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Where are these low cost-of-living geographically ?
It is tricky to make a determination .
I am looking for a 3BR unit in a quite and safe neighborhood.
I find many pieces suggest to rent instead of buy in current situation, where we will be paying more for Mortgage compare to monthly rent .
Home prices saying high due to raised property taxes as well.
I have few hundred grand equity to put into home, but concerned about wiping out due to housing bubble burst.
Could you give more info about small town rural areas, rust belt areas, old snow belt areas?
How do we identify those in a state or county ?
Thanks for your guidance.
Bear in mind, low prices can indicate less demand by most people for specific areas or properties.
Rural areas are all over the USA. Small towns, farming areas, country, what have you.
Rust Belt and Snow Belt...
Do the work. Refer to maps and pull up properties in various towns on the maps for the regions.
I would not care to be too remote in location, as I like medical services, some entertainment within decent reach, and broadband internet and pizza delivery.
Rust Belt:
"The Rust Belt, formerly the Steel Belt, is a region of the Northeastern, Midwestern United States and reaching into the very northern parts of the Southern United States. It includes Western New York, Pennsylvania, Ohio, West Virginia, Indiana, Illinois, the Lower Peninsula of Michigan, southeastern Wisconsin, small parts of Kentucky, Baltimore, and the St. Louis metropolitan area in Missouri.[1][2] Cities in the Rust Belt include Allentown, Buffalo, Chicago, Cincinnati, Cleveland, Detroit, Gary, Milwaukee, Philadelphia, Pittsburgh, Rochester, Toledo, Trenton, and Youngstown.
The term "Rust Belt" is a dysphemism to describe industry that has "rusted out", usually referring to the impact of deindustrialization, economic decline, population loss, and urban decay on these regions attributable to the shrinking industrial sector especially including steelmaking, automobile manufacturing, and coal mining. The term gained popularity in the U.S. beginning in the 1980s[3] when it was commonly contrasted with the Sun Belt, which was surging."
The Snowbelt, Snow Belt, Frostbelt, or Frost Belt[1] is the region near the Great Lakes in North America where heavy snowfall in the form of lake-effect snow is particularly common.[2] Snowbelts are typically found downwind of the lakes, principally off the eastern and southern shores.
I won't vouch for any town or neighborhood, so choose wisely. But here are some examples of houses that are more affordable than in many areas of the U.S.:
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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There are two ways to buy a home in this high-price/high interest climate. One is to come up with a bigger down payment, the other is to set your sights lower. Interest rates may never get down top 1-2% again but will drop from the 7-8% rate today, and when they do you can re-finance. When you are still working you must live close to home unless you can work from home or handle a long commute. It's much easier to find an affordable home after you are retired, and can go anywhere. Here in Sammamish WA where we live the median home price is at 1.9 million. For a brand new home is over $2.5 million. Go about 170 miles east on I90 and the median home in Moses Lake WA is $356k. A brand new home there starts at $309k.
...Interest rates may never get down top 1-2% again but will drop from the 7-8% rate today, and when they do you can re-finance....
I wouldn't bet on lower interest rates any time within a normal event horizon. The US government's printing money like there's no tomorrow, inflation's running something like 5%. You can only shove those massive increases in the money supply into house prices and stock prices for so long. Mortgage loans need to earn the lender more than the rate of inflation (well, really, to be strictly accurate, they need to earn the succession of mortgage owners the originator's going to sell to, more than inflation) so they're not a money-losing proposition for the lender and subsequent mortgage owner.
There are two ways to buy a home in this high-price/high interest climate. One is to come up with a bigger down payment, the other is to set your sights lower. Interest rates may never get down top 1-2% again but will drop from the 7-8% rate today, and when they do you can re-finance. When you are still working you must live close to home unless you can work from home or handle a long commute. It's much easier to find an affordable home after you are retired, and can go anywhere. Here in Sammamish WA where we live the median home price is at 1.9 million. For a brand new home is over $2.5 million. Go about 170 miles east on I90 and the median home in Moses Lake WA is $356k. A brand new home there starts at $309k.
How viable is refinancing really though? My understanding is that refinancing can cost between 2-6% of the loan value, which especially with todays inflated prices, is a tall order!
So you're signing a 30 year loan at a high rate which we can't really afford, and then are asked to save money enough to refi?
Also, most refi's require a certain amount of equity, something that is way more difficult to find today given the inflated prices and high rates.
I hope this is a lesson to everyone about how our government manipulates prices by spending and artificially propping up the economy to get votes. They've messed us up something fierce and just blame someone else and we accept that. Bravo...
We should be more demanding of our government and god forbid be better at sniffing out BS they promise.
End of story is this.. Don't finance a house today. You're going to get royally screwed. Don't bank of refinancing.
If you need to live in a high demand area, it's not going to get better, unless there's a worldwide economic collapse, in which case you're probably going to be in the same boat as everyone else.
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