Is it me, or have house prices reach the point of rediculous levels?

Question

Townhomes where I have grown up and lived (rural PA) are running in the mid 200's. As a single parent, I can afford a 1500-2000 per month payment. Am I going to be stuck renting for the rest of my life? I thought about moving outside the area but then I would have a rediculous commute or would have to find a lower paying job locally. I make about 45000 per year so I am not completely strapped, but I can't see putting 40% of my take home pay into a house.

I blame alot of these speculators who have been "flipping" houses over the last ten years.

I really would like to buy a house, but there is literally nothing within 30 miles of where I live for less than 200K. Except a trailer maybe. I am paying 725 for 2 bedroom rental (which is dirt cheap). I think I am better off staying here financially even though I am not building equity with rent.

Answer 1

You are right - they are out of control. You might consider a nice RV to buy with low payments and try to find a cheap place to park it and hook up to electricity, water, etc.

Answer 2

FWIW, for most people, the initial purchase of a home is a very big stretch, income-wise. My husband and had zero discretionary income for about the first five years that we were in our home. There seems to be some expectation that people have that you shouldn't buy a house if it means changing your spending patterns and having to economize for a few years after the purchase. Most people do have to economize, and economize severely, when they first buy a house. But most will also tell you that buying that first home was the best decision they ever made, even with the economization they have to do.

You have to consider, though, a couple of factors: First, your income is going to go up, isn't it? You say you're making $45K/year now. You don't say how long you've been at your job, but I would assume that you expect that you will get raises and maybe bonuses along the way? If you get a fixed-rate mortgage, then eventually your income will "grow into" your house payment and you won't be putting 40% of your take-home into the house.

Also, let us not forget that mortgage interest is tax-deductible. Have you gone to talk to an accountant to find out what the "real" delta in your spendable income will be if you purchase a house?

And you will be building equity in your home, which you never will if you keep renting.

...and, barring some real economic catastrophe that throws the whole US economy for a loop, houses are just going to keep going up in price. They are never going to get cheaper. So the longer you wait to make a decision about buying a house, on average, the higher the price you will pay.

Getting that first toe-hold in home ownership is a real leg up in economic status. If you can't do it by yourself, maybe you can find a partner. But if all that's holding you back is the thought of having to change your lifestyle severely because of the cost the first few years, I'd say you need to summon your courage and take the lifestyle hit for the tradeoff you get in economic advantages of buying a house.

Good luck.

Answer 3

I am in the same situation. I have the money for a down payment, but my house payment will be more then I can afford. I live in California and house prices start in the high $300,000. And that is for a small 3 bedroom. I rent right now,a beautiful 3 bedroom house with a pool and a small studio bedroom next to the pool. I pay $1,250.000 a month. Which is very cheap here. So I am also reluctant to move. I am also a single parent with 3 kids, so my payment has to be about what I pay now.

Answer 4

I agree with you!! I know the cost of materials and labor have gone up, up, up, but we are bordering on the ridiculous when you can't buy a home for less than 400,000 in some areas of the country. I bought a condo in Florida back in 1999 for 59,000. It was a 2 bedroom, 1 bath about 1200 square feet. I sold it a year later for 69,900 because I got transferred. I wish I had hung onto it and rented it out, because now those same condo's are selling for 170,000!!! Go talk to a real estate agent . You will be surprised at all the creative financing that's available that us mere mortals aren't privileged to know about. You may find that you can afford a 200,000 town home and not kill yourself with payments.

Answer 5

you have been right here for only below a year and you're point 6(ish). Wow - i presumed I spent alot of time right here! you need to keep it authentic - in any different case what's the factor? If somebody comes at right here to have sunshine blown at them, too undesirable. If I ask a question then i'm hoping for and assume truthful comments.