the lowest wage a company can pay any employee (like high school part time kids at McDonald’s)
My wife just I just purchased our first home in SC. Big tip, buy new construction. They have their own their lending company and can give you a better interest rate + incentives to lend with them. Also, everything is brand new and it comes with many warranties.
Yeah I like that 30/30/3 rule I hadn’t heard of a home no more than 3x your salary and I think that is good. It would probably be risky to save up too much or get too much of a mortgage where you can afford the cost but not the maintenance costs. I really hope we have a housing crash coming soon.
I think it's great that you showed how income has not kept up with the rising rents, and it's very difficult to rent on a median income especially with landlords having tge 3x rule. I've been looking for a house but the kind of house that I can afford has slowly decreased as interest rates have risen. I can basically only afford a house in the worst of neighborhoods now vs before where I could atleast make it to an ok area. I'm lucky to have the cheap mom & pop rental I have, because if I moved I wouldn't be able to save as much as I have been
Bruh, I make $100k and the 30/30/3 rule still seems unachievable in my area. Houses are so expensive :’)
The msot I can afford is $300k, but the cheapest home is $350k for a janky one
I’m around 160k a year rn but still living with my parents waiting for that interest rate to come down so I can either buy or build a home.
What area are you in? Or like what's the average cost of housing in your area?
Same here! Good luck to us.
Me too!! Let’s get it!
@n?a you don’t know how long the OP has been making 160k nor do you know what their financials are. They could be paying down debt, not budgeting and living paycheck to paycheck.
They clearly said they were waiting for interest rates to come down, so maybe they don’t have have enough yet to pay in full and they don’t want to pay a crap ton in interest.
Geez chill out instead of assuming everyone is a liar.
@n?a Again you IGNORED the fact that you don’t know his circumstances. He could just recently have been making 160k you don’t know if he is paying down debt or student loans. You acting like you everything about the OPs particular situation and being judgey is just petty and makes you look silly.
I'm so thankful at 43, my home is paid for.
Hot take: The 20% Down payment rule is now unattainable for most first time buyers in major/mid-sized cities. The best option for new home buyers in most major cities is to start with an affordable condo or townhome that they can buy with less than 5% down, live there for a few years to build equity, and then sell and use THAT money for their 20% down payment.
How does that work? You finance/get a mortgage for a townhouse/condo, live there for some years, and sell? What money did you earn in that time?
@@SoulEraser000 key words: build equity
Condos are hard to sell
@@daisylavender5275 Denver here. They sell in a hot minute in our area because it is the only way to own anything for under $350k within a 45-minute drive.
We need to build more houses, no matter the state of the economy. 400k for a home is asinine.
I'm looking for a house in california... 420K is a joke of a house.... normal houses nothing fancy is 650k
@@mariaelenamontes1369 California is the problem on that one. I recently moved out here and I’ll never come back. This place is a hellhole and I can’t wait to leave. Glad I’m only here for a year for work.
How do you build a house?
@@mariaelenamontes1369 that's absurd and should decline as california's cost of living and taxes are sky high. Pretty soon you won't be able to give them away
@@kT-ci1ke agree.. interest high.. taxes higher... is not ok...
I've always heard the 30% rule using take home pay, not gross.
Yeah a tend to avoid using gross income for any kind of budget or projection because of taxes. A $40,000 salary is more like $28,000
I think the most important aspect of this has to do with it being designed (intentionally) to be applicable to anyone on the surface. This is the absolute best case scenario using these numbers. As he touched on about the regular bills we all have that are not considered housing expenses. Vehicle loans and general “healthy” debt. But let’s not forget health insurance, and retirement. That gets taken right off the top. Health insurance, if you’re lucky enough to have a portion paid by your employer, still usually has a notable cost on the employee. But what do you do, gotta have it or live with the crippling fear of medical debt. Retirement is similar. Gotta pay into it, or live with the crippling fear of having to retire as a bridge troll. I could go on and on. These are just two common examples, but they directly impact the take home. Don’t forget deductibles, co pays, and losses in your retirement.
Moral of the story, there’s gonna be a massive problem when we are all old, and we don’t have equity in property, mortgage/rent that’s still being paid, and whatever fresh new hell awaits.