They are currently renting a 936 sq ft first floor apartment. They have 2 bedrooms and 1.5 baths, two parking stalls, access to a nice fitness center, pool, outdoor grill and patio area with direct access to a bike trail. Their rent is $1250.00 with all utilities included and they are able to max out their 401k's and add $100 per week into a rainy day account. My fear is that a purchase will cause them to reduce both of the saving tools they are currently funding.
Maybe, but buying a home, made me more fiscally responsible. I have less than two years left to pay off the current one I live in and it has more than doubled in value in the 14 years I have lived in it. 401k maxed most of those years. No car payments. As well as other investments like Roth IRA ect. I think I certainly would’ve missed out on a great investment had I chose not to own a home. Although I do agree it’s not for everyone.
Again, all that is a maybe you’re guessing just like anyone else. The current standard deduction is garbage I agree. Although just a few years into our first mortgage, we refinanced at 2.8% basically nullifying any tax deduction we got because it was such a low rate. This home was brand new, so no one owned it before. It has beaten valuations, almost every year. Certainly interest rates now are nowhere near what I was able to get so that would definitely play a factor. I also don’t see them going down anytime soon. So if homeownership is something they really want it may be out of reach if they wait too long.
The free money is gone for a while
How many missiles did you buy for Ukraine this year?
A couple less than the beers I bought this year
Man I almost paid enough in taxes to Zelenskyy this year to buy them an Abrams tank.
But did you take an account with that house will be worth 30 years from now?
We switched to a 15 year a couple years into a 30.
Even though interest rates are high now they're still cheaper than it was 30 years ago
Yes, we added a 3% per year increase in value. A 30 yr mortgage at 5%, taxes, interest, insurance, down payment, utilities and maintenance came to $722k. The home value increased from 180k to 326k over that same 30 years. A net loss of 396k. Assuming that they put their down payment into a brokerage account and added the $805 additional dollars per month the purchase would cost them, after 30 years at a 5% return, they would be roughly 250k ahead after deducting 30 years of rent.
But on the other hand nobody knows what the future is going to hold.
markets.businessinsider.com
They have a good reason behind that
Problem with a mortgage is you pay for the home 4/5 times over before it's yours. The 2021 average house payment was $890 more per month than rent for the same square footage.
