Older millenial here.
Max I ever spent on renting was 25% of my net income, but usually it was more like 20%. Now I actually spend only 10% of my net income on my mortgage, thanks to inflation helping my income while keeping the mortgage static.
(Sure there are also taxes on top of the mortgage, but I'm also building equity. Taxes + interest is even less than 10%)
Younger generations are definitely getting screwed.
Don't accept the status quo.
Just curious about your perspective. What would you think are some good ideas on changing the status quo?
I think that outlawing real estate as investments would mean that high to medium density living spaces like apartment complexes or high rises in cities don't get built, and allowing the government to dole out who gets what properties is another recipe for disaster.
Please don't take this as confrontational, I'm genuinely trying to consider what alternatives some people are thinking about.
I think Henry George had the right idea.
Fact is, as people get more money, they want bigger homes, second homes, rental properties, etc...
It's going to be a never ending bidding war between citizens to own the most and nicest properties.
So the solution is to tax real estate at high rates, but give that money back in the form of deductibles on income tax to the middle class who live in their middle class owner occupied homes.
Another part is to let government build a huge supply of very basic, affordable housing, which then serves as a price anchor.
Basically, not outlawing homes as investment, but making them unappealing as investments.
Most developed countries had or have systems like this in place. They just need strengthening.
Stop vilifying the poor, high subsidies and incentives for living in high-density housing including de-incentivizing predatory landlords, increase taxes on the rich, and a sliding scale of taxes on multiple properties with the lowest rates affecting the lowest value properties.
I was paying 400 for one bedroom in 2000. Now my apartment is 1800 which is about 60% of my income. The future is bullshit
Same hat kinda, around year 2000 I was paying $600 for a nice 2BR apartment.
I'm now paying $1600 for a 1BR in a shitty neighborhood. I make better money now but still.
I'm renewing on my current lease, taking over a 2bd for 2400 after my roommate moved out. 1bd in the same complex is going for 2200 for new renters, and its on the low end for my area. Quite frankly I don't understand how apartments are finding tenants, does everyone just coincidentally make 150k+?
33% of your income is still too fucking much for rent
I just read a really good article about why Tokyo, one of the biggest cities in the world, is also one of the most affordable for housing and pretty much everything else. Spoiler, they don't allow boomer nimbyism and they absolutely do allow a shitload of apartment building pretty much everywhere.
I recently looked up LA and SF and then other American cities in general for the first time on Google Earth. How much you could be allergic to apartments to let that happen? It's just really incredibly weird all these houses spaced out like nothing. I'd be really utterly surprised if US cities didn't have a rent problem with such a city design.
California is weird with its zoning laws, and those cities didn't start out large, nor have they existed as large cities for very long. My guess is that as time passes, those cities will start to look more like NYC, Boston, etc., which have more apartments/condos.
Most American cites spread out because they can. Building up is far more expensive at least in cost than building out...
And the average apartment size is 216 square feet.
Still bigger than the van I live in.
I make ~$1,500-$1,600 every two weeks (varies based on OT). My rent for a small one bedroom is $1,200 (utilities included). Other apartments in my town are easily $1,700+ for a barebones similar place, no utilities included.
As much as I pay for how small my place is, I still have it good compared to others in town. Other apartments I've seen have a miniscule kitchen, the only thing keeping them from being kitchenettes are the full sized appliances. I have a decently sized one for the size of my apartment.
I hate it here.
No, I sure as fuck do not. I bet it would've been nice though.
I remember only spending half my income on rent. And I'm old. But also from a high cost of living area.
All my life I have spent most of my income on housing and I am older than 35.
Mid 30s millennial here, no. I remember I could afford a 1 bedroom on my own making minimum wage in my home town, but it was something like 50% of my take-home at the time.
Best I can do is 50%
2/3 on my mortgage. Yay.
With any luck my income will continue to grow and this will change in the next few years.
And I’m feeling better and better about buying even if the timing was at the peak last year.
Huh, I only spend 25%. But then again, I rent from municipality owned housing in Sweden.
Until a decade ago, the rule of thumb was never spend more than 20% of your salary on rent. Then it changed to 25%. Now everyone's saying 33% like there's some sort of thought behind that number other than "We want more of your money"...
33%? For the last 5 years I've been paying closer to 45-50%.
That's not counting power bills, which cost several times more than in the US.
No
Nope! All of my rent (save for when I didn't pay for it) had always been higher than 1/3.
And I'm pretty sure that was a regulation out by governments to prevent landlords from overwhelming.
Gotta love that low wage loophole!
I've either paid a tenth (or less) or half. But I've been very lucky.
My mortgage is literally one half of one week's net income.
You want a pat on the back?
Just pointing out that it's all relative.
STOP...RENTING...
I feel like I'm taking crazy pills. It's easy to get out of this cycle. Most states will have First Time Homebuyers programs, and even if you've had a home before, not having a home for 3+ years can cause you to re-qualify again.
Live in a shithole for a while if you have to. OWNING a home is like paying yourself. It's so much cheaper than renting, yes you have to fix things when they break, but you should want to learn those skills anyhow. Toilets, water pumps, hot water heaters, all that shit is pretty easy to fix yourself. Every penny you put into a house is like a savings account that doesn't actually count against you. You get done with that loan, and the worth of that house is yours. You're not paying $2k/month to someone else, with nothing to show for it. You're literally paying $2k a month to YOURSELF. Want to move? Sell the house. Anything you've put into it, you'll get back and then some.
Just whatever you do, get a FIXED rate mortgage. Or go for owner-financed. There's lots of options and renters just make excuse after excuse after excuse why they won't buy a house.
A) poverty
B) you need to qualify for a mortgage, even with first time homebuyer programs
C) you severely underestimate what the mortgage is
D) people aren't always expecting to live in the same area for more than 5-7 years, at which point you've spent tons of money on closing and PMI that you absolutely aren't coming out ahead on
A) I've been in poverty my whole life.
B) By-owner financing is a thing, I mentioned it already. If you qualify for renting, you qualify for the first time homebuyers programs. You're making excuses and you clearly don't know how these programs work.
C) Again, nope.
D) Covered that already. Closing costs are miniscule compared to the amount of equity you build, and first time home buyers programs cover closing costs, enough with the copium.I bought my house without a front door, no working a/c, water pipes cut off inside the walls, no toilet. Learn how to do shit for yourself. I learned all the shit to fix my house from YouTube videos.
renters just make excuse after excuse after excuse why they won't buy a house.
"wahhh I'm living paycheck to paycheck and may not be able to pay rent this month, let alone set aside a down-payment and closing costs for a house when houses are at an all time high price"
Poor people, amirite? Don't they know that the solution to all their problems is to just get more money?
Living paycheck to paycheck is a valid reason how one can’t even save up to consider even buying a house. Soon with the rising prices it will even be living on borrowed time.
Where I live, a mortgage payment is twice what rent is. My family won't move, and I'm not spending 75% of my paycheck on a mortgage. Family won't move to LCOL. Also mortgage payments have gone up like 35% since the rate hikes, and housing costs are at all time highs.
Stop being poor isn't an option.
Just because things worked out for you doesn't mean they work out for others. You're not taking crazy pills, you're lacking empathy and seem very out of touch with reality.
Oh yeah, sure, I'll buy a shitty house an hour away from where I work, in a small village with not even a grocery store! Good idea! And then I'll be stuck there for the rest of my life because you can't sell houses in these places, because they are shitty!
Buying a house or apartment is a several decades investment. If you're settled in your life, sure, do that, but not everyone is in this case, and not everyone in this case can afford it.
BTW, so you know banks will not give you money these days? Half the requests are refused by banks in France these days because they're waiting for the yields to increase again.
Every penny you put into a house is like a savings account that doesn’t actually count against you. You get done with that loan, and the worth of that house is yours.
How should I reconcile this with the statement "you should see housing as necessities rather than investments"?
You shouldn't. Because I didn't state that ever.
Houses are investments in YOUR future.
Just buy a house 4Head
You severely underestimate the number of people who lack ambition, life skills, discipline, and financial responsibility. It may seem easy to you but to people without these things, it's like climbing a mountain.
Who has time to develop all that when you're burned out, pushed to your limit at your job that barely covers your primary expenses?
I know, not the whole picture, but neither is what you're saying. The first thing you list is ambition? I hope that's not in order of importance because I don't think most people lack ambition, I think they get stretched too thin and feel its hopeless no matter what.
Financial responsibility, life skills, these are important issues and more should be done to improve quality of them for the population. But discipline and ambition require a world where those get rewarded, and for some lucky people they do, but for many that's just not the case.
