7% interest rate?!

It's the opposite here. Rent is 100% cheaper than buying an equivalent home. At least in our city.
Like I posted before, my daughter lives in a neighborhood of identical duplexes. Her payment with taxes and insurance is a hair under $1,000. The other half of her duplex, same square footage, rents for $2,000
 
Yeah, if ownership was more expensive than renting investors wouldn't be snapping up properties en masse the way they are. They're doing it because the rent they can charge more than covers the cost of purchase + repairs. And while higher interest rates drive up ownership costs for those who need a mortgage, a significant chunk of investor purchases are cash.
Exactly.
 
Like I posted before, my daughter lives in a neighborhood of identical duplexes. Her payment with taxes and insurance is a hair under $1,000. The other half of her duplex, same square footage, rents for $2,000

I get it. We pay $3700 for our rental house. The house 2 down which is identical except for an additional 100sq ft of loft space just rented for $5000. If we wanted to buy a house equivalent to what we have now, $1.3M. Payment would be over double our rent. There is literally nothing under $1M in our required size range in the entire city. Every place is different.
 
We bought our first home in '94 and got 7.2% interest rate as part of a 1st time home buyer plan. We were thrilled because interest rates were double-digit at the time. Of course, we had to pay PMI since we were 1'st time home buyers - there's your scam right there. we pretty quickly figured out how to pay down the principal so we could get rid of the PMI. Still, making someone pay additional because they are a supposed risk to not keep up with payments is a division by zero that should make your head explode.

If I were a 1st time buyer right now I would not be so concerned with the interest rate. They control the interest rate to control inflation. Home prices should come down accordingly. That's going to put some people upside-down on their mortgages (paying more in mortgage than the house is worth) but it's an opportunity for you. Buy when the prices drop, interest rate be damned. You will have lots of opportunity to refinance down the road.
PMI is not because someone is a first time homebuyer, it's because they are putting less than 20% down. Just clarifying that.
 

I get it. We pay $3700 for our rental house. The house 2 down which is identical except for an additional 100sq ft of loft space just rented for $5000. If we wanted to buy a house equivalent to what we have now, $1.3M. Payment would be over double our rent. There is literally nothing under $1M in our required size range in the entire city. Every place is different.
Wonder how the landlords don't go belly up charging less than it costs?
 
Say it louder for people in the back!

The single-family home was perfected in New England 375 years ago. The center-hall colonial is the pinnacle of form and function. Four rooms downstairs. Kitchen, dining, living, office. Four bedrooms upstairs. Symmetrical and clean, five windows over four windows. The design scales and works just as well at 1,800 square feet as it does at 5,000 square feet.
I'm always torn between the center-hall colonial and the American Foursquare for my favorite classic design. Colonials are definitely nicer when the footprint is relatively large. Foursquares tend to work better, I think, if the house is under about 1200 sq. ft., or if the lot is narrow.
Our current house is a Foursquare. The lot is 38 ft. wide, and the house is 24 ft wide.

I've seen some really lovely updated Foursquare plans that have been enlarged a bit to add a family room tied to a larger kitchen, a full downstairs bath and a larger master upstairs. They are not really square, though, they've morphed into a rectangle a bit deeper than they are wide. If I were ever to build a new home, this is what I would probably choose, because it would be on an infill lot, so likely narrow.
 
Wonder how the landlords don't go belly up charging less than it costs?
Because a lot of the properties are owned for investment portfolios and people are wealthy enough to ride out the ups and downs of the market. They don’t need it to make sense monthly .. it will make sense over time.

There’s a huge difference between a landlord with 1-15 units and the investment firm that bought up half the townhouses in my sister- in-laws new development. They sat empty for two or three years and sold at triple their build cost.

These tax shelters are a huge reason for the housing shortages in Canada though the government would die before admitting they should have done something to curb that practice.
 
Me personally I would focus more on what I can budget monthly for expenses whether that is rent or a mortage. If a mortage, even with a "high" rate, is signifcantly lower than renting, then buy. ( keeping closing costs in mind too )

when calculating the on-going costs of home ownership there are considerations that must be factored in as far as cost well beyond the monthly mortgage payment-

property taxes (what is the historical norm on increases year to year), and

insurance (again, average historical increases on the type of home, region).

just b/c 'the numbers' show your monthly payment will be at an affordable amount upon closing doesn't mean it will always be at that number. the amount of a mortgage payment can (and in my experience) is annually adjusted up to cover the escrow account amounts for property taxes and insurance.



additionally to be considered when running the numbers-


utilities (most if not all rentals, at least apartments, bundle water and garbage into the base rent payment and i've found many renters are SHOCKED at the cost when faced with it on their own),

maintenance and repairs (a wise landlord is factoring these into the rent and a large increase in rent could be b/c of a major need- as is very evident at the place my oldest rents-their large rent increase this year has very apparently been funneled into structural maintenance and upgrades. a wise homeowner sets aside funds on a regular basis so that big dollar repairs don't have a financially devastating impact).




I'm wondering if this rather unusual "not-recession" will drive more people to older stable neighborhoods and perhaps cause more people to re-think the strange American compulsion to always want to live in a *new* house. Older homes are quite liveable and usually cost less per sq.ft than new

an older home was the norm for first time buyers (at least us and everyone we knew). one of the advantages we found when shopping in that housing market was realizing the value of buying a bit older vs a bit newer 'older home'. we found that slightly older homes likely had been prepared for sale by having big dollar items replaced vs. the slightly newer ones. it seemed like there was a 10 year 'sweet spot' on big ticket items-if there was still 10 years left on the expected life span then a seller would'nt have replaced but if it dropped below that 10 year mark then you were looking at a new one or a seller credit to pay for it. in our case it was a full roof for the home-they were within that 10 year window so it was done prior to listing (and b/c they were a bit squeemish about the age of a few other things they paid for a whole house warranty for the first year). this was in a neither a buyer nor seller's market.


People still don't like the idea of the past where things were more confined feel


'feel'. is it the actual square footage/layout or what it feels like? i say that b/c i recall when we sold in '06 our very experienced, decades long realtor commenting about a change he was observing in younger buyers that he thought would become much more common. he was seeing less focus on actual square footage vs. perceived or 'felt' space. he could show multiple homes to a buyer and despite identical amenities they would most often opt for a more costly option with less square footage if it had higher ceilings and other design elements that gave the perception of more space. i've noticed that where we live now as well that people to this day seem to have the same mindset-a house i wouldn't give a second look at b/c of the lack of actual usable space is frequently favored b/c of it's high ceilings. put some non accessible shelving kitchen cabinets that go up to the top of a kitchen wall in a house and it somehow feels more spacious to a potential buyer.
 
Because a lot of the properties are owned for investment portfolios and people are wealthy enough to ride out the ups and downs of the market. They don’t need it to make sense monthly .. it will make sense over time.

There’s a huge difference between a landlord with 1-15 units and the investment firm that bought up half the townhouses in my sister- in-laws new development. They sat empty for two or three years and sold at triple their build cost.

These tax shelters are a huge reason for the housing shortages in Canada though the government would die before admitting they should have done something to curb that practice.
Yeah. I have a friend who is office manager for an older couple that own hundreds of apartments and have for over 30 years. The cost basis is very low as the buildings as been paid for for a long time. Just upkeep.
 
See the post upthread about overseas investors seeking tax shelters.
Yup. An investment group bought up over 1,000 houses here over the past decade as rentals.
 
PMI is not because someone is a first time homebuyer, it's because they are putting less than 20% down. Just clarifying that.
Agreed and this is accurate. OTOH - if you are selling a house to buy a second house, you have > 20% down.
 
Agreed and this is accurate. OTOH - if you are selling a house to buy a second house, you have > 20% down.
that is not accurate either. I work in mortgage, and we have a lot of borrowers who sell one house and have only 10-15% for their down payment on their next house.
 
Foursquares tend to work better, I think, if the house is under about 1200 sq. ft., or if the lot is narrow.
Our current house is a Foursquare. The lot is 38 ft. wide, and the house is 24 ft wide.

I've seen some really lovely updated Foursquare plans that have been enlarged a bit to add a family room tied to a larger kitchen, a full downstairs bath and a larger master upstairs. They are not really square, though, they've morphed into a rectangle a bit deeper than they are wide. If I were ever to build a new home, this is what I would probably choose, because it would be on an infill lot, so likely narrow.
For a small house I prefer a one-and-a-half story dormered Cape, but I'm predisposed to anti-Midwest bias.
 
'feel'. is the actual square footage/layout or what it feels like? i say that b/c i recall when we sold in '06 our very experienced, decades long realtor commenting about a change he was observing in younger buyers that he thought would become much more common. he was seeing less focus on actual square footage vs. perceived or 'felt' space. he could show multiple homes to a buyer and despite identical amenities they would most often opt for a more costly option with less square footage if it had higher ceilings and other design elements that gave the perception of more space. i've noticed that where we live now as well that people to this day seem to have the same mindset-a house i wouldn't give a second look at b/c of the lack of actual usable space is frequently favored b/c of it's high ceilings. put some non accessible shelving kitchen cabinets that go up to the top of a kitchen wall in a house and it somehow feels more spacious to a potential buyer.
Both but more leaning towards how you feel within that space.

We lived in a 1500 sq foot rental house, one level, slab. and the kitchen table, kitchen and family room area was all open to each other except they built a wall that formed a semi-hallway and allowed for an island of sorts even though it wasn't in the middle of the kitchen. Had that house had walls separating them where the kitchen table had walls and just a doorway through the kitchen and the kitchen had a wall towards the family room area it would have been an awful layout, dark and too closed in. As is 3 rooms (2 of them bedrooms, 1 essentially a bedroom but lacked a closet) and the main bathroom along with the linen closet were scrunched together in one area. The master bedroom closet and bathroom having a bit of separation but just off of the family room.

Our home now, the main living area is actually less than the rental house. It is about 1,360 square feet (there's an upstairs and then unfinished basement that add to that). It has a bedroom (used as an office), a full bathroom, a kitchen with an island, a bump out for the kitchen table, the great room and the dining room. If the main living space was bigger but the dining room was completely closed off and only had 1 open doorway to walk through just that minor change alone would significantly alter the feel of the house especially combined with what we did putting a wall in the middle (see my other picture to another poster) rather than leaving it completely open. We def. didn't like completely open concept but we do not like too enclosed feel either.

High ceilings is actually quite nice TBH and we have that too. The front bedroom upstairs actually has the highest ceilings maybe 11 or 12 feet and it's to compensate that it's just a wee bit smaller than the other two bedrooms upstairs (aside from the master bedroom) but it also has its own bathroom but does not have a walk in closet like the other bedrooms just a double door one with no shelves built in. Unusable space to have the ceiling that high? I mean sure but it does give a bit more wider feel. We have a double story foyer and I love it. I think we have 10 ft ceilings in the main level, 9 in the basement and either 8 or 9 feet upstairs.

The room I grew up in at my mom's house was super tiny but had half of the ceiling part of the roof structure so it slanted way high. It would have made putting in a ceiling fan in there really difficult (so we never did) but it made a huge difference in how I felt in this room that only a full sized bed fit from one side of the wall to the other in an alcove, you could not have done any other bed in that room.

One big thing my husband and I talked about when building our house was what things cannot really be changed after the fact and what can. When looking at a home unless you're going down to studs and rearranging things a perspective homebuyer may see that higher ceiling as a pro because changing the size of the room or the layout of the entire house less feasible so if it makes it feel bigger that might be the way to go. I hear ya on non-accessible cabinets (I'm short so it doesn't take much) but taking it from our rental house where there just was no storage really at all save for some of those kitchen cabinets I would take storage 100% all day long. The cabinets may not be used on a daily basis and be something you need a step ladder for but still. Above our fridge is a deep storage spot, no I can't reach it really but it's been great to have. So maybe that part is eye of the beholder there.
 
Wonder how the landlords don't go belly up charging less than it costs?

Home prices here have gone up about 50% over the last couple years. This house was sold new for $787K in 2015. It's now worth $1.3M, conservatively. In this area, home appreciation is a guarantee, so its a long game.
 
that is not accurate either. I work in mortgage, and we have a lot of borrowers who sell one house and have only 10-15% for their down payment on their next house.
OK, so educate me; what is the PMI for?

I'll tell you what happened to us - as the value of our house went up, we tried to get the house re-appraised to demonstrate we owned > 20% of the value of the mortgage. Problem was, we had to get the appraisal done through the lender. Well, guess who doesn't have much interest in you getting a better appraisal to get the PMI removed? Oh yeah, that's the lender. All PMI was doing for us was making our monthly payment more $$$. It's all behind us now but sure didn't seem fair at the time.
 
For a small house I prefer a one-and-a-half story dormered Cape, but I'm predisposed to anti-Midwest bias.
There are foursquares all over the place in the greater northeast, ya' know. ;) Pennsylvania, in particular, has loads of them, as does Vermont. Not all of them are pretty, but the best Craftsman-influenced versions tend to be really lovely.

They are especially ubiquitous in areas developed around the turn of the 20th century, because quite a few of the most popular Sears Kit homes were foursquares.

BTW, IME, traditional layout homes didn't get that "dark" reputation until people started building post-War homes that had far fewer windows than previously. In our home, the kitchen has 3 windows, the dining room has 4, the living room has 5, and the foyer has 2 if you count the light in the door. (Our LR, DR, and foyer are open to one another, connected by 5 foot wide archways.) Upstairs, the main bedrooms have 3 windows each, and the smallest one has a double-window on a southfacing wall. Plenty of light.
 
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Many landlords use these homes as cash shelters, especially the foreign all cash buyers. You arent paying their mortgage, you are helping them avoid taxarion in China (usually). Other "investment" landlords put down a significant amount of cash down and then get interest only loans. The monthly cash flow pays the interest of the loan, they pocket the rest and rely on appreciation of the home over time. Then they sell the home for a profit.

I wish housing wasn't treated as an investment in this country. That's the entire reason why the market is the way it is.
China indeed. Moist people don't know what's gone on since 2008.
 













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