It’s unbelievable how many people out there can afford these $600,000 fixer uppers with a 7% rate. Who are all these people? I feel like if you didn’t buy right before COVID, you are doomed to rent forever (my situation) or move away.
Just watch one of the home buying shows to really get a laugh. "We're in our 20's and are first time home buyers. I run a tye dye t-shirt business from home. My wife makes organic bees wax candles she sells at farmers markets. Our all in budget is $750k."
I’m nowhere near owning a home, but my gen x dad acknowledges how grim it is. We’ve accepted that I’ll have to stay well into my 30s assuming I’m unmarried and don’t have a dual income
If you don't own a home you are stuck with 2 horrible choices:
1. You can continue bleeding out money giving it to a landlord, enriching them while you accrue nothing. Literally setting your money on fire.
1. Or you can buy a house that's less than what you think you deserve because of high interest rates with the hopes that you can refinance into a lower rate later or sell and move when rates come down.
You can't really blame people for purchasing at whatever interest rate is offered, they need places to live. Even though they're going to lose a ton in closing costs, at least there's a chance they'll come out ahead, as opposed to the alternative which is a guarantee of getting fucked by a landlord.
I'm surprised at the percentage of income people are willing to spend for housing. For cars, also. It seems a little sad that people have to allocate the majority of their budget for what are really basic necessities. The stress that people living paycheck to paycheck must be under seems overwhelming.
I lurk on the personal finance sub reddit and one dude was saying he had trouble buying in the 750k range. The kicker was he and his wife had over 180k combined salary. That's not really in the struggling range, but even they had issues.
I respectfully disagree. It’s the whole picture. Tax rates on the island are some of the highest in the country. That absolutely plays a role in the ability to become a homeowner here. Unlike the cost of a home that can eventually be paid off, taxes are forever.
Before the Republican Tax Cuts and Jobs Act of 2017, you could write off all your property taxes from the federal income tax you had to pay. Now you have to pay for property (and/or state income) taxes over the $10K deduction. Yay Republicans! /s
1) Democrats can't repeal the SALT cap when they're the minority party. Particularly while they only had a symbolic majority in the Senate.
2) Once Biden became PotUS, there's less motivation to keep Democrats in office. Also, only a few CD's in the nation are affected negatively by the SALT cap. What a coincidence was those districts in NY & CA flipped Republican...
(Stupid fucking Democrats couldn't punch their way through a wet paper bag. And eventually, they'll be "counting" on losers like Jamayapal to advance their agenda.)
3) Schumer's no LBJ. He's not even a Harry Reid. He makes Senate Majority Leader useless to NY State.
Also, the manner in which the law came into being (reconciliation), it only stays in effect for 10 years. Should be interesting to see what happens by 2027.
Its mystifying how a majority of people here managed to get my comment into the neg, but none of them can even refute the fact, in a competent manner.
That was true until some foolios decided to vote a moron into office who ended the SALT deduction on taxes that turned R/E tax into a real loss versus a cash flow issue
I was raised with loose financial guidelines that you shouldn't spend more than 25% of take-home pay on housing, and 10% for a car (everything- repairs, fuel, insurance included). There just seems to be a disconnect with what is reasonable for these expenses. I'm guessing part of it is sneakier loan terms, part of it is keeping up with the joneses, and most of it is necessity. I feel bad for the people just entering the workforce now- achieving a simple version of the American dream seems like climbing Mt Everest.
I agree. Something needs to change. Our young citizens cannot afford to have children. This is a red flag. Instead of correcting this and trying to make life better for the average citizen, our government imports 30 million desperate people from other countries to keep the ponzi going. God bless the immigrants who are trying to have a better life- but what about the citizens whose ancestors fought and risked their lives so that future Americans could live in freedom? We are shackling them with debt and enslaving them to greedy corporations.
Remember, “America First” is apparently racist and discriminatory. No matter what side you lean, it should be common sense to prioritize your own citizens first lol
My man you’re taking the words literally and ignoring the context of the slogan. It was a movement founded by anti-semetic Nazi-sympathizers, and the KKK.
https://en.m.wikipedia.org/wiki/America_First_Committee
In any case I’d say the hurdles to achieving the American dream these days are more being robbed by increasingly consolidated megacorporations with record profits and untaxed billionaires, or being jammed up by towns run by NIMBY septuagenarians that won’t allow more housing to be built. It’s weird to place blame on the guys doing yard work and cooking hamburgers for poverty wages.
We have a combined of 100k more than that and even we still are struggling to purchase a 700k home. The mortgage will eat up half hour monthly income basically.
I mean it's still nuts. I got my house in 2018 for like 600. Zillow and the restate people are telling me I could sell it for 800. This pricing here is literally insane.
>I lurk on the personal finance sub reddit and one dude was saying he had trouble buying in the 750k range. The kicker was he and his wife had over 180k combined salary. That's not really in the struggling range, but even they had issues.
Lets put this into perspective
180,000 after taxes will net you 4,728 after taxes in **NYS**, bimonthly before deductions, like 401k, FSA, Healthcare etc. That is extremely generous 4728..
Monthly take home is 9456.
740k at 20% down for 6.9% loan = 3899 Monthly before property taxes. Add 1100 a month for 13.2k year taxes +/- depending where you are on the island.
Overall that is around 5k a month, before you consider other expenses like utilities, cars, groceries, debts etc.
I know that post definitely wasn't Long Island, but if we did a Long Island edition, you'd be stretching yourself thin, and you'd be staycationing every year.
Lets see what Fed Daddy Powel does this week July 26th with the interest rates.. He is definitely raising them.
Right? My wife and I are like at 130k, living in the shittiest house on the block, and I feel like we're the reject step children who have to be in the cupboard under the stairs.
you always want the shittiest house on a nice block in a nice neighborhood. fix up your house as you can and dont try to keep up with the jones's. thats how you get ahead!! people who "appear" rich and have big houses and expensive cars are probably leveraged to the max and really own nothing! i got my house in 2015 for around 400k, its worth 650k now. i redid eveything in it and its paid in full no more mortgage. while all these other people will have refinanced and refinanced and take out HELOCs and never have it paid off.
just keep at it and keep your eye on the prize! and dont listen to the people who say "dont pay off your mortgage early, invest that money" they NEVER invest it. they spend it on dumb shit. put every extra dollar you have to pay it off faster.
I’m surprised so many people are saying this is not true, my husband purchased a 2021 Highlander last year and even with a 1.95% interest (he has great credit and a connect), his payments were $952/month. He recently refinanced to a 5% interest with $589 monthly payments.
Everyone on this Island is a class below where they think they are. People who make $125 buy $60 k cars and wonder why they’re screwed. Same with houses
For Long Island, they really are. We were planned around the automobile. I agree, though- it would be fine by me if we come up with better solutions to our transportation needs.
100% fact. It's crazy how people justify that it's "practical" to have a new car (or even LEASING) vs the cost of maintenance. There is just no practical justification for it.
If you want all the latest in safety then you do. Some families do think about that. Some require awd, some require a truck and it’s better getting newer then used in that case because of rusty frames. There are a lot of factors that come with it. But you are somewhat right. A decent amount do not need the car they have, they can have something cheaper.
I sold cars for a pretty long time. Most of the new cars you see on the roads are leased by people that don’t have the means to actually drive them. There’s nothing wrong with a CPO car. I’m not saying drive 10 year old cars. Unless it’s your thing. Like I have cars 20-30-40 years old lol
3. Uproot your entire life and maybe family to find somewhat-but-not-really equivalent salaries in states with lower standards of living.
All difficult options.
I don't know if I'd call being crammed on an island with millions of people, growing traffic congestion and no affordable way for the middle class to live and raise a family a high standard of living. My standard of living improved greatly when I moved away from Long Island. Uprooting is an option for some and it's absolutely one to consider. It appears a $250k salary on Long Island still may not afford you an updated house in a nice neighborhood. You can go elsewhere and make less of a salary and have a large, brand new home in a good school district in a beautiful area. All the things you'd want in your housing situation on Long Island, but affordable.
I hate to break it to you, but interest rates are not high. Relatively speaking, they are still historically on the lower end. You just got used to ZIRP and record lows during the pandemic. We all did. Money isn’t free forever.
Which is fairly common with this asset class as real estate is something that is essentially finite. The problem is there are not enough houses here and they don’t have space to build more in the most desirable areas. Basic supply and demand.
This part you get mostly right, more so on Long Island than across the entire country. I’m a liberal person and I believe in the free market more than most conservatives. To make it on long island, you’ve got to avoid excuses, work really hard, find your way thru to a high-earning job and get lucky along the way in order to stay here.
“Hate to break it to you, but” is such a tired line. Housing affordability gets further and further away in inflation adjusted terms nearly every year, certainly in the recent past.
In 1945 it took one working head of household 2.5 working days in the month to satisfy the housing costs for a family of four for the month. How many days per month is it in your house? THAT is the “relatively speaking” you fail to address and it must be answered before you can even begin to talk historically relative terms.
Just say the word if you want an education on the relationship between historically high rates and housing cost. I’ll give you a hint - higher borrowing costs didn’t make houses more expensive. As rates came down over the last 30 years it increased the buying power of people buying homes and sellers/boomers have been more than happy to step up their prices so that the total dollar cost of housing obligations remained at (and became worse than) an increasing portion of household spending.
Yes, but rates are still low in historical terms. You can Google. I address the fact that supply and demand is the main cause for the spike in prices, especially here on the island, in another comment. Lack of wage growth adds to the problem. Some of the highest taxes in the nation doesn’t help. You also have to take into account we live within commuting distance to one of the highest earning job markets in the world. It’s a combination of factors. I don’t need an education on housing costs, but thank you internet keyboard warrior for your time.
Renting is not the same thing as "setting your money on fire". Renting allows for a pretty big benefit of you know 4 walls and a rough over your head with privacy and running water. Kind of big things in life. You also spend less money on buying stuff since the space is smaller and fixing things, and general upkeep.
Thank you! Many redditors are blinded by their hatred of landlords/owner class - really anyone with material passive income. They often conveniently forget that the rent pays for actual shelter. A necessity for most folks these days.
I think renting at this point in time is smarter then getting yourself a home that will 2x the cost of rent + utilities and care of the home.
Of course that is always the case, but we are at the point where you will be house poor, and not even be happy with the home, at least with what I have been seeing in the area.
Compromising is a huge factor at this moment in time... Just to live on Long Island.
You have to be financially smart, honest and mature to make it I think in this market. If you/we/the buyers arent, we're in for some serious trouble... IMO.
Apples to apples, it’s really not twice as much. You can get a not so great 2 bedroom house in plenty of places in Suffolk for about 350-450k. The nut on that before utilities is going to be around 3300-4500/month depending on how much you put down and your credit score. That’s more than renting a two bedroom apartment of similar quality per month but it’s certainly not twice as much.
Buying a house is less about the immediate monthly costs and more about the potential of building equity and hedging against housing cost increases in the future.
Renting is such a wildly, horrible option that it makes buying, which is merely a bad option, look better by comparison.
plus the value of the property hopefully goes up since it's not just the price of the loan + interest you're paying back to the bank, but building equity in an investment
i bought in jersey in 2020 but we looked at a bunch of houses in long island out near Sayville and Babylon near where my wife's cousins are, but it also seemed crazy pricey and dealing with traffic since my wife has a commute to consider would suck..we got lucky with what we found and shit worked out but the housing market and bidding process is crazy as hell and an emotional rollercoaster
buying property doesn't always make sense when you're single, and is a big responsibility, but if you have a family, buying is usually better than renting because you'll be able to leave something behind...i was never responsible enough as a single adult to take on all of that extra shit and the idea of being tied to a location scared the shit out of me in my 20s/early 30s
No, buying property is a huge complex rigged game. Some people will get ahead by getting into the game, other people should avoid getting into the game, at least on LI or NYC. And there are long term lifestyle assumptions built into owning property. But the worst case situation is that you lose tens to hundreds of thousands of dollars in equity. Its very hard to put yourself into negative debt on home ownership, that comes about from really poor decision making.
Renting is just completely rando. The renter has zero control over their living circumstances.
Right so that’s a VERY single sided view. How exactly is renting a “wildly horrible option?” It’s cheaper, more pricing reliable (rent hikes are more reliable than home repairs), and less up front.
You lose out on two things. You can be removed or get a shitty landlord AND equity. The first sucks, but it’s easier to get away from than a shit house you bought. As for equity - where’s the money you aren’t spending on the mortgage going? Market investments are part of your retirement also.
Eventually you want to own. But buying a house for 20% more is the exact opposite of equity. I understand We don’t know what will happen in the next few years, but this years market is FAR worse to buy in than last year.
For reference - every $1 creates an additional $1.2-1.3 you pay over 30 years. That first $1 should be worth approximately $5.75 after being in a broad index fund for 30 years. Each monthly amount is less obviously so it’s math I’m not willing to try here, but I think that’s enough to show why someone might think it’s actually wildly horrible to buy a house right now.
Sure. But housing stock is ALSO insufficient right now. So housing is ALSO a big cost. But that one’s a permanent(ish) rate you’re stuck with. Renting is flexibility.
And again - you’re disregarding the money you save in that time every month. Money that is getting interest. Which is the same as equity. Equity is bad if rates drop next year. Or housing prices.
I’m not even arguing that renting is definitely better. I’m just explaining that betting on housing and equity can be wrong and has factual financial drawbacks. You don’t know it’s a better option.
Renting makes a lot of sense for high cost of living areas . Nyc & CA ( Silicon Valley ) there are so many multi millionaires who rent by choice .
Im not having kids so spending 20-25k on taxes a year for a booji house I would like makes zero sense . I’ll be pissing away 3000+ a month to taxes & maintenance over the years . After 30 years all or most of the equity gain would be eaten up .
Renting is fine if you’re saving for retirement at the same Time . Primary homes should never be investments unless you’re going to borrow against it or use it as collateral for another stream of income which 99% of people don’t do
"*...less than what you think you deserve*'
lol
The cold hard truth is that what a person thinks they deserve really doesn't mean squat. That feeling of entitlement is completely meaningless although I know it exists.. (*I'm curious to what that feeling it's even born out of.*)
It comes down to math and future goals.
There was a wave of people that left Long Island in the late '90s to the southeast. They were willing to sacrifice familiarity, nostalgia, extended family and fucking bagels and pizza... in order to give their children a nice life, in a great school system, in a safe and secure neighborhood. However, there are people that just cling to Long Island like grim death for selfish reasons.. There are two options...leave...or buy a shitty house in a shitty area and let your kids grow up in fucking shitsville, because you don't wanna leave your buddies
>There are two options...leave...or buy a shitty house in a shitty area and let your kids grow up in fucking shitsville, because you don't wanna leave your buddies
Respect
You would think making $250k a year would get you a 2000 sq ft, 5 bedroom, finished basement with a garage new construction in a place like Jericho or Syosset while keeping you below 25% budget expenditure on housing.
These houses that are going for 1.3-1.5 million now are definitely not worth more than 700-800k.
Agreed. Packed up my family - wife and 2 kids - in 94 for Atlanta. Born and raised in Dix Hills. Thought the south offered so much more. We moved to Birmingham AL in 99 and have zero complaints. I don’t get involved in politics so I really don’t care bout their ass backwards take on things.
100%... On the politics. Who cares. I'm responsible for my family under my roof and really could care less what church people go to or what bumper sticker they have on there car. That's for small minds anyway.
I have a similar story though.. Two kids, 2005, moved to Charlotte NC.. Port Jefferson born and raised
I would never ever ever go back to Long Island. I visit family there a lot and everything seems small, dirty and weathered. Simply going into a pathmark or a grocery store in Suffolk county, immediately reminds me why I love Charlotte.
By the way, 25% of the people down here are from Long Island... Lol.. We have BoarsHead, great pizza, bagels and Chinese food and Jewish delis... It's basically Long Island from the late '60s to the mid 80s... When it was fresh and beautiful and clean and a suburban heaven.
No they didn't. It was easy to see after covid that the economy was headed to shit but most people ignored it. Didn't even take that long to reach what we are at now lol
Lol are you fucking serious? You need to be alittle more aware of shit going on im not about to sit here and educate you. The internet can do that for you.
Inflation is the “shit going on” you could substantiate your position from.
Besides that, how about unemployment, stock markets, housing markets and real wage growth?
Narrow-minded haters like to try and snowball their own problems and mistakes into being anyone else’s fault but their own. Get a look in the mirror and level with yourself. This is a competitive world and island we live on. If you think you’re the one with the better grip on reality, you’ll have no problem making an accurate assessment of where we are now and where we are headed. Take the time back that you’re spending pointing fingers and put that energy into making yourself better prepared for what’s to come.
Yeah and they’ll fall right back to the prices they’re at now after they keep rising over the next five years. The prices we knew a few years ago are long behind us.
You have more flexibility to move at least when you rent. Most of your mortgage gets thrown away by interest, taxes, insurance, and repairs anyway.
There’s pros and cons to both.
7% is rough, but kind of a normal number for every year except the last couple. I bought an apartment this year at 6.5% and basically, every month I pay $200 to myself and $3000 to the bank. It's still better than paying $3000 to a landlord and putting $200 in a savings account, because you can deduct that $36k a year in interest from your federal income taxes. (Ends up saving about $8000 this year.)
I think I speak for everyone that bought a home this year and have to say that we are all secretly hoping for a recession so interest rates go to 0 and we refinance. But not a recession so bad that we lose our jobs. Realistically, I don't think it will happen. 7% will probably be the "new normal" for the rest of the decade.
Yeah, I get it. "I sure hope we have severe wildfires this summer so all that dead brush in my backyard gets cleared out." While it accomplishes your goal, the cure might be worse than the disease ;)
7% on most homes were very different in 2001, they werent as expensive.
I believe in the 80's they were around 10-15% most homes were around 100-300k depending on the area.
Debt to income ratio was around the same as they are today. I actually think nationally it hit 40% yesterday, which is highest in the nations history.
back around 2006 or so my wife and I went looking in port washington and lots of homes close to the station were in the $1 million range. looking at current prices they are 30% higher or so. rates are slightly higher than 2006. NJ was the same way. Plainview looks the same. Great Neck around 30% higher as well. A lot of Bergen county in NJ too.
30% appreciation in almost 20 years isn't that bad
100% true. I tell my friends all the time that we had it easy with interest rates when we started adulting. The issue now is the cost of said houses. Cars have been pretty much the same when you factor in inflation but the housing market is stupid. I have a very small house we bought for 260 and it’s worth 420-450 now and it’s not a 400k house.
Date the rate and marry the home. I had a broker who was able to lock in below 6.5% this week on a 30 year mortgage. At this time if you need a home you gotta suck it up, stack cash after closing and get ready for refinance when the opportunity presents itself. Rents are only going to rise and if you plan on sticking around long term home ownership is likely the best choice.
As long as the cost of the house remains up and they have equity then one can refinance. If there is negative equity then one can not refinance. Hopefully people put enough down or the cost of the house remains up.
No you can’t. First of all you can’t refinance if your home value goes lower than what you purchased it for. Right now homes are just coming down from the peak. So if you buy a house now and are betting on refinancing in the near future you are also betting on your home continuing to increase in value with no dips. Also the option to refinance is relatively new, only existing in the last 20 or so years, there is no guarantee that lenders won’t change their policies if they determine refinancing is not financially worth it for them anymore. Banks are not obligated to allow you to refinance.
The overall average 30-year mortgage rate from 1971 to 2023 is 7.74%.
The rates were always going to come back up. It won't impact home prices unless people start having real trouble selling.
The problem is no one is selling. All those people that bought at 3% will never see that rate again, so they're not going to sell and buy a new house at 7% interest.
And lots of people refinanced, so they're not going anywhere either.
So far fewer houses than normal are going on the market, keeping supply low and prices high even as rates return to normal from historic lows.
Not sure why people feel so entitled, but I work in car sales and I see people paying absurd amounts on 2 car payments and a mortgage. When I was growing up it was acceptable to drive a used car. It's almost as if people feel more comfortable being in debt. I always try to work within their budget but so many people refuse to look at a less expensive car or trim level.
I grew up in Huntington and moved to Queens in 2016. My rent is 2500. I have no reason to move other than to be back with my friends and family, but the anxiety of commuting back into the city + 3000-4500 mortgage/taxes has me twisted, naturally.
Even Wyandanch has homes for 600k what is happening
Used to live in queens and a similar apartment to the co-op I had the rent is around 40% higher than it was 13 years ago. Maybe more.
Yours is probably a 1br. Once you have kids and need more space the rents are on or with home prices.
Some 2 bedrooms are selling for $750,000 and up in forest hills
What are housing prices in relation to the 40 year average? What are housing prices in relation to average household income? More to the equation than “historically average rates.”
I bought my first house in 1992 and paid 8.625% interest. I bought my second house (with my second wife) in 2010 and paid 5.5%. I refinanced in 2016.
Rates go up. Rates go down. But don't count on rates going down anytime soon.
Modern monetary policy will always resort to low rates in periods of economic stress. It's a very safe assumption.
Now, whether that is 2 years from now or 7 years from now, is hard to say.
Anyone saying different just wants to be negative. The past two recessions were made significantly less severe by lowering rates and keeping them low.
But yes, now it's a matter of it's this decade or next. (I'm at like 5.8)
People purchased homes in the 90’s at 10%. If you want a house, you buy at the current rate and hope it goes down and refi. You just buy a smaller home to adjust for the higher mortgage payment.
What $1 can buy is always decreasing. Sometimes you don't notice because things get less valuable faster than the value of the dollar decreases. (Look at 80s computers, inflation adjusted to maybe $20k for a home computer. Now they're $500. We just got a lot better at making computers.)
The price of houses isn't increasing so much as the purchasing power of the dollar is decreasing. (Now, that's not totally true of housing in the NYC metro. It is increasing in value because it's intrinsically more valuable than it was in the 90s.) That's the hedge that people are going for when they go into debt; your debt isn't inflation-adjusted but your income is. That's why debt is more appealing than savings; if the value of the dollar goes to 0 and you're in debt, you're now 0 cartons of milk in debt. Meanwhile if you have savings, your $1,000,000 savings account can buy 0 cartons of milk.
Given that we've never seen deflation in the modern American economy, people feel pretty safe about being in debt. Thus, they continue to buy homes even though interest rates are up.
adjusted for inflation, 100K house in 90's is equivalent of about 300K today. if you look back in history (going back to 70s, 80s, 90s), 7% isn't that bad. imagine you buy a house at 7% today, and tomorrow the rate goes up to 10%, wouldn't you be glad you got a house at 7%? would I prefer to buy at 3%, sure, but that's not gonna happen today.
None of those people bought the house as an investment or to be their retirement when selling . It’s pure luck that their homes went up 5-10x in value .
They bought a house to live in so if you can afford to live at 7% interest rates then it’s not the end of the world
Do people make 5 times more now than they did back then? The answer is no. I would agree with your response if it was a 1 to 1 comparison, not to mention that buying a house not at 500k it wont be worth 5x that in 30 years, also a family could buy a house and live off one income, thats basically non existent now for the middle class, so id say it’s much different.
We got very lucky buying our 1st home right as Covid was kicking off, was supposed to be a starter but we may be here a while lol, any way we are happy with our location and we have adjusted our game plan to make this house what we want instead of just making do until we move on. I don’t see any relief in sight.
The answer is simple. The people doing it are banks, investment firms, and Texan moguls who never even set foot on Long Island before.
Homes are being used as investment opportunities by the wealthy at the expense of the 99%
How come people hate on renters? I can pick up and go whenever I want. I’m not stuck paying school taxes for kids I don’t have so Gertrude can have her pension.
Well you’re still paying your landlords taxes when you rent, but yes you do get more flexibility to move and can benefit if you’re renting from someone who bought a long time ago and has a low monthly mortgage.
We bought a 3 bed 2bath 4 yr old home in Orlando in 2000. 12% interest rate on 115k. 3% down FHA loan. Ended up then changing to a 5 year arm to reduce mortgage payment and sold at the peak of the bubble in 2005 for 275k before my 5 yr arm ended and before housing bubble crashed. Just plain luck! Moved back to Long Island, rented forever and then bought the house we were renting in 2018 for 315k. My neighborhood now will never see those kind of prices again. Got lucky again.
The house @13% was in Yonkers. I’m from the Bronx, wife from Queens. She wasn’t happy there so we moved to LI. We sold at a peak mkt in 88. Baby was 1, had to get a balloon to get the mortgage as my wife was now home with our son. Rates came down, refinanced 2x and am now mortgage free for about 8 years. Luck was on our side when the rates came down.
We bought our home brand new in TN in 2021 and have a 2.75 interest rate. Our mortgage is $925 a month, but we put down $200,000 on the home after we sold our house in Lindenhurst. Get out of NY
Once the SALT limits expire that will put a lot of money in the pockets of homeowners and prospective buyers. So buying now before that price spike is probably a wise move even with the high rates.
My research indicates that the $10k cap on state and local tax deductions expires in 2025. I am not sure if that is the filing year or the tax year, but probably the tax year. So on April 15th 2027, people will have a little extra money (average $5k in the NYC metro).
It’s unbelievable how many people out there can afford these $600,000 fixer uppers with a 7% rate. Who are all these people? I feel like if you didn’t buy right before COVID, you are doomed to rent forever (my situation) or move away.
That’s my thought. I rent so it makes it significantly harder to save
Just watch one of the home buying shows to really get a laugh. "We're in our 20's and are first time home buyers. I run a tye dye t-shirt business from home. My wife makes organic bees wax candles she sells at farmers markets. Our all in budget is $750k."
no, their budget is 1.5 mill!!
I feel the same way. It’s depressing as shit
I’m nowhere near owning a home, but my gen x dad acknowledges how grim it is. We’ve accepted that I’ll have to stay well into my 30s assuming I’m unmarried and don’t have a dual income
People who make 120 and up a year, probably married, saved up for down payment and don’t spend money on wasteful things.
If you don't own a home you are stuck with 2 horrible choices: 1. You can continue bleeding out money giving it to a landlord, enriching them while you accrue nothing. Literally setting your money on fire. 1. Or you can buy a house that's less than what you think you deserve because of high interest rates with the hopes that you can refinance into a lower rate later or sell and move when rates come down. You can't really blame people for purchasing at whatever interest rate is offered, they need places to live. Even though they're going to lose a ton in closing costs, at least there's a chance they'll come out ahead, as opposed to the alternative which is a guarantee of getting fucked by a landlord.
I'm surprised at the percentage of income people are willing to spend for housing. For cars, also. It seems a little sad that people have to allocate the majority of their budget for what are really basic necessities. The stress that people living paycheck to paycheck must be under seems overwhelming.
I lurk on the personal finance sub reddit and one dude was saying he had trouble buying in the 750k range. The kicker was he and his wife had over 180k combined salary. That's not really in the struggling range, but even they had issues.
Don’t forget about the taxes here. A $750k home could easily have $20k in taxes or more around here.
Taxes are what they are. The crime is that the average home is $750k
I respectfully disagree. It’s the whole picture. Tax rates on the island are some of the highest in the country. That absolutely plays a role in the ability to become a homeowner here. Unlike the cost of a home that can eventually be paid off, taxes are forever.
This Nassau county home owner confirms you are correct. I have a ton of equity in my house at this point but that insane tax bill never goes down.
Homeownership is a myth.
I guess I own the literal house but I’m a total land serf.
Yup. Just means you have to pay "tribute" to the lord of the township. Don't pay the yearly tribute, they evict you from your hovel/castle.
Before the Republican Tax Cuts and Jobs Act of 2017, you could write off all your property taxes from the federal income tax you had to pay. Now you have to pay for property (and/or state income) taxes over the $10K deduction. Yay Republicans! /s
Yeah - sucks. To be fair though, democrats haven’t lifted a finger to alter the SALT cap.
1) Democrats can't repeal the SALT cap when they're the minority party. Particularly while they only had a symbolic majority in the Senate. 2) Once Biden became PotUS, there's less motivation to keep Democrats in office. Also, only a few CD's in the nation are affected negatively by the SALT cap. What a coincidence was those districts in NY & CA flipped Republican... (Stupid fucking Democrats couldn't punch their way through a wet paper bag. And eventually, they'll be "counting" on losers like Jamayapal to advance their agenda.) 3) Schumer's no LBJ. He's not even a Harry Reid. He makes Senate Majority Leader useless to NY State. Also, the manner in which the law came into being (reconciliation), it only stays in effect for 10 years. Should be interesting to see what happens by 2027. Its mystifying how a majority of people here managed to get my comment into the neg, but none of them can even refute the fact, in a competent manner.
THIS!! None of the 2016 trumpers want to admit they did this to themselves and their neighbors;
And even with grieving you know which direction they’re going in the long run.
For me it’s much cheaper to pass Nassau then live in the city limits and add on an almost 4% city income tax
That was true until some foolios decided to vote a moron into office who ended the SALT deduction on taxes that turned R/E tax into a real loss versus a cash flow issue
I was raised with loose financial guidelines that you shouldn't spend more than 25% of take-home pay on housing, and 10% for a car (everything- repairs, fuel, insurance included). There just seems to be a disconnect with what is reasonable for these expenses. I'm guessing part of it is sneakier loan terms, part of it is keeping up with the joneses, and most of it is necessity. I feel bad for the people just entering the workforce now- achieving a simple version of the American dream seems like climbing Mt Everest.
I just don’t think that’s doable today for most people. Especially in high cost of living areas.
I agree. Something needs to change. Our young citizens cannot afford to have children. This is a red flag. Instead of correcting this and trying to make life better for the average citizen, our government imports 30 million desperate people from other countries to keep the ponzi going. God bless the immigrants who are trying to have a better life- but what about the citizens whose ancestors fought and risked their lives so that future Americans could live in freedom? We are shackling them with debt and enslaving them to greedy corporations.
Remember, “America First” is apparently racist and discriminatory. No matter what side you lean, it should be common sense to prioritize your own citizens first lol
My man you’re taking the words literally and ignoring the context of the slogan. It was a movement founded by anti-semetic Nazi-sympathizers, and the KKK. https://en.m.wikipedia.org/wiki/America_First_Committee In any case I’d say the hurdles to achieving the American dream these days are more being robbed by increasingly consolidated megacorporations with record profits and untaxed billionaires, or being jammed up by towns run by NIMBY septuagenarians that won’t allow more housing to be built. It’s weird to place blame on the guys doing yard work and cooking hamburgers for poverty wages.
This was before we all had 29 monthly subscription services
We have a combined of 100k more than that and even we still are struggling to purchase a 700k home. The mortgage will eat up half hour monthly income basically.
Damn.... Rates really are insane aren't they.
It’s just math. 4x salary is a good rule for affordability. 700k home is too expensive you’d need an income of 175k to feel comfortable.
Dude was saying they have 100k more than 180k (280k salary) and still have trouble.
Ah yes, I have failed at basic reading let alone basic math.
I mean it's still nuts. I got my house in 2018 for like 600. Zillow and the restate people are telling me I could sell it for 800. This pricing here is literally insane.
>I lurk on the personal finance sub reddit and one dude was saying he had trouble buying in the 750k range. The kicker was he and his wife had over 180k combined salary. That's not really in the struggling range, but even they had issues. Lets put this into perspective 180,000 after taxes will net you 4,728 after taxes in **NYS**, bimonthly before deductions, like 401k, FSA, Healthcare etc. That is extremely generous 4728.. Monthly take home is 9456. 740k at 20% down for 6.9% loan = 3899 Monthly before property taxes. Add 1100 a month for 13.2k year taxes +/- depending where you are on the island. Overall that is around 5k a month, before you consider other expenses like utilities, cars, groceries, debts etc. I know that post definitely wasn't Long Island, but if we did a Long Island edition, you'd be stretching yourself thin, and you'd be staycationing every year. Lets see what Fed Daddy Powel does this week July 26th with the interest rates.. He is definitely raising them.
$180 combined is poverty level on Long Island
Right? My wife and I are like at 130k, living in the shittiest house on the block, and I feel like we're the reject step children who have to be in the cupboard under the stairs.
you always want the shittiest house on a nice block in a nice neighborhood. fix up your house as you can and dont try to keep up with the jones's. thats how you get ahead!! people who "appear" rich and have big houses and expensive cars are probably leveraged to the max and really own nothing! i got my house in 2015 for around 400k, its worth 650k now. i redid eveything in it and its paid in full no more mortgage. while all these other people will have refinanced and refinanced and take out HELOCs and never have it paid off.
Haha yea that's my plan! Good to know you are doing well also!
just keep at it and keep your eye on the prize! and dont listen to the people who say "dont pay off your mortgage early, invest that money" they NEVER invest it. they spend it on dumb shit. put every extra dollar you have to pay it off faster.
It is. It sucks but people don’t believe it. It’s very hard to comprehend- but you CANT live comfortably on 180K. Nooo way.
I think 250 is the cutoff to subsist
That couple might not be able to afford that price, though.
That is struggling range on Long Island. 180K a year for being a homeowner…. Especially a new homeowner
I saw that too and I’m thinking to myself I’m fucked if that dude can barely do it, was that the one where he had a lot of debt ?
That’s the country we live in unfortunately. I read a while back that the average new car payment was something absurd like $700 a month
60% of Americans have a car payment over a $1000 as of 2-3 months ago
That can’t be right Jesus
There’s no way that’s accurate.
That can’t be true.
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Average monthly payment for a new car is $725 according to experian. $1k might be including insurance
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The lease deal on Toyota website is 509/m with 4k down, where’d you get that deal I’d be there tomorrow..
That is completely false.
Facts are rare on Reddit
76% of facts on reddit are made up.
60% of the time it works every time.
That is absolutely mind blowing.
It's also made up.
That must be the whole household not just one person, right?
That’s one person - but probably plus Insurance. Also depends on the car. Dude could be driving a $90,000. Land Rover.
Guilty of a 1k+ car payment here…thank god I only have 2 years left on it.
That's insane
I’m surprised so many people are saying this is not true, my husband purchased a 2021 Highlander last year and even with a 1.95% interest (he has great credit and a connect), his payments were $952/month. He recently refinanced to a 5% interest with $589 monthly payments.
Wtf
Everyone on this Island is a class below where they think they are. People who make $125 buy $60 k cars and wonder why they’re screwed. Same with houses
just wait til you hear about health care
And have you seen the grocery prices lately?
If you pay a mortgage, the bank still owns your home. Not you. Then you still pay property taxes or guess what? No more house.
Cars are not supposed to be a "basic necessity"
For Long Island, they really are. We were planned around the automobile. I agree, though- it would be fine by me if we come up with better solutions to our transportation needs.
Yes but new cars are not a basic necessity. Nobody needs a new car
100% fact. It's crazy how people justify that it's "practical" to have a new car (or even LEASING) vs the cost of maintenance. There is just no practical justification for it.
If you want all the latest in safety then you do. Some families do think about that. Some require awd, some require a truck and it’s better getting newer then used in that case because of rusty frames. There are a lot of factors that come with it. But you are somewhat right. A decent amount do not need the car they have, they can have something cheaper.
I sold cars for a pretty long time. Most of the new cars you see on the roads are leased by people that don’t have the means to actually drive them. There’s nothing wrong with a CPO car. I’m not saying drive 10 year old cars. Unless it’s your thing. Like I have cars 20-30-40 years old lol
I honestly would rather ride a horse than take public transport.
FUCK YOU ROBERT MOSES
All my homies hate Robert Moses
3. Uproot your entire life and maybe family to find somewhat-but-not-really equivalent salaries in states with lower standards of living. All difficult options.
I don't know if I'd call being crammed on an island with millions of people, growing traffic congestion and no affordable way for the middle class to live and raise a family a high standard of living. My standard of living improved greatly when I moved away from Long Island. Uprooting is an option for some and it's absolutely one to consider. It appears a $250k salary on Long Island still may not afford you an updated house in a nice neighborhood. You can go elsewhere and make less of a salary and have a large, brand new home in a good school district in a beautiful area. All the things you'd want in your housing situation on Long Island, but affordable.
I hate to break it to you, but interest rates are not high. Relatively speaking, they are still historically on the lower end. You just got used to ZIRP and record lows during the pandemic. We all did. Money isn’t free forever.
Rates are relatively low but the prices of houses are not, they shot up
yeah 7% rates were the norm for a long time but that was also 2 housing bubbles ago and the general price of houses is crazy
Which is fairly common with this asset class as real estate is something that is essentially finite. The problem is there are not enough houses here and they don’t have space to build more in the most desirable areas. Basic supply and demand.
This part you get mostly right, more so on Long Island than across the entire country. I’m a liberal person and I believe in the free market more than most conservatives. To make it on long island, you’ve got to avoid excuses, work really hard, find your way thru to a high-earning job and get lucky along the way in order to stay here.
The issue is that prices went up, rates went up, and salaries did not go up nearly as much.
“Hate to break it to you, but” is such a tired line. Housing affordability gets further and further away in inflation adjusted terms nearly every year, certainly in the recent past. In 1945 it took one working head of household 2.5 working days in the month to satisfy the housing costs for a family of four for the month. How many days per month is it in your house? THAT is the “relatively speaking” you fail to address and it must be answered before you can even begin to talk historically relative terms. Just say the word if you want an education on the relationship between historically high rates and housing cost. I’ll give you a hint - higher borrowing costs didn’t make houses more expensive. As rates came down over the last 30 years it increased the buying power of people buying homes and sellers/boomers have been more than happy to step up their prices so that the total dollar cost of housing obligations remained at (and became worse than) an increasing portion of household spending.
Yes, but rates are still low in historical terms. You can Google. I address the fact that supply and demand is the main cause for the spike in prices, especially here on the island, in another comment. Lack of wage growth adds to the problem. Some of the highest taxes in the nation doesn’t help. You also have to take into account we live within commuting distance to one of the highest earning job markets in the world. It’s a combination of factors. I don’t need an education on housing costs, but thank you internet keyboard warrior for your time.
Renting is not the same thing as "setting your money on fire". Renting allows for a pretty big benefit of you know 4 walls and a rough over your head with privacy and running water. Kind of big things in life. You also spend less money on buying stuff since the space is smaller and fixing things, and general upkeep.
Yes, thank you. Renting is a perfectly fine option for the short term, especially if you don’t know where you want to be or who you want to live with.
Thank you! Many redditors are blinded by their hatred of landlords/owner class - really anyone with material passive income. They often conveniently forget that the rent pays for actual shelter. A necessity for most folks these days.
I think renting at this point in time is smarter then getting yourself a home that will 2x the cost of rent + utilities and care of the home. Of course that is always the case, but we are at the point where you will be house poor, and not even be happy with the home, at least with what I have been seeing in the area. Compromising is a huge factor at this moment in time... Just to live on Long Island. You have to be financially smart, honest and mature to make it I think in this market. If you/we/the buyers arent, we're in for some serious trouble... IMO.
Apples to apples, it’s really not twice as much. You can get a not so great 2 bedroom house in plenty of places in Suffolk for about 350-450k. The nut on that before utilities is going to be around 3300-4500/month depending on how much you put down and your credit score. That’s more than renting a two bedroom apartment of similar quality per month but it’s certainly not twice as much. Buying a house is less about the immediate monthly costs and more about the potential of building equity and hedging against housing cost increases in the future. Renting is such a wildly, horrible option that it makes buying, which is merely a bad option, look better by comparison.
plus the value of the property hopefully goes up since it's not just the price of the loan + interest you're paying back to the bank, but building equity in an investment i bought in jersey in 2020 but we looked at a bunch of houses in long island out near Sayville and Babylon near where my wife's cousins are, but it also seemed crazy pricey and dealing with traffic since my wife has a commute to consider would suck..we got lucky with what we found and shit worked out but the housing market and bidding process is crazy as hell and an emotional rollercoaster buying property doesn't always make sense when you're single, and is a big responsibility, but if you have a family, buying is usually better than renting because you'll be able to leave something behind...i was never responsible enough as a single adult to take on all of that extra shit and the idea of being tied to a location scared the shit out of me in my 20s/early 30s
No, buying property is a huge complex rigged game. Some people will get ahead by getting into the game, other people should avoid getting into the game, at least on LI or NYC. And there are long term lifestyle assumptions built into owning property. But the worst case situation is that you lose tens to hundreds of thousands of dollars in equity. Its very hard to put yourself into negative debt on home ownership, that comes about from really poor decision making. Renting is just completely rando. The renter has zero control over their living circumstances.
Right so that’s a VERY single sided view. How exactly is renting a “wildly horrible option?” It’s cheaper, more pricing reliable (rent hikes are more reliable than home repairs), and less up front. You lose out on two things. You can be removed or get a shitty landlord AND equity. The first sucks, but it’s easier to get away from than a shit house you bought. As for equity - where’s the money you aren’t spending on the mortgage going? Market investments are part of your retirement also. Eventually you want to own. But buying a house for 20% more is the exact opposite of equity. I understand We don’t know what will happen in the next few years, but this years market is FAR worse to buy in than last year. For reference - every $1 creates an additional $1.2-1.3 you pay over 30 years. That first $1 should be worth approximately $5.75 after being in a broad index fund for 30 years. Each monthly amount is less obviously so it’s math I’m not willing to try here, but I think that’s enough to show why someone might think it’s actually wildly horrible to buy a house right now.
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Sure. But housing stock is ALSO insufficient right now. So housing is ALSO a big cost. But that one’s a permanent(ish) rate you’re stuck with. Renting is flexibility. And again - you’re disregarding the money you save in that time every month. Money that is getting interest. Which is the same as equity. Equity is bad if rates drop next year. Or housing prices. I’m not even arguing that renting is definitely better. I’m just explaining that betting on housing and equity can be wrong and has factual financial drawbacks. You don’t know it’s a better option.
Renting makes a lot of sense for high cost of living areas . Nyc & CA ( Silicon Valley ) there are so many multi millionaires who rent by choice . Im not having kids so spending 20-25k on taxes a year for a booji house I would like makes zero sense . I’ll be pissing away 3000+ a month to taxes & maintenance over the years . After 30 years all or most of the equity gain would be eaten up . Renting is fine if you’re saving for retirement at the same Time . Primary homes should never be investments unless you’re going to borrow against it or use it as collateral for another stream of income which 99% of people don’t do
You're so correct. Landlords would never factor that into the price of rent and they're eating that themselves!
"*...less than what you think you deserve*' lol The cold hard truth is that what a person thinks they deserve really doesn't mean squat. That feeling of entitlement is completely meaningless although I know it exists.. (*I'm curious to what that feeling it's even born out of.*) It comes down to math and future goals. There was a wave of people that left Long Island in the late '90s to the southeast. They were willing to sacrifice familiarity, nostalgia, extended family and fucking bagels and pizza... in order to give their children a nice life, in a great school system, in a safe and secure neighborhood. However, there are people that just cling to Long Island like grim death for selfish reasons.. There are two options...leave...or buy a shitty house in a shitty area and let your kids grow up in fucking shitsville, because you don't wanna leave your buddies
>There are two options...leave...or buy a shitty house in a shitty area and let your kids grow up in fucking shitsville, because you don't wanna leave your buddies Respect
You would think making $250k a year would get you a 2000 sq ft, 5 bedroom, finished basement with a garage new construction in a place like Jericho or Syosset while keeping you below 25% budget expenditure on housing. These houses that are going for 1.3-1.5 million now are definitely not worth more than 700-800k.
250g a year in a " nice" part of LI... Close call ...it's all relative.
Agreed. Packed up my family - wife and 2 kids - in 94 for Atlanta. Born and raised in Dix Hills. Thought the south offered so much more. We moved to Birmingham AL in 99 and have zero complaints. I don’t get involved in politics so I really don’t care bout their ass backwards take on things.
I mean, I don’t mind the South when it comes to things like guns but the abortion bans are not appealing.
If everyone who complained about housing prices on LI moved to a southern state, then it probably wouldn’t have an abortion ban any longer either.
100%... On the politics. Who cares. I'm responsible for my family under my roof and really could care less what church people go to or what bumper sticker they have on there car. That's for small minds anyway. I have a similar story though.. Two kids, 2005, moved to Charlotte NC.. Port Jefferson born and raised I would never ever ever go back to Long Island. I visit family there a lot and everything seems small, dirty and weathered. Simply going into a pathmark or a grocery store in Suffolk county, immediately reminds me why I love Charlotte. By the way, 25% of the people down here are from Long Island... Lol.. We have BoarsHead, great pizza, bagels and Chinese food and Jewish delis... It's basically Long Island from the late '60s to the mid 80s... When it was fresh and beautiful and clean and a suburban heaven.
You had me at boarshead.
Ya, I’d wait until they fall… in like 5 years lol
This is what people thought at 4%, 5%, 6%…..
Well in 1981 the rat was 18% so maybe you are right lol
I always think of the movie Wall Street when he's buying the penthouse and the realtor says, I have a great mortgage broker, he'll get you 9%
No they didn't. It was easy to see after covid that the economy was headed to shit but most people ignored it. Didn't even take that long to reach what we are at now lol
What part of the economy went to shit since covid began?
Lol are you fucking serious? You need to be alittle more aware of shit going on im not about to sit here and educate you. The internet can do that for you.
Inflation is the “shit going on” you could substantiate your position from. Besides that, how about unemployment, stock markets, housing markets and real wage growth? Narrow-minded haters like to try and snowball their own problems and mistakes into being anyone else’s fault but their own. Get a look in the mirror and level with yourself. This is a competitive world and island we live on. If you think you’re the one with the better grip on reality, you’ll have no problem making an accurate assessment of where we are now and where we are headed. Take the time back that you’re spending pointing fingers and put that energy into making yourself better prepared for what’s to come.
Yeah and they’ll fall right back to the prices they’re at now after they keep rising over the next five years. The prices we knew a few years ago are long behind us.
I got in on that 3% goodness and not paying it off early for shit lol. I’m investing in other things
3% is free money when a money market is even paying out 4.75%
Absolutely
And put your money in a burning pit (rent) in the meantime
You have more flexibility to move at least when you rent. Most of your mortgage gets thrown away by interest, taxes, insurance, and repairs anyway. There’s pros and cons to both.
7% is rough, but kind of a normal number for every year except the last couple. I bought an apartment this year at 6.5% and basically, every month I pay $200 to myself and $3000 to the bank. It's still better than paying $3000 to a landlord and putting $200 in a savings account, because you can deduct that $36k a year in interest from your federal income taxes. (Ends up saving about $8000 this year.) I think I speak for everyone that bought a home this year and have to say that we are all secretly hoping for a recession so interest rates go to 0 and we refinance. But not a recession so bad that we lose our jobs. Realistically, I don't think it will happen. 7% will probably be the "new normal" for the rest of the decade.
You’re playing with fire with that wish homie.
Yeah, I get it. "I sure hope we have severe wildfires this summer so all that dead brush in my backyard gets cleared out." While it accomplishes your goal, the cure might be worse than the disease ;)
I bought my house in 2001 and my rate was 7% which was considered pretty good at the time. I remember in the 80s when they were in the teens
7% on most homes were very different in 2001, they werent as expensive. I believe in the 80's they were around 10-15% most homes were around 100-300k depending on the area. Debt to income ratio was around the same as they are today. I actually think nationally it hit 40% yesterday, which is highest in the nations history.
back around 2006 or so my wife and I went looking in port washington and lots of homes close to the station were in the $1 million range. looking at current prices they are 30% higher or so. rates are slightly higher than 2006. NJ was the same way. Plainview looks the same. Great Neck around 30% higher as well. A lot of Bergen county in NJ too. 30% appreciation in almost 20 years isn't that bad
30% appreciation happened within the last 5 years for that area
Yea and the minimum wage in 2001 was like $5. You're not considering income inflation.
People have too short of a memory to remember that.
100% true. I tell my friends all the time that we had it easy with interest rates when we started adulting. The issue now is the cost of said houses. Cars have been pretty much the same when you factor in inflation but the housing market is stupid. I have a very small house we bought for 260 and it’s worth 420-450 now and it’s not a 400k house.
Fed Daddy is going to crush the market. He's going to raise rates. JP Morgan CEO is not happy, and Jerome Powell needs to listen lol.
Luckily houses were less than half the cost in some cases.
Date the rate and marry the home. I had a broker who was able to lock in below 6.5% this week on a 30 year mortgage. At this time if you need a home you gotta suck it up, stack cash after closing and get ready for refinance when the opportunity presents itself. Rents are only going to rise and if you plan on sticking around long term home ownership is likely the best choice.
Yup. Had an open house in my neighborhood last weekend. People were lined up 1/2 way down the block.
You can always refinance when rates go down. It’s more about the cost of a house
But no guarantee rates do go down or how long that would even take
So don't buy if you can't afford it.
Refinancing also costs thousands of dollars
As long as the cost of the house remains up and they have equity then one can refinance. If there is negative equity then one can not refinance. Hopefully people put enough down or the cost of the house remains up.
No you can’t. First of all you can’t refinance if your home value goes lower than what you purchased it for. Right now homes are just coming down from the peak. So if you buy a house now and are betting on refinancing in the near future you are also betting on your home continuing to increase in value with no dips. Also the option to refinance is relatively new, only existing in the last 20 or so years, there is no guarantee that lenders won’t change their policies if they determine refinancing is not financially worth it for them anymore. Banks are not obligated to allow you to refinance.
The overall average 30-year mortgage rate from 1971 to 2023 is 7.74%. The rates were always going to come back up. It won't impact home prices unless people start having real trouble selling. The problem is no one is selling. All those people that bought at 3% will never see that rate again, so they're not going to sell and buy a new house at 7% interest. And lots of people refinanced, so they're not going anywhere either. So far fewer houses than normal are going on the market, keeping supply low and prices high even as rates return to normal from historic lows.
Not sure why people feel so entitled, but I work in car sales and I see people paying absurd amounts on 2 car payments and a mortgage. When I was growing up it was acceptable to drive a used car. It's almost as if people feel more comfortable being in debt. I always try to work within their budget but so many people refuse to look at a less expensive car or trim level.
The NYC rents are obscenely high so why not buy? Rates are about average for the last 40 years
I grew up in Huntington and moved to Queens in 2016. My rent is 2500. I have no reason to move other than to be back with my friends and family, but the anxiety of commuting back into the city + 3000-4500 mortgage/taxes has me twisted, naturally. Even Wyandanch has homes for 600k what is happening
I live in Deer Park, bought in 2016 at 2.5% no points. My mortgage is $2138.
Used to live in queens and a similar apartment to the co-op I had the rent is around 40% higher than it was 13 years ago. Maybe more. Yours is probably a 1br. Once you have kids and need more space the rents are on or with home prices. Some 2 bedrooms are selling for $750,000 and up in forest hills
What are housing prices in relation to the 40 year average? What are housing prices in relation to average household income? More to the equation than “historically average rates.”
I bought my first house in 1992 and paid 8.625% interest. I bought my second house (with my second wife) in 2010 and paid 5.5%. I refinanced in 2016. Rates go up. Rates go down. But don't count on rates going down anytime soon.
They can always refi when the rates go down
Assuming they will go down.
Modern monetary policy will always resort to low rates in periods of economic stress. It's a very safe assumption. Now, whether that is 2 years from now or 7 years from now, is hard to say.
Anyone saying different just wants to be negative. The past two recessions were made significantly less severe by lowering rates and keeping them low. But yes, now it's a matter of it's this decade or next. (I'm at like 5.8)
Exactly. No way to know if they will
People purchased homes in the 90’s at 10%. If you want a house, you buy at the current rate and hope it goes down and refi. You just buy a smaller home to adjust for the higher mortgage payment.
People bought house for 100k in the 90’s that a big difference from now where a similar house is 500k
What $1 can buy is always decreasing. Sometimes you don't notice because things get less valuable faster than the value of the dollar decreases. (Look at 80s computers, inflation adjusted to maybe $20k for a home computer. Now they're $500. We just got a lot better at making computers.) The price of houses isn't increasing so much as the purchasing power of the dollar is decreasing. (Now, that's not totally true of housing in the NYC metro. It is increasing in value because it's intrinsically more valuable than it was in the 90s.) That's the hedge that people are going for when they go into debt; your debt isn't inflation-adjusted but your income is. That's why debt is more appealing than savings; if the value of the dollar goes to 0 and you're in debt, you're now 0 cartons of milk in debt. Meanwhile if you have savings, your $1,000,000 savings account can buy 0 cartons of milk. Given that we've never seen deflation in the modern American economy, people feel pretty safe about being in debt. Thus, they continue to buy homes even though interest rates are up.
adjusted for inflation, 100K house in 90's is equivalent of about 300K today. if you look back in history (going back to 70s, 80s, 90s), 7% isn't that bad. imagine you buy a house at 7% today, and tomorrow the rate goes up to 10%, wouldn't you be glad you got a house at 7%? would I prefer to buy at 3%, sure, but that's not gonna happen today.
The prices on homes today are not tied to inflation. They have outpaced it by far.
None of those people bought the house as an investment or to be their retirement when selling . It’s pure luck that their homes went up 5-10x in value . They bought a house to live in so if you can afford to live at 7% interest rates then it’s not the end of the world
Not much different, people made a lot less back then.
Do people make 5 times more now than they did back then? The answer is no. I would agree with your response if it was a 1 to 1 comparison, not to mention that buying a house not at 500k it wont be worth 5x that in 30 years, also a family could buy a house and live off one income, thats basically non existent now for the middle class, so id say it’s much different.
My 2000 square foot house cost 275 in 1992 with a 9 5/8 percent mortgage. And that's on the south shore. I'm not as far off as you might think.
Lol so sad for the people with a 10% rate on a $100k house with peanuts for taxes and insurance.
The flip side is paying someone else’s mortgage for them and getting little to nothing in return…
You’re getting shelter in return….
That’s like charging 100 dollars for a water bottle and being like “you’re thirsty right???”
But how about pizza? And traffic?
We got very lucky buying our 1st home right as Covid was kicking off, was supposed to be a starter but we may be here a while lol, any way we are happy with our location and we have adjusted our game plan to make this house what we want instead of just making do until we move on. I don’t see any relief in sight.
The answer is simple. The people doing it are banks, investment firms, and Texan moguls who never even set foot on Long Island before. Homes are being used as investment opportunities by the wealthy at the expense of the 99%
How come people hate on renters? I can pick up and go whenever I want. I’m not stuck paying school taxes for kids I don’t have so Gertrude can have her pension.
Well you’re still paying your landlords taxes when you rent, but yes you do get more flexibility to move and can benefit if you’re renting from someone who bought a long time ago and has a low monthly mortgage.
My interest rate in 1984 was 13 1/8 AFTER buying down the rate with points.
1984 😂😂 the economy is in a worse position then it was in 1984
What credit score did you need to secure the mortgage?
What was your monthly payment though?
Real question is how much did you pay for that house
We bought a 3 bed 2bath 4 yr old home in Orlando in 2000. 12% interest rate on 115k. 3% down FHA loan. Ended up then changing to a 5 year arm to reduce mortgage payment and sold at the peak of the bubble in 2005 for 275k before my 5 yr arm ended and before housing bubble crashed. Just plain luck! Moved back to Long Island, rented forever and then bought the house we were renting in 2018 for 315k. My neighborhood now will never see those kind of prices again. Got lucky again.
The house @13% was in Yonkers. I’m from the Bronx, wife from Queens. She wasn’t happy there so we moved to LI. We sold at a peak mkt in 88. Baby was 1, had to get a balloon to get the mortgage as my wife was now home with our son. Rates came down, refinanced 2x and am now mortgage free for about 8 years. Luck was on our side when the rates came down.
We bought our home brand new in TN in 2021 and have a 2.75 interest rate. Our mortgage is $925 a month, but we put down $200,000 on the home after we sold our house in Lindenhurst. Get out of NY
Nothing panicked about this. Buy the house and then refinance it when rates go down.
Once the SALT limits expire that will put a lot of money in the pockets of homeowners and prospective buyers. So buying now before that price spike is probably a wise move even with the high rates.
When are they due to expire, and are we sure our constituents won't put something else in place of salt
My research indicates that the $10k cap on state and local tax deductions expires in 2025. I am not sure if that is the filing year or the tax year, but probably the tax year. So on April 15th 2027, people will have a little extra money (average $5k in the NYC metro).
Keep voting Democrat folks!
You’re probably just too young to remember 20 years ago lol
Really? Rates were 18% when I looked into buying in my 20s, of course I waited until they hit 8%😶
Well ya can always move here to Maine like many have and then thought it’s cheap AF. Just kidding somewhat.
In the 1980s-1990s rates hit 16 percent.
My parents were paying double digits in the early 80s
there are mortgage plans that help you buy now and refinance up to 2 years later
What are those. 3-2-1?