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Housing market affordability is so bad that Zillow says it will take you 13.5 years to break even on a purchase from July onward (finance.yahoo.com)

submitted 1 year ago by [email protected] to c/[email protected]

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[–] piranhaphish 6 points 1 year ago (1 children)

I mean, yeah, I guess ...

But, that seems like bad advice in general and I'm not sure why you would say that. I am genuinely curious if you care to explain. Beyond reading most of this article, I haven't done any research into current interest rates or house prices lately, so maybe there's more to it than I am aware.

Generally, buying a house is a good long-term strategy. You can give 100% of your money to somebody else with rent, or you can effectively put an increasingly bigger portion of that money into savings. Even if a mortgage payment is 50% more than rent somewhere, that difference would basically be the principal portion of the payment at the beginning and more later on, meaning it stays your money. And even if the price of houses are leveling off now, they're nearly guaranteed to go up at some rate.

According to the article, if you don't think you'll be able to keep your mortgage for 13.5 years, then it sounds like the closing cost and other fees could make it a bad investment. So maybe if you're 60 years old or if you don't ever expect to increase your salary then maybe this isn't a good idea. Otherwise, I don't think somebody should just blanket decide to resign to being a slave to housing and life in general.

Buying a home isn't as easy as it used to be. But it's not impossible. And it is probably the single biggest thing you can do to change the trajectory of your life. For many people, I would think it is worth serious consideration.

These are just my opinions, though. I'm not a financial advisor.

[–] [email protected] 4 points 1 year ago

Generally, buying a house is a good long-term strategy.

The essence of it is that this is only true if housing prices continue to go up, which is fundamentally at odds with the societal goal of housing being affordable. Houses cannot be both cheap and good investments. Over the past ~100 years, housing has been treated largely as an investment vehicle, which has created the current mess where you're golden if you're rich enough to buy and thoroughly fucked if you can't.

We've been grossly underbuilding for decades relative to population growth in cities, and this is the result. We'd be much better off if we built enough to make housing a non-issue and left the investments to assets that aren't required to live. But also, depending on the market, rents can be cheaper relative to a mortgage such that investing the difference in stocks etc. will have you pull out ahead. That's beyond the fact that, in some markets, down payments are simply out of reach of most people. I'm in Manhattan, and a decent condo clocks in at around a million. I might get there if I get married and we save for a solid chunk of time, but this isn't a place where a young person can move and quickly decide to buy a place. Renting isn't a bad thing in situations like this.