Not hard to understand what many can not afford a home. Higher interest rates increase the monthly payment but the larger issue is that property tax is out of control. Texas Association of Realtors needs to work with our friends in Austin to get that under control. We are seeing increase of property tax of over 50% annually.TexAgs Sponsors said:
From TexAgs Sponsor, Red Pear Realty:Interest Rates If you ask Google what mortgage interest rates are today, it will tell you 7.9%
However, 100% of the deals we have closed at Red Pear Realty in the last 6 months have been under 7.0%.Down Payment Many still think that 20% down is required to buy a home.
That's NOT true!
There are 3% Conventional Loan options with lower costs than a traditional FHA loan.
Mortgage Insurance Rates were recently reduced with many borrowers paying less than $40 per month, and with conventional loans, there is no 1.75% upfront funding fee like that charged by FHA .
Depending upon your profession, you could get no-strings-attached down payment assistance from TSAHC.Student Loan Debt Millennials carry an average balance of $33,173 per borrower. While it is less than the average of a Baby Boomer or Gen Xer, inflation changes that dollar amount significantly.
<a href="https://educationdata.org/student-loan-debt-by-generation" target="_blank">
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What Can you do about it?
If your student loans are in deferment, you need only to record 0.5% of the loan balance as your monthly payment when calculating your Debt to Income (DTI) Ratio.Affordability Check out this map from TAMU REC detailing the Texas Housing Affordability Index, where a ratio of 1.00 means the median family income is exactly equal to the required income to purchase the median-priced home in the area.
Quote: A higher THAI indicates relatively greater affordability. A ratio of 1.00 means that the median family income (MFI) is exactly sufficient to purchase the median-priced home. A THAI above 1.00 means the MFI exceeds the required income to purchase a median-priced home. Conversely, a THAI below 1.00 indicates the MFI is not sufficient to purchase the median-priced home.
<a href="https://www.recenter.tamu.edu/data/housing-affordability/#!/thai-dp4qr35" target="_blank">
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Curious what the median home price in your neighborhood is? You can check out median home values by zip code on Zillow, HERE.
What's stopping you from buying a home this year?
With experienced agents in Houston, Dallas, Austin, San Antonio, and Bryan/College Station, Red Pear Realty splits commissions with our Buyers and lists for just 1.5%. www.MyRedPear.com
dallasiteinsa02 said:
The real estate lobby wants home PRICES TO STAY HIGH. They are going to discourage anything that disincentives HIGHER PRICES.
all about the solid headline!Red Pear Realty said:
Property taxes are certainly a big component of housing unaffordability but they aren't the only cause. States without property taxes altogether are actually the most unaffordable in the US (NY, CA, HI, etc).
And yes, the Realtor lobby is probably the biggest thing standing in between the average American and some pretty large real estate tax changes. For instance, the Biden administration has tossed around the idea of taxing unrealized capital gains.
And finally, I want to congratulate Breanne on this thread idea and implementation. Across the various boards, I'm told this is the most viewed and commented sponsor post of all time on TexAgs. Well done.
Red Pear Realty said:
Property taxes are certainly a big component of housing unaffordability but they aren't the only cause. States without property taxes altogether are actually the most unaffordable in the US (NY, CA, HI, etc).
Red Pear Jack said:
https://www.cbsnews.com/amp/news/homes-for-sale-affordable-housing-prices/
"Homes "unaffordable" in 99% of nation for average American"
From a different article: "Common lending standards call for a 28% debt-to-income ratio. The 35% figure marks the "highest level since 2007 and stands well above the 21% figure from early in 2021, right before home-mortgage rates began shooting up from historic lows," Attom reported."
You're right. Someone making $65k/yr and looking at a $350k house is the difference. Tons of starter home communities in the low-200's. Issue is they all want the house they had when they grew up. My first place in '08 was a foreclosed townhouse in an OK part of a Houston suburb. Got it for <$100k. That couple of years in my 20's of living there vs. down in Midtown like my friends paid off when I sold it and built another house, and paid off even more when my wife and I bought our current house in '18.Win At Life said:
As a graduate engineer in 1989, I made the average starting salary of $30,000 and bought a new 4B 2200SF house for $90,000; or 3x my salary.
Today, my graduate engineering son is making the average starting salary of $65,000 and is looking at new 4B 2100SF houses costing $350,000; or 5.4x his salary.
That's the difference right there.
Aaaand there's the true issue and the mindset behind all of this. Be close to nightlife and partying in your 20's (which means higher rent and tons of bar tabs and eating out) or live further away and be able to buy something to start with to use as a tool for your next home and drive into town and grab a room to bar hop with your buddies once a month?Medaggie said:
Yeah they can get a starter in the boonies but you only get to enjoy the best years of your life one.
Sacrifice enjoying your 20's or a decent home. Tough choice.
I'm closer to 42 than I want to admit, and I have NEVER had a $500/mo car payment, including buying a new one earlier this year. Why? Because I drive cars for 10+ years and save money so I can pretty much pay for a new car. Now, I'm also looking at the Honda/Toyota vehicles and not the German variety or $70k+ trucks to use on the city streets.Quote:
If Gen Z gets no help from their parents, they are looking at a minimum 100K debt leaving a decent college. Get out, make 70K/yr which is 60K take home or 5K/mo. Decent Apt 1500/mo, car payment 500/mo, utilities/gas $500/mo, Food/entertainment $700/mo, student loans $1000/mo. That leaves less than 1k/mo.
Saving for a down payment is a distant dream unless you get some big raises quickly.
Bullchit! Bought a brand new Honda Accord in January for $29k drive out. Is it a top of the line model? No. It's a Sport SE. Has leather, heated seats, Apple CarPlay, etc, which is all I really needed. Do you know what it's not? A $60k Tahoe because I can only drive SUVs, or a F-150 because I'm a man and need to drive a truck. Do you know what it is? Reliable transportation that has some bells and whistles that costs $30k.Quote:
$60,000 vehicle? Yes- 5 years ago a $60,000 vehicle was a luxury vehicle. Today, 60k doesn't even get you all of the new vehicles in the middle class friendly brands (GMC, Ford, Chevy, etc). Don't have cash to cover a new or used vehicle? Enjoy a high interest rate.
If they expect you to be available outside of work hours, they will give you a phone or a phone allowance. I've had jobs where I needed to be available 24/7. They gave me $120/mo for phone expense. My current job has more responsibility, but they don't expect me to be available when I leave, so they don't pay. Some positions that have that expectation are given an iPhone from the company.Quote:
You talk about $800 phones- is there somewhere to get a cheaper phone that meets the requirements most employers expect their employees to have? The ability to immediately access email, servers, and the internet has become an expectation of employers, meaning you HAVE to have a smart phone (which many employers don't cover for you). With that, you get a pretty hefty monthly bill (certainly not the $10/month per line bill that was around when I was a teen
Yeah, wasn't the best of areas, but I also knew I wasn't going to be there long term. But I think that goes to my point. If you want to live in a desirable area, you're going to pay for it. I would say I live in a desirable neighborhood now that is certainly past starter home buy in. But it took me 10 years and 2 houses to get here, and the equity I made from the previous 2 houses made it a lot easier. If I had the expectation that my first home be my current home, I'd be beetching too.Diggity said:
I stand corrected...you could still likely find a house in Aldine for $200K if that's your jam.
devil's advocate here, might it have been a better decision to go for the $100K home in the better area at that time? Appreciation in Aldine certainly has a ceiling.
I also do find it a little comical when people ignore that past generations had their own hardships that they overcame.htxag09 said:
I also do find it a little comical when people argue that affordability isn't an issue for younger generations, it's just they choose different lifestyles, then immediately tell a story about buying a house and selling it for 2x 3 years later.....
I 100% agree on what is acceptable these days as a home vs. 20 years ago. We never had granite, stainless, hardwood floors, etc. growing up.aTm2004 said:I also do find it a little comical when people ignore that past generations had their own hardships that they overcame.htxag09 said:
I also do find it a little comical when people argue that affordability isn't an issue for younger generations, it's just they choose different lifestyles, then immediately tell a story about buying a house and selling it for 2x 3 years later.....
Do you know why I sold it for almost double 3 years later? Go back and read what I bought. Here's a hint...it wasn't a full brick custom home in a popular part of town. Foreclosures that need some work haven't gone away. What has is the understanding that your first place most likely won't be like what your parents have.
let's be real here, the availability of foreclosure/short sales is nothing close to what it was back in 2008.aTm2004 said:I also do find it a little comical when people ignore that past generations had their own hardships that they overcame.htxag09 said:
I also do find it a little comical when people argue that affordability isn't an issue for younger generations, it's just they choose different lifestyles, then immediately tell a story about buying a house and selling it for 2x 3 years later.....
Do you know why I sold it for almost double 3 years later? Go back and read what I bought. Here's a hint...it wasn't a full brick custom home in a popular part of town. Foreclosures that need some work haven't gone away. What has is the understanding that your first place most likely won't be like what your parents have.
What luck? Being single and taking a chance to buy a house during a recession when companies were laying people off? That luck? Yeah, a downturn in the market happened then, so I took a chance. Guess what...downturns will happen again in the future and have happened since.htxag09 said:I 100% agree on what is acceptable these days as a home vs. 20 years ago. We never had granite, stainless, hardwood floors, etc. growing up.aTm2004 said:I also do find it a little comical when people ignore that past generations had their own hardships that they overcame.htxag09 said:
I also do find it a little comical when people argue that affordability isn't an issue for younger generations, it's just they choose different lifestyles, then immediately tell a story about buying a house and selling it for 2x 3 years later.....
Do you know why I sold it for almost double 3 years later? Go back and read what I bought. Here's a hint...it wasn't a full brick custom home in a popular part of town. Foreclosures that need some work haven't gone away. What has is the understanding that your first place most likely won't be like what your parents have.
But.....if you can't admit that a decent part of the success you've had in upgrading homes 3 times to get to your current home isn't partially do to luck, I don't know what to tell you. And guess what, you still sold a home that "wasn't a full brick custom home in a popular part of town" for 2x after 3 years. Almost worth 3x now. Sure, you bought a foreclosure and put some work in it, how much, though? Doubt it was substantial of that equity, that equity was mainly from the market. And the point still stands. Someone would now need to spend $200k to buy a home you bought for $80k 15 years ago. And that home is now 17 years old so will likely need more work than when you bought it, even though it was a foreclosure, in the near future.
We are in a similar boat. Bought a home well within our means and not the most desirable part of Houston, not rough by any means, but not the heights. We lived there for 11+ years and just bought in a more desirable area. I can admit that the amount of equity in that home has way more to do with luck than with me being smart. Mainly just luck on when I graduated and entered the housing market.
How is it any different today than say 20 years ago? Chevy, GM, Ford, Chrysler, etc have always had vehicles that were high priced just along side vehicles that were much cheaper. The difference was usually the higher priced vehicles had options that most expect today...leather, premium audio, etc. Cheaper vehicles are out there, but people's expectations of what they need in a vehicle have changed. That, coupled with people able to get 7+ year loans now and they are happy to carry that $600+ monthly note on a continuous basis. The manufactures know this and continue to offer more and more, which drives the prices up. People keep paying and taking on that debt.histag10 said:
Reading comprehension not your strong suit? I didn't say you couldn't get a newbcar fir under 60k. I said you can't even get all of the vehicles from the middle class type brands for under 60k (and yes, not that long ago, suburbans, Tahoe, and trucks were pretty much all under 60k).
I only grew up in a small hick town surrounded by them, and raised by a father that worked swing shift and a oil services plant that had to strip in the laundry room and run directly to the shower the moment he got home so he didn't get the house dirty. And a mom, that while my dad faced the realities of the oil industry, worked jobs at Walmart and Kroger until he was able to get back to work. Do you know what he drove? A cheap Chevy W/T...vinyl seats and floor, manual windows and locks, etc.Quote:
I have had plenty of jobs (as has my husband) that expects the ability to check email at home without giving an allowance. It's almost like you have never encountered a blue collar worker...
Sounds like your boss wasn't respectful of your time.Quote:
Hell, my job at TAMU, while on maternity leave, I was getting texts and emails from my boss about stuff at work.
I never said I was right or you were wrong, and I read what you wrote. What you're not seeing is how silly what you wrote is. You make it seem as if the only option available to people are $60k+ vehicles. There are great options available to people (both new and used) for half of that. Do you need a $60k Tahoe? Very few do. A $40k Explorer or Traverse would fill the needs of majority of people who buy Tahoes (majority, not all...so don't go with the "well, by BIL pulls a 24' boat with his wife's). Have a lot of kids? A minivan would serve the purpose you're looking for for much cheaper than a $70k+ Suburban or Navigator, but pride gets in the way all too often. But hey, it's their money and they can drive what they want. Just don't complain about how hard life is and how hard it is to buy a house while blowing what they have on unnecessary things. Again...the instant gratification generation.Quote:
Just because your experience has been different does not mean it is wrong. What I have said is absolutely the experience if many people. And in regards to the vehicle part- actually reading what I wrote and not what you wanted me to write will help you out there.
Doesn't seem to stop them from buying new vehicles or traveling around the world for pictures to fill their IG.Quote:
All major macro indicators of significantly less flexibility for those just starting their careers.
aTm2004 said:
Heroes of our own story? WTF does that mean? Its like people refuse to acknowledge that late-Gen Xers and Millennials faced issues as well. We just didn't cry about them on the internet.
Here are 2 different charts that show where average home prices were/are:
https://dqydj.com/historical-home-prices/
https://fred.stlouisfed.org/series/ASPUS
What can you take from that? From 2007-2020 (pre-COVID), home prices didn't go up all that much. If you're wondering what those gray lines are...those are recessions.
Not even 3 years out of college and the US hits a recession, unemployment hits double digits, and the banks too big to fail, failed. None of it driven by a virus. No government checks and no student loan payment deferral. Yeah, student loans existed then as well...we just didn't ask someone to pay them for us. Wanted to actually buy a house during that time? They went full roto rooter on you to make sure they didn't make the same mistake that caused the recession.
Rent and homes have gone up more than wages, but starting wages today are up from where they were 20 years ago as well. People's luxury expenses are also up vs where they were 20 years ago. But buying a house can be done today if they really wanted to and could manage their expectations of their first house. If they make it important, they will find a way. The issue is, for many, it's not important enough to give up the lifestyle they have to achieve that goal, nor are they willing to live in an area that would involve a commute to work. There are millions of us where it was important enough and we worked and sacrificed to get there, and we're tired of the crying about how hard it is from the late-Millennials and Gen Z that wants everything given to them. STFU already. If you put as much effort into achieving your goal as you do into complaining, you'd get there.Doesn't seem to stop them from buying new vehicles or traveling around the world for pictures to fill their IG.Quote:
All major macro indicators of significantly less flexibility for those just starting their careers.
WFH is way more common now and isn't going anywhere. So a dedicated office space is certainly a must for a lot of families. Unless the boy/girl are less than say 10, they'll each need their own room.woodiewood1 said:
Buyer of modest incomes can afford homes. The main issue is that they want most of what their parents worked 40 years to get. First time home buyers don't need a separate bedroom for every boy and girl child. The don't need workout rooms and offices. Don't need an kitchen with a large island and separate dining room. Don't even need a dedicated laundry room, nor an outdoor kitchen.
Get a modest 3/2 with a two car garage.
I'm firmly in the costs are getting out of control camp and it's rough for new entrants into the market....._lefraud_ said:WFH is way more common now and isn't going anywhere. So a dedicated office space is certainly a must for a lot of families. Unless the boy/girl are less than say 10, they'll each need their own room.woodiewood1 said:
Buyer of modest incomes can afford homes. The main issue is that they want most of what their parents worked 40 years to get. First time home buyers don't need a separate bedroom for every boy and girl child. The don't need workout rooms and offices. Don't need an kitchen with a large island and separate dining room. Don't even need a dedicated laundry room, nor an outdoor kitchen.
Get a modest 3/2 with a two car garage.
Buying a "modest home" in a desirable or even decent metro area in TX just isn't a thing right now.
