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If I Had To Buy My First Home 52 Years Later


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2023 Dec 2, 12:46pm   374 views  10 comments

by ohomen171   ➕follow (2)   💰tip   ignore  

#1945Storm Drive There was a fascinating program last night on television. It talked about the quality of the US economy and the problems that young people have with the actual realities of their lives.
The U.S. economy looks brilliant on paper. GDP grew by more than 5% for the last quarter. Unemployment is at 3.9%. There are "help wanted" signs everywhere. The stock market looks great.
Social media posts from young people were shown. To make a long story short, they complained that they could not afford a car, rent, or purchase a house.
Let me focus on buying a house. I bought my first house at 1945 Storm Drive, Falls Church, Virginia in February of 1972. I was 24 years old. I paid $22,000 US for the house. I got a no-downpayment loan with monthly payments of $200. My first wife and I had a combined income of roughly $1,000 per month. Our house payment was 20% of our monthly income.
Let us fast forward almost 52 years to now. According to Redfin, my first house is now valued at $733,217. If a young couple aged 24 wanted to buy this house, they most likely would get what is called a conventional loan. A 20% down payment would be required. This would work out to be roughly $146,643. The balance of the 30-year mortgage would be $586,573. That loan would have an annual interest rate of 7.877% assuming that the couple had good credit. The monthly payment would be $5,905 per month plus property tax of $1.32 per $100 of assessed value. We can estimate a final payment of $6,300 per month. With a 25% mortgage payment to income ratio, we have a final monthly income of $25,200 or $302,00 per year.
The numbers tell the whole story. For example, let us assume that the couple is two recent MBA graduates. They might have a combined salary of $200,000. Unless this 24-year-old couple has some very wealthy and generous parents, they could not afford the same house that I afforded long ago.

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1   HeadSet   2023 Dec 2, 12:59pm  

ohomen171 says

Unless this 24-year-old couple has some very wealthy and generous parents, they could not afford the same house that I afforded long ago.

Yeah, and that same style house would have been affordable on a single salary just ten years earlier in 1962, before the economy adjusted to a two-income household.
2   GNL   2023 Dec 2, 1:12pm  

@ohomen171, what was you and your wife's occupations when you bought the home?
3   ohomen171   2023 Dec 2, 1:14pm  

My wife was a secretary in the office of Senator Hugh Scott. I was a US Navy 2nd class petty officer working at Bupers. We each cleared $500 per month.
4   GNL   2023 Dec 2, 1:49pm  

ohomen171 says

My wife was a secretary in the office of Senator Hugh Scott. I was a US Navy 2nd class petty officer working at Bupers. We each cleared $500 per month.

Yep, that's a far cry, no disrespect intended, from the current 2 MBA income requirement today.
5   clambo   2023 Dec 2, 2:10pm  

Almost nobody I know can buy a house today if they had to.
6   Tenpoundbass   2023 Dec 2, 2:30pm  

People grew their money in high yield accounts at the Saving and Loans.
How much were you putting in your savings account, and what was the interest you were getting?
People had a nest egg larger than their mortgage balance. Back then interest baring loans were so good, that they thought it was foolish to pay off your house. As you were getting more interest putting it in the bank then you were paying down your loan. When stock markets crashed, or recessions came and went, you didn't lose value of your savings. Just the interest you were being paid changed.
Oh but we can pay for our groceries by waiving our iPhone at the Kiosk. Well aren't we all techie.
8   Patrick   2023 Dec 2, 5:11pm  

ohomen171 says


Navy 2nd class petty officer working at Bupers



The Bureau of Naval Personnel (BUPERS) in the United States Department of the Navy provides administrative leadership and policy planning for the Office of the Chief of Naval Operations (OPNAV) and the U.S. Navy at large. BUPERS is led by the Chief of Naval Personnel. The command's name changed to the Bureau of Naval Personnel on May 13, 1942, and in 1982 it changed to Naval Military Personnel Command. In 1991, the name changed back to BUPERS.
9   GNL   2023 Dec 2, 9:26pm  

@ohomen, is that address in Pimmit Hills?
10   REpro   2023 Dec 2, 10:54pm  

You still can do it, depend on where it is and timing.
16 years ago, I found good deal to purchase a brand-new house in Northern Dallas new development. Convinced daughter at 23 years, soon after college to buy this 4,000 s.f. two story, all brick, beautiful house. She did it without down payment. Soon she convinced her boyfriend at that time, to move from NYC to live together. Their combined salary were less than 20% going for mortgage and escrow. Two years later they get married and have 4 children.

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