MemphisAg1 said:

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Get Off My Lawn said:

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agwrestler said:

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tk111 said:

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It's really terrible. I know a number of young couples just a few years removed from college that have been very successful and are still absolutely crushed at their prospects of getting a home due to the overwhelming double-whammy that is prices and interest rates.

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Buy the starter home they can afford instead of their dream McMansion.

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Apparently you missed this in the past 20 pages, but there's a feeding frenzy for "affordable" homes. A modest home in a safe neighborhood is going to be bought by someone who's desperate enough to overpay / outbid a dozen other desperate couples. The "starter" home rung has been largely kicked out from the ladder.

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Today's expectation for a "starter" home is well beyond what a lot of folks started with. My starter home was a 40 year old 1200 SF, two window AC units, no garage, and 1.5 baths. Pier and beam construction (no concrete slab) and no fireplace. No pool, no fence, no deck. Just a home that was water tight. Neighborhood was relatively safe but a few of the inhabitants were a bit "sketchy."

Those homes, or something similar, are out there today. But a lot of young folks have upgraded expectations well beyond a traditional starter home.

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You're correct, but you're missing the point.

The starter home you described costs more than it ever has, which is way more than most can afford. This isnt a case of expectations not matching reality. This is an "all time high"

MemphisAg1 said:

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Those homes, or something similar, are out there today.

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I mean, they aren't. Sure, they probably exist but they're now 60-80 year old homes in neighborhoods that are in far from "relatively safe" neighborhoods. The construction methods you described largely stopped happening by the 60's. The homes like that that still exist today are either in the ghetto, are expensive due to land values and getting torn down by investors, or are so far from jobs that it is untenable. I agree that lots of folks have unrealistic expectations and waste money but it's also unrealistic to say that lots of what you described, in a neighborhood you described, are out there.

MemphisAg1 said:

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Get Off My Lawn said:

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agwrestler said:

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tk111 said:

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It's really terrible. I know a number of young couples just a few years removed from college that have been very successful and are still absolutely crushed at their prospects of getting a home due to the overwhelming double-whammy that is prices and interest rates.

---

Buy the starter home they can afford instead of their dream McMansion.

---

Apparently you missed this in the past 20 pages, but there's a feeding frenzy for "affordable" homes. A modest home in a safe neighborhood is going to be bought by someone who's desperate enough to overpay / outbid a dozen other desperate couples. The "starter" home rung has been largely kicked out from the ladder.

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Today's expectation for a "starter" home is well beyond what a lot of folks started with. My starter home was a 40 year old 1200 SF, two window AC units, no garage, and 1.5 baths. Pier and beam construction (no concrete slab) and no fireplace. No pool, no fence, no deck. Just a home that was water tight. Neighborhood was relatively safe but a few of the inhabitants were a bit "sketchy."

Those homes, or something similar, are out there today. But a lot of young folks have upgraded expectations well beyond a traditional starter home.

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Living in luxury apartments paid for by mommy and daddy during their 5+ years in undergrad gave a warped sense of what to expect once they had to pull their own weight, and was a disservice and complete failure in parenting. I lived in the biggest and cheapest ****hole within walking distance to campus so that I could leave with minimal debt, but this also helped give perspective on how far money goes, and the value behind it. I continued to live frugally for many years after graduation, with minimal debt, and by the time I started making real money I could buy pretty much anything I wanted after saving and creating a lifestyle to make it happen. Perspective and expectations are completely gone with everyone under the age of 45 (I'm 41, for reference). Sacrifice and patience, without instant gratification, are no longer options.

rilloaggie said:

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MemphisAg1 said:

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Those homes, or something similar, are out there today.

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I mean, they aren't. Sure, they probably exist but they're now 60-80 year old homes in neighborhoods that are in far from "relatively safe" neighborhoods. The construction methods you described largely stopped happening by the 60's. The homes like that that still exist today are either in the ghetto, are expensive due to land values and getting torn down by investors, or are so far from jobs that it is untenable. I agree that lots of folks have unrealistic expectations and waste money but it's also unrealistic to say that lots of what you described, in a neighborhood you described, are out there.

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I hear you. I'm not suggesting someone buying those exact houses, but something of similar stature and cost in today's world. I think of the home my dad built in 1978 when I was in high school. 2200 SF, 3 BR, 2.5 bath, concrete slab, fireplace, single garage, and central air. Really nice at the time, but it's now in a neighborhood that's relatively safe with an occasional sketchy character. Good bones on the homes, but they need a bit of work here and there. No HOA.

That house will be much less than a brand new 2800 SF, 3/4 BR, 3 bath, 2 to 3 car garage, granite countertops, tile floors, walk-in closets, 10 to 12 foot ceilings, fancy molding, digitally synchronized, and sleek back deck in an HOA with a community pool and all the trappings.

No heartburn against those folks who can swing it. Congrats. Just saying, those are not starter homes.

MemphisAg1 said:

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rilloaggie said:

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MemphisAg1 said:

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Those homes, or something similar, are out there today.

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I mean, they aren't. Sure, they probably exist but they're now 60-80 year old homes in neighborhoods that are in far from "relatively safe" neighborhoods. The construction methods you described largely stopped happening by the 60's. The homes like that that still exist today are either in the ghetto, are expensive due to land values and getting torn down by investors, or are so far from jobs that it is untenable. I agree that lots of folks have unrealistic expectations and waste money but it's also unrealistic to say that lots of what you described, in a neighborhood you described, are out there.

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I hear you. I'm not suggesting someone buying those exact houses, but something of similar stature and cost in today's world. I think of the home my dad built in 1978 when I was in high school. 2200 SF, 3 BR, 2.5 bath, concrete slab, fireplace, single garage, and central air. Really nice at the time, but it's now in a neighborhood that's relatively safe with an occasional sketchy character. Good bones on the homes, but they need a bit of work here and there. No HOA.

That house will be much less than a brand new 2800 SF, 3/4 BR, 3 bath, 2 to 3 car garage, granite countertops, tile floors, walk-in closets, 10 to 12 foot ceilings, fancy molding, digitally synchronized, and sleek back deck in an HOA with a community pool and all the trappings.

No heartburn against those folks who can swing it. Congrats. Just saying, those are not starter homes.

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I'm out of the starter home phase but I can acknowledge it's an issue.

I'm glancing at a 100,000 population suburb in Texas (30-40 min from downtown) for reference. 16 houses under $350,000 for sale. Which still would put you around $3,000/month for mortgage, taxes and insurance.

4 are small townhomes or condos
3 in bad neighborhoods in bad shape
1 in a good neighborhood in really bad shape
Other 8 are nothing fancy but not bad. All $300-350k. Everyone will be fighting over these 8 not fancy, 1,500 sq ft homes.

It is a problem for young people right now.

BoydCrowder13 said:

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I'm out of the starter home phase but I can acknowledge it's an issue.

I'm glancing at a 100,000 population suburb in Texas (30-40 min from downtown) for reference. 16 houses under $350,000 for sale. Which still would put you around $3,000/month for mortgage, taxes and insurance.

4 are small townhomes or condos
3 in bad neighborhoods in bad shape
1 in a good neighborhood in really bad shape
Other 8 are nothing fancy but not bad. All $300-350k. Everyone will be fighting over these 8 not fancy, 1,500 sq ft homes.

It is a problem for young people right now.

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I agree it's a huge challenge for youngsters to get into a starter home. The down payment, monthly note, and property tax burden are tough on the typical young person's income. I watched my oldest son navigate it four years ago; he was fortunate to get in right before prices took a moon shot.

The point I was trying to make is that many homes called "starters" are not a starter home. That example I gave of the new 2800 SF house with 3/4 BR, 3 baths, 2 to 3 car garage, granite countertops, tile floors, etc. is a prime example. I bought/built 7 homes from 1997-2016 as I moved around for my career. That house is like my 3rd or 4th home as we gradually moved up the scale.

Interest rates reverting to more normal levels recently have significantly increased the hurdle for getting into a home. My first home in 1997 saw a mortgage rate of 7.5%, and I remember how tight it was to fit into an already tight budget. Then we entered a magical period of low interest rates for roughly 20 years that made housing much more affordable. Got a 3.875 five year ARM on my third home in 2003 which allowed us to buy more house for the dollar. Refinanced my current and final home for 2.5% 30 years, so we're set.

But lots of folks aren't, and I get that. If interest rates stay at/near these levels, I wonder if we'll see builders scale back the size and fanciness features to remove some cost and target that segment that's desperate to crack into the home ownership club.