Everyone is buying houses!

amother

Forsythia

Thu, Jun 16 2022, 10:06 pm

We bought our house when we were 40. I also felt like a nebach all those years but looking back, it was much better for us not to have the responsability of ownership, no maintenance, (ok we always had nice landlords). Sometimes I miss those carefree days. We were also able to move easily when our neighborhood started changing. Bh very happy now with our investment which we did at a good time both with housing pricing and interest rates.
Now our mechutanim want to buy a house for our newly married couple. They have some yerusha money that they want to be able to place in real estate. But my daughter is not too happy about it because she loves where she lives now but doesnt know if thats where she wants to be in 10 years. Also it would be wierd for her to live in a big house even if its just a 3 bedroom and then she knows her inlaws will expect tp be hosted on a regular basis... You never know what goes on in other people lives!

amother

Watermelon

Thu, Jun 16 2022, 10:07 pm

We just bought had 4 kids in a small rental. We didn't have any family help and not much savings. We borrowed a lot of money (not from family) for a down payment. BH we are able to afford the mortgage and paying back the money we borrowed. Although it is tight every month I thank Hashem every day that we managed to buy a house.

amother

Bronze

Thu, Jun 16 2022, 10:11 pm

amother [ Black ] wrote:

Nothing wrong with that if you ask me. Because at the same time they are taking their own risk , if the other person one day decides to keep it for themselves then whose tough luck is it ? I thought they have a house in their name while "secretly" getting medicaid. Or they someway have two names.

(Imagine getting section 8 in your own house )

Of course it's wrong, it's illegal. They don't report their full income either.

amother

SandyBrown

Thu, Jun 16 2022, 10:11 pm

There really is no mystery - anyone who is 25 and buying a home has been given the down payment in some way - either as an inheritance or as a gift from parents.

And at least among the families I know who are more or less functional - giving the down payment is not used to control the kids or to infantilize them. It is viewed as providing them with a bit of their inheritance ahead of time for a good purpose.

Although it is possible it is unlikely that the couple would have sufficient savings at the point for a down payment unless the woman has been working for a number of years - lived at home and saved almost every penny.

It seems as though it would make more economic sense to provide a down payment for a home in lieu of spending a huge sum for a wedding plus expensive wedding gifts but I can't begin to understand how all of this works out in real life. There appear to be a significant number of people who have difficulty supporting their families in a relatively modest manner - how do they come up with $30,000 to marry off each of their children?

amother

Fern

Thu, Jun 16 2022, 10:15 pm

amother [ SandyBrown ] wrote:

no not everyone buying a home at 25 has help....

amother

Iris

Thu, Jun 16 2022, 10:17 pm

amother [ Bluebonnet ] wrote:

OP, you mentioned two couples. That's not everybody. Though obviously the real estate market has been hot most places.

That said, I understand you're frustrated. It must feel terrible to feel like everyone is moving to a certain stage of life that you are not yet reaching and can't figure out how to get there.

I see three ways this happens:

1. Family gives (or heartily helps out with) downpayment to buy home.

2. Couple makes a ton of money. (Or perhaps one has some sort of inheritance).

If you don't fall into either of these categories, you'll have to do what I assume everyone else does.

3. Live below your means. The simpler you can live and the more you can put away the faster you will have a nice downpayment. The couples who do this from day one are smart. You start out with wedding money and with no kids yet it's so easy to keep expenses very low. Much bigger challenge as time goes on but still possible.

Hope you achieve your dream soon.

I fall into category #3 and I'm willing to bet that you would not be able to find someone who lives simpler than we do. We save and save and save, but it will never be enough for a house.

Furthermore, our savings is not just for a house. Only a percent of it can go towards a house. As we know we will never have family help for anything, we need to leave part of our savings for other expenses like simchos, braces etc and we cannot just drain our savings on a house

amother

Sienna

Thu, Jun 16 2022, 10:18 pm

amother [ OP ] wrote:

How many kids did you have at the time you bought? Where did you buy? What is your profession?

I feel like those are all factors

and btw I am speaking as a slp. I have 95k in loans to pay back and I make peanuts every month

Live in Brooklyn, husband is in management at that time we had 1 kid and we were pregnant with a second. Covid unemployment was a massive windfall as I had maxed out unemployment and was fully on the books before Covid started, due to Covid it was extended so I got 26 weeks plus the Covid max of 39 weeks (maybe more or less than 39). Also since I was fully on the books my unemployment salary wasn’t $200 like most but more than double plus all the weeks we got additional $600 and later $300 (I think).
We pay about $2200 rent and had no childcare at that point, no programs except health insurance. HaShem is bh really good to us.

ETA:We bought in Lakewood for 500k

amother

SandyBrown

Thu, Jun 16 2022, 10:20 pm

amother [ Fern ] wrote:

no not everyone buying a home at 25 has help....

My post contained this possibility

Although it is possible it is unlikely that the couple would have sufficient savings at the point for a down payment unless the woman has been working for a number of years - lived at home and saved almost every penny.

But absent unusual circumstances please explain how someone has accumulated $80,000 ore or less to cover down payment, closing costs and other incidental costs of moving without being given the money by parents or inheriting it.

There simply aren't enough years of working at 25 for people to have saved that amount unless the person saved to the exclusion of all other expenses including rent. If they didn't go to college what kind of salary are they earning? If they did go to college to get a degree to earn a higher salary they wouldn't have been in the work force for many years.

amother

cornflower

Thu, Jun 16 2022, 10:26 pm

amother [ Iris ] wrote:

Do you really know people IRL who can buy a house in the CURRENT market at 25 with no help? And if you do, where do they live?

I kind of agree with this. I bought at 25 with no help but prices were way lower. In my area houses comparable to what I bought are at least 300k more than what I paid. We lived simply in a tiny apt to save on rent money. Didn't eat out. No cleaning help. Me and dh were working. For a kollel couple, or a couple that the dh wasn't working early on, in today's market, I don't see how they can buy a house completely independently. It could be possible but its hard. Also it's not only about making the down payment...you need to afford the mortgage and all the surprise expenses that crop up when you own a home.

amother

NeonBlue

Thu, Jun 16 2022, 10:29 pm

amother [ SandyBrown ] wrote:

My post contained this possibility

Although it is possible it is unlikely that the couple would have sufficient savings at the point for a down payment unless the woman has been working for a number of years - lived at home and saved almost every penny.

But absent unusual circumstances please explain how someone has accumulated $80,000 ore or less to cover down payment, closing costs and other incidental costs of moving without being given the money by parents or inheriting it.

There simply aren't enough years for people to have saved that amount unless the person saved to the exclusion of all other expenses including rent.

A lot of people I know (including myself, my siblings, my husband, his siblings and several of my siblings' spouses) have money saved from when they were babies- gifts or money earned and it was put into investments for 20+ years and grew to 10s of thousands of dollars. We used that to buy our house when I was 22.

amother

Sienna

Thu, Jun 16 2022, 10:34 pm

amother [ Fern ] wrote:

also not everyone owns homes even when they marry off all their children

So true but it should definitely be a goal for most as one never knows when they can be evicted (as in landlord decides to sell, needs apt for kid etc..) it’s a major security and great investment.

If u can’t buy a house to live in cuz monthly payments are too high but have a down payment etc. it might be worth investing in a small property out of town and having some rental income.

amother

SandyBrown

Thu, Jun 16 2022, 10:34 pm

amother [ NeonBlue ] wrote:

Not to be technical but if you were given gifts as a child then you received financial help.

This is also true in terms of money you earned as a child because - at least in imamother - many kids are expected to use their earnings to pay for camp and seminary and even clothing and other incidentals.

If a family pays for those kinds of things the child is effectively receiving a financial benefit that children growing up in less affluent homes wouldn't have.

All of that money was allowed to grow because you weren't asked to use it to pay for stuff.

The bottom line is that home ownership at such a young age is relatively rare unless one has received some kind of financial help from family towards the down payment. Not impossible as there are always examples of how it might be done but it would in general be relatively low percentage at that age.

amother

Electricblue

Thu, Jun 16 2022, 10:34 pm

I did buy my first house as a 19 yr old girl, was a small condo I put down only 10% so had to pay PMI but then flipped it several years later for 100% profit and did a 1031 for several more properties and been playing around with the market since. So I got zero support but bh had mazal.
Were not wealthy but bh not struggling.
The market is really tough now but there is no crash coming as many predict. The only time real estate can go down is when the supply exceeds the demand and thats not happening any time soon. So regardless of the interest rates increasing if anyone can buy now they should. One can always do a refi when the rates come down again

amother

Sienna

Thu, Jun 16 2022, 10:38 pm

amother [ Iris ] wrote:

You're making a lot of assumptions and generalizations based on your personal experience. BH it worked out well for you, but being on unemployment for a few months does not mean you can suddenly afford a house. And most people on unemployment needed to use at least some of that money to live. If your DH makes enough to support your family, and all of your money could go into savings, then you are already at a financial advantage that many of us do not havr

Op was asking how it’s possible, I gave one scenario about unemployment, another scenario others gave was help from family. Of course Covid unemployment or stimulus didn’t make everyone rich, I’m sure many used it to pay debts or live off of and survive.

amother

Iris

Thu, Jun 16 2022, 10:42 pm

amother [ NeonBlue ] wrote:

Then you and your siblings had help in buying a house! I got married with a few thousand dollars in my savings account and that's it.

Help to buy a house can come in many forms:
Parent/grandparent giving you cash directly
Parent/grandparent putting money aside for you when you were a child
Parent/grandparent allowing you to live rent free in their home or extra apartment

DH and I have none of this available to us. So very unlikely we will ever be able to buy a house. And yes we live simply and save and save and save but it is never going to cut it

amother

Ivory

Thu, Jun 16 2022, 10:44 pm

amother [ Iris ] wrote:

Do you really know people IRL who can buy a house in the CURRENT market at 25 with no help? And if you do, where do they live?

Me.

I had a great job and was working for 4 years before I got married. We bought in Jackson a small starter home for 450k last year. We live very simply and put money in savings every month until we had 60k for down payment + closing costs.

amother

Electricblue

Thu, Jun 16 2022, 10:45 pm

amother [ Electricblue ] wrote:

Forgot to mention I bought the house with the one year minimal earning from my job

amother

Dill

Thu, Jun 16 2022, 10:46 pm

amother [ OP ] wrote:

thanks for sharing
can I ask what your profession was at 21 that you were able to buy a house? what about your siblings? where do you live?
and how old are you now? I feel like the prices now are not what people paid years ago..

I bought at 21 with a cosigner a super cheap house in the low 3s. I sold two years later and bought in a new up and coming area for 500k.(without a corner bh) My house is now worth about 1.2.
My siblings all made it a priority buy early on. Some did it on their own but most have a cosigner as they were just starting their jobs.
I am now in low 30s.