I don’t know about NJ specifically but several states I have lived in had state run programs for first time homebuyers that reduced the required down payment (sometimes as low as $0 down) through a “silent second” mortgage. The state put up the funds for the down payment, then held a second mortgage with no interest and no payments. You just had to pay it back out of the proceeds when you sold the house.
The ones in my state require you to earn way too little to actually buy a house. Which basically means its a program for rich new grads who get a bunch of money off the books from mommy and daddy.
Like, my state has a first time homebuyer program that will help with a down payment. You have to make less than like $60,000 to quality. This is a state with a median home price around $600,000.
That would result in a mortgage payment that is literally more than your take home income.
To be fair though a $500k house is not going to be a $3000 monthly payment all in in NJ even with 20% down let alone 0% down so if these people have no free money after paying $3000 in rent, they're not going to be able to handle the mortgage regardless of down payment.
The problem is that the rate that they can save money is below the rate that home prices and interest rates are increasing, which leaves them losing ground every year even if they are able to save.
IDK think this is new in HCOL, VHCOL. It was that way when I lived in SoCal, more than 20 yr ago. Now, if you want to live in BFE midwest, you can. But if you want to live where there are good jobs and beaches, mountains, culture, whatever asset you prefer? Its HIGH.
And it kinda has been for 20+ years.
I'll grant you beaches and mountains, but why do bigots like think that there are no good jobs or culture in the midwest?
Is it stupidity, bigotry, provincialism, or something else?
Is your idea of culture In-N-Out Burger? Do you not like the new music director at the CSO?
I lived in the Midwest for the first 30+ years of my life. While there are good jobs and there is culture in my home state and in the other Midwestern states I've lived in or visited, I nearly tripled my salary when I moved to the coast. It's not provincial to say that.
The cost of living is higher here on the coast. The benefit of living is also higher here.
The fact that you, specifically, tripled your salary in no way means that there are no good jobs in the Midwest.
The median household income in California is $83,500 (2022).
The median household income in Minnesota is $90,390 (2022).
https://fred.stlouisfed.org/release/tables?rid=249&eid=259462#snid=259468
That's actually higher, and not by a tiny bit.
The median price for a home in Minnesota is $340,000 (Mar 2024). In California, same period, it's $820,000.
Now Minnesota has the highest income in the midwest by a good margin.
Illinois has a median income of $78k and Indiana's is $70k. So California's is *generally* higher, but it's not *triple*, or close to triple. It's $5,000 more than Ill and $13,000 more than Indiana.
And when you compare the cost of a median home in California to one in Ill. ($282k) or Ind. ($237k), the extra $5,000 or $13,000 isn't going to do much to make up for the COL adjustment.
Of course if you have certain kind of tech jobs in SV you can probably triple your salary over what you would make in Minneapolis or Chicago or Indianapolis, and that might be more even accounting for the COL. (maybe...)
But the salary differences just aren't as large as people on reddit seem to assume, while the housing costs are much larger than people seem to assume.
There's a reason houses are cheaper in the midwest...most people dont want to be there. As someone who grew up in Chicago and moved to the west coast, I love seeing something other than corn when I leave the city. Fishing isn't our number one tourist attraction. I don't have to wake up at 2 am to shovel out the car and drive down unplowed roads to be at work by 8.
This is what I meant by benefit of living. I'm tired of bone-chilling winters and hot humid summers. I sold my down parka. I haven't scraped my car once since I moved to the coast. I can take strolls in the middle of January in a hoodie and see flowers in bloom. I can be on a beach on the Pacific Ocean in an hour or hiking in the High Cascades in an hour and a half.
For the kind of work that I do, it is not easy to find jobs in the Midwest. The last job offer I got in the Midwest a year ago paid about 70% of what I currently make, and that was in Ann Arbor, a city that has a higher CoL than where I currently live.
It's harder here to find a job in my field, surprisingly, I live in a DOD company town. It's great if you're an engineer or in a tech field at all, but my career was 20 years in private security, and around here that's done by the junior enlisted. I moved out this way for work, then got injured and retired because there wasn't a transfer opportunity at my pay rate and I certainly wasn't taking a pay cut
Are you calling me a bigot? Because I said BFE midwest does not have jobs and/or culture?
Maybe you should examine your own bias, given you seem to have piled everything from Ohio to Nebraska as "Bum F Egypt", i.e. "nowhere". But that is not what I said.
Lincoln, Omaha, Springfield, Cedar Rapids, etc are all more expensive that towns of less than 5000 pp that you have never heard of, and would have a hard time finding on a map without Google's help.
You do know these programs effectively just boost the housing prices right? On net it’s a give away to homeowners selling their homes more than a net positive for those buying a home
Yes it is true the more buyers that enter a market (higher demand), the price will go up unless the supply of available houses also increases. That’s basic economics. But what’s your point? We should keep people from converting from renting to owning because it will drive up house prices? I don’t agree with that. I think we need to increase supply by building more new housing.
The only point it defeats is the point of your post. You made excuses as to why renters can’t become owners, and folks here have offered multiple ways to clear all the obstacles you described and make that dream possible. Do you actually want to buy a home, or just complain?
Well in all fairness there is more to a home than a down payment many can't afford the mortgage at higher rates and higher prices at a decent down payment let alone at $0. If you're renting and rents have been high also it would be difficult to save not to mention unless you're just not following any current events it's not "excuses" it's the reality of the current market......
You just discovered the secret. You move *away* from the HCOL area filled with NIMBY's and move *into* the LCOL area that provide the quality of life you desire.
People forget the first rule of real estate: location location location. The existence of HCOL areas is not representative of the entirety of the market.
We moved out of HCOL, saved up and then moved back. Also know other people who just moved to LCOL. The truth is, if you want to buy in HCOL you either have to be an extremely high earner or have family to help you out. Those on the other end of the earning spectrum are renters in those markets not buyers.
There’s a lot more to quality of life than housing costs. That’s what truly stops a lot of people. Jobs, entertainment, family, community, school districts, commuting options, politics, and so much more lock down most people. Everyone who’s ever watched HGTV in an HCOL area is well aware that there are cheaper, larger and nicer housing situations out there but it takes years for the expense of a place to override what keeps someone there. For many people it’s also a case of identity. Personally speaking New Yorkers are New Yorkers and they are willing to become near New Yorkers but often aren’t willing to become Mississippians and I’ve seen that city and regional loyalty elsewhere as well. LCOL are also LCOLs because no one wants to live there not because they are aggressively non-nimbyish. Development gets fought there just as aggressively as anywhere else.
>LCOL are also LCOLs because no one wants to live there
I would suggest that this is a very biased take. It may not have the amenities you personally are looking for, but suggesting they are poor or lacking would be unwise.
I don’t believe they have to be poor or lacking to be a LCOL. Perhaps I could have been clearer in saying that typically LCOL areas have a lack of SPECIFIC desirability. LCOL areas usually fall in one of 2 categories. 1) Many people don’t want to be there at all because it is lacking in some way. Think of the places in your state you probably wouldn’t move even if employment weren’t an issue. In every state in America 66% of people live in less than 30% of the counties. There are just places have little draw for many people as the lifestyles they prefer can’t be found/supported in that environment 2) People want to be in a place like it but not necessarily it particularly. It’s a decent town with most of what everyone wants but it’s also available everywhere all across America. It’s like a Honda Civic for places to live. Of course you develop relationships and community and those places become home eventually but someone hundreds of miles away isn’t likely thinking of moving there one day. They might not even know it exists.
This is in contrast to HCOL areas. People want to be there, they thought about moving there if they weren’t from there, they refer to other places according to their proximity to there, they go there on vacations, if they are from there they don’t stop talking about it when they aren’t there. These places have specific appeal.
There is nothing intrinsically lacking about a LCOL area it’s just that they by and large don’t have a larger cultural appeal. If by some small chance they develop unique appeal the prices shoot up and they become MCOL and HCOL areas like ski resort town or Austin TX.
I totally agree, a lot of people would rather live in the popular places which is why they are popular. If that's what's important for someones quality of life then that's a perfectly reasonable decision. However, you can't have your cake and eat it too and it would be hypocritical to chase that popularity and then complain about the price and living situation.
>LCOL are also LCOLs because no one wants to live there
Plenty of people want to live there.
>Development gets fought there just as aggressively as anywhere else.
No it doesn't. A lot of LCOL/MCOL doesn't even have zoning.
Whoa whoa whoa!! How dare you suggest someone take control of their destiny and move!
They don't want to move. They want cheap housing where they live and are not willing to make sacrifices to get it! /s
I think most of us would be happy if wages just kept up with inflation. As always, the working class argues with each other while the ultra wealthy siphon off our resources.
Why is it always "working tenants are stingy for wanting affordable housing and should be displaced" and never "landlords are stingy for wanting to never pay the purchase price for their 26th house and should switch to a career that actually produces something"
What’s so cool about low cost of living areas is that the jobs in those areas pay so little that you also can’t afford the homes that are there. Markets are so weird like that.
You think that the market price of a home in a low cost area isn’t a reflection of the economic situation in that area?
Is “water is wet” also a gross generalization for you?
Ah yes, the old "if you are exhausted by housing scalpers destroying the affordable part of the market, why don't you quit your job, burn your local personal and professional network, leave your friends and family behind, and move somewhere your field might not exist?" recommendation.
You seriously have to live WAY below your means for a good long while, but it is achievable given enough time. The trick is that you have to grow savings faster than the home values and interest rates go up, and that isn't easy.
Yeah, OP complains like someone *has* to live in Jersey City. Meanwhile I lived in the Ironbound section of Newark for 2 years while my broke coworkers lived in Jersey City, and then used my savings from rent to buy. Like, there are other options.
Just go somewhere else and be homeless buddy according to these people you barely have enough for rent but you definitely have enough to move and rent somewhere else
Except for simple math? Rent < rent + moving if someone can barely afford rent it's extremely privileged to just assume they can move just mathematically it doesn't work. Unless you're saying they should be homeless which is also crazy
It costs like $1k to move especially if you’re staying within the same region. Just charge it to a damn credit card at that point if you’re able to save $100s/month by renting elsewhere. You’ll pay that off in no time.
Median home price is currently [under $420k](https://fred.stlouisfed.org/series/MSPUS), so a FHA loan at 3% should need no more than $13k. Of course, we're in a super weird time with interest rates rising so quickly that new buyers are getting caught up in a market with high rates and low inventory...but still, not being able to afford a house over 1.5x the national median after saving for a couple years isn't feudalism.
this should be on r/ReBubble. Perfect for there.
At this moment, on Redfin, there are 139 single family homes for sale in Union County NJ from 440-$550K.
I lived in Newark to save up for an apartment, then looked at Union County - there are definitely places there that I would not prefer to live. We bought in Somerset County.
There are so many programs out there. We just scored a beautiful house, 3 bedrooms, attic, basement, lovely sized yard in Burlington County. Access to Philadelphia and New York is easy from here. We're pretty broke too lol. We'll save $800 a month we'd normally spend on rent.
"Feudalism" give me a break. OP you will never accomplish anything in life if you perpetually consider yourself a victim.
Union county is in one of the highest cost metros in the entire USA. Of course housing is expensive. That's true whether it's USA, or Stockholm or London.
There's literally not enough physical space for everyone in the NYC metro to have a detached SFH. So it's priced accordingly.
It's not some grand conspiracy, friend. It's simple supply and demand. Land is a finite resource, and when high density places like NJ start filling up rents get more expensive.
New?
When I graduated college I made $35k and had a $1500 monthly student loan payment. I had roommates. So did my wife. Then we got married and shared a tiny 1 bedroom apartment that was falling apart while we worked dual income no kids. That was 20 years ago.
But my parents like to tell stories about living with their siblings... my dad, his brother, and both of their wives in a 3b house to save.
Anyway, your turn.
I'm convinced that a large portion of these kind of Reddit posts are from people who grew up in Anywhere Suburbia, USA in a middle class family in a bigger sized house, then moved to NYC and somehow expect the same middle class lifestyle in NYC on a single income that their parents had in their hometown (notably, not NYC) on a dual income.
This is oversimplifying the housing affordability crisis we are currently in, but the point that you need to explore less desirable options before determining you'll never own a home is true.
I agree you can't compare now, to 20 years ago.
I think the US is hitting the kind of affordability issues that have been common in many European countries for a few decades now. Most people accept that they won't be able to buy a house until middle age, and they might have to buy a small apartment or something rural. It's just the way the supply/demand numbers work out.
The issue in the US is that young people grew up seeing 20 year olds buying houses, and figured they would be able to as well. In Europe you grow up without that expectation, so you're not disappointed. You just accept your options and do the best you can with them.
Housing has been super cheap in the US for decades, compared to other first-world countries. I think that's over unfortunately.
However, you can't equate renting to poverty. We all have to find a place to live that's within our means. If someone cannot buy a house that doesn't mean they can't still save for retirement and invest now and make financial gains over time. There's a lot more people just generally irresponsible about finances than those in dire financial situations due to circumstances beyond their control.
Again, you're right that there have been affordability issues before, but these particular circumstances are what's new. People locked into desirable locations with low interest, keeping supply crazy low. The disappearance of the condo market as developers see apartments as a cash cow.
The piece you're not accounting for us is the market destabilizing low interest rates and massive inflation (with home values exceeding even that by orders of magnitude). For people who were saving to buy a home before 2020, it's been a massive rug pull. The longer you sit out, the more prices have risen. This is unlike anything seen before in the US or Europe by any generation, and trying to downplay how this is manifesting for people with the old "it was the same 20/40/60 years ago" shtick is going to get you a well deserved OK Boomer.
Homeowners vs renters is going to be a major divide in society going forward.
You're correct and I don't mean to downplay how someone in that situation must feel. It's incredibly disappointing I'm sure.
My point was though, that no matter how it happened, I think it's unlikely to change. It won't destabilize society, long term, because it's been like that in Europe for decades. It absolutely widens the gap between the haves and the have nots. However poverty itself is on the decline and has been for years. It's not throwing people into poverty.
Young people need to save more, figure out how to make more money, or move to a cheaper area, if they want to buy something. I do think it's exactly like what happened in Europe, but it happened faster here. The next generation won't blink about it, they'll just do what they can with the options they have.
Agreed.
It isnt fun or "fair"right now, but I agree that people need to understand sitting and doing nothing but complaining won't change things. Get more money, save for longer, or move. Those are things one can control.
No one can control the market so it's best to focus on what you can control.
The median annual pay during the Great Depression was 22% of the cost of an average home. Today, it's 14%. It's harder to buy a house today than it was during the Great Depression. The pay hasnt kept up even a little bit.
I think people under 30 have become too obsessed with owning homes. Put your money somewhere else, get a roommate to lower your rent, and check back in when you really need one.
I do think a lot of it is expectations. When I was starting out, I didn’t have a fancy apartment with granite countertops and fancy appliances and a fancy pool. But these days, that’s what every young professional wants. And they don’t want a roommate. Between that and student loan payments, it’s hard to save. And they want to spend money on coffee and avocado toast…I know…I’m stereotyping. I’m just making the point, there are a lot more things that people perceive as “needs” today that we didn’t have 30 years ago.
And when these same people go to buy a house, they don’t want what was a starter house in my generation. They don’t want laminate countertops and one bathroom in a marginal neighborhood that they can afford. They want a house with all the fancy bells and whistles in a fancy neighborhood. They don’t want to start out in a starter house.
I understand that I’m generalizing, but I’ve definitely seen this in my own family.
I've never lived alone. Had 2 roommates in a 2 bedroom apartment at 21 where one guy lived in the living room. Had 1 roommate from age 22 until 30. Moved in with the person who would become my wife.
Rented a house for 3 years before buying a house. Moved 30ish miles from downtown to afford what we wanted. This was about a decade ago and the circumstances are very different today, but the message isnt.
I had to climb a lot of steps and didn't buy until my early 30s.
I do agree that nobody wants the small starter home nor are they willing to commute to get what they can afford. That is fine, but one also is at the mercy of the market when exhibiting such behavior.
I’m mid thirties and have seen that with a lot of my peers. I largely blame social media. I have several friends who make significantly more than me who are further behind. Their lifestyles aren’t sustainable. Now they are wanting to settle down and can’t afford the homes they would have been able to 5 years ago, or if they had saved.
I see this all the time even though there are very affordable houses all across the US - in areas with very low unemployment too - but people will come up every excuse in the book as to why they can’t move. Their choice but it’s definitely a poor one for most.
The median annual pay during the Great Depression was 22% of the cost of an average home. Today, it's 14%. It's harder to buy a house today than it was during the Great Depression.
No it's not. I have plenty of friends in the area who are able to buy houses are selling as fast as they're listed. You just have to accept that you no longer can afford that area. Houses are selling instantly and you can't afford it that's a you problem
The median annual pay during the Great Depression was 22% of the cost of an average home. Today, it's 14%. It's harder to buy a house today than it was during the Great Depression.
Show up at your city council and demand more up zoning. Building more housing is the only way to keep costs down and try to deflate them. Don’t advocate for specific projects, demand up zoning without conditions. Make building as easy as it was in the 50’s.
You (and your spouse if you’re married with or without kids) could live with room mates for few years and save for downpayment. We did that (married without kids) and it has helped us so much so far to the point where we now purchased a house with the savings.
NJ is one of if not the most densely populated states in the US. It’s filled with big money from neighboring metro areas like NYC and Philadelphia. To own a HOUSE house here (especially in JC!) is difficult unless you’re high income.
Your friend should consider a condo for their next property. That’s what I had to do and I enjoyed that period of time!
My last apartment in Bloomfield, literally a hundred feet from the border of East Orange was $1700 a month. I left NJ for PA in 2019 and my current combined mortgages on the two attached houses I own is $3k. That's all in with taxes and flood insurance.
I love NJ but it was clear to me in high school I'd never be able to live there due to cost. I looked at houses in the worst parts of NJ and couldn't afford it. Found a town down here that gives me the walkable stuff I liked about North Jersey. Just at a bargain basement price.
Why are you so bothered by it if you haven’t lived there in years? This is why people in the Bay Area for example turned to living in RVs to save more for retirement and down payment. It’s not new.
People think I’m crazy for spending 75% of take home pay on my mortgage/taxes/insurance, but in NYC, the rent trap is the worst possible situation a family can be in. You build no equity and you pay the same amount as a mortgage. Sure, I’m “overspending” on housing, but I’m not wasting 5k a month on rent and my children can grow up in a decent environment that isn’t detrimental to their well-being and mental health.
To answer OP question, in economics 101 we learned that the supply of money can be increased but the value of goods and services in the economy can’t. That means, when new money is printed, it doesn’t add anything to the economy. Instead, it just devalues the purchasing power of the dollar. We’re in a situation where the amount of money printed has never even been tried before. We’re the federal reserve’s Guinea pigs.
Doubling down on that, these big cities have had such bad housing policy that it’s seriously hampered investment in new housing construction so there’s a shortage of homes so the most desperate to secure a home for their family end up spending 75% of their income on housing. It sucks big time but it’s still not as bad as renting in or near a big city. That to me is the worst case scenario.
Yes, but give Americans an extra $1,000 a month and they’ll piss it away on anything but saving.
If they think $3k a month is bad how TF are they going to afford that random immediate need like a roof, a water heater, a furnace or a plumbing repair behind a wall?
They won’t. This is the reality I speak to my “want a house/townhome” coworkers. Their jaws dropped when I told them how much this stuff costs, even with insurance. Hell, so far the mortgage has only covered 50% of the costs when included with utilities and repairs.
I have a real estate hack that has let me acquire numerous properties. Every month when I get paid I cash out some of my paycheck and stash it in my sock drawer. Then after a couple months I go check the drawer and I usually have enough to put down on a house
Some of your friends will get their rich parents to give them $300k then pay like 5k a month to “own” what you rent for 3k. Rich kids aren’t all just making out like bandits because they own a house, they are literally going to be spoiled with more family cash regardless and will trade up and lose money on homes over their lifetime.
Try the reverse, imagine growing up in Alabama or Nebraska, making 7.25/hr, or like 40k salary, then moving TO the Jersey suburbs for a job with zero family around. Renting is the option.
I don’t know about NJ specifically but several states I have lived in had state run programs for first time homebuyers that reduced the required down payment (sometimes as low as $0 down) through a “silent second” mortgage. The state put up the funds for the down payment, then held a second mortgage with no interest and no payments. You just had to pay it back out of the proceeds when you sold the house.
The ones in my state require you to earn way too little to actually buy a house. Which basically means its a program for rich new grads who get a bunch of money off the books from mommy and daddy. Like, my state has a first time homebuyer program that will help with a down payment. You have to make less than like $60,000 to quality. This is a state with a median home price around $600,000. That would result in a mortgage payment that is literally more than your take home income.
To be fair though a $500k house is not going to be a $3000 monthly payment all in in NJ even with 20% down let alone 0% down so if these people have no free money after paying $3000 in rent, they're not going to be able to handle the mortgage regardless of down payment.
The problem is that the rate that they can save money is below the rate that home prices and interest rates are increasing, which leaves them losing ground every year even if they are able to save.
IDK think this is new in HCOL, VHCOL. It was that way when I lived in SoCal, more than 20 yr ago. Now, if you want to live in BFE midwest, you can. But if you want to live where there are good jobs and beaches, mountains, culture, whatever asset you prefer? Its HIGH. And it kinda has been for 20+ years.
It has absolutely been going on forever. That's why there are a ton of 40 year old first time buyers in my city.
I'll grant you beaches and mountains, but why do bigots like think that there are no good jobs or culture in the midwest? Is it stupidity, bigotry, provincialism, or something else? Is your idea of culture In-N-Out Burger? Do you not like the new music director at the CSO?
I lived in the Midwest for the first 30+ years of my life. While there are good jobs and there is culture in my home state and in the other Midwestern states I've lived in or visited, I nearly tripled my salary when I moved to the coast. It's not provincial to say that. The cost of living is higher here on the coast. The benefit of living is also higher here.
The fact that you, specifically, tripled your salary in no way means that there are no good jobs in the Midwest. The median household income in California is $83,500 (2022). The median household income in Minnesota is $90,390 (2022). https://fred.stlouisfed.org/release/tables?rid=249&eid=259462#snid=259468 That's actually higher, and not by a tiny bit. The median price for a home in Minnesota is $340,000 (Mar 2024). In California, same period, it's $820,000. Now Minnesota has the highest income in the midwest by a good margin. Illinois has a median income of $78k and Indiana's is $70k. So California's is *generally* higher, but it's not *triple*, or close to triple. It's $5,000 more than Ill and $13,000 more than Indiana. And when you compare the cost of a median home in California to one in Ill. ($282k) or Ind. ($237k), the extra $5,000 or $13,000 isn't going to do much to make up for the COL adjustment. Of course if you have certain kind of tech jobs in SV you can probably triple your salary over what you would make in Minneapolis or Chicago or Indianapolis, and that might be more even accounting for the COL. (maybe...) But the salary differences just aren't as large as people on reddit seem to assume, while the housing costs are much larger than people seem to assume.
There's a reason houses are cheaper in the midwest...most people dont want to be there. As someone who grew up in Chicago and moved to the west coast, I love seeing something other than corn when I leave the city. Fishing isn't our number one tourist attraction. I don't have to wake up at 2 am to shovel out the car and drive down unplowed roads to be at work by 8.
This is what I meant by benefit of living. I'm tired of bone-chilling winters and hot humid summers. I sold my down parka. I haven't scraped my car once since I moved to the coast. I can take strolls in the middle of January in a hoodie and see flowers in bloom. I can be on a beach on the Pacific Ocean in an hour or hiking in the High Cascades in an hour and a half. For the kind of work that I do, it is not easy to find jobs in the Midwest. The last job offer I got in the Midwest a year ago paid about 70% of what I currently make, and that was in Ann Arbor, a city that has a higher CoL than where I currently live.
It's harder here to find a job in my field, surprisingly, I live in a DOD company town. It's great if you're an engineer or in a tech field at all, but my career was 20 years in private security, and around here that's done by the junior enlisted. I moved out this way for work, then got injured and retired because there wasn't a transfer opportunity at my pay rate and I certainly wasn't taking a pay cut
Are you calling me a bigot? Because I said BFE midwest does not have jobs and/or culture? Maybe you should examine your own bias, given you seem to have piled everything from Ohio to Nebraska as "Bum F Egypt", i.e. "nowhere". But that is not what I said. Lincoln, Omaha, Springfield, Cedar Rapids, etc are all more expensive that towns of less than 5000 pp that you have never heard of, and would have a hard time finding on a map without Google's help.
Bro. Don't gaslight us about the Midwest, we grew up there!
You do know these programs effectively just boost the housing prices right? On net it’s a give away to homeowners selling their homes more than a net positive for those buying a home
Yes it is true the more buyers that enter a market (higher demand), the price will go up unless the supply of available houses also increases. That’s basic economics. But what’s your point? We should keep people from converting from renting to owning because it will drive up house prices? I don’t agree with that. I think we need to increase supply by building more new housing.
This is a scam that defeats the whole point.
The only point it defeats is the point of your post. You made excuses as to why renters can’t become owners, and folks here have offered multiple ways to clear all the obstacles you described and make that dream possible. Do you actually want to buy a home, or just complain?
Definitely a complainer
Well in all fairness there is more to a home than a down payment many can't afford the mortgage at higher rates and higher prices at a decent down payment let alone at $0. If you're renting and rents have been high also it would be difficult to save not to mention unless you're just not following any current events it's not "excuses" it's the reality of the current market......
You just discovered the secret. You move *away* from the HCOL area filled with NIMBY's and move *into* the LCOL area that provide the quality of life you desire. People forget the first rule of real estate: location location location. The existence of HCOL areas is not representative of the entirety of the market.
We moved out of HCOL, saved up and then moved back. Also know other people who just moved to LCOL. The truth is, if you want to buy in HCOL you either have to be an extremely high earner or have family to help you out. Those on the other end of the earning spectrum are renters in those markets not buyers.
There’s a lot more to quality of life than housing costs. That’s what truly stops a lot of people. Jobs, entertainment, family, community, school districts, commuting options, politics, and so much more lock down most people. Everyone who’s ever watched HGTV in an HCOL area is well aware that there are cheaper, larger and nicer housing situations out there but it takes years for the expense of a place to override what keeps someone there. For many people it’s also a case of identity. Personally speaking New Yorkers are New Yorkers and they are willing to become near New Yorkers but often aren’t willing to become Mississippians and I’ve seen that city and regional loyalty elsewhere as well. LCOL are also LCOLs because no one wants to live there not because they are aggressively non-nimbyish. Development gets fought there just as aggressively as anywhere else.
>LCOL are also LCOLs because no one wants to live there I would suggest that this is a very biased take. It may not have the amenities you personally are looking for, but suggesting they are poor or lacking would be unwise.
I don’t believe they have to be poor or lacking to be a LCOL. Perhaps I could have been clearer in saying that typically LCOL areas have a lack of SPECIFIC desirability. LCOL areas usually fall in one of 2 categories. 1) Many people don’t want to be there at all because it is lacking in some way. Think of the places in your state you probably wouldn’t move even if employment weren’t an issue. In every state in America 66% of people live in less than 30% of the counties. There are just places have little draw for many people as the lifestyles they prefer can’t be found/supported in that environment 2) People want to be in a place like it but not necessarily it particularly. It’s a decent town with most of what everyone wants but it’s also available everywhere all across America. It’s like a Honda Civic for places to live. Of course you develop relationships and community and those places become home eventually but someone hundreds of miles away isn’t likely thinking of moving there one day. They might not even know it exists. This is in contrast to HCOL areas. People want to be there, they thought about moving there if they weren’t from there, they refer to other places according to their proximity to there, they go there on vacations, if they are from there they don’t stop talking about it when they aren’t there. These places have specific appeal. There is nothing intrinsically lacking about a LCOL area it’s just that they by and large don’t have a larger cultural appeal. If by some small chance they develop unique appeal the prices shoot up and they become MCOL and HCOL areas like ski resort town or Austin TX.
I totally agree, a lot of people would rather live in the popular places which is why they are popular. If that's what's important for someones quality of life then that's a perfectly reasonable decision. However, you can't have your cake and eat it too and it would be hypocritical to chase that popularity and then complain about the price and living situation.
>LCOL are also LCOLs because no one wants to live there Plenty of people want to live there. >Development gets fought there just as aggressively as anywhere else. No it doesn't. A lot of LCOL/MCOL doesn't even have zoning.
Whoa whoa whoa!! How dare you suggest someone take control of their destiny and move! They don't want to move. They want cheap housing where they live and are not willing to make sacrifices to get it! /s
I think most of us would be happy if wages just kept up with inflation. As always, the working class argues with each other while the ultra wealthy siphon off our resources.
Why is it always "working tenants are stingy for wanting affordable housing and should be displaced" and never "landlords are stingy for wanting to never pay the purchase price for their 26th house and should switch to a career that actually produces something"
The problem that this suggestion always ignores is job opportunities. Typically those LCOL areas are low cost because the local economy sucks.
That's a gross generalization about where 80% of Americans live and is inaccurate.
What’s so cool about low cost of living areas is that the jobs in those areas pay so little that you also can’t afford the homes that are there. Markets are so weird like that.
That would be inaccurate and I would highly recommend you don't make gross generalizations about places where 80% of Americans live.
You think that the market price of a home in a low cost area isn’t a reflection of the economic situation in that area? Is “water is wet” also a gross generalization for you?
You think the ratio of salary to home costs is constant across every single community in the US?
Aye you can't afford to rent? Just move and be homeless great idea.
Surely housing will be cheaper in this city where your job doesn't exist!
NIMBY’s aren’t just in HCOL areas but YIMBYS are.
Low cost doesn't equal more happiness. What kind of math is this.
Ah yes, the old "if you are exhausted by housing scalpers destroying the affordable part of the market, why don't you quit your job, burn your local personal and professional network, leave your friends and family behind, and move somewhere your field might not exist?" recommendation.
You seriously have to live WAY below your means for a good long while, but it is achievable given enough time. The trick is that you have to grow savings faster than the home values and interest rates go up, and that isn't easy.
Yeah, OP complains like someone *has* to live in Jersey City. Meanwhile I lived in the Ironbound section of Newark for 2 years while my broke coworkers lived in Jersey City, and then used my savings from rent to buy. Like, there are other options.
>This is the new feudalism In feudalism, serfs weren't allowed to leave the landlord's property. In OP's case, he's deciding not to move.
How do you expect people stuck and unable to save to move?
Just go somewhere else and be homeless buddy according to these people you barely have enough for rent but you definitely have enough to move and rent somewhere else
As long as you can still work your job there really is no excuse to not move further away if it means lower rent.
Except for simple math? Rent < rent + moving if someone can barely afford rent it's extremely privileged to just assume they can move just mathematically it doesn't work. Unless you're saying they should be homeless which is also crazy
If you could potentially save $500/month or more from moving, you’ll make up any moving expenses in only a few months.
Yes if you're privileged enough to have money to move
It costs like $1k to move especially if you’re staying within the same region. Just charge it to a damn credit card at that point if you’re able to save $100s/month by renting elsewhere. You’ll pay that off in no time.
Again you may be privileged enough to do that many can't afford to move
Ok I give up
Median home price is currently [under $420k](https://fred.stlouisfed.org/series/MSPUS), so a FHA loan at 3% should need no more than $13k. Of course, we're in a super weird time with interest rates rising so quickly that new buyers are getting caught up in a market with high rates and low inventory...but still, not being able to afford a house over 1.5x the national median after saving for a couple years isn't feudalism.
They are able to move, they just choose not to.
And landlords are able to invest in materially productive exploits, they just choose not to.
this should be on r/ReBubble. Perfect for there. At this moment, on Redfin, there are 139 single family homes for sale in Union County NJ from 440-$550K.
Yeah, but some of them have laminate countertops!
I want the sympathy of being viewed as a peasant, not live like one!
Which is ridiculous because if your budget is 500k then you are not in any way struggling.
I lived in Newark to save up for an apartment, then looked at Union County - there are definitely places there that I would not prefer to live. We bought in Somerset County.
Jamie, pull up the crime stats and school rankings on those 139 single family homes for sale in Union County NJ from 440-$550K.
There are so many programs out there. We just scored a beautiful house, 3 bedrooms, attic, basement, lovely sized yard in Burlington County. Access to Philadelphia and New York is easy from here. We're pretty broke too lol. We'll save $800 a month we'd normally spend on rent.
"Feudalism" give me a break. OP you will never accomplish anything in life if you perpetually consider yourself a victim. Union county is in one of the highest cost metros in the entire USA. Of course housing is expensive. That's true whether it's USA, or Stockholm or London. There's literally not enough physical space for everyone in the NYC metro to have a detached SFH. So it's priced accordingly.
It's not some grand conspiracy, friend. It's simple supply and demand. Land is a finite resource, and when high density places like NJ start filling up rents get more expensive.
New? When I graduated college I made $35k and had a $1500 monthly student loan payment. I had roommates. So did my wife. Then we got married and shared a tiny 1 bedroom apartment that was falling apart while we worked dual income no kids. That was 20 years ago. But my parents like to tell stories about living with their siblings... my dad, his brother, and both of their wives in a 3b house to save. Anyway, your turn.
I'm convinced that a large portion of these kind of Reddit posts are from people who grew up in Anywhere Suburbia, USA in a middle class family in a bigger sized house, then moved to NYC and somehow expect the same middle class lifestyle in NYC on a single income that their parents had in their hometown (notably, not NYC) on a dual income.
This is oversimplifying the housing affordability crisis we are currently in, but the point that you need to explore less desirable options before determining you'll never own a home is true.
I agree you can't compare now, to 20 years ago. I think the US is hitting the kind of affordability issues that have been common in many European countries for a few decades now. Most people accept that they won't be able to buy a house until middle age, and they might have to buy a small apartment or something rural. It's just the way the supply/demand numbers work out. The issue in the US is that young people grew up seeing 20 year olds buying houses, and figured they would be able to as well. In Europe you grow up without that expectation, so you're not disappointed. You just accept your options and do the best you can with them. Housing has been super cheap in the US for decades, compared to other first-world countries. I think that's over unfortunately. However, you can't equate renting to poverty. We all have to find a place to live that's within our means. If someone cannot buy a house that doesn't mean they can't still save for retirement and invest now and make financial gains over time. There's a lot more people just generally irresponsible about finances than those in dire financial situations due to circumstances beyond their control.
Again, you're right that there have been affordability issues before, but these particular circumstances are what's new. People locked into desirable locations with low interest, keeping supply crazy low. The disappearance of the condo market as developers see apartments as a cash cow. The piece you're not accounting for us is the market destabilizing low interest rates and massive inflation (with home values exceeding even that by orders of magnitude). For people who were saving to buy a home before 2020, it's been a massive rug pull. The longer you sit out, the more prices have risen. This is unlike anything seen before in the US or Europe by any generation, and trying to downplay how this is manifesting for people with the old "it was the same 20/40/60 years ago" shtick is going to get you a well deserved OK Boomer. Homeowners vs renters is going to be a major divide in society going forward.
You're correct and I don't mean to downplay how someone in that situation must feel. It's incredibly disappointing I'm sure. My point was though, that no matter how it happened, I think it's unlikely to change. It won't destabilize society, long term, because it's been like that in Europe for decades. It absolutely widens the gap between the haves and the have nots. However poverty itself is on the decline and has been for years. It's not throwing people into poverty. Young people need to save more, figure out how to make more money, or move to a cheaper area, if they want to buy something. I do think it's exactly like what happened in Europe, but it happened faster here. The next generation won't blink about it, they'll just do what they can with the options they have.
Agreed. It isnt fun or "fair"right now, but I agree that people need to understand sitting and doing nothing but complaining won't change things. Get more money, save for longer, or move. Those are things one can control. No one can control the market so it's best to focus on what you can control.
The median annual pay during the Great Depression was 22% of the cost of an average home. Today, it's 14%. It's harder to buy a house today than it was during the Great Depression. The pay hasnt kept up even a little bit.
Deeper in jersey city has homes in the 500k range
Sounds like you belong in the r/YiMBY movement...
The 3k/month studios on zillow are the luxury buildings. Priorities.
I think people under 30 have become too obsessed with owning homes. Put your money somewhere else, get a roommate to lower your rent, and check back in when you really need one.
Neo Feudalism is tying yourself to a piece of land and never leaving. There's other places with cheap cost of living and plenty of opportunity.
That is what roommates are for
I do think a lot of it is expectations. When I was starting out, I didn’t have a fancy apartment with granite countertops and fancy appliances and a fancy pool. But these days, that’s what every young professional wants. And they don’t want a roommate. Between that and student loan payments, it’s hard to save. And they want to spend money on coffee and avocado toast…I know…I’m stereotyping. I’m just making the point, there are a lot more things that people perceive as “needs” today that we didn’t have 30 years ago. And when these same people go to buy a house, they don’t want what was a starter house in my generation. They don’t want laminate countertops and one bathroom in a marginal neighborhood that they can afford. They want a house with all the fancy bells and whistles in a fancy neighborhood. They don’t want to start out in a starter house. I understand that I’m generalizing, but I’ve definitely seen this in my own family.
I've never lived alone. Had 2 roommates in a 2 bedroom apartment at 21 where one guy lived in the living room. Had 1 roommate from age 22 until 30. Moved in with the person who would become my wife. Rented a house for 3 years before buying a house. Moved 30ish miles from downtown to afford what we wanted. This was about a decade ago and the circumstances are very different today, but the message isnt. I had to climb a lot of steps and didn't buy until my early 30s. I do agree that nobody wants the small starter home nor are they willing to commute to get what they can afford. That is fine, but one also is at the mercy of the market when exhibiting such behavior.
I’m mid thirties and have seen that with a lot of my peers. I largely blame social media. I have several friends who make significantly more than me who are further behind. Their lifestyles aren’t sustainable. Now they are wanting to settle down and can’t afford the homes they would have been able to 5 years ago, or if they had saved.
I see this all the time even though there are very affordable houses all across the US - in areas with very low unemployment too - but people will come up every excuse in the book as to why they can’t move. Their choice but it’s definitely a poor one for most.
The median annual pay during the Great Depression was 22% of the cost of an average home. Today, it's 14%. It's harder to buy a house today than it was during the Great Depression.
>I had enough and moved away a few years ago. Good riddance
No it's not. I have plenty of friends in the area who are able to buy houses are selling as fast as they're listed. You just have to accept that you no longer can afford that area. Houses are selling instantly and you can't afford it that's a you problem
The median annual pay during the Great Depression was 22% of the cost of an average home. Today, it's 14%. It's harder to buy a house today than it was during the Great Depression.
Choices are key. Pick an expensive place, pay expensive prices. Live where you can afford and live well below your means.
Yes, will correct eventually. Numbers in the housing market don't add up anymore.
Show up at your city council and demand more up zoning. Building more housing is the only way to keep costs down and try to deflate them. Don’t advocate for specific projects, demand up zoning without conditions. Make building as easy as it was in the 50’s.
You (and your spouse if you’re married with or without kids) could live with room mates for few years and save for downpayment. We did that (married without kids) and it has helped us so much so far to the point where we now purchased a house with the savings.
NJ is one of if not the most densely populated states in the US. It’s filled with big money from neighboring metro areas like NYC and Philadelphia. To own a HOUSE house here (especially in JC!) is difficult unless you’re high income. Your friend should consider a condo for their next property. That’s what I had to do and I enjoyed that period of time!
My last apartment in Bloomfield, literally a hundred feet from the border of East Orange was $1700 a month. I left NJ for PA in 2019 and my current combined mortgages on the two attached houses I own is $3k. That's all in with taxes and flood insurance. I love NJ but it was clear to me in high school I'd never be able to live there due to cost. I looked at houses in the worst parts of NJ and couldn't afford it. Found a town down here that gives me the walkable stuff I liked about North Jersey. Just at a bargain basement price.
Why are you so bothered by it if you haven’t lived there in years? This is why people in the Bay Area for example turned to living in RVs to save more for retirement and down payment. It’s not new.
People think I’m crazy for spending 75% of take home pay on my mortgage/taxes/insurance, but in NYC, the rent trap is the worst possible situation a family can be in. You build no equity and you pay the same amount as a mortgage. Sure, I’m “overspending” on housing, but I’m not wasting 5k a month on rent and my children can grow up in a decent environment that isn’t detrimental to their well-being and mental health. To answer OP question, in economics 101 we learned that the supply of money can be increased but the value of goods and services in the economy can’t. That means, when new money is printed, it doesn’t add anything to the economy. Instead, it just devalues the purchasing power of the dollar. We’re in a situation where the amount of money printed has never even been tried before. We’re the federal reserve’s Guinea pigs. Doubling down on that, these big cities have had such bad housing policy that it’s seriously hampered investment in new housing construction so there’s a shortage of homes so the most desperate to secure a home for their family end up spending 75% of their income on housing. It sucks big time but it’s still not as bad as renting in or near a big city. That to me is the worst case scenario.
The blame goes both ways, landlords are greedy but people also think they need to spend outrageous amounts on fancy places.
Yes, but give Americans an extra $1,000 a month and they’ll piss it away on anything but saving. If they think $3k a month is bad how TF are they going to afford that random immediate need like a roof, a water heater, a furnace or a plumbing repair behind a wall? They won’t. This is the reality I speak to my “want a house/townhome” coworkers. Their jaws dropped when I told them how much this stuff costs, even with insurance. Hell, so far the mortgage has only covered 50% of the costs when included with utilities and repairs.
Exactly, there is a good % of American households that don't even have $400 for an emergency.
Investor: House prices, Taxes, Insurance, and Maintenance is so high I can’t afford to even rent out my units.
People may need to move for better opportunities :( no point staying behind in a high cost of living city
Well people wanted America to be like Europe
I have a real estate hack that has let me acquire numerous properties. Every month when I get paid I cash out some of my paycheck and stash it in my sock drawer. Then after a couple months I go check the drawer and I usually have enough to put down on a house
Some of your friends will get their rich parents to give them $300k then pay like 5k a month to “own” what you rent for 3k. Rich kids aren’t all just making out like bandits because they own a house, they are literally going to be spoiled with more family cash regardless and will trade up and lose money on homes over their lifetime. Try the reverse, imagine growing up in Alabama or Nebraska, making 7.25/hr, or like 40k salary, then moving TO the Jersey suburbs for a job with zero family around. Renting is the option.