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Originally Posted by 2000cs
Depends on several factors, most important your ability to pay the mortgage today, but also inflation, local market conditions, etc.
In the 1970s, when we had persistent inflation and low growth (“Stagflation - stagnant economy with inflation), in growing markets like Calif (again, not the entire state but the major population areas and growth/expansion areas), you could buy a house and make more money in its appreciation over 2 years than your salary. It was common to buy in and trade up, but after only a few years if you hadn’t bought in already, you weren’t going to be able to.
New lending “products” emerged, like the variable rate loan (ARM - adjustable rate mortgage) and some with a fixed/variable (5 year fixed, then variable rate for 25 years). The idea was either your income would increase over the 5 years so you could afford the higher rate, or rates would come down and the variable would be affordable, or you’d get the appreciation and sell or refi. Quite a gamble, but it worked for a lot of people.
Those lending products are part of why it is hard to compare affordability between the 1970s/1980s and today. Different products, different down payment requirements, etc. Also housing stock has changed dramatically - what was a starter house in the 1970s is not on many peoples list today (too small, too old, etc). What we called McMansions in the 1970s are the starter size homes of today.
Point of this is if you want to own a house, there are ways to do it but you may have to compromise on size or location or whatever. And maybe it is a good time to get in and ride a wave of appreciation (inflation-driven, but there are some supply issues for housing as well). Just like you don’t start your career as IBM’s CEO, you don’t start with your dream house (or car, or…).
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Around here a McMansion that cost $500k or less before this bs started, is now double the price & a "starter" home that was $250k is now $500-600k.