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> I bought my first house in the early 1990s. Saving the down payment was tough. Compare housing prices since 1990 vs. wage growth over the same period. For th
by actionablefiber 4y ago
> I bought my first house in the early 1990s. Saving the down payment was tough.
Compare housing prices since 1990 vs. wage growth over the same period. For the overwhelming majority of people entering the workforce today, there is no way to realistically save for a down payment unless you forego saving for anything else - no 401k, no IRA, no emergency fund, no car, no family.
- jalk 4y agoDon't forget that the interest rate was around 10% in the early 1990ies
- ejb999 4y agoMy first mortgage was 10.5% in 1989.
- triceratops 4y agoYeah that's one reason why houses in the 90s were more affordable.
- Scoundreller 4y agoAffordable for people planning on paying down the mortgage, but horrible for investors expecting to just refi and refi while maintaining a constant high double-digit LTV. Think about them! /s
- cko 4y agoI think a more apt comparison would be monthly mortgage + interest payment divided by price per square ft over time. I suspect it just barely tracks inflation. Houses have gotten bigger and interest rates have fallen since then.
- actionablefiber 4y agoI understand the bit about interest rates. But the disappearance of starter homes from the market is part of the problem, not a cool accounting trick to hide it.
- chipsa 4y agoWith a Roth IRA, you can withdraw the principle penalty free, while the earnings stay in the account. Also, you can withdraw 10k for buying a house from either IRA type, penalty free. You lose out on the future earnings from that withdrawal, but you can use it.