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> If you have a 5% deposit saved and a high salary, you still can't afford a home because lots of people are in your position and have driven up house prices an

> If you have a 5% deposit saved and a high salary, you still can't afford a home because lots of people are in your position and have driven up house prices and rates and leverage available sucks. I keep hearing this trope and reading about it. Not positive why it gets repeated. It doesn't take long to do a realtor.com or trulia search to find a shit-ton of affordable homes. It seems to me that, there's a certain class of people, many of which I gather hang out on HN, that don't have either a long enough lifetime behind them to possess an acute perspective or just outright completely have false expectations. My home value in the midwest hasn't risen in 15 years. My value actually decreased by 10K two years ago. Within 6 blocks of my house in SE WI, I can find about 80, 3bdr, single family houses for sale, many if not most under 120K. I'm looking at a 3bdr, 1bath now for 60K that I would love to fix up and turn into a rental. If you feel like 120-130K is not 'affordable' to someone with a 5% deposit saved and a "high salary", let me blow your mind. Nobody, and I mean, not a single person on my block makes more than 48K/year. Me and my wife bought our house for 124K, while making 28K/year jointly!

nixgeek 5y ago
Right now all I hear near Seattle is properties that are relatively unexceptional, that people bought 2-4 years ago for $800k, and are now being listed at $1.2M. They’ll list on a Friday, get 35 viewings over the weekend, and the seller has 10+ offers by Wednesday and accepts $300k over asking with all contingencies waived. I’ve personally heard over a dozen such examples in the last 90 days. I’m sure someone’s looked at MLS data and done a better analysis. Lenders continue to appraise nearer the initial asking, availability of capital is tightening up because of risk and underwriting has become more conservative since Summer 2020, typically meaning buyers need >740 credit and good debt-to-income ratios to do 5% down, and then they also need the $300k cash to bridge the gap between appraisers valuations and what it actually takes to do a deal in this market. Despite COVID purporting to offer more work location flexibility, what we seem to be experiencing in WA is downtown renters looking to buy within 30 miles of work, perhaps for a “Hybrid” future, rather than packing their bags and moving to WI.
nly 5y ago
I'm in the UK. House price inflation nationwide has been running at 7-8% a year for 20 years and price:income ratios are at all-time highs. The mortgage rates on 5% down are like 3.5% and the mortgage rates on 20-25% down are like 1.5%, so effectively your monthly mortgage payment could get 50% higher with a 5% deposit.
nly 5y ago
124/28 is only 4.4x income. Property in the UK is more like 9x.

nixgeek 5y ago

Right now all I hear near Seattle is properties that are relatively unexceptional, that people bought 2-4 years ago for $800k, and are now being listed at $1.2M. They’ll list on a Friday, get 35 viewings over the weekend, and the seller has 10+ offers by Wednesday and accepts $300k over asking with all contingencies waived. I’ve personally heard over a dozen such examples in the last 90 days. I’m sure someone’s looked at MLS data and done a better analysis. Lenders continue to appraise nearer the initial asking, availability of capital is tightening up because of risk and underwriting has become more conservative since Summer 2020, typically meaning buyers need >740 credit and good debt-to-income ratios to do 5% down, and then they also need the $300k cash to bridge the gap between appraisers valuations and what it actually takes to do a deal in this market. Despite COVID purporting to offer more work location flexibility, what we seem to be experiencing in WA is downtown renters looking to buy within 30 miles of work, perhaps for a “Hybrid” future, rather than packing their bags and moving to WI.

nly 5y ago

I'm in the UK. House price inflation nationwide has been running at 7-8% a year for 20 years and price:income ratios are at all-time highs. The mortgage rates on 5% down are like 3.5% and the mortgage rates on 20-25% down are like 1.5%, so effectively your monthly mortgage payment could get 50% higher with a 5% deposit.

nly 5y ago

124/28 is only 4.4x income. Property in the UK is more like 9x.