Rents Are Through The Roof >10% Over PrePandemic Levels; In 0 of 50 States Can a Minimum Wage Worker Afford Housing

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A lot of great points in here that IMO start to tell the whole story.
I lived the terrible market when I bought my house last year. We put in 9 bids before one hit. The townhouse we landed we don't even like and we paid well above my rational market value. We were outbid on all our other bids by 10-80k. Our first bid was in January and the final one we hit on was April. We were out every single weekend looking at houses and needed to have our offers in the day the house went up or it would be gone. These investment firms were waiving inspections, cash offers and buying homes sight unseen. And here i am walking around houses asking about the HVAC and Roof age..... *puts on clown makeup*

All this to say we were priced out of our DC rental when the land lord wanted us to pay $3,100 for our 900sq foot place. I had some money saved for a down payment and I couldn't fathom paying that much in rent when my job was leaning toward remote at the time. I fully expect all of this to come crashing down knowing I will probably be upside down in my current house.
What do you mean "upside down" in my current house?

I feel you and I were in very similar situations with being new parents and looking for a house. I actually went a different route and didn't buy a house in this current market cause I knew we would be paying for a home that we didn't necessarily like but felt pressured by the circumstances.
Now we are just waiting it out hopefully for some normalcy in the housing market.
 

Hank Scorpio

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This is not the reason IMO

There is not that much outmigration from Cali and NY to cause rents to increase all over the US at this high of a rate.

Californians being moving to Vegas in droves since the 90s and rents haven't jumped as much as it did in the past year

I feel it has more to do with housing supply. There are not enough homes, single but especially multifamily, being built so renters that would transition into a single-family home are staying in apartments longer. And there are not enough apartments being built to apply downward pressure on prices.

People will look for any reason, any disruption from the norm, but if we had enough housing supply all those other things wouldn't matter that much

Basically, the same thing that made housing expensive in Cali and NY, is the same thing affecting the entire country

Housing supply is a MAJOR reason why rent has gone up.
 
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The corporations screwing us on both ends. Owning the apartments and the houses. That way they can drive both up simultaneously. Soon if you don’t inherit a house, sell your existing house to buy another house, or got a lot of money you’re not going to be able to afford a house.

It’s a double edged sword. I know people who could only afford to buy far out so they did and they hate it. Gotta factor in quality of life but I’m in no rush at the moment. I don’t fall for the house shaming like others :lol:
 
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What do you mean "upside down" in my current house?

I feel you and I were in very similar situations with being new parents and looking for a house. I actually went a different route and didn't buy a house in this current market cause I knew we would be paying for a home that we didn't necessarily like but felt pressured by the circumstances.
Now we are just waiting it out hopefully for some normalcy in the housing market.

By upside down i mean owing more than the house is worth.

In all honesty my town house is prob worth $350k ish....(this is my personal cheap opinion with 0 factual information based on price per sq foot or anything...literally pulled out of my ***) I paid $420k for my place. When the market corrects i assume i will be able to sell my house for $350k but right now I owe $360k (after my downpayment and a years worth of mortgage payments) on the house. So i would sell my house and still owe $10k on my mortgage. Thats what i mean by upside down.

But at least i bought the house with the plan to camp out here for at least 10-15 years. All i am hoping is to sell it for what I bought it for whenever that is
 
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PatRiley

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We just bought a house and probably overpaid for it. However, the mortgage is well within our means. We could have spent more on a nicer or bigger house.

The way I look at it is if the market crashes, I just need to be able to cover my existing mortgage. Our household income more than covers that.

Am I a dummy for thinking this way?
 
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Do all of you live in highly expensive parts of the country? I know most are averse, but most of the middle of the country you can still get new construction for under 250
 

sneakaprince

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We just bought a house and probably overpaid for it. However, the mortgage is well within our means. We could have spent more on a nicer or bigger house.

The way I look at it is if the market crashes, I just need to be able to cover my existing mortgage. Our household income more than covers that.

Am I a dummy for thinking this way?
I don't think so. As long as it's well within your means it's not a big deal. The market will crash and rebound again with time.


Even if you can't sell the house as the market crashes you should be able to rent it and at least get most if not all of your mortgage covered by a tenant.

You will continue to pay down the debt and as the market recovers your asset will appreciate in value.


The people who are in trouble are people putting down 5% or under and can barely afford the house. They will get hit hard if market has a 20% correction and they are within a year or two of their loan. They too can always rent but depending on what your mortgage looks like sometimes rental income isn't enough.
 

RustyShackleford

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The same monetary policy that caused 8.5% CPI while decimating equities and real assets because debt to gdp levels are at 120%? Oh.
Monetary policy is not the sole reason CPI is 8.5%. It is mainly COVID-related issues. Supply chain issues, and higher energy prices in the face of high consumer demand.

In the case of taming inflation (the Fed doesn't use the CPI as the inflation metric btw) their mistake might be they didn't increase rates and stop QE sooner (in the summer of 2021). However, it would not make that ton of a difference. No one saw the war in Ukraine coming, the economy recovered faster than expected, the supply chain has returned to pre Covid efficiency. But now the Fee are now trying to cool down a macroeconomy that is way hotter than anyone predicted.

Plus the main way you kill inflation in to raise rates until you cause a recession. So what is your complaint/request? You want the Fed to trigger a recession

If the Fed did the opposite of what they did at the start of Covid, we would have had a harsher recession and a slower recovery.

The debt to GDP ratio was caused by fiscal policy. Congress and the President's spending. Fiscal spending in the face of economic downturns and emergencies is common. Simple Keynesian econ. I don't know how the Fed gets blamed for the actions of hundreds of other people. And BTW, if they trigger a recession to kill inflation, then that will probably apply upward pressure on debt and downward pressure on GDP, making the situation worse

Sorry, but you are not making a lot of sense
 
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I’m tryna get my rent down to around 1000$ the places I looked at today were flat out dumps at that price point. I damn near fell through a whole in the floor at one. Places I looked at literally as recently as early 2021 have seriously doubled their prices since then with no improvements. From like 1300 to over 2500, just because they can.

I pay 1400 for a 4 bed 2 bath 2 car garage duplex. In 2020 it was slightly an overpay, but now people renting them for 1900 and my landlords own 4 of them. They have 2 on airbnb for 330$ a night and they stay occupied so I know they want me out or to raise my rent to 1900. Its fine really my only complaint is having that gas hot water heater in such a relatively new house, my gas bill be over 100 and my electric be over 100 and I gotta pay utilities too.
 
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Do all of you live in highly expensive parts of the country? I know most are averse, but most of the middle of the country you can still get new construction for under 250

I would imagine a great majority of NT is from a major metropolitan area…. $250k for new construction is unfathomable to me
 
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I would imagine a great majority of NT is from a major metropolitan area…. $250k for new construction is unfathomable to me
Yea but there are major metropolitans other than New York City and its adjacents and California and Denver (I thijk maybe Boston crept into the top 5 most expensive recently too) and Seattle
 
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