- cross-posted to:
- finance@beehaw.org
- cross-posted to:
- finance@beehaw.org
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Put a hard stop to the purchasing of homes by corporations/businesses and people with no intention of living in them.
You should need proof of intention to live in the home within a reasonable amount of time after the purchase in order to make the sale. The flipping of homes for profit by those with cash and more money is a detriment to the market and the american dream for the rest of the population trying to get a foothold.
The problem isn’t necessarily flipping houses, if the ones doing the flipping really are improving the property and are able to refurbish old properties to be more appealing. If they put in the work, they deserve to make money off of that - but they only make their money if they sell.
The problem is corporations who buy up housing stock, with no immediate plans to resell. They view houses like a commodity, and if they constrain supply in certain areas they can artificially create profit. This profit, though, comes at the expense of everyone who is looking for a home at the time.
I think the solution is for localities to step in and crank up property taxes for residential units that are not either occupied or actively on the market. Once a company keeps a property off the market for a year, make it much more painful for them to hold it for another year.
House flippers are incentivized not to make good, long term, sustainable, or efficient home improvements. Their only incentive is to make a house more sellable upon initial inspection, house flipping is a bad practice I would argue far more often than not.
The problem is housing as an investment like a stock. They should be commodities.
house flipping is a bad practice
I spent the last year looking for a house to buy, and since it took me a year I got to see many of the shit-bucket houses I was looking at (since they were in my price range) get bought up and “flipped” - which usually amounted to just some paint slapped on everything and those fucking grey fake wood vinyl planks that everybody loves these days put down everywhere - and then resold for absurd prices. I respect people that do a good job of renovating houses, but most of these flippers aren’t doing that.
I’m in no position to buy a house, but I like to browse and dream, and my mindset at this point is basically–give me an honest old house that hasn’t been renovated since 1970…at least I can SEE the problem-spots (cracked this or that, stains, etc.) and make a plan on how to tackle them.
Like, my gut feeling when I see that horrible silver-blue color scheme anything flipped/“renovated” in the past few years is to run as fast as I can. You can’t plan, you don’t know what you’ll have to tackle, it’s all hidden under fresh paint or flooring. Is there mold? Who knows. Water damage? Who knows. Old pipes/electrical/etc. that need fixing? Who knows, the signs that might have given you a clue were hidden or pulled out. It’s all a big mystery.
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Hey I like the grey wood floor look lol
Inherently, flipping houses is about increasing the price of the home. This directly relates to the article by making more houses further out of range of more people.
Houses with issues might not be able to be financed by a mortgage. So a company/individuals will fix the issues, then resell the house to someone who can now get an FHA loan for it.
FHA loans have strict requirements on the condition of the house in order to give funding.
If someone does work on the house, they should get paid for their efforts.
Hard agree. Also they can slap a really big transfer tax on non-owner occupied as well.
Non-owner occupied properties already aren’t eligible for the capital gains exclusion. I guess we could make unoccupied houses subject to regular income tax instead of capital gains tax rates would further discourage empty houses. That, and higher property taxes would probably be enough.
I live in a high property tax area and even though prices have gone up, it’s nowhere near as crazy as other parts of the country.
All agreed except the localities bit. These smaller cities councilmen are too cheap to bribe. A $1,000 check will have them hanging on your every word. I’ve seen it with my own eyes. Probably best bumped up to state level.
But yes, we should ban corporations at some well-defined point. I mean, what if I incorporate myself? Now I can’t buy another house?
To add, the corps buying up housing are also the ones that have the most potential to back housing builders, but since they’re buying up stock to artificially decrease supply, then they’re deincentivized to support builders. I really wish these big corps had some sort of for each unit you buy, you must build a unit within the next 2 years.
Good point! That’s a great idea.
Higher taxes is just a cost of doing business which is passed on to other tenants, be it long or short term rentals, even if housing stock is temporarily held - though I don’t disagree that such a vacancy tax is a good.
GP was right - forbid corporations from owning any residential property if 4 or fewer units and greater than four unless the building is wholly owned.
On the tax side, add a purchasing tax of 15-25%, 90% of which is rebated at closing for non-corporations who have not received the rebate in the previous 24 months. That targets flippers and property-bros willing to go naked on liability.
We do need to have an exception for those who need to buy through a corporation in order to protect their privacy, especially with the rise of professions such as streaming.
Those professions aren’t going to be going anywhere anytime soon.
This would take all the single family and duplexes off the rental market and make a ton of people homeless. No thanks. There’s enough people homeless in this country due to drug and alcohol issues.
Rather than a hard stop, I think it would be a good idea to significantly increase taxes on real estate no one is actively living in, and use the proceeds to subsidize construction of new housing.
This seems to be the most reasonable. Disincentiivize multiple property ownership rather than outright ban it. The ones who can eat the cost will pay taxes and the rest will just bow out of the market.
But housing is a need and people will keep paying any price to not be homeless, this feels like it leads to massive corporations still owning all of them and paying large taxes they can eat short term and raise to massive prices of rent. Maybe they dump some stock but I’m just not sure it does much other than diversify smaller investors that used property for assets
this feels like it leads to massive corporations still owning all of them and paying large taxes
Then the taxes aren’t high enough. That’s an easy fix. It’s one of those times the state doesn’t want to optimise the rate for total tax earned but to make paying it for any length of time actually prohibitive. Make it so that they can’t possibly raise rents high enough to cover those taxes and they’ll understand quickly.
The other side of the equation is a bit harder, and that’s housing overstock: Companies will be sitting on housing they can’t rent out due to lack of demand for housing. One idea would be to allow them to lease homes out to municipalities for literally nothing but tax forgiveness and the municipalities can use that to house the left-over homeless, unemployed, etc. Call it a half write off. Oh those leases need sensible minimum durations, I’d say five years is a good start.
smaller investors that used property for assets
You can easily make smaller investors be hit significant less by it by scaling the tax to the number of vacant housing units. Own a second home you rent out and spend four months finding a renter you like? Fine, pay ten bucks. Do that to 1000 housing units? Pay 10000 bucks for each.
Yes, those kinds of rates are right-out financial violence. That’s the point: The state has to step in as the larger bully to keep the small ones in check to avert market failure.
Your argument falls flat once you remember that there is in fact plenty of homeless people and there will always be those who will choose not to pay irregardless of logic or desire of self preservation. And while yes, any privatization of housing isn’t really any good, but you don’t have to make it impossible for them to make money off of it. You just play their own logic against them and keep it just on the line where they will ultimately go for something else to profit off of other than housing as their returns and infinite growth will eventually lead them into microscopic margins so any variability becomes a threat to the bottom line.
Rather than a hard stop, I think it would be a good idea to significantly increase taxes on real estate no one is actively living in, and use the proceeds to subsidize construction of new housing.
An alternative is to replace property tax with a land tax. That way instead of penalizing people for building more housing, they are penalized for holding onto land that could be used to house more people (or whatever other use is in mind).
Nah tax the fuck outta landlords
There should also be taxes on rental properties beyond the first to prevent the “hoard and rent” cycle
I disagree, because that would disincentivize housing. I think the price of housing is mostly just a function of how much of it is on the market. Wealth inequality is also a problem but should be addressed in other ways.
As an aside, the tax should also apply to commercial real estate so there is an incentive to convert offices to apartments.
To add to that, put a limit on airBNBs and similar, you can only have one. Corporations are buying homes and small apartments for that too.
I live in a touristy area and literally everything is getting turned into AirBnBs. It’s a huge problem because the people who actually live here have nowhere to live now
It’s gotten out of control. I would say one in ten houses in my neighborhood are airBNBs.
It’s disgusting because airbnbs in my area can have 50% occupancy and do better than a long term, meaning for about 180 days of the year that housing is just artificially decreased supply.
$200/night * 15 days = $3k/mo
If you want to operate an airbnb in Berlin you need a hotel license (unless you actually live in the thing at the same time, or only do it for I think about a month a year, say when you’re on vacation). Long story short the city isn’t giving out any licenses in areas with high rent pressure, which is basically all of Berlin.
But those things are highly regional, there’s plenty of villages in the alps with an absurd amount of tourist accommodation compared to the number of regular inhabitants, but they also don’t have any industry but family farms and tourism. If you own something on Sylt and somewhere else you’re paying sky-high secondary residence taxes (rich fucks don’t rent they just buy holiday homes).
How is your homeless situation, does it alleviate it somewhat?
Municipalities are required to house everyone so the situation doesn’t even begin to be comparable to the US. Ballpark a shabby dorm room to yourself as the minimum, bath and kitchen might be shared, washing machine will almost invariably be. In Berlin there’s about 27k living in those shelters, about 2k are sleeping rough, and that’s as a metropolis smaller cities tend to have zero. None of that includes people crashing on somebody else’s couch, but it does include apartment burned down and you don’t want to pay for a hotel until you find something new kind of situations.
The official term is “emergency accommodations” and they’re supposed to be short-term, hence also the low standards, but we haven’t built enough social housing in ages and the stuff that got build constantly stops to be social housing as municipalities cheaped out and simply tacked “X% of units as social housing for 30 years” onto building permits, which leads to municipalities push come to shove having to rent hotel rooms and eat the difference.
The whole situation could be solved within a decade if we re-instituted the social housing programmes of the 50s, and you can’t do it as one-off investment as construction companies aren’t willing to increase their own capacity for a short-term boom.
Side note: Berlin had a referendum to expropriate all landlords who have more than 3k units, it passed, but wasn’t 100% binding and politics is dragging its feet implementing it, including the social democrats. With legalities out of the way though they’re now starting one that would be immediately applicable law.
The reasoning of the socdems isn’t even completely wrong, “we should build instead of expropriate” but MFers don’t seem to understand that people are out for blood. If the people want to expropriate something you can say your bit that you think that there’s better solutions but fucking do it. Especially in the east.
And, no, the landlords won’t get compensated at market rates. The whole thing is possible because for landlords housing units are means of production and Article 15, Berlin doesn’t even have to show it’s for the public good. Eminent domain type stuff is Article 14, 15 is way stronger and there because the constitution was deliberately written to be compatible with democratic socialism.
You guys are kind of bad ass taking care of your own though, even if there are politics around it.
ATL had a pretty good program at one point. If you made $60k, you could buy a $250k house with the requirement that you would be the primary resident for the first year.
What’s even better is that the comparables in the area were all $450k, so 3 years later, all of the homes got valued around $500-600k.
331.9 million (2021) US Population / ~142 million housing units in the United States (2021) = ~2.34 people average needed per dwelling to fully house everyone.
According to Statista: " The average American household consisted of 2.5 people in 2022. "
If people did not need vacation homes, and investment property… We appear to have enough housing for everyone already.
I’m working under the assumption hotels/motels are not included… there should be plenty of those to house people on vacation, and leaves plenty of room for the ultra wealthy to still have their vacation homes.
Sources: Statista, US Census, Google
Just levy additional taxes on the homes that aren’t owner occupied and make it less attractive to investors.
its maddening there are plenty of homes out there completely empty
well that doesn’t sound like free market capitalism!
This situation has turned into a real cock for so many people.
The place I got my mortgage through sends out emails regularly with updates on my home value, current rates, and other assorted stuff. I originally bought this house at the tail end of 2020. It’s not the best house around, still needs work, but it had the room we needed, was in our budget (220), and the payment was low because the rate was great (2.75). Our original plan was stay here a bit, get rid of some debt, and then maybe try to find what we’d like to be our forever home, wherever that may be (we’re 44).
That idea went south in a hurry. What once probably wouldn’t have been worth sinking extra money into to fix, may now be the only choice. The aforementioned newsletter has a section where it shows what you could “save” at current rates by refinancing or taking cash out. The most recent one said I could “save” -$213400, meaning if we refinanced to take cash out to fix things up right now, it would cost us the entire price of the home yet again, on top of what the home and interest will already cost. Where a home in the 400’s was achievable before, our home in the 200s would nearly not be now.
I feel terrible for people having to try to achieve home ownership at this point, or probably for the rest of the decade. On the one hand, I understand how fortunate I am to have gotten in when I did, and to have a home period; on the other, like many, I’m now essentially trapped, which has the ripple effect of keeping both rates and prices high because most people aren’t going to trade a sub-3% mortgage for 7%+, assuming they can even find a place to go at this point.
Add in corporations branching out into a new area to do their level best to eliminate the concept of ownership for the majority of people, and politicians focusing on the more serious global issues like who goes in which bathroom, and my hope for the future couldn’t be squashed any further if you put it in a hydraulic press.
Real estate will crash, eventually. Hard to predict exactly when and why, but if history is any guide, a market crash eventually is practically inevitable. It could conceivably happen relatively quickly for any number of reasons, but crash it will.
That doesn’t necessarily mean it will become readily affordable - when real estate goes south, a lot of other stuff will be crashing with it. History books are full of monumental calamity. There’s no reason to expect that to change.
This time is different. The new business model isn’t selling homes - it’s single family rental.
I coordinate all development projects in one of the fastest-growing cities in the county, and 100% of new single-family projects proposed since 2021 have been build-for-rent.
Why sell someone a house when you can rent it to them forever AND increase the price every year.
Practically all housing development is financed with borrowed money against the property. Given the build-to rent model, the party at the end of the cashflow stream relies on rent checks being paid every month to remain solvent. When the rents stop being collected, at some critical point, some loan that is reliant upon that rental stream will default. When that happens, the properties are called in by the borrower and auctioned off at foreclosure.
Now yes, the major lenders, developers and speculators will spread their risk as much as possible by diversifying their portfolios and try not to be caught short by a problem in any specific market. But when there is a some kind of macroeconomic shock, ALL the markets will suddenly contract and be flooded with foreclosed properties and other rapidly depreciating assets. That’s more-or-less what happened in 2007. Massive liquidity injections and historically low interest rates supposedly saved us from a prolonged financial catastrophe then - but there were still a LOT of foreclosures. I also think we are still seeing that situation playing out today. Current housing markets are unsustainable in a climate of higher interest rates. This will all come crashing down, probably sooner than most people expect. When it happens, it happens fast - and of course the reasons will seem obvious with hindsight.
By the way, perhaps you’re being ironic - “This time is different” is the defining catchphrase when looking at historical financial crashes: https://www.economist.com/media/pdf/this-time-is-different-reinhart-e.pdf
I’m not saying a crash definitely won’t happen, but these BFR projects are a different beast than what we had in 2008. There are lots of reasons this isn’t as financially risky.
The biggest factor is how they’re being financed. They’re mostly doing public financing where the lender is the municipality and it’s paid back with extra taxes attached to the development agreement. The interest in these deals is usually 0%. The idea is that the government makes is money off of the tax money from the residents.
If the development falls through the government will just put a tax lien on the property for the past-due portion of the 25-year 0% deal that will be bought up cheap and fast by the next group.
Interesting. Thank you for the very enlightening info. So the local government is providing interest-free loans to developers for BFR projects, when prevailing rates are over 5 percent?
If the scope of BFR subsidization is as large as indicated then it’s probably buoying the housing market. A quick search found this glowing report on the BFR “boom”.
https://rei-ink.com/the-build-for-rent-evolution/
Real estate developers getting free government loans from public treasuries. What could possibly go wrong?
The housing market isn’t going to crash. New homes aren’t going to flood the market and demand for homes will not fall. As long as we have a growing population the price of homes will also increase.
Yes, there is finite supply and ever-growing demand, however the price of real estate ultimately reflects both the buyer and lender’s confidence that the mortgage payment will be met. This can be affected not only by interest rates but by labor market conditions and other factors.
If there is a sudden surge in interest rates in response to some kind of inflationary shock, or the credit market becomes suddenly much more restrictive in terms of lending standards, then housing prices will most certainly fall, simply because the pool of potential buyers at a given price level is smaller.
When pressures on the housing market are coupled with leveraged loans on variable rates going upside down, people will begin dumping their real estate investments. These factors compound to cause a sharp reduction in price. In 2007-8 metro home prices declined up to 50% from their earlier peaks - but seem to have increased about 200% since the bottom, roughly, to where they are today That’s quite a considerable appreciation and seems unlikely to be sustained. Maybe I’m wrong - we’re just shooting the shit on Lemmy - but looking at what’s happened before, real estate seems overheated - but it may well keep on boiling for all I know.
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And corporations will be right there to buy it all up and further make it worse.
It should be fucking illegal for corporations to own single-family homes, full stop.
A more elegant solution would be to slap on a massive tax for houses that are not the primary homestead of the owner. Make it possible for companies to build and sell, but make it super expensive to sit on them or rent them out.
With houses being sold at 3x what they were just a few years ago in my area, it’s more profitable to leave half the houses empty than to sell them at a reasonable cost.
I could get on board with that, as long as you account for situations where you might have bought a second house and moved, while still trying to sell the first. Technically you would still own two houses and I’d hate to see individuals punished for merely trying to sell their old house.
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Hey are you me? We moved temporarily to a place with a far longer commute with the plan that we’d ride out the silliness of the market for about 5 years. That was in 2017. They’ll fucking bury me here lol.
It’s more than homes. Groceries have rocketed up in price. Cars are also unaffordable. Business people crowing about how great the (phantom) economy is are going to be leaping out of windows by next year. That’s when “the economy” will catch up to the fact that if no one can afford to buy anything then there is no economy.
I live on social security disability, about 1100$ a month.
A combo meal at McDonald’s is 12$.
2 combo meals a day from a fast food restaurant would completely wipe out my budget. No money for rent. No phone bill. No water or electric money. No money for garbage removal. The idea of a car is laughable. There wouldn’t even be enough for a bus pass.
It’s been a real struggle. After all the inflation hikes of 2022, they only raised my payments 50$ a month.
They simply don’t care about the people voting for them more than the companies bankrolling their campaigns that earn their paychecks. It’s that simple.
I feel for you.
I’m in an average family earning average wages. Maintaining our standard of living is now at least $500 more a month, and that’s just from utilities, rent, and groceries (!). I’ve cancelled everything streaming aside from Youtube. We don’t eat out any longer, because that’s easily jumped at least $30 a meal for a family of four. Depending on your point of view, we were fortunate enough to have things we could cut back on that weren’t essentials.
I grew up fairly poor and by all metrics my family is better off, but it certainly doesn’t feel like it at times. I’ve had more month left at the end of my money more times than I’d care to admit.
I have no idea how those who were “just getting by” are continuing to do so.
Dang, sorry about all that. “More months left at the end of my money” really hits home for me, haven’t heard that expression before.
The only reason I’ve just been able to get by is because of friends and family, if I had any smaller of a safety net of people that care about me I would absolutely be on the streets. I’m not sure where you live, but the number of beggars has skyrocketed around me, and it’s not dirty crazy homeless people that just need help in general, it’s regular people out of work that are just trying to get money to pay their kids. People are selling 10$ roses on the sides of the highways to try to get by. There’s no affordable housing for anyone and the best jobs available still don’t pay much more than 50K a year. My boyfriend is a fully licensed mechanic and has about as much money leftover each month as a fast food worker in the '90s. Pays $1,400 in rent a month just to have a place to live (475sq ft), which is often nearly half of his income for the month.
I didn’t mental ramble so much with all those complaints, I think it’s just baffling in mind blowing how bad everything is and how little politicians and even companies seems to be noticing or caring about it. Citizens need money to give companies money. Eventually if people are only buying their necessities, companies won’t be able to make money. It just seems so unsustainable and I don’t know why more alarm bells aren’t being rang.
jesus, there aren’t even studio apartments in my area for 1100 a month
I find it so dystopian that cars are one of the essential things to have when living in America.
If it weren’t for my parents I couldn’t afford to live in this state as I live with them. Even as a homeowner, my mom is finding it hard to cope as homeowners insurance rates keep rising and the crisis is deepening as more insurers leave the state or stop offering new policies. I financed a used car back in 2022 for $8,500. I don’t think I’ll ever own a home here, not that I’d want to anyway, and as for cars I’m better off buying cheap and used.
California too, huh? That or… Florida?
Florida.
Meanwhile, Florida’s Republican politicians plug their ears the moment anyone mentions the numerous threats Florida faces in the here and now from climate change. How dare anyone ask me to do anything about my state being overrun by the ocean and smothered by increasing hurricanes! Shameful!
I just made the mistake of moving here…truth on never owning a home.
The only difference between a citizen and a serf is the right of ownership. This is the “freedom” people fought and died for. Welcome to Neo Feudal America where you will own nothing and you will be happy about it because complainers go to the gas chambers. Remember to go get your “Real ID” and passports because you are in the process of being tied to the land too.
Growing up, learning history, I always wondered how average people went from the freedoms of the citizens of Rome to feudal serfs barely more than slaves. I never thought I would get to learn first hand.
Americans would probably have a lot more freedom if they didn’t normalize getting into debt. You can save a lot of money if you never pay anyone interest.
Oh fuck off I missed owning a home because I was too afraid of debt. It’s impossible for most to save enough cash for a house outright especially with how insanely the prices inflate
The rapid inflation occurring right now is expected to slow down in the coming years. Over time it is highly probable you will catch up as long as you keep saving.
Can confirm, I only have a low rate mortgage and otherwise no debt. I bought my cars with cash, worked my way through school, etc, and I have a comfortable savings. We’re not rich, we just don’t piss away our money to interest.
Honestly, if you can avoid credit card interest and make an average income, you can probably afford a home by your 30s in most of the US.
I don’t think that’s even remotely the case for the vast majority of the workforce. It takes an incredible position of privelege to think otherwise.
For the average US citizen, they have a spare ~$200/month (see my comment history for context) the median US home price is $420,385 according to redfin. That means your closing costs (4%) + minimum down payment (3.5%) for an FHA loan would be (.075 * 420385) $31,528 which would take 157 months assuming you had no emergencies or extra expenses at all. Leaving you destitute to pay your mortgage on a home which will have inevitably increased in price since you started saving.
It’s a pipe dream for most US citizens, everyone has surprise expenses. People lose jobs, people buy things for leisure (what’s the point of living if you don’t?) Once they spend their 13 years of perfectly saved money to buy the average house, how do they afford the inevitable expenses? Save another 13 years to pay for another roof? Unfortunately now they have a mortgage which will be more expensive than their rent.
I assume the context you’re talking about is this article:
U.S. households’ average monthly expenses total $6,081
And then you estimate the income as being ~$6275 or so, hence your $200 extra number.
That figure seems to come from this study by BLS. Instead of taking that number at face value, let’s take a look and see where people are spending their money. The following is for a 4-person family unit, because that’s the default for the USDA food plans (dollar figures assume $6083 per month to expenses):
- Housing - 31.6% - $1922
- Transportation - 18.4% - $1119
- Food - 12.9% - $785
- Personal insurance and pensions - 14.1% - $858
- Healthcare - 7.2% - $438
- Entertainment - 4.7% - $286
- Other - 11.2% - $681
What stands out to me is the insane amount of spending for transportation. Here’s what I estimate, assuming two cars and excluding acquisition costs:
- insurance - I pay about $50-75/month for our older two cars with liability only insurance (YMMV by area and police record)
- gas - @30mpg, 20k miles/year, and $4/gallon (national average is <$4) - $222
So let’s assume $300/month for both, that means people are spending ~$800/month on acquisition and maintenance. That’s nuts! Over 10 years, that’s ~$96k! You can buy a new car for $25-30k with a 10 year warranty, so something doesn’t add up. If you finance new cars, you’re usually forced to get comprehensive insurance, so not only are you paying a high finance charge (including interest), you’re also forced into a higher insurance payment.
My strategy is to buy quality older cars and keep them for 10 years or so. For example, I bought one car ~9 years ago for $10.5k w/ ~60k miles, and I’ve spend <$5k total (probably $2-3k, I DIY pretty much everything) on repairs and maintenance. But let’s say I actually spent $5k, that means my average monthly expense is ~$140 for acquisition and maintenance. Double that and I’m under the average expenses in a car by almost half ($300/month for insurance+gas and $300/month for acquisition and maintenance, so $600 vs ~$1100).
So just with that, we can increase the savings per month by $500, meaning $700/month saved. To get that $30k down payment would take ~4 years. That’s totally reasonable.
I think people on average just don’t know how to follow a budget, save money, etc. I really don’t think we have an income problem in the US (at least for the median household), we have an education and priorities problem.
If you have actual numbers for a household, I’d love to go through it because I’ve made a ton of assumptions here.
I think people on average just don’t know how to follow a budget, save money, etc. I really don’t think we have an income problem in the US (at least for the median household), we have an education and priorities problem.
Bingo. But people don’t want to hear that the problem is themselves, it’s far easier to complain about and blame other people.
Exactly.
I can point to plenty of extreme examples of rich people losing everything because of poor financial planning, such as lottery winners, sports stars, and trust fund kids. You can’t outearn a spending problem, and you can often outsave an income problem. Most millionaires are also frugal, and that is extremely interesting to me.
For example, my brother retired super early because he was extremely frugal, and now he lives on a pretty typical average income in terms of regular spending (though his house certainly isn’t typical). He’s a millionaire, but he lives on someone like $60k/year. Why? He doesn’t see value in spending more money, so he stopped working as soon as his savings growth outpaced his spending needs. He had a great job (actuary, eventually became VP), and he decided to retire at 40 after living in $50-60k/year or so and earning more than double that.
On the flip side, my cousin lives in a higher cost area than me and they’re in a single income household making a mediocre salary (social worker, so something like $70k in a higher cost area). They own a house and are on their way with retirement savings, and they do this while having four kids. Part of their plan is to live near family so they have free baby sitters, inexpensive vacation options, and someone to help with household projects. I’m guessing they spend about $50-60k/year just like my brother. They’ll probably work until normal retirement age and have a healthy retirement.
So I look at these examples and can’t help but think that money problems are often symptom of poor financial education or mismatched priorities, or both. Occasionally there’s a legitimate income problem, but if you’re making around an average income, it’s usually a budgeting problem.
I don’t disagree that spending less on transportation helps to save for a down payment. Finding inexpensive and reliable cars is not an easy task, but for people who were lucky, like myself, to find one it makes one chunk of the budget easier to stomach.
I own a home, so I’m not speaking from a place of woe is me, but from a position of empathy.
Don’t forget you have to qualify for your mortgage, even if you have a downpayment. Lenders will let you spend up to a max of 43% (and most far less than that) of your pretax income on your mortgage payment. If you’re the average household, 6275 * .43= $2698.25 monthly maximum payment. The average home price is $420,385 as we established earlier. Minus our down payment you could almost (but not quite) afford the loan with a PITI of 43%, the new payment would be around $2700/month with interest rates as they are today around 7.5%. But let’s say you are above average income wise for the sake of the narrative.
Oh shoot, $2700/month? That changes our household budget, now you’re spending at least an extra $800/month not including maintenance, utilities, and the many other expenses that come with home ownership. If you take that money out of your transportation budget you’re left with $300/month, hope you don’t have any surprise expenses! If your property taxes go up you have to give up something to afford it. Lose your job, lose your house. Paycheck to paycheck for the next 30 years, sounds like a nightmare to me.
On top of that affordability is getting worse, living expenses are rising, wages aren’t rising as quickly, the average person who didn’t luck into a home already will be less and less likely to afford one.
In my area, the average is right around $450k, so I think we’re pretty representative of the rest of the US. I did a quick search, and I saw a dozen or so listings for townhouse around $300-350k. If we look at the top end, with a 20% down payment ($70k), the mortgage+HOA is ~$2500/month. If we look at the bottom end, it’s ~$2300. I even see one as low as $2k/month. Note, this doesn’t include utilities or maintenance. So for an average household income of $6275, we’re looking at 30-37% of your income for the mortgage + HOA.
Rent for a similar place (2-3 bed, 2 bath) is $1500-2000. So it is currently cheaper to rent in terms of cash flow, but buying keeps your payment constant (inflation will be on your side) and builds equity, so longer term it should still be cheaper to own vs rent.
left with $300/month
Are you assuming a massive $800/month transportation budget or something?
Let’s assume $6275/month income, here’s a budget that I think makes sense:
- mortgage + HOA - $2500/month (could save $200 or more buying a cheaper place)
- food - assuming 4 person household with young kids (two under 5, which should be the target for these houses) - ~$900 (if you don’t have kids, it’s ~$550); this is the low cost food plan, not the “thrifty” food plan
- transportation - ~$700/month; insurance ($50-100 in my area for two cars), gas ($100-150), maintenance/repairs (~$50/month), yearly registration ($100-150 in my area, so <$15/month); purchase price (assuming buying used and keeping for 10 years, a 2017 Corolla is ~$17k and a 2007 is ~$5k, so $1.2k/year or $100/month; add taxes and fees and assume ~$150/month on the high side)
- utilities - ~$300/month; we spend a little more, but our house is larger than the ones i referenced (2400sq ft)
- taxes without any retirement savings - ~$8000/year, or ~$670/month (my state is ~5%, federal is ~11% at this income, so 16% of $75k)
So, the major expenses come out to ~$5100/month. Add in another $500 or so for other stuff, and $5600 is a decent spending estimate. That leaves $600-700/month for savings, or 10-11%. Typical retirement savings goal is 10-15%, and that could be met by trimming some of these expenses by $200-250/monthn (a lot of that is taxes if going for pretax investments).
So yes, mortgage rates and property values certainly make things difficult, but I hope I’ve showed that it’s not as hopeless and many people assume. I think the average household could own a house and still save 10-15% of their pretax income. They’d need to drive older cars, but nothing unreasonable (5-15 years old; both of my cars are 15+ years old and have minimal maintenance costs).
Unfortunately, the average person seems to suck at budgeting, which is why I say it’s more often a budgeting problem instead of an income problem. The important thing is to establish good budgeting habits early, and then the focus should be on increasing income. Ideally, as your income rises, your spending doesn’t rise as quickly, so you end up with more cash flow as you get to the point where you want to invest in a house.
So I’m getting closer to 30 so I think this relates to me and my experience well to share.
I’ve been paid a pretty reasonable pay middle class+ generally just shy of that perfect $70,000 of legend on average. Managed to pay off my absurd credit card debt from college and stopped payments on my college loans. I don’t have a car I bile to get around and am generally frugal and had my company helping pay for a lot my stuff
I had about $11,000 pre COVID and that was practically all wiped out during the worst of it because Florida didn’t believe in unemployment. At which point I was 26ish.
I think pre COVID I may have actually managed to hit over $30,000 by early 30s enough to actually put down on a house.
I now make over $70,000 a year… I have saved about $2,000 this last year living the same frugal life, still no car, still no debt payments really… I don’t think your math works anymore. It’s so completely soul crushing now how fast I went from doing ok to being in a gutter.
What are the main differences? If you don’t mind, could you share your budget?
I know housing has increased a ton recently, but according to BLS data it isn’t that much higher (like 10-15% from 2020 to 2022, which is high, but not “end of the world” high). Food has increased a lot, but food away from home has grown a lot faster than food at home, so I’m thinking there’s a difference in what people eat (e.g. more delivery than before perhaps?).
I’m fortunate because I bought before 2020, so my housing costs are largely fixed. However, running the numbers with local data still indicates that buying is feasible, it’ll just take longer.
Well the most obvious difference is rent and utilities and food.
My rent went from 1550 a month for a small condo in Florida to 2600 because my landlord sold the unit to a new owner who went out of their way to fight me on the price and make the few months I was under them pretty awful. (They offered to go month to month while we figured it out and after the first month raised the price by a shit ton) So then I spent a good amount of money having to move all my stuff (which I did take the bold decision to pay a couple grand to completely leave the state in order to save on rent) but I’m in a cheap rent city with abundant housing and am still paying more at about $1850 months now plus $250 in utilities each month and about another $180 for phone and Internet since it’s not like I have a family plan.
I do really like to eat more than hotdogs and try to be healthy but it means I spend probably about $600 a month on food even cooking at home 5 nights a week.
Part of the massive loss of money has been trying to move to find work, cheaper rent, and a state that might treat me better.
I have an HSA that doesn’t have any matching from my job because I work tech which means I’m a contractor that is owned by a company in India making a lot off of me and I thought I would put $250 a month to my 401k but it’s not matched either and is just a waste of money since it won’t amount to anything when I retire.
Then I now have to pay $175 for student loans and about $50 for credit card debt cause I’m trying to raise my credit score.
I definitely feel like I should be saving more per month than I am but actually don’t know where it goes. Public transit isn’t cheap actually, but I doubt it is eating my income. I think it’s just costs of like, getting a passport renewed cost hundreds, tooth filling fell out and dental work cost hundreds, we got fleas from buying used items and treating cost a couple hundred. Just things just one issue at a time eat into what I have
That rent hike is insane, I’m sorry that hit you. Not sure if you’re looking for suggestions, if not ignore my message.
All those numbers seem right, except maybe the internet/phone adding up to $180 - I use mint mobile, which has you pre-pay, but can be as cheap as $15/month. Also make sure you’re calling into your ISP and asking for promotions - unless you’re under special conditions, internet shouldn’t be more than $75/month.
This part I’m less sure about without knowing deets like what rate your student loans/cc are at, but I think you have the right idea with not paying into your 401k when you have outstanding debt, which is an inverse 401k. If the interest rates are manageable I’d first ensure you have an emergency fund of a few months cost of living, then put that towards paying off debt faster.
LoL yeah the rent hike was killer and I have since decided to try and do better so I’ll be trying to get a rental acquainted real estate agent and do lots of my own searching in a month. I think I might be able to get back to 1600 at least and I have a GF to help split costs now.
Phone plan is from getting scammed by Verizon and I know it’s awful but I need to let about another year go by so I don’t get forced to pay them like a thousand straight out for my phone. After ill probably move to mint or whatever, maybe Fi, anything that’s cheaper. My home Internet is actually the cheap part at like $55 for gigabit fiber.
And student loans are just gonna be a fucked thing forever. It was a private loan cause my dad said it would be a smarter idea to go with his bank and it has a variable interest that i thinks is up to 18% now on… so yeah I just find the minimum I can (which is more than 0 now cause I get paid enough) but yeah I’m trying to make sure I can have 3 months of rent and cheap food costs in my account but it means I really won’t get enough to put a down payment on stuff to get a car or house.
Edit: I’m just realizing it really might be a good idea to see if literally anyone else is willing to give me a loan for the amount of my outstanding student loans just so maybe i can get a fixed rate
$50 for credit card debt cause I’m trying to raise my credit score
Paying credit card interest doesn’t increase your score whatsoever, paying your bill on time does. Just pay whatever is due (statement balance, not minimum payment) and you’ll get positive payment history. Don’t waste money on interest.
actually don’t know where it goes
It sounds like you need a budget. Track every penny so you know where everything goes. Worst case scenario, you don’t find any waste, but you do know where your money is going.
I do that and make corrections every so often. I’ll realize I’m spending more than I expected at restaurants, or my car insurance went up, or whatever.
work tech… 401k… not matched either
Perhaps it’s time to look around for a new job. I don’t know what you mean by “work tech,” but surely you’re worth more than whatever they’re paying you (you can at least get better benefits). I also don’t know if you’re Indian or American, but I do know plenty of companies can handle immigration paperwork (e.g. mine does, we have plenty of people who used to work at InfoSys at my org).
Right now is a rough time to look, but there are opportunities everywhere.
Good luck! I hope you can get into a more comfortable financial situation.
I’m in a cheap rent city with abundant housing and am still paying more at about $1850 months now
That’s not a cheap rent city. You’re in a higher priced area. My area is a lower cost of living area. Rent is under $1,000/mo unless you want to live in a luxury high rise by the water.
another $180 for phone and Internet
I pay $80/mo for Internet on one of the higher plans and $45/mo for a cell phone plan. Total $125/mo. How is yours so much higher?
definitely feel like I should be saving more per month than I am but actually don’t know where it goes.
This is where tracking your income and making a budget comes in.
In Florida, rents and house prices have increased way more than 10-15% in the last few years, where are you? We bought our house in 2020, the house across the street (slightly smaller and less yard but comparable) sold for 54% more than we bought ours for; and that price was in line with the other houses being sold.
I really thought we were buying at the peak when we did buy the house, assumed it would decrease from what seemed an outrageous amount (double what the previous owners paid in 2010) but it’s about impossible now for most. Everyone I work with rents, unless they had a house before I did.
where are you?
I’m in Utah, and we’re in the same situation (our house doubled since we bought, which was ~9 years ago). The numbers I cited are national though, so obviously it’ll lose a bit of nuance that’s more relevant to specific states, and numbers can vary wildly from city to city. Also, other expenses can vary wildly as well, such as auto insurance being much more expensive in Florida (from what I hear) vs Utah, despite both being no-fault states.
But even in my area, there are still affordable houses. Mine may have doubled, but houses just 15 miles or so away haven’t increased nearly as much.
Where exactly are you spending your 70k that leaves you with only 2k at the end? Especially when you’re not paying off debt? Genuinely curious.
When I hear about middle class people struggling to pay the bills, I’m always curious what their lifestyle looks like and where they are spending their money. Literally today I saw a news article that broke down a family’s monthly expenses like this:
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$1700 rent
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$800 payment for two cars
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$400 insurance
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$250 phone
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$60 internet
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food paid for with whatever’s left
The big thing that stood out were the cars. They obviously bought some brand new cars that they couldn’t afford. If they sold those and replaced them with beaters their budget would be solved.
The worst part is, the news article was trying to paint this example as proof that the economy is ruined and only new laws can save us.
Who the fuck is paying $250/mo for their phones?? I literally pay $20/mo. Unlimited voice and text, 5gb data, and pay as you go past that. But I’m on WiFi almost all the time so I’ve never used a lot of data.
Or does that include the cost of buying a new phone? A new android phone is like $500 and lasts probably five years. Doesn’t add up
I’m assuming they financed a flagship smartphone through the cell provider. Still a pointless waste of money
The phone also stands out.
$250/month is just nuts! We pay like $30/month for two lines, though I could see up to $60/month for two lines being reasonable (unlimited data at Mint for two lines). We spend about $500 every 3 years or so for phones, so add in ~$30/month to save for that, round a bit for taxes, and you really shouldn’t be paying more than $100/month for two lines.
Insurance also seems high. We pay ~$50/month for two cars, though they’re older cars and we are in our 30s with clean records, so we’ve got that going for us.
So since I don’t have a car payment, have inexpensive insurance, and don’t pay out the nose for my phone, I save like $1400/month vs those numbers you quoted. So if the average person actually spends that much (I doubt it), by cutting out some unnecessary expenses, they could buy a house.
I’m not sure if this is really representative of everyone, but it’s telling that the news decided to use that example when trying to convince viewers the economy is bad. I’d love to see more research into middle class spending habits, as I suspect that predatory lending and consumerism cause problems more than inflation.
Agreed. For now, you can check out the BLS data here. The categories leave a lot to be desired, but I think it’s still interesting. Specifically, the amount people spend on transportation is terrifying, and that’s definitely on the “predatory lending” end of the spectrum.
We have clean driver records and paid off cars, and insuring 3 cars 4 drivers is running $900 a month for us here. That is car insurance alone, no car payment. Phone we do pay $200 but it’s covering 8 people, calls text unlimited data on 8 phones so if we made the kids pay could reduce that to about $50.
But your $50 car insurance is unusual. And not everyone can get a rate like that while simultaneously living close enough to work to manage the rest of the transportation expenses.
I don’t think it’s that unusual in my area. I’ve never paid more than $450 or so for 6-months of coverage on two cars, and I’ve been with multiple insurers. Granted, I get liability only, but comprehensive coverage isn’t that much more expensive (esp. on the older cars I drive). Something different is happening in Florida that isn’t happening here.
And I don’t live that close to work, my commute is ~25 miles each way. I live in the suburbs and work in the city.
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The problem is there is inflation, high interest rates, house prices increasing rapidly, skyrocketing rent and wages staying stagnant. If you try to save money for 30 years in hopes of buying a home, it would be a difficult prospect currently. In my area, most of the friends that are renting are paying 2000+ in rent. I pay 1300 for my mortgage. If I had started saving when I bought my house, I still wouldn’t have enough and my house is now worth 3X what I paid for it. I don’t know where you are from but you clearly don’t understand the current situation in the US.
Tell your friends to move in as roommates and instead of paying 2000 on rent, they pay 1000 each. Invest the difference.
I didn’t have to do that 15 years ago. By your logic, 45 years from now people just have to accept living with 7 other people to be able to afford to someday buy a home. You’re are just moving the goal posts so you can continue blaming the people for a situation caused by corporations and the rich.
Ah but we did have to split rent 5 ways in the late 80s, just to barely get by. Nice that you didn’t have to but we did. The difference is that we knew it was possible to do better - used that time to go to school and get a degree that got me a different job and more money.
And technically even now, splitting the mortgage with husband. One income would not get close to covering the bills.
Arguing for social change should not keep one from offering advice on surviving the current situation and getting ahead. Roommates are a time honored way of getting by.
Which do you think will improve your life more, blaming the rich and staying broke, or making a temporary sacrifice to save money?
Last time I checked, you could try to make changes to society and save money at the same time. How much has posting on the internet blaming average people for their problems improved your life? Which do you think will improve your life more, arguing with someone over the internet or getting a second job with your extra time?
I agree, you can and should both save money and try to fix society. I offered you a suggestion to save money and you got mad because I forgot to add the obligatory “eat the rich” clause.
Yeah I was raised to understand debt is for three things: education (as an investment and treated as such), mortgages, and cars (though I avoid car loans where I can).
I’d take education and cars off that list. With the price of college where it’s at, if you can’t afford it on your own, I think you should look for alternatives like community college or online courses. It’s better to get education in things you’re not passionate about than to attend college and get saddled in crippling student debt that not even bankruptcy can save you from.
I’m also against paying interest on cars because a reliable used one is still cheap enough for most people to pay cash. Brand new cars should be seen as luxury items.
Idk my engineering degree is paying off as is my sister’s.
Cars can be bought on debt but shouldn’t stupidly be bought on debt. You buy a practical car with a strong down payment and a manageable interest rate. I don’t do that myself when I can help it, but as I see it I took a loan from my savings to buy my car because nobody offered a better interest rate.
Also I could buy heating aids on credit in this line of thought, but I once again choose to pay cash when possible.
Engineering is a degree with a practical application.
Those getting degrees in philosophy or art history aren’t practical.
Also people shouldn’t dismiss getting into the trades. Especially women. Right now there’s a shortage of good contractors. There’s good money to be made. You don’t need college for that.
That’s generally pretty true and also irrelevant to my point of it being worth it to go into debt to invest in education.
Additionally degrees in things like philosophy and art history can be valuable if you go in with a clear headed career path from them.
Trades absolutely shouldn’t be discarded. But the toll on the body should be weighed alongside it. You can make great money as a plumber while you’re still physically able. But if your knees hurt as an 18 year old, don’t try.
But if you want something NOW, instead of saving up for it, you take on debt. People don’t have as much patience it seems, than in years past. Also society has become more reliant on convenience (which costs more) and being lazy than taking the longer route (which costs less overall).
But that’s the freedom in it, right? The ability to choose the more convenient, fun route than the longer, saver route. An “ant vs grasshopper” fable in real life.
It also feels good to smoke cigarettes and eat cheeseburgers. And there has also been a big marketing push for those. I don’t necessarily think people are and more impulsive, but they’ve been led to believe debt isn’t as harmful as it actually is.
Cigarettes are nasty.
Tell that to the average person living 50 years ago.
They were nasty 50 years ago and they’re nasty today.
You’re missing my point. Marketers convinced people they were good so they’d smoke more.
It is more complicated than it first seems. The inflation rate is controlled within the way debt is handled and it is a way to tie together the politics of nations in order to bring mutual benefit and stability. It is not anything like an individual’s debt to an institution. The rate of inflation balances against the debt in a way that makes it irrelevant in the grand scheme of things. Talking about debt like it is a bad thing in the world of today is a major form of populist manipulation for conservatives. The whole point and purpose of the GOP is to prevent reasonable legislation from having the opportunity to pass. This is what the billionaires are funding. It isn’t about liberalism or responsibility or any bullshit like that. The only purpose is to continue keeping all of the legal loopholes open for exploitation. The USA has a tenth of the laws and protections of any other western nation. This is why there are 750 billionaires and a major homeless problem with most Americans unable to own a home or even most of their property any more due to DRM/neo-digital-feudalism. The GOP is a circus show leading the nation around to one side show after another simply to prevent anyone else from taking the stage. They have no morals, there are no limits. When the focus shifts away from them, they instigate another ever more outrageous event where the outcome is already secured well in advance. This is all about distraction, from the budget, to stealing fundamental human rights from half the population, to massive open corruption by the supreme court, to rocket Karen fighting for Putin, to DeSatan or the orange usurper, to book burning, and defunding education, it is all just a distraction so that no reasonable legislation has the time or opportunity to pass. This is how 750 people robbed the country blind.
The only difference between a citizen and a serf is the right of ownership.
Nope. Serfs were forbidden from moving out of where they lived.
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Fuck real IDs
What’s wrong with them?
It requires that you provide a lot of documentation to get something that qualifies as a RealID. Multiple documents showing your full name, birth date, SSN, and proof of address. And if you can’t provide that paperwork, no ID for you, get fucked. Maybe that doesn’t seem like much, you just need the RealID to fly on planes, right? But if you can’t get an ID you can’t get hired. You can’t drive. You can’t rent a place. You can’t vote in a lot of places.
And then you get the ugly Catch 22 where you can’t get a RealID because you’re homeless and jobless, and you can’t get a home or job because you don’t have any ID.
My dad helped an old friend he knew who he found out hard been homeless for a while. And realized how you can be unpersoned. The old guy had no living family, no supporting documents to prove who he was and as such couldn’t get an ID. Which meant he couldn’t get a bank account, or a job that wasn’t cash under the table.
I don’t really have any idea of owning a home for the rest of my life. Even making enough money to potentially get close seems impossibly out of reach.
I feel like I should just claim homes that are empty at this point.
You bought it as an investment but nobody is renting it since you’re letting your rentee pay your bills? Looks like this is my property now.
This is partially why “squatters’ rights” was a law. Live in a home for a certain number of years, and it’s legally yours if the “owner” suddenly shows up and tries to kick you out. It also had to do with banks selling property that people already owned, but that’s just another form of corporate skullduggery.
Move in like a sovereign citizen haha.
First time home buyers in the US don’t need any cash for a down payment or closing costs. You can roll it all into the mortgage. This is how the majority of first time homebuyers get started. You just need a good credit score and enough income to qualify for the mortgage - which is impossible in some cities and easy on a McDonalds wage in others.
It’s worse than the headline says. The study set 71k as the average US income for a single person…
Which is the official household number. The actual single income average is 50-60k.
This still seems high to me, damn. In my town average household income is 30k lol. Even surrounding “nice” towns aren’t that much higher
I guess there’s places where people must make so much money
West Virginia, or something?
Lmao rural Illinois
Oh definitely these are national numbers. Even just state by state starts to vary a lot
The heck? A ton of my friends are making like 40k… I guess they’re still within the bell average.
Oh that’s the fun part. Everyone discusses mean and median. Mode is in the 35-40 range last I tracked it down. (it wasn’t easy to find and I have my theories about why)
Wow, I just bought a house three months ago, I guess I’m part of the 1%. #feelsweird
Lemmy leans tech and higher income, so yeah, I’d expect a higher proportion.
(Coughbragcough)
This is the best summary I could come up with:
The typical American cannot afford to buy a home in a growing number of communities across the nation, according to common lending standards.
“The dynamics influencing the U.S. housing market appear to continuously work against everyday Americans, potentially to the point where they could start to have a significant impact on home prices,” ATTOM CEO Rob Barber said in a statement Thursday.
ATTOM’s data adds to a growing body of real estate research in recent years that highlights the lack of affordable housing .
Factoring in a mortgage payment, homeowners insurance and property taxes, the typical home priced today would require 35% of someone’s annual wages, ATTOM said.
Cities with the most unaffordable homes include Los Angeles, Chicago, Phoenix, San Diego and Orange County, California, ATTOM said.
Communities surrounding Cleveland, Detroit, Houston, Philadelphia or Pittsburgh have the most affordable homes compared with median salaries for residents there, according to the firm.
The original article contains 486 words, the summary contains 151 words. Saved 69%. I’m a bot and I’m open source!
I wonder if they consider Lansing to be a “community surrounding Detroit.” Housing is much cheaper here than anywhere else I’ve seen
We purchased right before ar the beginning of the rate increases. A 10 year ARM. Hoping the rates stabilize by that 10 year mark or things might get expensive for a few years.
Purchased at like 4.1% but absolutely refused an ARM. We have a fixed rate and absolutely nothing would ever make me get an ARM.
Oh I’ve a solution for this the average American can all go and try to buy home in that 1% are so it also becomes unaffordable. Problem solved.
If it’s getting paid for by renters or by owners, it’s not unaffordable.
Unaffordable for the average American.
That doesn’t make any sense. The housing sales market is enormous. Much more than the amount of “upper crust” buyers. The rich aren’t buying them all, and the investment/landlord buyers can only afford them if the actual renters pay the bills which would not be the “upper crust” super wealthy. Therefore the statement that 99% can’t afford them must be false.
the statement that 99% can’t afford them
That’s not what’s being said. The claim is that the median home price in 99% of regions is unaffordable with median income.
And? It’s near enough the same to be no different.
It’s completely different.
Imagine you have 10 people. 1 has $100, 2 have $50, and 7 have $20. Now imagine you have 10 stores selling pants. 1 store has a few pants for $50, and a bunch for $10. 1 store has a few pants for $80 and a bunch for $25. 8 have pants for $30, $25, and $10.
In this scenario, the median wealth is $20, and in all but one store the median price is $25. So in 90% of stores, the median pants cost more than the median amount a person can spend. BUT, all but one still have plenty of pants that cost less than the median. Given this, you wouldn’t say “90% of people can’t afford pants”.
You don’t take out a 30-year loan for pants.
You’re right. This is just an example to illustrate the statistics involved. At this point it doesn’t seem like you’re continuing this debate in good faith.
