Re:In January, there were more real-estate agents than homes...
by jpm_sd on Monday March 22, 2021 @01:45PM
(#26544068)
It's enough of a seller's market that OP will almost certainly have to rent at/near their destination while house hunting. Last time I moved, it was 6 months of rental while going to open houses every weekend.
Re:In January, there were more real-estate agents than homes...
by freeone3000 on Monday March 22, 2021 @01:46PM
(#26544086)
Even with regards to maintaining a degree of flexibility, it might be worth considering if you actually do lose money on closing costs + taxes + value loss than you will on rent, even for a short term. Half or more of every mortgage payment is invested in an asset, 0% of every rent payment is.
Re:In January, there were more real-estate agents than homes...
by ghaff on Monday March 22, 2021 @02:27PM
(#26544735)
On the other hand you're foregoing any further returns on the money you take out of savings to pay the down payment and closing costs. It's definitely not as simple as rent is throwing money away compared to buying.
Re:In January, there were more real-estate agents than homes...
by freeone3000 on Monday March 22, 2021 @03:06PM
(#26545285)
For a $200,000 down payment on a $2500 a month mortgage (with 50% going to principal) versus $2000 a month rent, you'd need ten months to get past the $10,000 closing costs even assuming 10% return on next-best option and that the value of your home remains flat. Owning the place you live is probably the best investment you can make.
Re:In January, there were more real-estate agents than homes...
by FireBeyond on Monday March 22, 2021 @04:20PM
(#26546347)
The median household income was $68K in 2019, the highest it's ever been. That's $55K a year after tax. Now you're paying $2,000 in rent. Even if you don't spend a single cent of income on anything else besides a house, you'd still be looking at seven years to come up with that downpayment. Realistically, more like 15 years with expenses, at a minimum. i.e. "Don't buy a house until you're about 40 years old".
> The usual rule of thumb is that you can afford a mortgage two to 2.5 times your annual income.
So for the median family, $140K-$170K.
I'm not sure where the median family lives that they're buying $170K homes that they were previously renting for $2K/month, but it sure ain't anywhere near here.
Not to mention appraisal discrepancies, which require you to have the funds for the downpayment, for the closing, and to cover the appraisal discrepancy dollar for dollar.
But generally, I'm just trying to figure out how we come to the conclusion that the average family is putting anything close to a fraction of $200K to a downpayment.
Re:In January, there were more real-estate agents than homes...
by freeone3000 on Monday March 22, 2021 @04:28PM
(#26546471)
Usually inheritance and gifts from wealthy relatives. If you don't have that, you won't be buying a house and will forever be renting save the rare outliers with $200k/year jobs. It still doesn't make renting a good idea.
- Do you have confidence that you'll be able to continue working from wherever you move to?
- Are you looking at a house or a condo? (It's generally easier to rent an apartment than a house.)
- What are your motivations to buy? There's plenty out there on the financial side. Some of it is even reasonably accurate. However, IMO you should probably be thinking more about whether you want stability and the ability to customize a home or are you wanting to maintain a degree of flexibility if you decide to move somewhere else in a few years?
- Do you know the area(s) you're thinking of moving to? If not, it may make sense to rent for a while while you decide if that's where you really want to be.