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How reasonable is it to expect a 22 year old to be able to take out a mortgage, given their age and likely lack of any meaningful down payment? When I was 22 a

How reasonable is it to expect a 22 year old to be able to take out a mortgage, given their age and likely lack of any meaningful down payment? When I was 22 all I had was about $5K in savings, less than a year of experience at my first full-time salaried position and student loan debt to pay off. I imagine any reasonable loan officer would deny me on the spot for a mortgage given my liabilities and lack of proven ability to make payments.

CyanBird 5y ago
> How reasonable is it to expect a 22 year old to be able to take out a mortgage, given their age and likely lack of any meaningful down payment? In the 60s when the wages were high and inflation high as well? Very expectable, it was common place for people in their early 20 to be able to afford homes, and it was seen as very good that was the case
- themaninthedark 5y ago
  Let me preface this by saying that housing prices are ridiculous. That said, a new house from the 60's is very different from a new house today. The things that come to mind: Much larger kitchen space. Shared bathroom vs every bedroom has a bathroom plus half bath for guests. Major code differences for electrical.
  - chiefofgxbxl 5y ago
    I see similar arguments with vehicle prices, where vehicles are more expensive, but they are higher build quality, have more features (heated seats, blind-spot warning, etc.), so it's not technically correct to use the term "inflation" since the product is different. But it still feels wrong to say that this isn't a concern and to dismiss it with that argument, since people still need entry-level options, even if we tout the new bells and whistles we've added to the houses or vehicles over the past few decades. Saying "housing prices are ridiculous" followed by, "but you get more features!" is no consolation to the family looking to get their foot in the door of the housing market.
  - p1necone 5y ago
    This doesn't really mean anything unless you have the option to buy a house without all those bells and whistles for less.
  - micromacrofoot 5y ago
    new housing isn’t what’s driving up prices though, there are 100 year old houses that are just as expensive despite having more old-fashioned layouts
- Domenic_S 5y ago
  Do you have a citation for that claim? I searched for it but didn't find a great source - the one I found put homeownership at ~22yo in 1960 at less than 20%.
- jbay808 5y ago
  For most of the '60s, inflation was below 2%, while interest rates were 3 to 5%. Inflation started picking up north of 3% in 1967, and interest rates climbed along with it, to 8%. High interest rates (especially above inflation) create an incentive to save money, and keep property prices low. The higher borrowing costs keep the bid prices of property down, and the positive real interest rate means people don't need to speculate on assets like real estate to save their money. https://www.longtermtrends.net/real-interest-rate/ https://www.longtermtrends.net/real-interest-rate/

CyanBird 5y ago

> How reasonable is it to expect a 22 year old to be able to take out a mortgage, given their age and likely lack of any meaningful down payment? In the 60s when the wages were high and inflation high as well? Very expectable, it was common place for people in their early 20 to be able to afford homes, and it was seen as very good that was the case

themaninthedark 5y ago
Let me preface this by saying that housing prices are ridiculous. That said, a new house from the 60's is very different from a new house today. The things that come to mind: Much larger kitchen space. Shared bathroom vs every bedroom has a bathroom plus half bath for guests. Major code differences for electrical.
- chiefofgxbxl 5y ago
  I see similar arguments with vehicle prices, where vehicles are more expensive, but they are higher build quality, have more features (heated seats, blind-spot warning, etc.), so it's not technically correct to use the term "inflation" since the product is different. But it still feels wrong to say that this isn't a concern and to dismiss it with that argument, since people still need entry-level options, even if we tout the new bells and whistles we've added to the houses or vehicles over the past few decades. Saying "housing prices are ridiculous" followed by, "but you get more features!" is no consolation to the family looking to get their foot in the door of the housing market.
- p1necone 5y ago
  This doesn't really mean anything unless you have the option to buy a house without all those bells and whistles for less.
- micromacrofoot 5y ago
  new housing isn’t what’s driving up prices though, there are 100 year old houses that are just as expensive despite having more old-fashioned layouts
Domenic_S 5y ago
Do you have a citation for that claim? I searched for it but didn't find a great source - the one I found put homeownership at ~22yo in 1960 at less than 20%.
jbay808 5y ago
For most of the '60s, inflation was below 2%, while interest rates were 3 to 5%. Inflation started picking up north of 3% in 1967, and interest rates climbed along with it, to 8%. High interest rates (especially above inflation) create an incentive to save money, and keep property prices low. The higher borrowing costs keep the bid prices of property down, and the positive real interest rate means people don't need to speculate on assets like real estate to save their money. https://www.longtermtrends.net/real-interest-rate/ https://www.longtermtrends.net/real-interest-rate/