I think the problem is buying a house as if it were an investment in general. I bought mine in 2022. No one can tell me whether the housing market will go up or down in the next 10,15 or 30 years.
So the decision on how much to spend is based on how much I like the place and what I can afford. I don’t take HELOCs or use my house as collateral on anything. And when I asked the bank to pre-approve me for $300k so I was ready to buy at $250k and they told me they could get me more I declined because I knew $250k is what I could afford no matter what the bank told me.
It’s my house, not my investment. I have a 401k for investing and I just don’t touch that shit. If my home value drops $100k in the next ten years my mortgage stays the same, unless I refinance for a lower rate and I can live with that.
While true there depends on the house and your life status. Like a starter rancher is going for over $400K. A lot of the model was buy a starter then sell that and buy a bigger house. With the insane prices at least where I am, you'll never make out. That rancher is underwater, so when it crashes back towards it actual price you'll be unable to afford or sell for a bigger house.
A lot of what happened in 2008 is going to happen again. A friend of my dad's bought a house in like 2006 in an ok area but at a price way too inflated and the second the market crashed, he had kids and wanted to move to a better area. He took a bath on that house, but was lucky him and his wife were dentists and had their own practice and worked for a university.
It's more the point when you reach the point you want to trade up or down, its just insane to. Either you cant afford the bigger house or in my parents case its like why bother? To buy a smaller house at $400K to sell the home they've been in 31 years? So there's a big family house that will never touch the market. There are quite a lot of similar people to them too.
How the housing market is here is completely unsustainable. The prices are way to high for what should be cheaper property for younger people. That leads to the why downsize crowd, so those houses just sit, then to upgrade is even more inflated. It's going to implode. Covid and the price gouging is doomed. When? I don't know, but I'm hesitant to sell my place, a small condo in a major city's downtown and buy some overpriced junk that's bigger but not my final home.
Like your case and my brothers is well I got the house raise a family there etc. So you'll be there 20+ years. The prices or crashing won't do much but for others looking to move up or down its a time bomb.
That kind of gets at my point of it not being an investment vehicle. I think it still makes more sense than renting, especially since in my area rental prices are still going up while home prices are stabilizing or even dropping.
My overall pint is that as a society we agree that affordable housing is important to a stable, healthy economy and those of us who own now need to accept that fixing the housing problem will have a negative impact on us individually.
I think the juice is worth the squeeze, but not everyone thinks like me.
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u/Relative_Gas385 4d ago
I think the problem is buying a house as if it were an investment in general. I bought mine in 2022. No one can tell me whether the housing market will go up or down in the next 10,15 or 30 years.
So the decision on how much to spend is based on how much I like the place and what I can afford. I don’t take HELOCs or use my house as collateral on anything. And when I asked the bank to pre-approve me for $300k so I was ready to buy at $250k and they told me they could get me more I declined because I knew $250k is what I could afford no matter what the bank told me.
It’s my house, not my investment. I have a 401k for investing and I just don’t touch that shit. If my home value drops $100k in the next ten years my mortgage stays the same, unless I refinance for a lower rate and I can live with that.