Say goodbye to the 20% down payment. Zillow says you’ll need to put down roughly 35%, or almost $128,000, to afford a typical home

[1srelluc]

Say goodbye to the 20% down payment. Zillow says you’ll need to put down roughly 35%, or almost $128,000, to afford a typical home

In Los Angeles, a median-income household would need to put roughly 80% down to afford a typical home and its monthly payments in the city, according to Zillow.

finance.yahoo.com

Thinking about buying a home? You might be in for a rude awakening: a 20% down payment is no longer enough for most people to afford monthly payments—not when home values are 45% higher than before the pandemic, and mortgage payments are roughly 115% higher, according to Zillow.

“Down payments have always been important, but in the current market, where interest rates remain high and volatile and home values are stable or rising, boosting the amount you put down can make the difference between a home that’s affordable and one that’s not,” Zillow’s chief economist, Skylar Olsen, wrote in an analysis yesterday.

The analysis, looking at major metropolitan areas, found homebuyers earning the median income need to put down 35.4%, which equates to almost $127,750, to comfortably afford payments on the typical home in America.

Comfortably, in this case, means you’re spending no more than 30% of the typical income in your specific area on housing—so your mortgage payment, property taxes, and insurance. Anyone who spends more than 30% of their income on housing is considered cost-burdened, and severely-cost burdened if housing takes up more than half their income. (In May, the value of a typical home was $360,310, and the typical monthly mortgage payment was $1,931, after a 20% down payment.....

I say Zillow is partly to blame for it. Their "Zestimates" have been grossly elevated for a long time. The "Zestimate" on my mom's house/lot was about $75k over appraisal.....No fucking way.

Also municipalities have latched on to their inflated bullshit and taxes followed suit. I always laugh when I look at what they say my place is worth....Till appraisal time rolls around and then I'm down at the county office fighting it.

The correlation between Zillow and assessments is no accident. I believe that at this point accessors are just looking up the Zillow estimate and running with it.

 

[pknopp]

Interest rates are not high. They are if anything pretty normal. When I bought my first house in 1985 I paid 9.9%.

Money isn't supposed to be "free".

Housing prices can't be both high and unaffordable for people.

 

[1srelluc]

Interest rates are not high. They are if anything pretty normal. When I bought my first house in 1985 I paid 9.9%.

Money isn't supposed to be "free".

Housing prices can't be both high and unaffordable for people.

I agree, interest rates are about where they need to be....Maybe a tic lower.

It's the price of homes that are the problem.....On average they are now 8X people's average income. I also think unreasonable expectations as to home size enters into it too.

 

[Moonglow]

Say goodbye to the 20% down payment. Zillow says you’ll need to put down roughly 35%, or almost $128,000, to afford a typical home

In Los Angeles, a median-income household would need to put roughly 80% down to afford a typical home and its monthly payments in the city, according to Zillow.

finance.yahoo.com

Thinking about buying a home? You might be in for a rude awakening: a 20% down payment is no longer enough for most people to afford monthly payments—not when home values are 45% higher than before the pandemic, and mortgage payments are roughly 115% higher, according to Zillow.

“Down payments have always been important, but in the current market, where interest rates remain high and volatile and home values are stable or rising, boosting the amount you put down can make the difference between a home that’s affordable and one that’s not,” Zillow’s chief economist, Skylar Olsen, wrote in an analysis yesterday.

The analysis, looking at major metropolitan areas, found homebuyers earning the median income need to put down 35.4%, which equates to almost $127,750, to comfortably afford payments on the typical home in America.

Comfortably, in this case, means you’re spending no more than 30% of the typical income in your specific area on housing—so your mortgage payment, property taxes, and insurance. Anyone who spends more than 30% of their income on housing is considered cost-burdened, and severely-cost burdened if housing takes up more than half their income. (In May, the value of a typical home was $360,310, and the typical monthly mortgage payment was $1,931, after a 20% down payment.....

I say Zillow is partly to blame for it. Their "Zestimates" have been grossly elevated for a long time. The "Zestimate" on my mom's house/lot was about $75k over appraisal.....No fucking way.

Also municipalities have latched on to their inflated bullshit and taxes followed suit. I always laugh when I look at what they say my place is worth....Till appraisal time rolls around and then I'm down at the county office fighting it.

The correlation between Zillow and assessments is no accident. I believe that at this point accessors are just looking up the Zillow estimate and running with it.

Not with a VA loan.

 

[pknopp]

I agree, interest rates are about where they need to be....Maybe a tic lower.

It's the price of homes that are the problem.....On average they are now 8X people's average income. I also think unreasonable expectations as to home size enters into it too.

I am generalizing but yes, people often times expect too much. Too many shows on where some young couple is looking at $3 million dollar homes.

 

[MarcATL]

Yah, that's what you get when deregulation has allowed mega-corporations like Zillow to buy up all the properties and gouge the prices up to where they are literally unaffordable for those who are not wealthy.

 

[JoeB131]

I agree, interest rates are about where they need to be....Maybe a tic lower.

It's the price of homes that are the problem.....On average they are now 8X people's average income. I also think unreasonable expectations as to home size enters into it too.

Blame the house builders. They are building McMansions instead of the sensible small homes that we grew up in.

A Single family home has grown from 909 Sq. Feet in 1949 to 2480 today.

 

[1srelluc]

Blame the house builders. They are building McMansions instead of the sensible small homes that we grew up in.

A Single family home has grown from 909 Sq. Feet in 1949 to 2480 today.

Given the prices of lots it's more cost effective for a builder to build two story 2K+ sq ft homes.....A town lot (.25 acre) goes for 65-75K in my AO.

But hell most are building 1500 sq ft two story duplexes on them, selling them to investors before they are finished, and in turn they are rented out.

A lot of older homes on .50 to 1 acre lots are being torn down and duplexes or townhouses built upon them.

That's exactly what is happening in my mom's old neighborhood. A place a few houses down sat on 1.25 acres. The old (but nice) house is being torn down and six duplexes are going in its place.

As for my Mom's house/lots it will be torn down and a McMansion built upon the two lots. I close on it tomorrow.

 

[1srelluc]

1945 average household income: $1400
1945 average median home price: $2938 (2x average income)

1970 average household income: $9870
1970 average median home price: $23400 (2.4x average income)

2000 average household income: $35296
2000 average median home price: $119600 (3.4x average income)

2020 average household income: $48060
2020 average median home price: $412000 (8.6 x average income)

2024 average household income $77,397
2024 average median home price.....$420,800 (5.5X average income)

Income went up in FJB bucks but so did inflation.

 

[Harpy Eagle]

1945 average household income: $1400
1945 average median home price: $2938 (2x average income)

1970 average household income: $9870
1970 average median home price: $23400 (2.4x average income)

2000 average household income: $35296
2000 average median home price: $119600 (3.4x average income)

2020 average household income: $48060
2020 average median home price: $412000 (8.6 x average income)

View attachment 966755

2024 average household income $77,397
2024 average median home price.....$420,800 (5.5X average income)

Income went up in FJB bucks but so did inflation.

So, it is good news that the cost of a house vs average income is coming down, right?

 

[citygator]

Say goodbye to the 20% down payment. Zillow says you’ll need to put down roughly 35%, or almost $128,000, to afford a typical home

In Los Angeles, a median-income household would need to put roughly 80% down to afford a typical home and its monthly payments in the city, according to Zillow.

finance.yahoo.com

Thinking about buying a home? You might be in for a rude awakening: a 20% down payment is no longer enough for most people to afford monthly payments—not when home values are 45% higher than before the pandemic, and mortgage payments are roughly 115% higher, according to Zillow.

“Down payments have always been important, but in the current market, where interest rates remain high and volatile and home values are stable or rising, boosting the amount you put down can make the difference between a home that’s affordable and one that’s not,” Zillow’s chief economist, Skylar Olsen, wrote in an analysis yesterday.

The analysis, looking at major metropolitan areas, found homebuyers earning the median income need to put down 35.4%, which equates to almost $127,750, to comfortably afford payments on the typical home in America.

Comfortably, in this case, means you’re spending no more than 30% of the typical income in your specific area on housing—so your mortgage payment, property taxes, and insurance. Anyone who spends more than 30% of their income on housing is considered cost-burdened, and severely-cost burdened if housing takes up more than half their income. (In May, the value of a typical home was $360,310, and the typical monthly mortgage payment was $1,931, after a 20% down payment.....

I say Zillow is partly to blame for it. Their "Zestimates" have been grossly elevated for a long time. The "Zestimate" on my mom's house/lot was about $75k over appraisal.....No fucking way.

Also municipalities have latched on to their inflated bullshit and taxes followed suit. I always laugh when I look at what they say my place is worth....Till appraisal time rolls around and then I'm down at the county office fighting it.

The correlation between Zillow and assessments is no accident. I believe that at this point accessors are just looking up the Zillow estimate and running with it.

My kid bought his first home with his new wife and didnt put any more down than my first house. The average is an average which means there are over half of the houses well below that price. You should look at median first then look at the bottom quarter for new buyers. Most existing buyers have equity they are transferring over.

 

[1srelluc]

So, it is good news that the cost of a house vs average income is coming down, right?

It would be if the income was not in FJB bucks and the other inflationary pressures home buyers are currently seeing.

 

[Toddsterpatriot]

Yah, that's what you get when deregulation has allowed mega-corporations like Zillow to buy up all the properties and gouge the prices up to where they are literally unaffordable for those who are not wealthy.

Zillow is getting out of the iBuying business and will shut down its Zillow Offers division, resulting in a 25% reduction in its staff.

In its quarterly earnings report on Tuesday, the company said it will see a total write-down of more than $540 million as a result of its exit from the business, which buys homes and resells them.

https://www.cnn.com/2021/11/02/homes/zillow-exit-ibuying-home-business/index.html

DURR

 

[Toddsterpatriot]

1945 average household income: $1400
1945 average median home price: $2938 (2x average income)

1970 average household income: $9870
1970 average median home price: $23400 (2.4x average income)

2000 average household income: $35296
2000 average median home price: $119600 (3.4x average income)

2020 average household income: $48060
2020 average median home price: $412000 (8.6 x average income)

View attachment 966755

2024 average household income $77,397
2024 average median home price.....$420,800 (5.5X average income)

Income went up in FJB bucks but so did inflation.

Do you mean median household income?

 

[1srelluc]

Do you mean median household income?

Yes.

 

[Toddsterpatriot]

Yes.

Thanks.
What's your source?
Your 2020 household income figures are way too low.

 

[1srelluc]

Thanks.
What's your source?
Your 2020 household income figures are way too low.

Just looked them up.....Various sources.....Your sources may vary.

 

[Toddsterpatriot]

Just looked them up.....Various sources.....Your sources may vary.

Median Household Income by State 2024

worldpopulationreview.com

 

[iamwhatiseem]

1945 average household income: $1400
1945 average median home price: $2938 (2x average income)

1970 average household income: $9870
1970 average median home price: $23400 (2.4x average income)

2000 average household income: $35296
2000 average median home price: $119600 (3.4x average income)

2020 average household income: $48060
2020 average median home price: $412000 (8.6 x average income)

View attachment 966755

2024 average household income $77,397
2024 average median home price.....$420,800 (5.5X average income)

Income went up in FJB bucks but so did inflation.

This is all due to government pushing home ownership, and backing up bad loans.

Something else to consider...
In the 1950s the avg. sq footage of a newly built home was 983 sq. feet.
By the 1990s that blew up to 2080 sq ft, with on average 1 less person per home.
By the 2010s it was 2292 sq. ft.

 

[Woodznutz]

Yah, that's what you get when deregulation has allowed mega-corporations like Zillow to buy up all the properties and gouge the prices up to where they are literally unaffordable for those who are not wealthy.

But they got the idea from small investors who began buying up fixer-uppers and foreclosures back in the '70's.