Author Topic: NYT article on homeownership  (Read 13851 times)

bostonjim

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NYT article on homeownership
« on: June 24, 2015, 11:27:14 AM »
http://www.nytimes.com/2015/06/24/business/economy/more-americans-are-renting-and-paying-more-as-homeownership-falls.html?hp&action=click&pgtype=Homepage&module=second-column-region&region=top-news&WT.nav=top-news&gwh=B5DE82578600E8A10C2545E9E6463AC1&gwt=pay

So the guy they profile who "looks longingly" at a house that sells for $200,000 makes "almost $100,000" but just can't scrape together a down payment:

"With a monthly rent of $1,400, car payments, unpredictable family expenses, a spotty credit report and an empty savings account, Mr. McDowell sees no way to soon pull together a decent down payment.

“My wife and I have been wanting to go on the market to buy a house for years now,” Mr. McDowell, 41, said. “But bills, bills, bills and car notes and car insurance. We haven’t been able to save anything.”"

$100,000/yr, paying $1400 rent, and can't save anything?  Those have gotta be some big bills, bills, bills...

Chris22

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Re: NYT article on homeownership
« Reply #1 on: June 24, 2015, 11:43:51 AM »
You can make fun of him, or you can rent to him.... ;)

slugline

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Re: NYT article on homeownership
« Reply #2 on: June 24, 2015, 02:04:07 PM »
41 and burdened by student loans -- let's hope those classes are paying off.

Dee18

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Re: NYT article on homeownership
« Reply #3 on: June 24, 2015, 05:00:18 PM »
If only McDowell read MMM he would know that one doesn't have to buy two new cars in one year for reliable transportation.  And both adults have long commutes. 

deborah

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Re: NYT article on homeownership
« Reply #4 on: June 24, 2015, 08:25:43 PM »
According to the article he makes $70k and she makes $30k. She's essentially working to pay for preschool (which is code for day care) and to service the note on her vehicle. No mention is made of how long the "long" commutes are. Add in gas, tolls, and possibly parking, and she'd be better off staying at home and watching the kid (and the kid would probably get a better education in the process).
It is OK to say this for the first year or two, BUT after a couple of years, her pay goes up, the preschool fees disappear, and the family is miles better off financially.

If she stays at home, her experience in her field of work goes down, and she has more difficulty getting a reasonably paying job.

LanceThrustington

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Re: NYT article on homeownership
« Reply #5 on: June 24, 2015, 09:30:45 PM »
articles like this make me jealous of US housing prices.

Here in Melbourne a "cheap" house 45min train trip from the city is 600k and we have simmilar wages.
« Last Edit: June 24, 2015, 09:37:30 PM by LanceThrustington »

Cressida

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Re: NYT article on homeownership
« Reply #6 on: June 24, 2015, 10:21:24 PM »
According to the article he makes $70k and she makes $30k. She's essentially working to pay for preschool (which is code for day care) and to service the note on her vehicle. No mention is made of how long the "long" commutes are. Add in gas, tolls, and possibly parking, and she'd be better off staying at home and watching the kid (and the kid would probably get a better education in the process).
It is OK to say this for the first year or two, BUT after a couple of years, her pay goes up, the preschool fees disappear, and the family is miles better off financially.

If she stays at home, her experience in her field of work goes down, and she has more difficulty getting a reasonably paying job.

+1

I'm not criticizing anyone for SAHPing, but let's not misrepresent the financial facts.

John Dough

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Big Sob Story
« Reply #7 on: June 25, 2015, 09:01:33 AM »
I feel so sorry for these people who can't buy a house on $100,000 a year.
$800 a month nursery school.
Two brand new cars $750 a month for long commutes.
Can't even afford a $200,000 house.

Somebody punch them in the face please.


http://www.nytimes.com/2015/06/24/business/economy/more-americans-are-renting-and-paying-more-as-homeownership-falls.html?smid=nytcore-iphone-share&smprod=nytcore-iphone


« Last Edit: June 25, 2015, 09:05:34 AM by John Dough »

Chris22

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Re: NYT article on homeownership
« Reply #8 on: June 25, 2015, 09:15:29 AM »
(and the kid would probably get a better education in the process).

I see this sentiment, and I'm biased (have a kid in daycare) but I disagree.  Many/most SAHPs only have so many hours during the day then can really give their full attention to the kids (it's taxing, I don't blame them for it) and then the kid gets stuck in front of a screen and the parents does chores or sits behind their own screen.

Versus daycare, where there are trained teachers, and lots of other kids to interact with.  I have a nephew almost exactly my daughter's age who stays home with a nanny, and the difference in advancement, vocabulary, emotional maturity, etc, is astounding, and I attribute that to the daycare she's been attending since she was ~5 months old. 

And BTW, my wife makes more than 6x what daycare costs.

trailrated

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Re: Big Sob Story
« Reply #9 on: June 25, 2015, 09:26:32 AM »
The $800 for child care is not that bad (at least for the area I am in). But HOLY FUCKING SHIT he would rather have two nice cars than a house. Guy needs to get his priorities straight. Sadly people get caught up in thinking they "deserve" something rather than earning it.

Once they purchase (go into debt) for it they cling to the idea that it is a great part of their lives but don't realize it is a curse. Why can't they pay their bills...cause of their cars. Why is their insurance so high...cause of their cars. Why can't they afford a house...cause of their cars.

Can't get ahead in life...must be the economy, must be the man keeping you down, must be an unjust system. NO IT'S SITTING IN YOUR FUCKING DRIVEWAY.


taekvideo

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Re: Big Sob Story
« Reply #10 on: June 25, 2015, 09:28:07 AM »
The house wouldn't be any more expensive than their apartment on a monthly basis even if they put no money down.
My credit union encouraged me to get a zero-down one when I bought my house like a year and a half ago, though I did end up putting 5% down.
I know tons of people around here get them because they don't want to save for a down payment (or are psychologically incapable lol..).
Though I guess if his credit rating is really bad he might not get approved for one, or things could be different where he lives.
But regardless, they should look into slashing those "bills" at least temporarily to get a down payment.

PS $1400 rent on a small place... yikes. Wouldn't want to live there!

PPS
Quote
After being stranded when his car broke down, he bought two new vehicles last year to ensure they both can get to work. Payments total about $750 a month.
This reeks of rationalization.

Bajadoc

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Re: Big Sob Story
« Reply #11 on: June 25, 2015, 09:34:01 AM »
I know a lot of people like that.

EllieStan

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Re: Big Sob Story
« Reply #12 on: June 25, 2015, 10:13:38 AM »
Unfortunately (for them), people like those are the reason why I am so careful with my money. I have many friends who fit into that description and their mistakes taught me how to budget responsibly.

One of my friends is one step away from bankruptcy. They bought a house they can't afford, she decided to have a baby, she's pregnant again and she now has to rely on credit to pay for groceries, because otherwise she wouldn't be able to make her monthly monrtgage payments. Both her and her SO have massive CC debts. In 2014, she consolidated her debts, hoping to lower her monthly payments. She called me a few months later, telling me she didn't have to wear glasses anymore : ''Laser eye surgery is affordable, it only costs $40 a month!'' Major. Facepalm.

Priorities seem to be: having it all in a 1-3 year timeframe, even if it means having huge debts. And even if they end up purchasing a house, they are housepoor.
« Last Edit: June 25, 2015, 10:21:56 AM by EllieStan »

The Accidental Mustachian

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Re: Big Sob Story
« Reply #13 on: June 25, 2015, 12:58:54 PM »
Wow, so its considered a perfectly normal response to a pretty shitty but everyday event (car breaking down) to replace both of their vehicles with brand new ones. Brilliant, the marketing guys at Ford must be creaming themselves at this article. Notice too the evocative language, he was 'stranded'. Well by definition you're kind of stranded if your vehicle breaks down, same as your 'stranded' if your train or bus is cancelled. No need to make it sound ike he survived his ship sinking on the high seas.

Tbh i suspect that this is just the tip of the ice berg for this guy and his problems run a lot deeper. I doubt if he would be buying that house if it was £80,000

immocardo

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Re: Big Sob Story
« Reply #14 on: June 25, 2015, 01:29:07 PM »
So he spent 40k+ on cars and has an all in one computer sitting on his lap in the picture.

Pretty sure he isn't struggling too much.

Also, the fact that the article says "He doesn't even have any family he can ask for money" Makes me want to vomit

Cougar

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Re: Big Sob Story
« Reply #15 on: June 25, 2015, 01:35:16 PM »
I feel so sorry for these people who can't buy a house on $100,000 a year.
$800 a month nursery school.
Two brand new cars $750 a month for long commutes.
Can't even afford a $200,000 house.

Somebody punch them in the face please.


http://www.nytimes.com/2015/06/24/business/economy/more-americans-are-renting-and-paying-more-as-homeownership-falls.html?smid=nytcore-iphone-share&smprod=nytcore-iphone


2nd this.

my parents have a neighbor that was pulling down over 100k with a high school education monitoring controls for a local refinery and he was always in debt because he cant manage money and now lost his job and house because getting drunk was more important.

I'd be FREAKING RETIRED in 10 years if I were him.

GetItRight

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Re: Big Sob Story
« Reply #16 on: June 25, 2015, 01:58:46 PM »
The $800 for child care is not that bad (at least for the area I am in). But HOLY FUCKING SHIT he would rather have two nice cars than a house. Guy needs to get his priorities straight.

Indeed he needs to get his priorities straight. Kid you pay someone else to spend time with instead of yourself/SO or cars, same mismatch of priorities. Both seem pointless waste if owning a house is the primary goal, but the shame is the kid requires paid supervision if you're not interested in spending time with him and there are emotional and developmental issues whereas if you don't spend time with your car, the car doesn't care.

banjarian

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Re: Big Sob Story
« Reply #17 on: June 25, 2015, 02:38:21 PM »
That car thing is such an excuse. This is exactly what a perpetual victim sounds like - using a temporary, small threat to mobility to justify an excessive purchase that goes far above and beyond solving the problem.

Bajadoc

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Re: Big Sob Story
« Reply #18 on: June 25, 2015, 04:58:20 PM »
That car thing is such an excuse. This is exactly what a perpetual victim sounds like - using a temporary, small threat to mobility to justify an excessive purchase that goes far above and beyond solving the problem.

Nicely put.
« Last Edit: June 25, 2015, 05:03:17 PM by Bajadoc »

Bearded Man

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Re: NYT article on homeownership
« Reply #19 on: June 25, 2015, 06:10:10 PM »
I bought a smaller/older home in a not so impressive neighborhood for my first house. Although I ended up moving because I could not stand the street (somewhat busy street) and some of the neighbors, so I moved. Don't regret it, had a lot of good times there and it's a rental now. I can always move back into it even if only temporarily if I need to.

MoneyCat

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Re: NYT article on homeownership
« Reply #20 on: June 25, 2015, 07:06:56 PM »
Hey, bottle service at the club is hella expensive.  Who can save any money when there's partying to do?

arebelspy

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Re: NYT article on homeownership
« Reply #21 on: June 25, 2015, 07:32:27 PM »
[MOD NOTE: Merged Duplicate Topics.]

http://www.nytimes.com/2015/06/24/business/economy/more-americans-are-renting-and-paying-more-as-homeownership-falls.html?hp&action=click&pgtype=Homepage&module=second-column-region&region=top-news&WT.nav=top-news&gwh=B5DE82578600E8A10C2545E9E6463AC1&gwt=pay

So the guy they profile who "looks longingly" at a house that sells for $200,000 makes "almost $100,000" but just can't scrape together a down payment:

"With a monthly rent of $1,400, car payments, unpredictable family expenses, a spotty credit report and an empty savings account, Mr. McDowell sees no way to soon pull together a decent down payment.

“My wife and I have been wanting to go on the market to buy a house for years now,” Mr. McDowell, 41, said. “But bills, bills, bills and car notes and car insurance. We haven’t been able to save anything.”"

$100,000/yr, paying $1400 rent, and can't save anything?  Those have gotta be some big bills, bills, bills...
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YoungInvestor

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Re: NYT article on homeownership
« Reply #22 on: June 26, 2015, 06:07:29 AM »
Where in the world do you need 1400/month to rent a place but can buy a (probaly quite bigger) house for 200k? The monthly payment on the 200k house would be 1150$ (at 5%). Seems like a no-brainer to me.

I think what the article probably omits is that X$ must be spent on renovations, which probably brings the total much higher, explaining why he can't afford it.

Kitsune

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Re: NYT article on homeownership
« Reply #23 on: June 26, 2015, 07:28:33 AM »
... I don't understand him. We're in a similar spot on the surface (early 30s, young child in daycare, 100-120K combined salaries depending on the year), and we are building a 350K house with 45% down payment. And we have retirement savings, no debt (other than the now-new mortgage which we hope to have paid off in 10 years), a paid-off car in great condition... It's possible to make a series of choices that leave you unable to buy a house (say, two new cars with car payments will definitely do it, along with a rent higher than our mortgage payment...) but that's a CHOICE you made, not an inherent sign that the system is unfair.

(Granted, we live in Quebec; our childcare costs us about 300$/month and is subsidized, and my daughter LOVES daycare and the other kids there. But our taxes are correspondingly higher, so... it probably evens out, in the end.)

druth

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Re: NYT article on homeownership
« Reply #24 on: June 26, 2015, 09:01:49 AM »
I'm guessing this guys credit score is awful, but they conveniently don't mention it.   

I'm approved for a 200k+ house, with literally only 1000$ down, and I make 61k.  That's through a special state program, but even without it I'm still approved for a 5% down loan!  That's 10k!  If you can't save 10k you probably can't afford to own a house and pay maintenance.

It seems like we are actually back to the days of it being too easy to have a loan.  We can afford a 200k house because we have two incomes and are qualed off of one, but it blows my mind that I would be allowed a PITI of 43% of my take home with almost nothing down.

marcela

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Re: NYT article on homeownership
« Reply #25 on: June 26, 2015, 10:15:30 AM »
Where in the world do you need 1400/month to rent a place but can buy a (probaly quite bigger) house for 200k? The monthly payment on the 200k house would be 1150$ (at 5%). Seems like a no-brainer to me.

I think what the article probably omits is that X$ must be spent on renovations, which probably brings the total much higher, explaining why he can't afford it.

We're in a similar boat, our rent is $1250 and we recently considered buying a 145k house. We decided against it when we realized that our $1250 rent figure includes all our utilities, furniture, a pool, easy access to bus routes and the ease of moving if our circumstances change. The tiny mortgage payment we would have on a 145k house would not include our property taxes, homeowners insurance, closing costs and all the other things we currently take for granted like a new washing machine for free when ours broke down.
It's important to look at all of these things when deciding to purchase a home.

Sofa King

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Re: NYT article on homeownership
« Reply #26 on: June 26, 2015, 10:21:11 AM »
http://www.nytimes.com/2015/06/24/business/economy/more-americans-are-renting-and-paying-more-as-homeownership-falls.html?hp&action=click&pgtype=Homepage&module=second-column-region&region=top-news&WT.nav=top-news&gwh=B5DE82578600E8A10C2545E9E6463AC1&gwt=pay

So the guy they profile who "looks longingly" at a house that sells for $200,000 makes "almost $100,000" but just can't scrape together a down payment:

"With a monthly rent of $1,400, car payments, unpredictable family expenses, a spotty credit report and an empty savings account, Mr. McDowell sees no way to soon pull together a decent down payment.

“My wife and I have been wanting to go on the market to buy a house for years now,” Mr. McDowell, 41, said. “But bills, bills, bills and car notes and car insurance. We haven’t been able to save anything.”"

$100,000/yr, paying $1400 rent, and can't save anything?  Those have gotta be some big bills, bills, bills...

The guy in the article if a stupid fucking idiot.

nobodyspecial

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Re: NYT article on homeownership
« Reply #27 on: June 28, 2015, 05:28:29 PM »
The guy in the article if a stupid fucking idiot.
See - if they had just printed that they could have saved a whole lot of ink

xclonexclonex

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Re: NYT article on homeownership
« Reply #28 on: July 13, 2015, 10:50:09 AM »
I do not understand this. I hate to say this, but Americans seem very entitled to me. When I first moved here from a 3rd world country, I couldn't believe how good you all have it.

Focus on the positives I say.

gReed Smith

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Re: NYT article on homeownership
« Reply #29 on: July 13, 2015, 11:31:09 AM »
Where in the world do you need 1400/month to rent a place but can buy a (probaly quite bigger) house for 200k? The monthly payment on the 200k house would be 1150$ (at 5%). Seems like a no-brainer to me.

I think what the article probably omits is that X$ must be spent on renovations, which probably brings the total much higher, explaining why he can't afford it.

My city has pretty similar numbers.  A nicer two bedroom apartment would easily cost $1,400/month.  I think the house they picture would be between $180-210k, depending on the neighborhood and school district.  With a 5% down payment, you could just about trade the rent payment for a mortgage (including taxes and insurance).

EricP

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Re: NYT article on homeownership
« Reply #30 on: July 13, 2015, 12:00:40 PM »
http://www.nytimes.com/2015/06/24/business/economy/more-americans-are-renting-and-paying-more-as-homeownership-falls.html?hp&action=click&pgtype=Homepage&module=second-column-region&region=top-news&WT.nav=top-news&gwh=B5DE82578600E8A10C2545E9E6463AC1&gwt=pay

So the guy they profile who "looks longingly" at a house that sells for $200,000 makes "almost $100,000" but just can't scrape together a down payment:

"With a monthly rent of $1,400, car payments, unpredictable family expenses, a spotty credit report and an empty savings account, Mr. McDowell sees no way to soon pull together a decent down payment.

“My wife and I have been wanting to go on the market to buy a house for years now,” Mr. McDowell, 41, said. “But bills, bills, bills and car notes and car insurance. We haven’t been able to save anything.”"

$100,000/yr, paying $1400 rent, and can't save anything?  Those have gotta be some big bills, bills, bills...

The guy in the article if a stupid fucking idiot.

Typos when someone is being this inflammatory of another person make me chuckle.

RFAAOATB

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Re: NYT article on homeownership
« Reply #31 on: July 13, 2015, 12:30:55 PM »
I do not understand this. I hate to say this, but Americans seem very entitled to me. When I first moved here from a 3rd world country, I couldn't believe how good you all have it.

Focus on the positives I say.

The positives don't look so impressive when the rich have so much more.  My perfectly adequate condo mocks me with its small size and proximity to others.  Ugh if I only had the income to have a house as big as my parents'.  Not making as much money as my father is going to lead me to a life of mediocrity surrounded by mediocrity.  True it's not a life of poverty surrounded by poverty, but there should be an aspirational desire in all of us no matter where we start.

xclonexclonex

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Re: NYT article on homeownership
« Reply #32 on: July 13, 2015, 12:58:45 PM »
The positives don't look so impressive when the rich have so much more.  My perfectly adequate condo mocks me with its small size and proximity to others.  Ugh if I only had the income to have a house as big as my parents'.  Not making as much money as my father is going to lead me to a life of mediocrity surrounded by mediocrity.  True it's not a life of poverty surrounded by poverty, but there should be an aspirational desire in all of us no matter where we start.

There will always be someone who has more than you.

And if you think this country is so bad, show me what other country has it as good? :) I am not attacking you, but if only more Americans realized how good you still have it, maybe you all work towards preserving it for the future. As it stands, I don't see a lot of appreciation for this country from its citizens.

kendallf

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Re: NYT article on homeownership
« Reply #33 on: July 13, 2015, 01:09:59 PM »
The positives don't look so impressive when the rich have so much more.  My perfectly adequate condo mocks me with its small size and proximity to others.  Ugh if I only had the income to have a house as big as my parents'.  Not making as much money as my father is going to lead me to a life of mediocrity surrounded by mediocrity.  True it's not a life of poverty surrounded by poverty, but there should be an aspirational desire in all of us no matter where we start.

There will always be someone who has more than you.

And if you think this country is so bad, show me what other country has it as good? :) I am not attacking you, but if only more Americans realized how good you still have it, maybe you all work towards preserving it for the future. As it stands, I don't see a lot of appreciation for this country from its citizens.
I believe the post you're responding to was meant as irony.  It's the internet, it's hard to tell..

xclonexclonex

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Re: NYT article on homeownership
« Reply #34 on: July 13, 2015, 01:38:32 PM »
The positives don't look so impressive when the rich have so much more.  My perfectly adequate condo mocks me with its small size and proximity to others.  Ugh if I only had the income to have a house as big as my parents'.  Not making as much money as my father is going to lead me to a life of mediocrity surrounded by mediocrity.  True it's not a life of poverty surrounded by poverty, but there should be an aspirational desire in all of us no matter where we start.

There will always be someone who has more than you.

And if you think this country is so bad, show me what other country has it as good? :) I am not attacking you, but if only more Americans realized how good you still have it, maybe you all work towards preserving it for the future. As it stands, I don't see a lot of appreciation for this country from its citizens.
I believe the post you're responding to was meant as irony.  It's the internet, it's hard to tell..

I see. I apologize.

Gondolin

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Re: NYT article on homeownership
« Reply #35 on: July 13, 2015, 01:46:19 PM »
The math here isn't adding up for me. Even if the household is being taxed at a ~30% effective rate between federal and state (with no tax advantage contributions), that leaves ~$70K take home pay. This would make the monthly income ~$5.8K.

The costs listed in the article, while obviously excessive, total to $2950 (rent, cars, pre-school). Even if we add a $500 student loan payment and $550 in food and dog expenses the monthly spend is ~$4K. Where is that other $1.8K going every month??  Even if these numbers are conservative, we could easily rerun them with more liberal estimates (35% tax rate, $700 loan payment, etc.) and they should still have no trouble saving that down payment in 1-3 years.


On the different topic, the NYT loves to moan about homeownership is out of reach for so many Americans but all I see on the chart they provided is a return to the historic average of ~2/3 homeowners.

arebelspy

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Re: NYT article on homeownership
« Reply #36 on: July 13, 2015, 02:00:48 PM »
There will always be someone who has more than you.

Hm.  I have not yet met that person.

I know this is a popular idea, but you might want to question it.  :)
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ShoulderThingThatGoesUp

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Re: NYT article on homeownership
« Reply #37 on: July 13, 2015, 02:05:28 PM »
The positives don't look so impressive when the rich have so much more.  My perfectly adequate condo mocks me with its small size and proximity to others.  Ugh if I only had the income to have a house as big as my parents'.  Not making as much money as my father is going to lead me to a life of mediocrity surrounded by mediocrity.  True it's not a life of poverty surrounded by poverty, but there should be an aspirational desire in all of us no matter where we start.

There will always be someone who has more than you.

And if you think this country is so bad, show me what other country has it as good? :) I am not attacking you, but if only more Americans realized how good you still have it, maybe you all work towards preserving it for the future. As it stands, I don't see a lot of appreciation for this country from its citizens.
I believe the post you're responding to was meant as irony.  It's the internet, it's hard to tell..

I hope you're right, but there are people out there who think that.

Purple Economist

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Re: NYT article on homeownership
« Reply #38 on: July 13, 2015, 02:08:16 PM »
There will always be someone who has more than you.

Hm.  I have not yet met that person.

I know this is a popular idea, but you might want to question it.  :)

You only haven't met them.

arebelspy

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Re: NYT article on homeownership
« Reply #39 on: July 13, 2015, 02:17:24 PM »

There will always be someone who has more than you.

Hm.  I have not yet met that person.

I know this is a popular idea, but you might want to question it.  :)

You only haven't met them.

I don't know of anyone either.

I doubt I ever will, though I admit it's possible.
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thek1d

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Re: NYT article on homeownership
« Reply #40 on: July 13, 2015, 02:30:49 PM »
Sounds like one of my new neighbors.  House went up for rent at around $2k/mo. The family that moved in has 2 kids, 2 really sweet rides (jacked up Tahoe and jacked up Tundra) and it seems like every weekend they're going out on their boat.

EricP

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Re: NYT article on homeownership
« Reply #41 on: July 14, 2015, 08:45:00 AM »
Sounds like one of my new neighbors.  House went up for rent at around $2k/mo. The family that moved in has 2 kids, 2 really sweet rides (jacked up Tahoe and jacked up Tundra) and it seems like every weekend they're going out on their boat.

At least they're using the boat.  That's better than most boat owners.

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Re: NYT article on homeownership
« Reply #42 on: July 14, 2015, 09:11:54 AM »
The positives don't look so impressive when the rich have so much more.  My perfectly adequate condo mocks me with its small size and proximity to others.  Ugh if I only had the income to have a house as big as my parents'.  Not making as much money as my father is going to lead me to a life of mediocrity surrounded by mediocrity.  True it's not a life of poverty surrounded by poverty, but there should be an aspirational desire in all of us no matter where we start.
Everyone here is aspirational as hell, but we aspire to actually BE rich, not just to look rich.
More importantly, we aspire to happiness first and foremost - regardless of money.

Does it help you at all to know that the rich generally aren't any happier than you are? Repeated studies show happiness stops rising with income somewhere around $50K.
Does it help to know that many of the people with nicer houses and cars actually aren't rich, just high earners locked into a treadmill of debt and lifestyle creep?

Those are the facts.

I live in a $130k house (optimistically, after adding solar panels) in a $100k neighborhood, in a city where the average is $260K and $400-600K McMansions are ubiquitous. I drive by the high-end houses all the time (I'm a Realtor, among other things) and in my mind all I see are severed arteries gushing wealth, piles of dollars spiralling down the drain. Why would I want to pay more for the privilege of... paying more, forever? That's all it really is: more debt, more taxes, more insurance, more utilities, more maintenance? Hell no. I'm the guy whose mortgage is 4% of household income and who's saving more money than some people are making, without giving up one bit of happiness in the here and now.

So I say, aspire to greatness by all means. But don't confuse that with aspiring to bigger and shinier piles of shit to take care of.

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Re: NYT article on homeownership
« Reply #43 on: July 14, 2015, 01:15:09 PM »
I know it is veering OT, but I had to pop in here.  There are many many factors involved.  My DD loved daycare, because there were so few kids her age near us (only one within walking distance).  She made lots of friends there that took her all through school.  And she went 3 days a week in summer, at her own request since she could have stayed home, because she would be missing out on too many activities if she stayed at home.

Re gender, our kindergarten had the starting children come in as groups of 4, with a parent, to see the place and know what to expect.  In our group were DD, 2 friends from daycare, and another little girl (so all girls).  The 3 from daycare were calm, collected, ready to see the place and where they would be and how things worked.  The 4th hid behind her mother's skirt (literally) for a good part of the visit, before she got up the courage to move away from her mother.  Whether she was extremely shy, or just not used to interacting with children she did not know, I don't know.  But the teacher told me later that most children who have been in daycare adjust much better to kindergarten, simply because most of them have had more experience with situations outside the home.  So in this case, although personalities definitely played a part, gender did not.

I should point out I am not advocating here for daycare, I grew up (until high school) with a SAHM and so did most of my friends.  We were fine, and our children in daycare are fine.  Children are resilient, they have to be given life has never been easy.     

(and the kid would probably get a better education in the process).

I see this sentiment, and I'm biased (have a kid in daycare) but I disagree.  Many/most SAHPs only have so many hours during the day then can really give their full attention to the kids (it's taxing, I don't blame them for it) and then the kid gets stuck in front of a screen and the parents does chores or sits behind their own screen.

Versus daycare, where there are trained teachers, and lots of other kids to interact with.  I have a nephew almost exactly my daughter's age who stays home with a nanny, and the difference in advancement, vocabulary, emotional maturity, etc, is astounding, and I attribute that to the daycare she's been attending since she was ~5 months old. 

And BTW, my wife makes more than 6x what daycare costs.

I'm biased as my wife stays at home, but not all parents stick their children in front of a screen all day and keep them socially isolated.

And the differences you see in those 2 children are just 2 data points, and I'd say that gender is a major factor too.

astvilla

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Re: NYT article on homeownership
« Reply #44 on: July 14, 2015, 03:44:18 PM »
There's definitely something Mr. McDowell isn't telling the reporter. Then again, news is not so investigative on the details like Yahoo was. 

I'd say the car purchases were stupid, depends on what cars though.  Still stupid I think. 

Student loans? Really? Depends when he graduated, unless he went to school late and graduated relatively recently, there's no reason he should have any student loans left.  Seems he had kids on the later side too, should've built up a stash. 

This case is just an example of someone who doesn't know how to manage their finances.  Though the point that housing is expensive and rents are going up is true from what I see in my area. And $1400/month I guess isn't bad for a family in NJ.  Cost of living in NJ is very high, I know that myself.  A lot of other people live in insanely low cost areas.  I read other Mustachians buying nice homes for 100K I mean really?  100K in NJ gets you like Newark or Camden, not exactly areas you want to be in.  So I can sort of understand why it's hard to save for a downpayment.

If I make 50K, probably taking back 35K, rent itself is super high, the lowest would be a room in a shared house for 700/month, setting me back 8400 after tax.  Then car insurance (3K/yr quote for me, luckily still w/parents so I ain't paying that...yet), food (expensive), gas (cheap in NJ).  So 8-12K I could save every year if I was out on my own.  And that's w/out kids.  Granted he has 100K/year but I can still see it not being "rich".  NJ does have very high rent, surprised Florida is higher, didn't know that.

Ryo

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Re: NYT article on homeownership
« Reply #45 on: July 15, 2015, 01:34:06 AM »
I'm a bit more sympathetic about the student loans ... not everyone finishes university at 22, so it could very well have been a later-in-life expense. 

But buying TWO brand new cars just because his car broke down once?  Seriously ... no words for that justification.  Does he really believe new cars are immune from such problems?


golden1

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Re: NYT article on homeownership
« Reply #46 on: July 15, 2015, 12:03:43 PM »
Quote
I see this sentiment, and I'm biased (have a kid in daycare) but I disagree.  Many/most SAHPs only have so many hours during the day then can really give their full attention to the kids (it's taxing, I don't blame them for it) and then the kid gets stuck in front of a screen and the parents does chores or sits behind their own screen.

Versus daycare, where there are trained teachers, and lots of other kids to interact with.  I have a nephew almost exactly my daughter's age who stays home with a nanny, and the difference in advancement, vocabulary, emotional maturity, etc, is astounding, and I attribute that to the daycare she's been attending since she was ~5 months old. 

It's not either/or.  I was a SAHM for awhile and when my kids hit preschool age, I sent my kids to a 3 hour a day / 3 day a week preschool to get some of that pre-school socialization time.  It was much much cheaper than full time daycare.

Also, while I do think that daycare teachers care about the kids they teach, their attention and resources are split amongst several children, and while they are trained, they aren't generally as invested in the kids welfare as a parent is.  It isn't their kid after all.