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Agreed, those loans were nuts, and many were not even at fixed rates so when they went up people lost their homes.
originally posted by: andy06shake
a reply to: CornishCeltGuy
Blame the 120% mortgages that were doing the rounds back when the arse fell out of the property market.
Again total agreement, I've known friends who have had to pay over 2 grand just to secure a rented flat!
Even trying to rent private accommodation these days is a nightmare never mind buying a home. Some agents/renters want deposits that are twice the first month's rent and even require guarantors in some instances.
originally posted by: paraphi
To be honest, even in my day a twenty year old could not afford a house. Your 20 year old "child" has unrealistic expectations.
originally posted by: CornishCeltGuy
I bought my first house in 1996. I was earning £16,000 per year at the time and was able to borrow up to 3 times my salary with a 5% deposit to lay down. Being sensible, I quickly saved up £1,800 for a deposit and borrowed £34,200 to secure a 3 story 3 bedroomed house with front and back gardens. Mortgage payments were easily payable on my own salary, so with my wife working full time we lived like a king and queen.
Now fast forward to this year, that same house is on the market again at an asking price of £230,000. Curious, I checked the current pay grade of the job I was working back in 1996, and it is a measly £23,000 per year.
Using the same 3 times salary mortgage calculation it means a loan of £69,000 is the most someone at that pay grade could possibly obtain.
I checked estate agents in my area and the only properties available at that price are bedsit/studio flats/apartments (shower room/toilet, open plan kitchen/bedroom/living room) with no patio/yard/garden.
What a change 20 years can make. My own 20 year old 'child' is earning £22,500 per year at the moment and can only dream of buying property. It'll probably only happen whenever I or my Mother dies and he'll get his inheritance as a jump start.
So that's my story from here in England, I'm wondering is it similar in the US, and/or are there massive regional/state differences?
What's the price of property where you are compared to wages, and has it got worse in the last couple of decades?
I can only see it getting worse as more wealthy people buy properties solely to rent out. Millions of young people unable to buy so renting and paying the landlords mortgage instead. How did we let this happen to ourselves...
originally posted by: surfer_soul
a reply to: andy06shake
It’s because anybody with any savings whatsoever has been investing it in property.
Prices keep rising disproportionately to inflation and its considered the easiest and quickest legal way of making money. Government policy hasn’t helped neither has the greed of the banks.
It all comes down to greed at the end of the day.