Could you afford to buy your own home now?

[MamaBelle4]

That people just starting out can't even afford our house here is rather a bad thing.

People just starting out EVERYWHERE can't afford homes. With higher COL comes higher pay, and with lower COL comes lower pay. But I would be extremely surprised if it's easy on anyone just starting out anywhere.

I really think we're headed to a great big crash.

 

[RamblingMad]

People just starting out EVERYWHERE can't afford homes. With higher COL comes higher pay, and with lower COL comes lower pay. But I would be extremely surprised if it's easy on anyone just starting out anywhere.

I really think we're headed to a great big crash.

Except there is a shortage of homes now.

 

[leebee]

Nope. We have a big 115 year old house, about 2200 sq feet, full basement with finished walk-out room, LR, DR, family room, kitchen, 3 bedrooms, 2 baths, small storage room, laundry room, full walk-up attic on about 0.2acres. We bought it in 2005 for $193K. Just had it appraised for a home equity loan; it came in at $331K. We live in a small college town just outside of Bangor, ME.

 

[Jml813]

It would be tough. We bought the house new 7 years ago and it's now worth almost half a million more than we paid for it. We paid $270.

 

[DCLMP]

Except there is a shortage of homes now.

I have a few co-workers trying to get out of their new builds because they can no longer afford it with interests going up. Our neighbors put their house up for sale and pulled it after a few weeks no offers. Our city has had the highest price increases over the last two years because people are leaving Cali in droves. I think by this this time next year will see a big shift in the housing market. Recession has a way of doing that.

 

[TippyThomas]

I could, but I wouldn't.

 

[rlk]

Our apartment has almost tripled in value since we purchased it 19 years ago. While we could afford to, we would not purchase it now.

 

[Colleen27]

Yes, though just barely and I wouldn't be happy with the tradeoffs it would take to balance our monthly budget.

ETA: If the question is "would I?", the answer would be a reluctant yes. Because while the monthly payment would be a stretch, rentals in our area are hard to find and one big enough for a family that wouldn't force us to part with our pets would cost more than the mortgage to buy this house at today's prices.

 

[GreatLakes]

Of course because I would also own a home that would sell for the same amount.

 

[FlightlessDuck]

If I wasn't paying both of my kids' students loans, yes.

 

[Luv Bunnies]

Ours is paid off. We bought it nearly 3 years ago (downsized from a larger house so were able to pay cash). The value has increased anywhere from $100-$200k. Yes, we live in an area with crazy housing prices. We could afford it today if we had to. That’s assuming we also would have gotten more for our old house.

 

[Cheburashka]

I bought a house last summer due to a break-up, right at the height of the summer frenzy in a popular city that used to be affordable. Emphasis on "used to be". Um, yeah. I invited my mother to live with us, so she can pay rent and help me afford the house. I could scape by without that but wouldn't want to. I'm now in graduate school because I need to make more money to really afford living here.

And I was lucky to get this little house. It's in a cute neighborhood, nowhere near as convenient as where I lived with my ex, but it's the best I could do. I was very lucky to get it. I did active house hunting for about a week, and that really had me on the edge, seeing how little I could afford and how competitive everything was. I'm so glad that ended quickly, but now I have a big mortgage to pay every month, and this is a high property tax state.

 

[bcwife76]

Not a chance We paid $529K for our house 10 1/2 yrs ago and if we put it on the market now it would go for more than double. Our house IS paid off so I suppose we *could* but I'd rather have all that money and downsize.

 

[peabody58]

Yes, but only if I hadn't retired 7 years ago and had continued to save at the rates I had been doing. But then I would have given up 7 wonderful stress-free years of my life.

 

[peabody58]

Duplicate post... my bad.

 

[SirDuff]

.

Oh wait - that was a serious question?!?! I live in Vancouver - city with the third highest cost of living in the world (Tokyo is #1, and Sydney, Australia just displaced us for #2).

What list are you looking at? I was wondering if something had changed recently but I cannot find any list that has Vancouver as second (actually, I don't see it in the top 10-20 (depending on what the list prints)). I know, however, that different places measure "most expensive" differently, so curious to see how the list you're using was made.

A few lists that I did find...
https://www.bloomberg.com/news/arti...s-singapore-are-world-s-most-expensive-cities

https://www.usnews.com/news/cities/articles/worlds-most-expensive-cities

https://www.travelandleisure.com/trip-ideas/most-expensive-cities-in-the-world

https://www.goodhousekeeping.com/life/travel/g39074204/most-expensive-cities-in-the-world/

https://www.timeout.com/news/revealed-the-most-expensive-cities-in-the-world-right-now-112520

https://edition.cnn.com/travel/article/world-most-expensive-cities-2021/index.html

 

[LuvOrlando]

Sure but that's part of the equation no matter what. We've refinanced twice now (most recent being in May 2020). Closing costs, appraisal fees (we were waived for one in May 2020 but paid for one the first refinance) and all have to be considered regardless of the interest rate. But you'd want to calculate your total savings over the life of the loan not just the initial hit.

For the refinance we did (the first one) to get rid of PMI we went from 4.5% to a 4.25% the reduction in interest wasn't our main goal. Getting rid of the PMI when the only way we could have was wait until 2022 or 2023 (the maturation date) was our goal. In our case our home appreciated more than 15% (we had put a 5% down payment) in the 2 1/2 years so we saved quite a chunk of money even though our PMI was only about $160/month there were only two ways out of it refinance or wait for the maturation date. You couldn't call just to have it removed when you reached that equity mark due to changes in laws.

When I made my comment I was more thinking "what's the goal" and since the OP said "hoping to get their mortgage paid down enough to get rid of their mortgage insurance" it made me think their goal was to get rid of PMI and depending on when the home loan originated the only way to get rid of it would be to refinance due to the laws.

When did this happen with not being able to remove the PMI? PMI, like GAP insurance, is supposed to protect the bank from losses with higher risk borrowers within a high liability space on 20% loan to value, there is no sound justification for in within that 20% space so it's exploitative and predatory to prevent people from dropping it. If the laws changed to prevent dropping it then it's also really unethical that this went through because dropping it means people need to pay closing costs to exit the system.. WTH?

 

[mumto3girls]

Yes, we could although the monthly payment would not be as comfortable. We could well afford the house when we bought it in 2001. Although the house has tripled in value our earnings have also generally increased (self employed and our earnings vary year to year but in general have probably at least doubled on average). We also live in an area with a low cost of living.

 

[Kathryn Merteuil]

Probably not, from what I have seen the prices have gone way up.

 

[JBRB828]

We bought our house 44 years ago for just $46,000. We have made a killing on it, but, would we move, nope! We thought about it before my husband retired, then just decided we would just stay put. I like the fact that someday my kids will hopefully enjoy a lot of money, even though both own homes.