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If you are a homeowner it is almost insane to move. Most people I know could not afford their house if they were buying it today. Often by a huge margin. Mov

If you are a homeowner it is almost insane to move. Most people I know could not afford their house if they were buying it today. Often by a huge margin. Moving would mean becoming a renter again and losing a much larger chunk of their paycheck every month to housing. It’s too late to start a whole new 30 year mortgage, even when you account for the proceeds from selling their existing house. Prices are insane. This is a natural consequence of home prices doubling or tripling over the past 10 years.

benjaminwootton 3y ago
You don’t start from scratch. You sell your existing house, which has benefited from inflation, then buy somewhere with the same mortgage payment over the same remaining duration you had if you choose not to trade up. Yes there are significant transaction costs but it isn’t as though you are starting again with your housing equity.
- arka2147483647 3y ago
  If you move from not-so-prosperous place to where its booming, there is no way you get equivalent home for the same price
- pcbro141 3y ago
  Interest rates.
- jnosCo 3y ago
  Interest rates doubling over the past year change the math on this. For instance, to keep my same mortgage payment, even with significant equity, i could only afford what I paid for the house originally, which would be a significant downgrade in today's market.
  - subsubzero 3y ago
    agree, what really makes me upset is how housing prices in certain areas has not gone down at all given that rates are double what they were a year or 2 ago. The un-affordability is beyond reason.
    - lotsofpulp 3y ago
      It is just supply and demand. Supply is half of what it used to be. https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtCkvoqzCIBrw6J-bq9cyVfNXj9LSXF3-eaDhJEEvrB7CnbDEoqoEX-CkKLZxnZN1HRS4GosRSLBxe4nZEIgrYClyIecXO0dDman9qa2OQ6C1bLNJleTg_nzkdHD9bwiHVNTz3VH9FwL51vZgNEIvSr3LxFyUKCyGf51iWKkq3GCkQeOGhaA/s1086/AltosYoYMay152023.PNG https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg... https://www.calculatedriskblog.com/2023/05/housing-may-15th-weekly-update.html https://www.calculatedriskblog.com/2023/05/housing-may-15th-... The supply demand situation is probably even worse in high demand areas.
    - rightbyte 3y ago
      Prices are sticky and people are way more emotional when it comes pricing their home than other things. Those who refuse to sell now are just keeping up the price for the ones who do sell. If the price is not sustainable ot will go down.
  - SoftTalker 3y ago
    > even with significant equity Yep, and if you fell for one of your lender's incessant pitches on borrowing on your equity or refinancing and taking equity out, you're really locked in to your situation. I'm very convinced that most people doing home equity loans or refis with cash out don't understand how much they are backsliding when they do that.
    - sokoloff 3y ago
      I think that depends on what they did with the cash. If they invested it in the S&P 500, that was generally a very good trade. If they turned it into new cars and expensive vacations, well, that was hopefully something that they really enjoyed, because those are things that are even more expensive when financed.
  - benjaminwootton 3y ago
    Lots of people have made that point, but I’ll respond here. Yes this is true, but only at this point in time when interest rates have shot up from historically low. Most of the time this won’t be the case, and soon this effect could work in the other way in that you could move to a house of similar value for a lower cost if interest rates come down. And the 30 year fixed rate mortgage is unique to the US. Here in the UK, we only fix for 2-5 years typically. So easy on the downvotes!
    - bobthepanda 3y ago
      Do people expect interest rates to lower again any time soon? Inflation just recently started trending down. Right now US supply has shrunk so prices don’t seem to be declining enough to offset the rise in interest rates; the monthly payments for anything in the market are still eye-watering even factoring in price declines.
      - nonethewiser 3y ago
        Well if you expect them to rise or stay the same for a while then now is actually not a bad time to buy.
    - nradov 3y ago
      It is actually pretty much the case for most US homeowners. Everyone I know refinanced their mortgages when interest rates were lower. I got a 2.874% 30 year fixed rate mortgage in 2021 which was a great deal, but now I am essentially stuck here. There's no way I can afford to move. Existing home sales volume is way down. https://www.wsj.com/articles/low-mortgage-rates-home-sales-low-supply-899aab29 https://www.wsj.com/articles/low-mortgage-rates-home-sales-l... https://ycharts.com/indicators/us_existing_home_sales https://ycharts.com/indicators/us_existing_home_sales The situation may be different in other countries.
      - throwaway2037 3y ago
        You wrote: There's no way I can afford to move. You are lucky to win the housing lottery. Congrats! Can you imagine being a young couple (20s 30s) trying to buy your first home the US right now? Hopeless. Wait a few years as an oppressed renter!
  - nonethewiser 3y ago
    That assumes you started your mortgage in roughly the last 10-15 years in the US or somewhere else with the same rate history. Average rates before then were consistently higher. https://fred.stlouisfed.org/series/MORTGAGE30US https://fred.stlouisfed.org/series/MORTGAGE30US If you started your mortgage before then its a neutral to positive rate-wise.
    - giaour 3y ago
      Many holders of higher rate mortgages refinanced during the last 10-15 years, too.
- mediaman 3y ago
  You are generally right, but currently most homeowners have mortgage debt at rates far below market, so they could afford much less house than before (if they need financing).
- substation13 3y ago
  If the prices have significantly risen since you purchased (as they have for most buyers) then moving even to the same quality of house makes you a net buyer because you need to take on more financing. Remember, the day you buy a house, you are no richer. This is because the asset (house) is offset by the liability (the mortgage).
  - benjaminwootton 3y ago
    I don’t understand. I buy a house with a $300k mortgage. The price rises to $500k. I then sell the house and buy another for $500k, rolling my $200k equity and $300k mortgage for no net change. If you are trading up then yes, the more expensive house rose faster than your house. But that’s the case anytime you move and not unique to a job relocation.
    - nradov 3y ago
      Nope, there is a huge net change because interest rates have increased. Mortgage rates bottomed out in 2020 at about 2.65%, so the monthly payment on a $300K mortgage was only $1209. Now at 5.87% the payment would be $1774. https://fred.stlouisfed.org/series/MORTGAGE30US https://fred.stlouisfed.org/series/MORTGAGE30US
      - woobar 3y ago
        Why are you comparing to the absolute minimum? Didn't people use to have mortgages before 2020? My first house was close to $300K, mortgage was 6.5%. No one was crying about this back then.
        nradov 3y ago
        I am comparing to the absolute minimum because most homeowners with decent credit ratings refinanced their loans a couple years ago near the minimum. Now they can't afford to sell their current homes and buy in a different area because the monthly payments would be unaffordable (unless they buy in a much cheaper area or a much smaller home). I don't think anyone is crying about it but this is reducing labor mobility and slowing down economic growth. It's one of the unintended consequences of the Federal Reserve raising interest rates due to inflation.
- balls187 3y ago
  That isn't even remotely true here in the Seattle area. Even if you have significant equity in your house, the supply of "better" comparable homes is sparse at best. And likely your existing mortgage is at a rate 1/2 of the current rates.
- chimeracoder 3y ago
  > You don’t start from scratch. You sell your existing house, which has benefited from inflation, then buy somewhere with the same mortgage payment over the same remaining duration you had if you choose not to trade up. In California, Prop 13 means that property taxes are essentially fixed and nonincreasing at the time you purchase your house. This is sometimes used as a defense of Prop 13, but all it really means is that any increase in total tax burden has to fall disproportionately (in fact, almost exclusively) on new purchasers and their tenants. Forcing someone to relocate means giving up that privileged tax status and starting over "from scratch".
  - KerrAvon 3y ago
    There is one limited exception: once you’re 55, you can transfer your existing property tax base (but only if the county you’re moving to allows it), but only once. This is a ridiculous system, and there really needs to be property tax reform in CA, but it needs to be done in such a way that it doesn’t fuck over existing property owners, which is really difficult.
    - chimeracoder 3y ago
      > but it needs to be done in such a way that it doesn’t fuck over existing property owners This is impossible. The current system is such an extreme and unsustainable transfer of wealth towards property owners that there's no way to create a sustainable (let alone equitable) system that doesn't involve current property owners giving something up.
    - triceratops 3y ago
      End Prop 13 protections for all property purchases. Stop grandfathering in existing property when it's inherited. It'll really fuck over new buyers in the short-term. But it's one way to get less resistance from existing owners - who are largely voters. And the skyrocketing property taxes on new purchases might put a damper on prices.
      - nradov 3y ago
- gwbas1c 3y ago
  > You sell your existing house, which has benefited from inflation, then buy somewhere with the same mortgage payment over the same remaining duration you had if you choose not to trade up Are you living under a rock? Mortgage rates going up make that impossible.
- ryanSrich 3y ago
  > You sell your existing house, which has benefited from inflation Your new interest rate is going to absolutely demolish any inflation benefit your current house has. I don't think people really understand how bad higher interest rates are when there's a housing shortage. - A $500k house at 3% is $2,100/month. - A $500k house at 7.5% is $3,500/month - That's a difference of nearly $17,000/year The house that was $500k at 3% in 2021 is still $500k at 7.5% in 2023. Housing prices haven't budged. We'd need to see a 20-40% reduction in prices across the board to stabilize affordability, but that won't happen because there's too much demand.
spacemadness 3y ago
If this is a homeowners perspective, imagine how the current renting class feels. Something will boil over eventually.
- dehrmann 3y ago
  People can't afford to move because higher interest rates decreased the value of their home, so especially if they bought recently, a lot of their down payment is gone. This is actually advantageous to first-time buyers since higher interest rates (and lower prices) mean their down payments go further.
  - lotsoweiners 3y ago
    But that makes the assumption that the higher interest rates aren’t lowering supply by keeping homes off the market. I have a decently sized home (2300 sq ft) but had wanted to move onto something around 3500 sq ft and pay a new mortgage in proportion to the bigger home. Of course the interest rates increase would have been paying like 2.5 times what I’m currently paying so it is a no brained for me to stay put. On the other hand, no one in my neighborhood is moving anymore so nothing is available and prices remain pretty close to their peak. So at least where I am, we now have high purchase prices and even much higher monthly mortgages.
    - oblio 3y ago
      I'm curious as a non-American. How big is your family? I can't fathom needing a 360 sqm house except if I had 3+ kids. Also... how do you clean it all? How much is heating, cooling, etc?
      - Scoundreller 3y ago
        Generally, heating and cooling are a lot cheaper in USA (thank you cheap natgas, and solar if you can do it). Cleaning… a lot of the space goes unused or just stores stuff so it doesn’t get too dirty or people don’t care as much outside core areas. Central HVAC helps keep the dust down a bit vs. dead air and radiators.
subsubzero 3y ago
We are in that boat now, Wife has an offer to move to San Diego area. We are homeowners in a 30 year fixed at 3.75% and moving back there is almost impossible due to rates being at > 6% and barely any houses on the market and prices which are close to what they were in 2022(we moved from that area in 2022). We are very close to saying F - it with her rescinding her offer, this economy and housing market is beyond bad.
- givemeethekeys 3y ago
  Counter offer. Ask for a sufficiently large consternation and a 2 year severance should it not work out. Just like executives. They get a lot more.
  - ironmagma 3y ago
    What is "a consternation"? I've never heard this term and can't find it referenced anywhere.
    - olddustytrail 3y ago
      I think it's autocorrect for compensation.
      - neilv 3y ago
        I'm ready for some FAANG total consternation.
      - givemeethekeys 3y ago
        Thank you! Yes, I meant compensation :).
    - givemeethekeys 3y ago
      Sorry about that. Typo. I meant, "compensation".
  - tfehring 3y ago
nonethewiser 3y ago
This is entirely dependent on which market you are moving from and to. Within the same market it's a wash on average. From a more expensive market to a cheaper market you are coming out ahead. Your conundrum really only applies when going from a cheaper market to a more expensive market.
felideon 3y ago
> becoming a renter again and losing a much larger chunk of their paycheck every month to housing Except it is now cheaper to rent than to own[1]. If you have to move for a job, you rent for at least a year if not a few years as you get a feeling your job stability. Of course, the main point stands that you can be fired at any time, which is why you never buy a house when affordability is at an all-time low since the crash[2]. [1] https://jbrec.com/insights/demand-shifting-from-owning-to-renting/ https://jbrec.com/insights/demand-shifting-from-owning-to-re... [2] https://www.atlantafed.org/center-for-housing-and-policy/data-and-tools/home-ownership-affordability-monitor https://www.atlantafed.org/center-for-housing-and-policy/dat...
- JohnFen 3y ago
  > Except it is now cheaper to rent than to own I've noticed that over the long haul (in my area, anyway), it's neither cheaper nor more expensive to rent vs own. In the short term, one can be more expensive than the other, though. But the big difference is that you're building equity if you're buying, and you're not if you're renting. So which is better, financially speaking, depends a lot on what you're trying to accomplish.
  - jandrewrogers 3y ago
    > But the big difference is that you're building equity if you're buying, and you're not if you're renting. You build equity when you are renting, just not in the housing market.
    - deleted 3y ago
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    - deleted 3y ago
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- poulsbohemian 3y ago
  >Except it is now cheaper to rent than to own[1]. Real estate is entirely local, such that making broad generalizations like this is detrimental. In some markets it may be better to rent, in others it is better to buy. Regardless of the cost, availability is also a factor - in my market, you might as well buy if you are qualified, as the market for rental properties is even tighter than buying and rents have increased faster than home prices.
BizarreByte 3y ago
>If you are a homeowner it is almost insane to move. I own a home and moved. I rent in the new city and let my mother live in the house I own, that way I don't have to sell it. If I ever want to go back I won't have any issues doing so.
- balderdash 3y ago
  Would she pay rent?
  - Scoundreller 3y ago
    Depending how many siblings one has, it may be a matter of pay now or pay later.
  - BizarreByte 3y ago
    Yes, she's paying a small amount of rent every month to cover basics. As much as I'd like to just give her the house and have her live there for free, that's not in the cards right now given the state of Canadian salaries. She doesn't mind as it's much, much better than the income assistance apartments she lived in before and I'm asking for a lot less than they did, which helps her too. Ultimately I'd like to buy another house and let her have that one, because she'll never be able to afford a house again on her own, but that's an aspirational goal at the moment.
- scarface_74 3y ago
  Yes and that’s very anecdotal. I also moved a rented out my home to my son and two of his friends we trust. If he comes up on hard times for a month or two, I don’t have an emotional issue with covering his rent. If it was a stranger, I would. If he gets to a point where he couldn’t pay rent because of a systemic problem, I trust him well enough to know that he wouldn’t make me go through a long eviction process. He would have to move. But we would help him find sone place cheaper. No for logistical reasons, he couldn’t stay with us. But my wife and I said, that once they move, we are selling the house. We do not want to be landlords.
  - 3y ago
trashface 3y ago
This is me. House is paid off, and has appreciated, so I can move to...where exactly? The only place with affordable housing is Dystopia US.
- deleted 3y ago
  [deleted]
- gen220 3y ago
  You should do a roadtrip! Dystopia US has some nice pockets. Affordable is all relative, of course. It's pretty much impossible to "win" in housing unless you're investing major sweat equity, or factoring-in intangibles like satisfaction with a like-minded community or peace of mind.
  - trashface 3y ago
    I'm starting to realize housing is unwinnable. I'm lucky to have a house at all, given the US just decided "lets not build" was a good policy apparently. But like a lot of aging people I can't afford to keep it. So yeah a roadtrip is in my future, and maybe a yurt out there somewhere.
    - gen220 3y ago
      There's two sides to the coin of recognizing "un-winnability". One is frustration, the other is a sense of peace that comes with recognizing that there's no marginal reward to trying so hard. Just avoid the obvious scams, which isn't too hard. A third option to skirts the coin, is to really embed yourself in a local community, renting in the meanwhile. There actually are "winner" situations and good deals if you go this way, but they generally come on the back of who you know and are friendly with – variously referred to as cronyism and nepotism, but it's how humans work.
nicenewtemp84 3y ago
If your home you bought 10 years ago doubled or tripped, why can't you move? You pocket the difference, put that down on the next over priced house, bringing your mortgage principal back down to the small mortgage you were paying 10 years ago on a cheap house. Ya, the rate is higher... But if you just made $600k on your $300k house, that you've paid down to $200k hopefully atleast... And you move and buy a house for the same $900k you just sold yours for, you only have a mortgage on $200k. Yes at a higher rate. And yes with higher property taxes. But hey, that's life. Don't move if it's not worth it. But it's not as impossible as you make it seem.
- CptFribble 3y ago
  [removed by commenter due to incorrect information] apologies, I was misinformed. consider this comment retracted
  - ipython 3y ago
    that's incorrect. Generally speaking you don't pay capital gains on the first $250k ($500k if filing jointly) under IRS rules. You can also adjust the cost basis of your home by adding in any improvements you may have made to the house, so assuming you made any improvements at all, you can potentially make that exemption even higher. See https://www.irs.gov/taxtopics/tc701 https://www.irs.gov/taxtopics/tc701.
scarface74 3y ago
> Most people I know could not afford their house if they were buying it today How is that true if you moved to a place with an equivalent cost of living? I had my house built in the suburbs of Atlanta for $350K in metro Atlanta. It’s now worth $650K. If I wanted to buy another house for $650K, I would sell my house. Get $300K in cash, use it for a down payment, and still have a $350K mortgage. Of course I’m ignoring selling costs, interest rate differences etc. I have a friend who located from Seattle to Atlanta. He also had a home in Seattle, he had $600K in equity that he was able to use to get a $900K house in Atlanta and have a $300K mortgage.
- yunohn 3y ago
  I find it hilarious when HN threads go deep, and commenters forget the actual point. This post and thread are talking about moving due to losing a job. Not about a calculated move done for financial gain.
  - scarface74 3y ago
    That’s just it. My friend from Seattle did move for a job. The other poster said that because of rising home prices, someone who owned a home couldn’t afford an equivalent home. My argument is that their current home probably also went up in value and they could use the equity to pay a large down payment to make a new home affordable. Alternatively, pocket the equity and rent instead of making a commitment to buy.
    - yunohn 3y ago
      That is what is commonly called an anecdote. Most people who are fired do not end up winning the housing profit lottery.
asdfman123 3y ago
> Moving would mean becoming a renter again and losing a much larger chunk of their paycheck every month to housing The problem isn't that you're an existing homeowner. The problem is housing is exorbitant. Everyone has to pay out of the nose for housing. The only difference is that you have an asset that has appreciated significantly, and in a way you're indirectly receiving dividends from it in the form of affordable mortgage payments. But if you didn't have that house, you'd be in an even worse spot.

benjaminwootton 3y ago

You don’t start from scratch. You sell your existing house, which has benefited from inflation, then buy somewhere with the same mortgage payment over the same remaining duration you had if you choose not to trade up. Yes there are significant transaction costs but it isn’t as though you are starting again with your housing equity.

arka2147483647 3y ago
If you move from not-so-prosperous place to where its booming, there is no way you get equivalent home for the same price
pcbro141 3y ago
Interest rates.
jnosCo 3y ago
Interest rates doubling over the past year change the math on this. For instance, to keep my same mortgage payment, even with significant equity, i could only afford what I paid for the house originally, which would be a significant downgrade in today's market.
- subsubzero 3y ago
  agree, what really makes me upset is how housing prices in certain areas has not gone down at all given that rates are double what they were a year or 2 ago. The un-affordability is beyond reason.
  - lotsofpulp 3y ago
    It is just supply and demand. Supply is half of what it used to be. https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtCkvoqzCIBrw6J-bq9cyVfNXj9LSXF3-eaDhJEEvrB7CnbDEoqoEX-CkKLZxnZN1HRS4GosRSLBxe4nZEIgrYClyIecXO0dDman9qa2OQ6C1bLNJleTg_nzkdHD9bwiHVNTz3VH9FwL51vZgNEIvSr3LxFyUKCyGf51iWKkq3GCkQeOGhaA/s1086/AltosYoYMay152023.PNG https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg... https://www.calculatedriskblog.com/2023/05/housing-may-15th-weekly-update.html https://www.calculatedriskblog.com/2023/05/housing-may-15th-... The supply demand situation is probably even worse in high demand areas.
  - rightbyte 3y ago
    Prices are sticky and people are way more emotional when it comes pricing their home than other things. Those who refuse to sell now are just keeping up the price for the ones who do sell. If the price is not sustainable ot will go down.
- SoftTalker 3y ago
  > even with significant equity Yep, and if you fell for one of your lender's incessant pitches on borrowing on your equity or refinancing and taking equity out, you're really locked in to your situation. I'm very convinced that most people doing home equity loans or refis with cash out don't understand how much they are backsliding when they do that.
  - sokoloff 3y ago
    I think that depends on what they did with the cash. If they invested it in the S&P 500, that was generally a very good trade. If they turned it into new cars and expensive vacations, well, that was hopefully something that they really enjoyed, because those are things that are even more expensive when financed.
- benjaminwootton 3y ago
  Lots of people have made that point, but I’ll respond here. Yes this is true, but only at this point in time when interest rates have shot up from historically low. Most of the time this won’t be the case, and soon this effect could work in the other way in that you could move to a house of similar value for a lower cost if interest rates come down. And the 30 year fixed rate mortgage is unique to the US. Here in the UK, we only fix for 2-5 years typically. So easy on the downvotes!
  - bobthepanda 3y ago
    Do people expect interest rates to lower again any time soon? Inflation just recently started trending down. Right now US supply has shrunk so prices don’t seem to be declining enough to offset the rise in interest rates; the monthly payments for anything in the market are still eye-watering even factoring in price declines.
    - nonethewiser 3y ago
      Well if you expect them to rise or stay the same for a while then now is actually not a bad time to buy.
  - nradov 3y ago
    It is actually pretty much the case for most US homeowners. Everyone I know refinanced their mortgages when interest rates were lower. I got a 2.874% 30 year fixed rate mortgage in 2021 which was a great deal, but now I am essentially stuck here. There's no way I can afford to move. Existing home sales volume is way down. https://www.wsj.com/articles/low-mortgage-rates-home-sales-low-supply-899aab29 https://www.wsj.com/articles/low-mortgage-rates-home-sales-l... https://ycharts.com/indicators/us_existing_home_sales https://ycharts.com/indicators/us_existing_home_sales The situation may be different in other countries.
    - throwaway2037 3y ago
      You wrote: There's no way I can afford to move. You are lucky to win the housing lottery. Congrats! Can you imagine being a young couple (20s 30s) trying to buy your first home the US right now? Hopeless. Wait a few years as an oppressed renter!
- nonethewiser 3y ago
  That assumes you started your mortgage in roughly the last 10-15 years in the US or somewhere else with the same rate history. Average rates before then were consistently higher. https://fred.stlouisfed.org/series/MORTGAGE30US https://fred.stlouisfed.org/series/MORTGAGE30US If you started your mortgage before then its a neutral to positive rate-wise.
  - giaour 3y ago
    Many holders of higher rate mortgages refinanced during the last 10-15 years, too.
mediaman 3y ago
You are generally right, but currently most homeowners have mortgage debt at rates far below market, so they could afford much less house than before (if they need financing).
substation13 3y ago
If the prices have significantly risen since you purchased (as they have for most buyers) then moving even to the same quality of house makes you a net buyer because you need to take on more financing. Remember, the day you buy a house, you are no richer. This is because the asset (house) is offset by the liability (the mortgage).
- benjaminwootton 3y ago
  I don’t understand. I buy a house with a $300k mortgage. The price rises to $500k. I then sell the house and buy another for $500k, rolling my $200k equity and $300k mortgage for no net change. If you are trading up then yes, the more expensive house rose faster than your house. But that’s the case anytime you move and not unique to a job relocation.
  - nradov 3y ago
    Nope, there is a huge net change because interest rates have increased. Mortgage rates bottomed out in 2020 at about 2.65%, so the monthly payment on a $300K mortgage was only $1209. Now at 5.87% the payment would be $1774. https://fred.stlouisfed.org/series/MORTGAGE30US https://fred.stlouisfed.org/series/MORTGAGE30US
    - woobar 3y ago
      Why are you comparing to the absolute minimum? Didn't people use to have mortgages before 2020? My first house was close to $300K, mortgage was 6.5%. No one was crying about this back then.
      - nradov 3y ago
        I am comparing to the absolute minimum because most homeowners with decent credit ratings refinanced their loans a couple years ago near the minimum. Now they can't afford to sell their current homes and buy in a different area because the monthly payments would be unaffordable (unless they buy in a much cheaper area or a much smaller home). I don't think anyone is crying about it but this is reducing labor mobility and slowing down economic growth. It's one of the unintended consequences of the Federal Reserve raising interest rates due to inflation.
balls187 3y ago
That isn't even remotely true here in the Seattle area. Even if you have significant equity in your house, the supply of "better" comparable homes is sparse at best. And likely your existing mortgage is at a rate 1/2 of the current rates.
chimeracoder 3y ago
> You don’t start from scratch. You sell your existing house, which has benefited from inflation, then buy somewhere with the same mortgage payment over the same remaining duration you had if you choose not to trade up. In California, Prop 13 means that property taxes are essentially fixed and nonincreasing at the time you purchase your house. This is sometimes used as a defense of Prop 13, but all it really means is that any increase in total tax burden has to fall disproportionately (in fact, almost exclusively) on new purchasers and their tenants. Forcing someone to relocate means giving up that privileged tax status and starting over "from scratch".
- KerrAvon 3y ago
  There is one limited exception: once you’re 55, you can transfer your existing property tax base (but only if the county you’re moving to allows it), but only once. This is a ridiculous system, and there really needs to be property tax reform in CA, but it needs to be done in such a way that it doesn’t fuck over existing property owners, which is really difficult.
  - chimeracoder 3y ago
    > but it needs to be done in such a way that it doesn’t fuck over existing property owners This is impossible. The current system is such an extreme and unsustainable transfer of wealth towards property owners that there's no way to create a sustainable (let alone equitable) system that doesn't involve current property owners giving something up.
  - triceratops 3y ago
    End Prop 13 protections for all property purchases. Stop grandfathering in existing property when it's inherited. It'll really fuck over new buyers in the short-term. But it's one way to get less resistance from existing owners - who are largely voters. And the skyrocketing property taxes on new purchases might put a damper on prices.
    - nradov 3y ago
gwbas1c 3y ago
> You sell your existing house, which has benefited from inflation, then buy somewhere with the same mortgage payment over the same remaining duration you had if you choose not to trade up Are you living under a rock? Mortgage rates going up make that impossible.
ryanSrich 3y ago
> You sell your existing house, which has benefited from inflation Your new interest rate is going to absolutely demolish any inflation benefit your current house has. I don't think people really understand how bad higher interest rates are when there's a housing shortage. - A $500k house at 3% is $2,100/month. - A $500k house at 7.5% is $3,500/month - That's a difference of nearly $17,000/year The house that was $500k at 3% in 2021 is still $500k at 7.5% in 2023. Housing prices haven't budged. We'd need to see a 20-40% reduction in prices across the board to stabilize affordability, but that won't happen because there's too much demand.

spacemadness 3y ago

If this is a homeowners perspective, imagine how the current renting class feels. Something will boil over eventually.

dehrmann 3y ago
People can't afford to move because higher interest rates decreased the value of their home, so especially if they bought recently, a lot of their down payment is gone. This is actually advantageous to first-time buyers since higher interest rates (and lower prices) mean their down payments go further.
- lotsoweiners 3y ago
  But that makes the assumption that the higher interest rates aren’t lowering supply by keeping homes off the market. I have a decently sized home (2300 sq ft) but had wanted to move onto something around 3500 sq ft and pay a new mortgage in proportion to the bigger home. Of course the interest rates increase would have been paying like 2.5 times what I’m currently paying so it is a no brained for me to stay put. On the other hand, no one in my neighborhood is moving anymore so nothing is available and prices remain pretty close to their peak. So at least where I am, we now have high purchase prices and even much higher monthly mortgages.
  - oblio 3y ago
    I'm curious as a non-American. How big is your family? I can't fathom needing a 360 sqm house except if I had 3+ kids. Also... how do you clean it all? How much is heating, cooling, etc?
    - Scoundreller 3y ago
      Generally, heating and cooling are a lot cheaper in USA (thank you cheap natgas, and solar if you can do it). Cleaning… a lot of the space goes unused or just stores stuff so it doesn’t get too dirty or people don’t care as much outside core areas. Central HVAC helps keep the dust down a bit vs. dead air and radiators.

subsubzero 3y ago

We are in that boat now, Wife has an offer to move to San Diego area. We are homeowners in a 30 year fixed at 3.75% and moving back there is almost impossible due to rates being at > 6% and barely any houses on the market and prices which are close to what they were in 2022(we moved from that area in 2022). We are very close to saying F - it with her rescinding her offer, this economy and housing market is beyond bad.

givemeethekeys 3y ago
Counter offer. Ask for a sufficiently large consternation and a 2 year severance should it not work out. Just like executives. They get a lot more.
- ironmagma 3y ago
  What is "a consternation"? I've never heard this term and can't find it referenced anywhere.
  - olddustytrail 3y ago
    I think it's autocorrect for compensation.
    - neilv 3y ago
      I'm ready for some FAANG total consternation.
    - givemeethekeys 3y ago
      Thank you! Yes, I meant compensation :).
  - givemeethekeys 3y ago
    Sorry about that. Typo. I meant, "compensation".
- tfehring 3y ago

nonethewiser 3y ago

This is entirely dependent on which market you are moving from and to. Within the same market it's a wash on average. From a more expensive market to a cheaper market you are coming out ahead. Your conundrum really only applies when going from a cheaper market to a more expensive market.

felideon 3y ago

> becoming a renter again and losing a much larger chunk of their paycheck every month to housing Except it is now cheaper to rent than to own[1]. If you have to move for a job, you rent for at least a year if not a few years as you get a feeling your job stability. Of course, the main point stands that you can be fired at any time, which is why you never buy a house when affordability is at an all-time low since the crash[2]. [1] https://jbrec.com/insights/demand-shifting-from-owning-to-renting/ https://jbrec.com/insights/demand-shifting-from-owning-to-re... [2] https://www.atlantafed.org/center-for-housing-and-policy/data-and-tools/home-ownership-affordability-monitor https://www.atlantafed.org/center-for-housing-and-policy/dat...

JohnFen 3y ago
> Except it is now cheaper to rent than to own I've noticed that over the long haul (in my area, anyway), it's neither cheaper nor more expensive to rent vs own. In the short term, one can be more expensive than the other, though. But the big difference is that you're building equity if you're buying, and you're not if you're renting. So which is better, financially speaking, depends a lot on what you're trying to accomplish.
- jandrewrogers 3y ago
  > But the big difference is that you're building equity if you're buying, and you're not if you're renting. You build equity when you are renting, just not in the housing market.
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poulsbohemian 3y ago
>Except it is now cheaper to rent than to own[1]. Real estate is entirely local, such that making broad generalizations like this is detrimental. In some markets it may be better to rent, in others it is better to buy. Regardless of the cost, availability is also a factor - in my market, you might as well buy if you are qualified, as the market for rental properties is even tighter than buying and rents have increased faster than home prices.

BizarreByte 3y ago

>If you are a homeowner it is almost insane to move. I own a home and moved. I rent in the new city and let my mother live in the house I own, that way I don't have to sell it. If I ever want to go back I won't have any issues doing so.

balderdash 3y ago
Would she pay rent?
- Scoundreller 3y ago
  Depending how many siblings one has, it may be a matter of pay now or pay later.
- BizarreByte 3y ago
  Yes, she's paying a small amount of rent every month to cover basics. As much as I'd like to just give her the house and have her live there for free, that's not in the cards right now given the state of Canadian salaries. She doesn't mind as it's much, much better than the income assistance apartments she lived in before and I'm asking for a lot less than they did, which helps her too. Ultimately I'd like to buy another house and let her have that one, because she'll never be able to afford a house again on her own, but that's an aspirational goal at the moment.
scarface_74 3y ago
Yes and that’s very anecdotal. I also moved a rented out my home to my son and two of his friends we trust. If he comes up on hard times for a month or two, I don’t have an emotional issue with covering his rent. If it was a stranger, I would. If he gets to a point where he couldn’t pay rent because of a systemic problem, I trust him well enough to know that he wouldn’t make me go through a long eviction process. He would have to move. But we would help him find sone place cheaper. No for logistical reasons, he couldn’t stay with us. But my wife and I said, that once they move, we are selling the house. We do not want to be landlords.
- 3y ago

trashface 3y ago

This is me. House is paid off, and has appreciated, so I can move to...where exactly? The only place with affordable housing is Dystopia US.

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gen220 3y ago
You should do a roadtrip! Dystopia US has some nice pockets. Affordable is all relative, of course. It's pretty much impossible to "win" in housing unless you're investing major sweat equity, or factoring-in intangibles like satisfaction with a like-minded community or peace of mind.
- trashface 3y ago
  I'm starting to realize housing is unwinnable. I'm lucky to have a house at all, given the US just decided "lets not build" was a good policy apparently. But like a lot of aging people I can't afford to keep it. So yeah a roadtrip is in my future, and maybe a yurt out there somewhere.
  - gen220 3y ago
    There's two sides to the coin of recognizing "un-winnability". One is frustration, the other is a sense of peace that comes with recognizing that there's no marginal reward to trying so hard. Just avoid the obvious scams, which isn't too hard. A third option to skirts the coin, is to really embed yourself in a local community, renting in the meanwhile. There actually are "winner" situations and good deals if you go this way, but they generally come on the back of who you know and are friendly with – variously referred to as cronyism and nepotism, but it's how humans work.

nicenewtemp84 3y ago

If your home you bought 10 years ago doubled or tripped, why can't you move? You pocket the difference, put that down on the next over priced house, bringing your mortgage principal back down to the small mortgage you were paying 10 years ago on a cheap house. Ya, the rate is higher... But if you just made $600k on your $300k house, that you've paid down to $200k hopefully atleast... And you move and buy a house for the same $900k you just sold yours for, you only have a mortgage on $200k. Yes at a higher rate. And yes with higher property taxes. But hey, that's life. Don't move if it's not worth it. But it's not as impossible as you make it seem.

CptFribble 3y ago
[removed by commenter due to incorrect information] apologies, I was misinformed. consider this comment retracted
- ipython 3y ago
  that's incorrect. Generally speaking you don't pay capital gains on the first $250k ($500k if filing jointly) under IRS rules. You can also adjust the cost basis of your home by adding in any improvements you may have made to the house, so assuming you made any improvements at all, you can potentially make that exemption even higher. See https://www.irs.gov/taxtopics/tc701 https://www.irs.gov/taxtopics/tc701.

scarface74 3y ago

> Most people I know could not afford their house if they were buying it today How is that true if you moved to a place with an equivalent cost of living? I had my house built in the suburbs of Atlanta for $350K in metro Atlanta. It’s now worth $650K. If I wanted to buy another house for $650K, I would sell my house. Get $300K in cash, use it for a down payment, and still have a $350K mortgage. Of course I’m ignoring selling costs, interest rate differences etc. I have a friend who located from Seattle to Atlanta. He also had a home in Seattle, he had $600K in equity that he was able to use to get a $900K house in Atlanta and have a $300K mortgage.

yunohn 3y ago
I find it hilarious when HN threads go deep, and commenters forget the actual point. This post and thread are talking about moving due to losing a job. Not about a calculated move done for financial gain.
- scarface74 3y ago
  That’s just it. My friend from Seattle did move for a job. The other poster said that because of rising home prices, someone who owned a home couldn’t afford an equivalent home. My argument is that their current home probably also went up in value and they could use the equity to pay a large down payment to make a new home affordable. Alternatively, pocket the equity and rent instead of making a commitment to buy.
  - yunohn 3y ago
    That is what is commonly called an anecdote. Most people who are fired do not end up winning the housing profit lottery.

asdfman123 3y ago

> Moving would mean becoming a renter again and losing a much larger chunk of their paycheck every month to housing The problem isn't that you're an existing homeowner. The problem is housing is exorbitant. Everyone has to pay out of the nose for housing. The only difference is that you have an asset that has appreciated significantly, and in a way you're indirectly receiving dividends from it in the form of affordable mortgage payments. But if you didn't have that house, you'd be in an even worse spot.