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I used to worry too, then I did it.
You don't need 20% down. I did it with just 7.5% ($30,000).
This was in 2021 though with 3.25% fixed 30 year interest.
Your anecdote doesn't disprove the fact that homebuying is more unaffordable than ever. I made a comment about this earlier today, but I've got enough cash for a 20% down-payment on a modest house in my area but still can't get a loan because ~55% of my monthly income is obligated towards rent. You've escaped the rat race, congratulations, but quite a bit has changed between 2021 and 2024, even if it doesn't feel like it was that long ago.
Then include rent in the income-to-expenses measurements for home loans? Getting rid of that portion is the whole point! Hell, someone paying stupid high rent is the best evidence they could have that you'll be able to pay back their loan since you have 55% of your income already dedicated to housing that will be freed up and available without changing your lifestyle. They should worry more the smaller that percentage is.
Your argument makes perfect sense. If the entire loan industry weren't a racket, it would be persuasive.
That was my thing, even though my rent was $1,800 a month, between my wife and myself, our combined income was $9K a month. So rent was 20%.
My guy... do you not understand how extraordinary your situation was? $9k a month "then I just did it" ffs
The 9K a month had less to do with it than the $30K down, which, again, was only 7.5%, not the 20% people expect.
Which you had because of that 9k/month
Again, because of the high income
The 30K was more because I had been working from home, not buying gas, and not eating out for 3 years. ;)
.... While making $9k a month.
Jesus fucking Christ dude your situation is exceptional because you make a fuck-ton more money than most people, it's not a difficult reality to accept.
In 2000 we did a zero down, 8% first on 80% and 9.5% second on 20%, at 2.5x our combined salary. Terrible loans and it was really really hard, but it was what we had to do to buy - network tv, one picked-up pizza per week, vacations were driving the kids to see their grandparents, constantly scrambled to pay taxes and insurance, and we just prayed that nothing broke. We know that we were really lucky.
https://themortgagereports.com/61853/30-year-mortgage-rates-chart
It's really bad and it's getting worse.
Allegedly rates are set to go back down later this year and people with shit rates should be able to refinance. Prices are absolutely sickening all around whether you rent or are paying off a mortgage.
really? I read somewhere that the Fed has no plans to change rates.
Rate cuts are alleged by people addicted to cheap debt, wanting to pump up asset prices. They alleged that there would be six rate cuts and have since revised that to three, but seem like they're going to revise that down to one. Eventually they'll understand that there will likely be zero rate cuts this year since the federal reserve that actually sets the rate hasn't indicated that they will cut rates because inflation hasn't settled down yet (and would likely shoot back up the second rates are cut).
Being able to put $30k into anything is not remotely achievable for a ton of people and your wording comes across as very dismissive
I bought my home with absolutely zero cash in hand. That's what first time home buyer assistance programs and grants are for.
Sure, no problem. Zero down at 7.125% on a home that now costs $350k, but only cost $150k about 5 years ago. I'm sure that's affordable for a family right now.
How much is the same family throwing away to rent that same home? How much will their rent be in 10 years? Locking into a mortgage ($2650/mo in your example) is the best way to go, even if the home prices are disgusting compared to 5 years ago.
The guy who says he and his partner make $175k/year should be able to afford it.
?
I had zero savings when I bought my house. My parents backed the loan which was good enough for the bank. Also I set the budget first and then looked what I could get with that. Well it turns out not much but not nothing either. My house is old and ridiculously small on modern standards but it's a house nevertheless and comes with a nice yard too. I paid 105k€ for it. It's 10km from the city centre on a quiet suburban area within 50 meters from a bus stop and it's a 20min trip to the city with a bus or 12minutes with a car.