7% interest rate?!

[mrodgers]

Same here. Renting a home is going to be cheaper.

It's cheaper now with the skyrocketing housing costs to purchase, but just 2 years ago, you could buy a house for under $800'month while typical rent was around $950-1200 for equivalent. Renting an actual house is still about that.

Though when you all talk about rent, I think of the 1 and 2 bedroom apartments with no space as what people rent. Renting houses isn't really a thing around here and living forever raising your family in a 2 bedroom apartment would be horrible. That costs around $650 here, but you are all sitting on top of one another at all times as a typical apartment made my tiny little 1000 sq ft house seem like a McMansion.

 

[DLgal]

For rich people it's a temporary expense. It's not a temporary expense when you don't have $100k lying around to put down on a house. It's the actual living expense of many many people.

I'm getting miserable nasty group emails from my new owner about rent not being paid. They are giving 5 days and state they will start the eviction process and once started that's it. You can't catch up and stop it. My neighborhood is mostly 70 year olds on limited incomes, many of them still working, disabled people, and fathers trying not to need to move to San Francisco where they can survive living in a cardboard box. The 40% increase in rent by being bought out by a faceless corporation is killing them. A trailer is the cheapest option and last step above before becoming homeless.

I have been a renter my whole adult life. I get it. It's our actual living expense also. We literally cannot afford to buy a house here at the current prices. We could afford half of what the houses cost...

My point in calling it a temporary expense is that we aren't committed to paying THAT rent price for 30 years. We CAN always find a cheaper rental if necessary. Somewhere. Probably not where we want to be, but if push comes to shove, we can walk away from our lease and find something cheaper. You can't easily walk away from a house payment without obliterating your credit.

 

[NotUrsula]

[snip]

Now an issue I do know has been affecting people's comps is more concentrated in a certain city where people purchase these small often 1 story homes that have been there for many decades tear it down and put up larger two story (something that is happening elsewhere in the country). People did get upset about the character of the city getting messed with as it was know for quaint homes so the city did put in some restrictions like how close to the property line, can't remember height was one of them. That does present an issue with a much more modern home amidst older homes.

Tear-downs are a HUGE issue over here; every county suburb inside the 270 ring has been gutted by developers building spec tear-downs that they can advertise as being in those good school districts. Kirkwood and Brentwood, in particular, are nearly unrecognizable from as recently as 4 years ago. Both towns had a few blocks of large homes that were showpieces, including Old Kirkwood's Painted Ladies, with the rest of them built from 1920-1950 and rather small & unassuming. Brentwood, even had a large group of Lustron homes. The average price in Kirkwood had been around $325K for most homes, with Brentwood's less tony addresses going for about $250K. Kirkwood's home were about 1/3 brick and 2/3 wooden siding, but almost all of Brentwood's smaller homes had been beautifully crafted St. Louis brick (which, coincidentally, sells for $1400/pallet now. That was a little bonus for the construction companies who traded for it and hauled it away to use it to build house extensions in Ladue.)

Those smaller homes have all been destroyed and replaced by much larger "wooden farmhouse" spec houses with an average price of $825K. Driving DD to the rink over the course of last summer, I saw whole streets in Kirkwood go down at a rate of 1 house per week; people were being offered 30% more than the house was worth purely to get the land, and the house that went up to replace it was priced at 4X the cost of the one they took down. What drives me nuts about the giant houses is that front garages have been allowed on them, whereas the rule there had always previously been that the garage had to be placed in the rear. But you can't do that when you're counting on taking the walls right up to the minimum setback to make the house as large as possible. It's ruined those beautiful streets.

 

[Mackenzie Click-Mickelson]

Tear-downs are a HUGE issue over here; every county suburb inside the 270 ring has been gutted by developers building spec tear-downs that they can advertise as being in those good school districts. Kirkwood and Brentwood, in particular, are nearly unrecognizable from as recently as 4 years ago. Both towns had a few blocks of large homes that were showpieces, including Old Kirkwood's Painted Ladies, with the rest of them built from 1920-1950 and rather small & unassuming. Brentwood, even had a large group of Lustron homes. The average price in Kirkwood had been around $325K for most homes, with Brentwood's less tony addresses going for about $250K. Kirkwood's home were about 1/3 brick and 2/3 wooden siding, but almost all of Brentwood's smaller homes had been beautifully crafted St. Louis brick (which, coincidentally, sells for $1400/pallet now. That was a little bonus for the construction companies who traded for it and hauled it away to use it to build house extensions in Ladue.)

Those smaller homes have all been destroyed and replaced by much larger "wooden farmhouse" spec houses with an average price of $825K. Driving DD to the rink over the course of last summer, I saw whole streets in Kirkwood go down at a rate of 1 house per week; people were being offered 30% more than the house was worth purely to get the land, and the house that went up to replace it was priced at 4X the cost of the one they took down. What drives me nuts about the giant houses is that front garages have been allowed on them, whereas the rule there had always previously been that the garage had to be placed in the rear. But you can't do that when you're counting on taking the walls right up to the minimum setback to make the house as large as possible. It's ruined those beautiful streets.

Yeah even in my aunt's city (which is near the one city I mentioned in my comment) has that every now and then, actually a house on her street was like that and while those homes were larger to begin with it's a striking difference in style. That other city just had them in such large amounts for how small the city was it grabbed the attention.

My husband's grandmother lives in Ballwin, MO near Manchester and for probably IDK maybe 8+ years she's been talking about how prevalent it has become to take these homes where they were more modest in size but had deep lots and people buying them, tearing them down and building bigger and bigger homes, thus it's really starting to effect the property taxes although these were not spec homes but rather a person just interested in the area but didn't like the existing home (same for the city in my area). We have seen the tear downs in her area too when we've visited. I haven't seen them in her direct neighborhood but you see them as you're driving right by it.

 

[tvguy]

I think you need to reread how you presented the issue.

If a lender doesn't believe, with the comps or can't find any to support the numbers along with an exterior visual of a house, has increased in enough value to remove PMI it's quite understandable they may want to go inside but in the absence of the homeowner not doing  anything to potentially improve the value that makes less sense. The answer would be more likely your house hasn't increased enough in value in proportion to what the loan currently sits try again later or pay down the loan enough to where the difference is gone.

I'm not getting into weed houses that's an entirely different conversation but it does still get into my other point of it's discriminatory to insist a homeowner isn't trashing their house, like you said, in order to remove PMI as that is basically like saying people who end up having PMI are more likely to do so. Your daughter should have filed a complaint at least that's what I would do to someone coming into my home with an assumption it's trashed.

And again reread my comments if the homeowner has done improvements or altered the house which can affect the value (the whole point of an appraisal) yeah going inside would seem prudent although depending on what it is a permit may have been required and paperwork online available and potentially already updated on the county page for the house.

All I know is what the process was and what the appraiser said. The appraiser said it was to verify the interior had not been trashed. And the links I posted show in California, most lenders require an interior inspection before removing PMI.

 

[RamblingMad]

I have been a renter my whole adult life. I get it. It's our actual living expense also. We literally cannot afford to buy a house here at the current prices. We could afford half of what the houses cost...

My point in calling it a temporary expense is that we aren't committed to paying THAT rent price for 30 years. We CAN always find a cheaper rental if necessary. Somewhere. Probably not where we want to be, but if push comes to shove, we can walk away from our lease and find something cheaper. You can't easily walk away from a house payment without obliterating your credit.

I own because rents have steadily risen over the last twenty years by me. An apartment I would have rented 20 years ago for $650 a month is now $1800 a month. Rents here have practically double every 10 years. It's like Disney ticket prices. I own to fix my cost of living knowing that I'll have maintenance items, but for the most part, I have a predictable monthly payment.

 

[Mackenzie Click-Mickelson]

All I know is what the process was and what the appraiser said. The appraiser said it was to verify the interior had not been trashed. And the links I posted show in California, most lenders require an interior inspection before removing PMI.

Your link didn't say any of that.

TBH when you put out things like the infamous Canadian stories you often say "I can only say what they say". It becomes hard to discuss in that way. We are not disagreeing on appraisals needed, waivers are not super common, interior inspections was the heart of the back and forth between you and I vs appraisal via exterior review and comps. If you're trying to use your link for backup it's not working.

I appreciate the civil manner but I'm out on the back and forth on this. The PP who I asked the question of has answered today and the rest had been in enough conversation

 

[tvguy]

Your link didn't say any of that.

TBH when you put out things like the infamous Canadian stories you often say "I can only say what they say". It becomes hard to discuss in that way. We are not disagreeing on appraisals needed, waivers are not super common, interior inspections was the heart of the back and forth between you and I vs appraisal via exterior review and comps. If you're trying to use your link for backup it's not working.

I appreciate the civil manner but I'm out on the back and forth on this. The PP who I asked the question of has answered today and the rest had been in enough conversation

I'm sorry, but I am confused. The broker who represents who knows how many lenders at the start of the process said to expect an interior inspection would be required. The lender emailed my daughter the form to request to drop PMI and said an interior inspection would be required. The independent appraiser contacted my daughter to set up an appointment for an interior inspection and THAT appraiser said this is normal.
Someday maybe my cousins will get on the DIS and you guys can debate all things Canadian. But several have been nice enough this year to send me photos of the Fruitcake at weddings they attended.

 

[DLgal]

I own because rents have steadily risen over the last twenty years by me. An apartment I would have rented 20 years ago for $650 a month is now $1800 a month. Rents here have practically double every 10 years. It's like Disney ticket prices. I own to fix my cost of living knowing that I'll have maintenance items, but for the most part, I have a predictable monthly payment.

That's nice. You also own because you could actually afford to buy the house in the first place. That's not been our reality. We are military. When we got married, our income was about $35k. Homes were already in the upper $300k at our first duty station. We spent 11 years in the region and were never qualified to purchase a home. 4 more years in another high COL area, then right back to Southern CA. We have never been in a position to afford to buy where we want to live.

If we could have bought a house for under $200k at any point, we would absolutely have done so.

Instead, we have been renting by necessity.

 

[DCLMP]

Watching my mother deal with 2 flights of steps in her house, I definitely don't want a 2 story house with laundry in the basement. No big deal when I was growing up in that house at a young age, but I owned a single story and no way would I want a 2 story looking forward into "retirement" years.

It more of heat rises thing for us. If I lived in a cold climate I wouldn't care so much.

 

[tvguy]

That's nice. You also own because you could actually afford to buy the house in the first place. That's not been our reality. We are military. When we got married, our income was about $35k. Homes were already in the upper $300k at our first duty station. We spent 11 years in the region and were never qualified to purchase a home. 4 more years in another high COL area, then right back to Southern CA. We have never been in a position to afford to buy where we want to live.

If we could have bought a house for under $200k at any point, we would absolutely have done so.

Instead, we have been renting by necessity.

You didn't get housing or a tax free housing allowance?
That is what made home ownership easier for my FIL. Career Air Force, 27 years of base housing, 27 years to save for a house when he retired.

 

[DCLMP]

Give our current rates and strong currency, lots of foreign monies are buying dollars to buy our debt.

And consumer debt isn't terrible. Sure, we're starting to see delinquencies go up. But that's to be expected with higher inflation. Consumers are being stretched. There are definitely go to be more bankruptcies over the next two years.

https://www.newyorkfed.org/microeconomics/hhdc.html

The rising 10 year yield says otherwise. Borrowing continues to rise even with the rise of interests rates so what does that tell you.

 

[RamblingMad]

The rising 10 year yield says otherwise. Borrowing continues to rise even with the rise of interests rates so what does that tell you.

The 10 year should go up. There should be some benefit for taking 10 years of duration risk over 3 months.

 

[NotUrsula]

That's the other thing that could change over the long term: tax laws, both here and abroad., and zoning rules as well. Many countries are getting a wee bit tired of single-family homes being bought up by overseas buyers who keep them off the market and just let them rot. Communities have a vested interest in keeping small property investments closer to home and in use or market rotation, and many are using legislation to bring their ownership mix back into balance.

 

[DLgal]

You didn't get housing or a tax free housing allowance?
That is what made home ownership easier for my FIL. Career Air Force, 27 years of base housing, 27 years to save for a house when he retired.

Yup. We did. That's how we paid our rent. That $35k was our income INCLUDING the housing allowance, which was a whopping $1050 a month when we were first starting out. Our rent was $1200/month. My husband's base pay was $1997/month. I didn't have a job yet when we first moved down here. I left my job in the Bay Area and had to find work with a temp agency.

When you live on base, they take 100% of your Basic Allowance for Housing. It's not free. And you get the "privilege" of living in projects quality houses on toxic land with toxic water supplies. No thanks. Housing on military bases became privatized a LONG time ago. You can do better for your BAH off base.

 

[barkley]

Yup. We did. That's how we paid our rent. That $35k was our income INCLUDING the housing allowance, which was a whopping $1050 a month when we were first starting out. Our rent was $1200/month. My husband's base pay was $1997/month. I didn't have a job yet when we first moved down here. I left my job in the Bay Area and had to find work with a temp agency.

When you live on base, they take 100% of your Basic Allowance for Housing. It's not free. And you get the "privilege" of living in projects quality houses on toxic land with toxic water supplies. No thanks. Housing on military bases became privatized a LONG time ago. You can do better for your BAH off base.

i administered public assistance in the bay area-people have no idea how low the pay can be for those who serve. we had a shameful amount of military families reliant on public assistance programs to meet their basic needs b/c the pay was in no way appropriate (lower prices at the store on base don't benefit a household that doesn't have the money to shop there-lots of referrals to food pantries, even when it was a strong economy/low inflation).

thank you so much for your entire family's service and sacrifices!

 

[CdnCarrie]

I'm sorry, but I am confused. The broker who represents who knows how many lenders at the start of the process said to expect an interior inspection would be required. The lender emailed my daughter the form to request to drop PMI and said an interior inspection would be required. The independent appraiser contacted my daughter to set up an appointment for an interior inspection and THAT appraiser said this is normal.
Someday maybe my cousins will get on the DIS and you guys can debate all things Canadian. But several have been nice enough this year to send me photos of the Fruitcake at weddings they attended.

I've always backed you up at the fruitcake thing. It was traditional at least on the prairies up until the 90s. Probably not as much anymore.
It would be cut up, wrapped and given out at the end of the night. I had it at my wedding.
Probably very regional Sask/MB thing. Or Anglo/Saxon Sask/MB thing.

 

[tvguy]

I've always backed you up at the fruitcake thing. It was traditional at least on the prairies up until the 90s. Probably not as much anymore.
It would be cut up, wrapped and given out at the end of the night. I had it at my wedding.
Probably very regional Sask/MB thing. Or Anglo/Saxon Sask/MB thing.

Full disclosure, my cousins in Ottawa are the ones sending the photos. Our moms were born and raised in Saskatchewan, but both moved elsewhere (Ottawa for their mom, California for my mom) more than 70 years ago.

 

[CdnCarrie]

Full disclosure, my cousins in Ottawa are the ones sending the photos. Our moms were born and raised in Saskatchewan, but both moved elsewhere (Ottawa for their mom, California for my mom) more than 70 years ago.

I doubt very much this tradition is still alive unless the grandmothers are doing it.

 

[DLgal]

i administered public assistance in the bay area-people have no idea how low the pay can be for those who serve. we had a shameful amount of military families reliant on public assistance programs to meet their basic needs b/c the pay was in no way appropriate (lower prices at the store on base don't benefit a household that doesn't have the money to shop there-lots of referrals to food pantries, even when it was a strong economy/low inflation).

thank you so much for your entire family's service and sacrifices!

It's really sad. My husband is an officer, and that's the only reason we were able to scrape by. The pay tables are public information. It's a shame that more tax payers don't know how little servicemembers actually get paid.

He now makes 5X the amount he did when he was newly commissioned, but we STILL can't qualify for a mortgage at the house prices where we live. It's nuts.