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Rent requirements in the US are nuts
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this post was submitted on 31 Aug 2023
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What really blows is when I bought my house 8 years ago, it was affordable. I now make almost 40% more and there is no way I could afford the same house. Mortgage, taxes and insurance (including flood insurance because the NFIP sucks) is less than $1,400. Once PMI is removed, it will be closer to 1,300, and once we finally remove flood insurance (because we are inland and the maps are outdated) it will be less than $1,100 a month.
I just don't see how millennials find homes anywhere remotely desirable in this market.
My daughter is only 13 but we're already expecting she's going to spend her 20s with us because of this.
Try 30s
Even back at the end of 2019, we managed to find a house in a decent area that we could afford on my $60K/yr job. The mortgage was only $100 more a month than we were paying for a TINY “2” bedroom apartment. We managed to use our state’s first time homebuyer program to get a grant to pay to remove the PMI up front, which was a big help. I now make more money but I really think we couldn’t afford our house now (at least at the price online website estimate). It’s crazy and we never want to move if we can avoid it!
I have a "starter house" but in a very desirable town, it's possible it might make someone more money to tear down and build a mcmansion. We will probably want to move, which is fine because bigger houses aren't that much more expensive. Once the mcmansions hit the market during the lull, they never went away. It's just no one is willing to pay 650k+ for them. So now they are in the 450k range, it has driven down the price of reasonably large and or older big farm style homes down. So now my 170k property is worth like almost 250k and the house that would have been 400k, is around 325 to 350. Those two events basically closed the gap significantly.
It's a strange market to be sure, but one way or another I think it'll end. Either mortgage rates go way, way down, or prices, or both in the medium to long term.