If you are paying that much for a starter home, you are paying for the location. Not saying houses are cheap, but they are only that crazy in a high cost of living area. It’s not really surprising that houses are expensive in places where everything is expensive. I bought a 2 bedroom home for $175k a few years ago in a city with a population of 10k.
Jobs are in population centers, though
The problem is finding a cheap house in a place where you can also get a job. The smaller the town, the less jobs (ymmv)
What does starter home mean?
Single bedroom house that is supposed to be a lot cheaper than the “family homes,” that would be in the same area. A 2 BR home may qualify as well. The issue is that they haven’t built any of these type of houses in over 60 years, and the prices are jacked sky high.
Think it was a rhetorical question, that $800k figure is crazy even by modern standards for a “starter” home.
In my state, $800k is 3,000 square foot, 4 bedrooms, rooftop balcony, in the capital downtown.
$400k gets you about the same, just like 5 miles from that downtown with more yard.
$200k gets you a thousand square foot townhouse built in 2004…
$75k gets you a thousand square foot mobile home built in 2020 on the outskirts of the capital…
He’s got a job and a family; how does he do it?
Balances work with his wife’s underwhelming cooking
He’s got all the answers that I wanna know
How can I be what I am, but 40 years ago?
Gee whiz, he got it and he flaunts
I am the thing he is, but he is it when I want
I guess it’s true that some people really got to fight to survive
And some people are white guys in 1985Bo Burnham - 1985
I don’t wanna pay for anything
Clothes and food and drugs for free
If it was 1970
I’d have a job at a factory
I am a man that’s made of meat
And you’re on the internet looking at feet
I hate almost everything that I see
And I just wanna disappearViagra Boys - Man Made of Meat
My first apartment, in the early 80s, was $300, and I couldn’t afford it on my $3.35 minimum wage salary, so I had a roommate.
After about 2 years, I got a real job, and my roommate decided to move out at the same time. I was stressing about finding a new roommate when I realized I could afford to pay for the entire place myself. I haven’t had a roommate since.
Well, until I got married, and later had a kid. I’m still not convinced it was the better move.
Just finally landed a “starter” home. 325k. During comparisons we looked at old listings of it being half that a decade ago. I still feel lucky because that’s “cheap” for a good neighborhood where I am. Mortgage and all rolled together comes in ar only $200 higher than my current rent, which will surely continue to rise every year unlike my fixed mortgage. But saving up that down payment in this economy took everything I had even with a decent salary.
Your mortgage will likely stay the same but I have some bad news about insurance and property taxes
Note that if property values continue to increase, then your property tax will also increase. Therefore, your monthly payments on your mortgage can increase.
When I bought my home in 2020, my mortgage was a flat $2,600 to the penny. Now it’s $2850.
The one good thing about that though is that property tax is deducted from your income, so you get 30 or 40% of that back at the end of the year depending on your overall tax bracket, and depending on where you live and what your property taxes are once you sum up the entire year, even though your mortgage is $200 more, you could actually be paying less in total.
Not if you don’t make enough to itemize deductions. Ask how I know 😮💨
The spirit of this is absolutely correct, but where is a “starter home” $800K?
Thanks. Yeah I figured this was a weird definition thing…
Zillow defines a starter home as one in the lowest third of home values in a given region.
To be sure, the typical starter home still costs far less than $1 million at just under $199,000, Zillow noted. Overall, the median home costs nearly $418,000, according to the National Association of Realtors.
Again I am not doubting the point, but my personal definition of starter home would be basically “the cheapest livable home with minimal standards applied”. Given that I live in a metro area but have seen homes for $450-500K which are decent, reading $800K was a starter was surprising to me.
Is it a metro area with significant sprawl?
Median list price in Massachusetts is $716,000 and most houses still go from listed to pending in around 8 days.
Yeah there’s some sprawl. It seems like it’s a competitive market. Haven’t been seriously looking and I know most homes go for more than listing price but the listing prices at least are sometimes much less than the cited $800K.
Yeah starter home should be based on median salary for the area, not the product itself. That just becomes inconvenient because then 95%+ of homes would fall out of that range and fuck the narrative even harder.
I live in Adelaide Australia, I have approval for a 800k loan and have been unable to buy anything. Every house always sells for 50-100k more than the asking price and it’s just stupid - and building new is even worse (just as expensive and the quality is terrible).
Gonna look at some crack shacks next.
In 2020 I was lucky that I had the opportunity to live rent-free with my girlfriend’s parents for a year to save up the 5% down payment required for first-time homebuyers. I had to get the cheapest, most run-down house with bars on the windows because the town was that bad. Still, living there for 4 years let me build up capital, and now I sold it and got a pretty nice place to live instead.
I thought I’d never get a house for all the reasons you posted, but it was possible, if only barely after a year of embarrassment and the luck to even have that. I hope you get the opportunity to save up that money somehow, too. It changes your life to have a house that basically puts your monthly housing money to paying off an investment rather than paying off your landlord’s investment instead.
Every single millennial homeowner I know managed to get their house one of two ways: get married in 2008 to a Gen-X doctor who can afford to buy a foreclosure when the market tanked, or get massive financial help from their parents.
That’s it. Those are the options. And unless you’ve got a time machine, I think the first one is off the table by now.
Gen Z here, bought a small home with 3% down first homeowners loan.
Honestly the only thing going for me was being married. Dual income was a big step up, but other than that it was just me and my wife. We don’t even make all that much, I have a degree in anthropology lol. No money from either of our parents.
We did rent the cheapest place we could find, and that neighborhood was rough. I will say if we tried to buy our house again today I’m not sure we could. Interest rates and home values have shot up like crazy. It only taken about 4 years for things to get that crazy.
Yeah I got lucky my parents were able to rent me and my wife the garage for about 4 years at a discount. Then since my in-laws were renting a house we decided to team up and go half on a house. This way we both got out of renting and we can all pitch in to cover the mortgage, we converted the garage to be our living room/kitchen and put a wall in the hallway so essentially the house is cut in half. Our commutes increased a ton to go to work, but its so much nicer on the weekends being away from a major city
Basically, yeah. If you don’t already have money saved up, and you don’t have someone who can cover the down payment for you, you need some method of living rent free for enough time to get $15-20k, at least in Minneapolis, where I live. The starter home I got for $200k in 2020 is now worth $250k, so the $10k down payment I saved up would now need to be $12.5k for first-time homebuyers.
Crazy that such a piece of crap house is worth so much more when the neighborhood has only gotten worse, but it shows that even just sitting on the house for a few years doing nothing to it like I did will net you some hefty capital. I sold my house after only 4 years, and after paying off the rest of the mortgage and the realtor fees, I had a nearly $50k check to show for it, thanks to what little of the mortgage I’d managed to actually pay down combined with the $30k increase in the price of the house in that time.
I bought my 2400 sq ft on a half acre built in 1994 with no major issues, in one of the highest quality school districts in the state for 450k about 3 years ago.
🤷♂️ Not everything is giant ass city pricing
“I’m an outlier and it worked for me so anybody that can’t just buy a home clearly needs to stop with the avacado toast”
Cool story bro.
I thought so. Much better than the fake news doomers.
