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Years ago when I was in my 20s and first got married, we bought a house thru the First time home buyers program, our credit wasnt that great, but we did both have good jobs, the house we bought for $84,900, with supposedly a low interest rate, (thanks to the FHA program)...well, if we had made every payment on that house for 30 yrs...we would have actually paid over $252k!!! (payments were around $700-800 a month).
People told us once we bought a house, we would see big tax returns every year, but due to us not having children, our tax returns were not all that great...
Looking back, it would have been a horrible financial decision to pay off that house completely...25 yrs later, its value is nowhere close to $252K.
The way I see it, the mortgage lender is who made the good financial decision...lend $85K to buy a house, (and get $252K in return!!)
Thank you all for the replies from all over the country. The wise thing , if possible, to do would be not to buy a home at this time. Try to get an apartment, wait , something is going to happen with the FED raising interest rates this year, the housing frenzy has to slow down sometime.
If history is an indication of the future then rate hikes will have little to no affect on housing prices. Also, several of my friends who rent are in real trouble right now because their last lease renewal saw massive rent increases (one +$800mo). Had they had the credit or cash to buy their rent would have afforded them a nice home in a nice neighborhood that has seen the values rise over $100k in the same timeframe (12mo). The right time to buy is when you have the means to do it.
--Relocation due to job change.
--Change in family status...marriage, new baby, etc.
--Need/want to be closer to other family.
--Change in health status...need to eliminate stairs. Or need to eliminate maintenance.
--Financially better to buy than to pay skyrocketing rents.
--Plan to sell current home, cash out equity, and move to East Podunk where R.E. prices are lower.
Years ago when I was in my 20s and first got married, we bought a house thru the First time home buyers program, our credit wasnt that great, but we did both have good jobs, the house we bought for $84,900, with supposedly a low interest rate, (thanks to the FHA program)...well, if we had made every payment on that house for 30 yrs...we would have actually paid over $252k!!! (payments were around $700-800 a month).
People told us once we bought a house, we would see big tax returns every year, but due to us not having children, our tax returns were not all that great...
Looking back, it would have been a horrible financial decision to pay off that house completely...25 yrs later, its value is nowhere close to $252K.
The way I see it, the mortgage lender is who made the good financial decision...lend $85K to buy a house, (and get $252K in return!!)
And what would you have paid in rent over 30 years? It costs $$$ to live, whether that’s rent, mortgage and/or property taxes. Over the long run, it generally is more financially beneficial to be paying your own mortgage and growing equity in your own property, which hopefully is appreciating over time as well.
Real estate investors bought a record 18.2% of the U.S. homes that were purchased during the third quarter of 2021, up from a revised rate of 16.1% in the second quarter and 11.2% a year earlier.
I will speculate that this one of the significant reasons for prices going up. I think investors moving their money somewhere else would trigger a significant correction.
I totally agree! I’m in the Boston area and was just having the same thoughts yesterday. The only people making out are the ones who have something to sell, but don’t have to turn around and buy. Let’s say you were lucky enough to inherit a home that you just want to offload for the cash—that’s who is cleaning up big time right now.
I just don't see houses going down anytime soon. There is little supply and high demand. High paying companies keep moving into the Boston area. No more land to build. Everyone wants a SFH with a yard now.
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