I hate these articles.
Please tell me more how that down payment assistance program will help you buy that $1m house you mentioned, Mr dude.
(Narrator: it doesn’t. I don’t mean to rip dpa’s cuz it’s a good idea, but there’s little way it can help people in locations with crazy housing markets. If you make a salary that qualifies, there is still no house you can afford that’s not a tear down. If you make more, you don’t qualify so you still can’t afford it.)
😡
https://www.forbes.com/sites/jamiegold/2023/08/08/heres-how-gen-z-can-become-homeowners/
@Beanc Give it a few months. The apartment market is beginning to soften. Housing is probably next.
https://fortune.com/2023/09/18/rental-market-softening-lardlords-offering-deals-says-redfin/
@Coctaanatis I appreciate the optimism, but the improvement required when median houses are 10-20 times median salary is….. if solved by softening.
As the author notes, the house he grew up in , accounting for inflation whatnot, would be about $250k and sold for over $1M.
It’s untenable.
@Beanc There's a mean trendline. We're currently well above it. Historically, that means prices will drop quite a bit.
Sure, but that chart proves my point (although CA specific, the issue isn’t).
The price index is the baseline.
Houses are five times more expensive than one (or two) generations up *at the baseline*
Said differently, that house that is $ 1m + in the article will *never* drop to the 258k it would be just accounting for inflation, that older generations saw the joy of.
@Beanc Older houses really aren't comperable to modern houses. Most were much smaller, lacked air-conditioning and building materials were lower grade. Fortunately, most of the really bad houses, think coldwater shotgun shacks, tiny capes, etc., are gone.
Also location makes a huge difference. As cities and suburbia have grown, so have median house prices. But in many rural areas houses are, even at today's inflated prices, relatively inexpensive.
@Coctaanatis
Sure. But you’re arguing things I didn’t post. Personally, I don’t care that the houses I can’t afford big/fancy- frankly, that’s part of the issue. And tbh, I don’t think housing was *that* different 20-30 yrs ago.
Back to OP. I said if you’re in a city with a hot market, it’s near impossible (genz )to buy a house. Many jobs *require* urban location. I have few options in location. Further, real housing prices (FRED) are country-wide, so on the whole, rural /city still trends.
You showed CA. So let’s look at LA.
MEDIANS:
Gross Salary: 38k/3k mo
household: 80k/6k mo
Median home price: 800k/est. 5k mo all-in
The above ignores income taxes as well.
If you subscribe to the “housing 1/3 of gross) a median 2-person household should have a salary of ~$15k / mo to buy a median house.
DPA in la county requires a salary max of ~ 70k. Huge gap. Obviously we’re talking medians here, but that gap should say a lot - Even if you’re looking for a crap house.
@Beanc @Coctaanatis
Worth noting that a new buyer of property in LA county gets new exciting property tax rates too. And they can be breath-taking.
I make good money and still can't buy a home in Portland, where I want to live.
I could afford a not-great house here in Dallas, in a neighborhood that doesn't suit my needs as someone who doesn't drive.
I wondered how some of my friends managed to buy houses, and realized they all have two (or three) incomes. (And bought them a decade ago.) For a single person? Home ownership if pretty much out of reach.