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That rewards savers. It also means savers end up saving more money, as higher interest rates reduce demand for loans creating downward pressure on the real est
by notch656a 4y ago
That rewards savers. It also means savers end up saving more money, as higher interest rates reduce demand for loans creating downward pressure on the real estate market.
The spenders of what they didn't have got rewarded for long enough.
- symlinkk 4y agoYeah just put some change in your piggy bank every now and then and eventually you’ll have $400,000!
- dougmwne 4y agoThe downvoters are being pedantic. Sure you could save 400k in cash with thrift and gumption, but the simple fact is that almost no one does, and certainly not enough people to soak up all the excess housing stock as rates continue to rise. A person could save that, but people do not.
- notch656a 4y agoEven when I was a forklift driver, a job available in practically every middle-sized low COL midwest city, I could save $10k a year by only spending on necessities. That's only like 15 years to buy a house somewhere like a middle-sized Midwest town with forklift jobs. Not too shabby if you can buy a house by 33. The piggy-bank method does work. Maybe more people should be doing it rather than us having a system inflating the hell out of our economy through loans with negative real interest rate.
- symlinkk 4y agoI just Googled it and the average forklift driver salary is $40k. After tax and retirement you’re taking home around $2500/mo. After putting $1200 in your piggy bank you’re left with $1300 to pay for rent, food, gas, car, phone. I seriously do not think that is possible, let alone pleasant.
- cjrp 4y agoSaving $10k/year is $833.3/month going in to savings (so $1600 left to live with). Doable if your rent is cheap.
- factsarelolz 4y agoYeah just live at home with mom and dad or have room mates for 15 years.
- cjrp 4y agoOr have room mates for a few years, and then move in with a partner and split the rent on a cheap 1 bed. It's doable without being miserable, most of the country lives like that.
- akgerber 4y agoRent in a city like Appleton, WI (a random small Midwestern industrial city) averages $659 for a 1br: https://appleton.craigslist.org/search/apa?min_price=&max_price=&max_bedrooms=1&availabilityMode=0&sale_date=all+dates https://appleton.craigslist.org/search/apa?min_price=&max_pr... Sharing a 2br is even cheaper. And this is only if one wants to buy a house all-cash. Another traditional route to homeownership in Midwestern cities is purchasing a 2-family house. The tenant's rent generally covers the house's mortgage, even at today's interest rates: https://www.zillow.com/homedetails/701-Broad-St-Menasha-WI-54952/216632927_zpid/ https://www.zillow.com/homedetails/701-Broad-St-Menasha-WI-5...?
- notch656a 4y agoThere's a certain segment of people with a smug self superiority that think because they earn six figures in places like Seattle or San Francisco that the simple forklift driver in bumfuck, WI has even less chance of buying a home than they have. They couldn't be more wrong. While the forklift driver is slowly saving 10k a year for a 150k house, the SF bro is saving 50k a year for a similar house for $1M. Guess who gets to the target first.
- system2 4y agoIn a big city $400k only buys 1/3 of the house.