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You don't need debt to explain this: * Median US home price, $227k * Median US rent, $1400/month * Median US household income, $61k * Median US individual i

You don't need debt to explain this: * Median US home price, $227k * Median US rent, $1400/month * Median US household income, $61k * Median US individual income, $31k All these facts are one google search away, on the front page. No need for a study to explain it.

MuffinFlavored 7y ago
I'm confused. What picture does this paint? 20% of a $227k home is $45.4k down Zillow estimates that mortgage (with insurance + taxes) to be $1,230. A $170 premium to rent versus own seems like a wonderful price to pay to not have to come up with a $45k down payment. Are you saying houses are too expensive, or wages are too low?
- qes 7y ago
  > Are you saying houses are too expensive, or wages are too low? Median housing cost is 54% of median income. That's.. high. The general recommendation is 30%. > A $170 premium to rent versus own seems like a wonderful price to pay to not have to come up with a $45k down payment. On the other hand, you'll be building equity with a house instead of building someone else's equity with rent. And housing prices don't always go up, but they mostly do. 11 years into a $210k house and I'm walking with nearly $100k after subtracting maintenance costs (carpeting, dishwasher, washer/dryer, water heater, roof, gutters, interior drywall repair, and exterior paint). Total mortgage payments have been about $190k. So I effectively paid $750/month to live in a 2000+ sq ft, 4 bedroom, 2 car attached garage house in a first-ring suburb of our state's metro area (renting it would be well over $2k/month) and I have a nice pile of cash I otherwise wouldn't have saved.
  - thekingshorses 7y ago
    Insurance, property taxes, maintenance adds up. Usually, you need at least $45k income to buy a $227k house. It is hard for a family of 4 to save $45k when they are living paycheck to paycheck.
  - _ah 7y ago
    That's nice, but it's important to remember that (regardless of your living situation) you are really just benefiting from an increase in the price of a leveraged asset, where the interest is backstopped and subsidized by the Federal government. If you had taken your down payment, and all subsequent principle payments, and invested them at 5x-10x leverage in a stock portfolio over the same time period, how would the returns compare?

MuffinFlavored 7y ago

I'm confused. What picture does this paint? 20% of a $227k home is $45.4k down Zillow estimates that mortgage (with insurance + taxes) to be $1,230. A $170 premium to rent versus own seems like a wonderful price to pay to not have to come up with a $45k down payment. Are you saying houses are too expensive, or wages are too low?

qes 7y ago
> Are you saying houses are too expensive, or wages are too low? Median housing cost is 54% of median income. That's.. high. The general recommendation is 30%. > A $170 premium to rent versus own seems like a wonderful price to pay to not have to come up with a $45k down payment. On the other hand, you'll be building equity with a house instead of building someone else's equity with rent. And housing prices don't always go up, but they mostly do. 11 years into a $210k house and I'm walking with nearly $100k after subtracting maintenance costs (carpeting, dishwasher, washer/dryer, water heater, roof, gutters, interior drywall repair, and exterior paint). Total mortgage payments have been about $190k. So I effectively paid $750/month to live in a 2000+ sq ft, 4 bedroom, 2 car attached garage house in a first-ring suburb of our state's metro area (renting it would be well over $2k/month) and I have a nice pile of cash I otherwise wouldn't have saved.
- thekingshorses 7y ago
  Insurance, property taxes, maintenance adds up. Usually, you need at least $45k income to buy a $227k house. It is hard for a family of 4 to save $45k when they are living paycheck to paycheck.
- _ah 7y ago
  That's nice, but it's important to remember that (regardless of your living situation) you are really just benefiting from an increase in the price of a leveraged asset, where the interest is backstopped and subsidized by the Federal government. If you had taken your down payment, and all subsequent principle payments, and invested them at 5x-10x leverage in a stock portfolio over the same time period, how would the returns compare?