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Young Homeowners

Home prices are down. Mortgage rates, rock bottom. If you’re young in America, does it, will it, make sense to buy a home?

In this Sept. 19, 2011 file photo, a house with a "for sale" sign in front is seen in Newton, Mass. Home ownership over the past decade posted the biggest drop since the Great Depression as layoffs, foreclosures and the mortgage mess made it harder for people to buy or hold onto their homes. (AP)

In this Sept. 19, 2011 file photo, a house with a "for sale" sign in front is seen in Newton, Mass. Home ownership over the past decade posted the biggest drop since the Great Depression as layoffs, foreclosures and the mortgage mess made it harder for people to buy or hold onto their homes. (AP)

It’s 2012, you’re a young American, and the U.S. housing market and mortgage rates are beaten down as low as we’ve ever seen.  Is it time to buy a house?  For twenty-somethings or young thirties with college debt and no job and living in mom’s basement, that may be the cue to start laughing.

But hard times don’t last forever, do they?  Mortgage rates in the three percents.  Rock bottom.  Foreclosed houses going for a song.  Rents, as the man says, “too damn high.”  Is it time to do it?  Somehow?  Somewhere?

This hour, On Point:  If you’re young in America, is it time to buy a home?

-Tom Ashbrook


Karl Case, professor of Economics Emeritus at Wellesley College and Senior Fellow at the Joint Center for Housing Studies at Harvard University. He is co-creator of the Case-Schiller index, which tracks housing prices.

Derek Thompson, senior editor at The Atlantic; oversees business coverage for their website.

Matt Yglesias, Slate’s business and economics correspondent. He’s also the author of The Rent Is Too Damn High.

From Tom’s Reading List

The Atlantic “Richer couples! Cheaper mortgages! Millions of unwanted houses! Despite all this, young home owners declined for 30 years, even before the Great Recession. Here’s how the American Dream shrank.”

The New York Times “Like many young married people, Steve and Logan Kinney dream of owning a home. So after several years of diligent saving, the couple, both teachers, scoured the listings in Boerum Hill, the leafy Brooklyn neighborhood where they rented.”

U.S. News & World Report “Young Americans, take heart; there is empirical evidence that your parents’ “When I was your age…” diatribes are currently meaningless.”


Low on Cash by Eric Lindell

The House that Built Me by Miranda Lambert

Young Americans by David Bowie


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  • Sullivus

    I am currently 32.  Three years ago my boyfriend and I purchased our first house and are thrilled with the decision.  We purchased a fixer-upper in what is supposedly one of the “bad” parts of Boston although our neighborhood is great.  For $250,000 we have a 1,600 square foot house with a yard and a garage.  Our mortgage with tax and insurance is $1,260 in comparison we were paying $1,200 a month three years ago for a 1,000 square foot apartment with no yard, no parking, and a 20 minute walk to the subway.  Yes it’s taken some sweat equity but we love our house and are looking forward to the day when we don’t have to pay a mortgage.

    • Sam Walworth


      However if you have kids sometime soon, then I think you may be in a tough position (given you are in “bad parts” of Boston).

      Thats the issue I struggle with, the houses in “good parts” of Boston area is cost prohibitive and in the “bad parts” the schools are not so great and home schooling is not in our minds :(

      • Sullivus

        Fortunately no kids for us!  We’re in Dorchester and I don’t know much about the local schools, but I have two friends who just bought a place in Newton and I figured the difference between what they pay in housing and what we pay would easily pay for some type of private or Catholic schooling.

        • Sam Walworth

          thats exactly was my thought initially, however private school education is either its for extremely wealthy (Mitt Romney et al) or its not that great at all (i have a 4 year old going to Pre-K in a Christian school).

          Secondly, even if we sent the kids to a Catholic school / Private School the social difference would be too big to bridge even at the kids’ level and I would rather not send my kids to such schools, where only the wealthy and elite would be sending their kids.

  • Gus

    I purchased a duplex when I was 26, renovated it, and at 30 purchased a short sale single family ranch.  Once I am done renovating this property I intend on renting it as well.  The population in my area keeps growing and housing is needed.  Eventually I would like to hand these properties off to my children (if I am so blessed).  It is costing more and more to get established and money equates to freedom in American society.  I only hope at some point I am able to enjoy this freedom.  

    With prices increasing for everything (i.e. food, education, transportation, and housing prior to the collapse) and wages remaining stagnant for the lower and middle classes, I honestly wonder if younger people in a generation will have homeownership as an option.

    • AddedNote

      also should mention increasing medical cost. the only folks doing better-than-ever a big-corporate profits.

    • Cory, Lord of the Nerds

      Great post Gus.  Thank you.

  • Anonymous

    Homeowners with an FHA-insured loan may find a conventional mortgage refinance reduces their monthly housing expenditures, best one out there is 123 Refinance

  • AC

    i guess it depends on how far you are willing to commute, regardless of this ‘good news’, the cost of a fairly decent (livable) home with access to public transportation is still soooo high….

  • Gregg

    I think buying a house at a young age is a good idea especially since prices are now more reflective of the market than the appraisers. I bought land when I was young.

  • Anonymous

    The issue that I would consider is your job. If you know you are going to be in the same job or area for at least 6 years or more then by all means look into buying a home or condo.
    But, if you think you will be moving you had better be prepared for the possibility that your property might not sell as fast as you need it too. If you go into buying for speculation then you have not learned anything from the last 4 years.

    Buy a home to live in.

  • Hidan

    Could you ask your guests if the 30year loans with 20% down has made a comeback?

  • Jasoturner

    The headline asks “will it, does it, make sense…” to buy a house.  This question strikes me as loaded, because it seems to presume that home ownership is primarily an investment question.

    Home ownership is a huge quality of life issue, and it also has meaning in terms of how a community feels and how it works.

    But then, in today’s America, pretty much everything has to be monetized to merit discussion, doesn’t it?

    • Patrik

      IMO, you are correct and also if something is needed for life it will be marked up for the highest earners…such as shelter, proper sustenance or healthcare.  Theres a scary chart on the facebook page showing the increase in healthcare costs which are right behind college tuition

  • Patrik

    It makes sense to buy a home when you’re young if:

    1. You are married or have a family

    2. You can afford it, not just the down payemnt but the other long-term costs associated with owning a home

    Being single and living in a house is a waste and prevents a family that may actually need it from having an affordable abode, just my opinion.

    • Patrik

      *I speak as a 31 year old btw

  • Cory, Lord of the Nerds

    I bought a house in my early 30′s.  A bit of a dump, and undervalued by about 30k.  My mortgage payment is only $760 on a 30 yr loan.

    The thing that never occurred to me is, you never truly own your home.  Your village can compel you to replace your sidewalk or sewer line at great expense.  Changes to your property can be prevented by your town/neighbors through codes and the permit process.

    I still believe in home ownership in the coming times.  Buy as far below your means as you can tolerate.  Use your home as a resource.  Garden, raise chickens, or rent a room to a student.  Share your home and expenses with family if you can.

    Just don’t suffer from the illusion that having title to a plot makes you lord and master of the land.  As with anything material, it can always be taken away.

  • Adks12020

    I’m 30.  I live with my girlfriend of 2.5 years and we plan to sign another lease to rent. She works in the mortgage/banking field and I work in the legal field in lending so we think about homes a lot..and everything along with ownership. There are a couple reasons we will continue to rent:

    -I’m in grad school and hope to change jobs when I’m done.  I’m not sure where that job will be.  She also plans to go to grad school in the fall.
    -In our city you can rent nice apartments (3 bedrooms-1000+sq.ft.) for less than the cost of a mortgage + taxes on a decent home.  A few hundred dollars less.
    -Landlords pay taxes and upkeep.  Renting is simpler.
    -I don’t want to buy a home until I can afford what I want.  I don’t want anything extravagant but I want a nice home and it doesn’t make sense to buy  a home I don’t plan on living in for a long time.

    I have a few friends that have purchased homes recently and they are happy but they are in much more permanent situations. Don’t get me wrong I want to buy a house sometime in the next 4 or 5 years but I’m totally ok with waiting with the rental market as it is right now.  Homes will still be cheaper in a few years than they were a few years ago.  No way the housing market will rebound that fast.

  • Alex

    Only if you are fairly certain that you will stay put for at least about 10 years.  Otherwise, you are limiting your freedom of movement severely.  If you need to move a couple of years after purchasing the house be prepared to take a loss.

    We purchased our fist town house in Mass half-way between Boston and Providence for $250K with 20% down in 2008. Spent additional bucks on renovations. Took advantage of the government $8,000 credit. Great. At the time I was working as a law clerk in Providence. So far so good. However, when my clerkship ended, I found a big law firm job in Manhattan. Now what? Move my family to NYC and lose a bunch of money selling the townhouse? So now I am commuting almost every week back and forth between Mass and NYC.

    Then I found a wonderful job opportunity in London. Got an offer and had to turn it down. The numbers simply did not work.

    Now, to be fair, the house situation was never the only factor we considered when deciding whether to move or not, but it is a huge factor.

    In conclusion, if you are young and restless, DO NOT BUY A HOUSE. Keep your freedom and flexibility.    

  • Anonymous

    My husband and I are both in well paid professional postions and hold advanced degrees.  He works in IT and I am in the health care field.  The biggest obstacle for us is being able to afford a downpayment.  We pay $2000 a month in rent plus additional utilities, which would easily be enough to cover a mortgage on a modest home in our area.  Although we have a credit rating in the mid 700s, we have been unable to secure a mortgage as all of the lenders we have contacted are not willing to loan to us without having between 10-20% down, which we don’t have.  We currently have no debt other than car loans and student payments.  We are working to save it, but with the costs of child care, student loan payments etc. it will take us almost a decade to save up that amount of money.   I think that lenders at the moment have sung the pendulum so far the other way that they are not willing to work with potnetial homeowners. I wish that there were more flexible options for initial downpayments.  We have looked into FHA loans or seeking assistance from first time homebuyer supports, however they have not been able to help us.

    • Anonymous

      You do have debt. Car and student loans are debt.
      Also, 10 to 20% down is the norm and always has been.
      It was the ARM’s and sub-prime mortgages that put a lot of people into foreclosure. Any decent 15 or 30 year fixed mortgage will require a 20% down payment.
      I do agree that the lenders have gone over the edge of the absurd, but part of that is the reaction to the whole mess they made in the first place.

      My parents saved for a decade in the 60′s to buy their first home, why should that be different now?

  • John in Vermont

    Please contrast the central question in this segment with another story you’ve also covered: young adults still living with their parents.  With depressed wages, low bank returns the rising costs of car ownership, etc. many young people find they can’t even afford rentals much less houses.

    Even the college educated snobs are finding it harder and harder to achieve the American dream of carving out a better life than their parents. You have to be wealthy like the Obama girls or the Romney brood.

    • John in Vermont

      The Atlantic article above lays out the contributing factors pretty well. Also, note Gus’ comment below – young people should consider owner-occupied rentals and shared living arrangements instead of single home ownership. Both bring equity growth and limit out of pocket expenses.

    • Adks12020

      College educated snobs? Really? Are you saying if you are college educated that you are automatically a snob?  I think there are a lot of people that grow up in poor households and work very hard to go to college and graduate would be offended by that.  A large number of my friends were in that boat in college…we all worked throughout college to pay for our tuition and are far from snobs.

      • John in Vermont

        Sorry – it was a Santorum reference that was meant to be funny or ironic. (Not much that’s funny about Santorum). Again sorry and I agree with all you said.

        • Adks12020

          ahhh, I heard the Santorum comment when he said it…hard to read sarcasm on these boards…my bad

  • Mario Chamorro

    summary : young people should buy multifamily homes near parents for best results this year .

    I think buying a home only makes sense for a younger person if you know you’re going to stay put for a long time . This is usually not true for people in their 20s and I think it should not be true . Those are years to be traveling, exploring your career and changing jobs. Maybe if you buy a home near your parents so they can help rent and manage it when you need to leave . Parents tend to be fairly stable .
    I also don’t think it makes sense to buy a single family home . You rely on your salary alone . A multifamily home makes more sense for mortgage protection in the case of job loss . It takes more work to manage the bigger home, but you’ll be better off. I don’t understand why the discussion is all about single family homes.

    Either way, this is the last year of good home buying opportunities. The economy has turned around and we’ll see interest rates and prices go up soon .

    • Mario Chamorro

      Maybe I should give some background about myself . I carefully chose a career 20 years ago that would be useful in the future ( Internet Engineering ) , moved to an area with good real estate and career opportunities near my now deceased parents ( Boston ) . I own a 2 family home here and inherited 7 units from my mother . I am actively looking for another buying opportunity right now .

  • john in danvers

    NAR affordability only works if you can expect your income to grow faster than the interest rate on your loan.  Unless you’re in the top 10%, good luck with that. 

    Additionally, it doesn’t factor in competing family un-funded liabilities, like college, medical care, and retirement.  The escalating costs of these things require houses to become even lower priced, else we will have a persistently lower standard of living.  

    There’s only so much a person can make in a lifetime.  Something’s gotta give. 

  • Guest

    I’ve recently been contemplating home ownership.  I’m 30, have substantial savings, and just… want to have a place of my own that I can put my stamp on, so to speak.  However, in the early stages of my research I’m realizing I may be better off renting right now — after factoring in condo fees and taxes, even if I buy a place it seems I’d still have a hefty monthly payment even after my mortgage was paid off.  So what’s the point of buying?  It just doesn’t seem worth it at this point in my life, and it makes me that my current rental situation is a better deal than I’d realized.

  • MSnell

    My wife and I currently have a home under contract in Columbia SC. I am not sure if the people who can’t get loans at 20% down aren’t looking very hard, or if it is simply due to their respective markets. We have found programs in our area that offer 100% financing with competitive rates. Plus there is always the FHA option that allows for 3.5% down.  

    I’m aware that it is simplistic, but why not buy the housing market when it is down (may or may not be at the bottom)? If we are in this home for 5-10 years we should be able to build at least some equity- the home as appraised for more than the selling price. It is necessary to note that the seller bought for 224k in 2004, we are buying for 199k.

    Maybe the point is to move to SC? Or at the very least find the markets that have jobs and depressed housing.

    • BHA in Vermont

       Sounds dangerous. The 0% down thing is one of the reasons the housing bubble happened in the first place. If you can’t save a down payment, you can’t afford a house.

      Yes, buying when the prices and mortgage rates are down IS the right time but not necessarily the right time for everyone.

      And thinking a house selling today for $199K is a good deal because it cost $224K 8 years ago is BAD logic.
      - What THEY paid means SQUAT.
      - The current appraised value means SQUAT. Just ask the people you are buying from. Their $224K probably was the appraised value 8 years ago. It isn’t now.
      - build equity in 5-10 years? Again, ask the current owners how that worked out for them.

      It USED to be that you could expect a capital asset like a house to appreciate and if you did a good job, you would have your job as long as you like. But no more.

      Unless you have the CASH or secure reserves elsewhere, jumping in now is not safe even if the prices are substantially down from 10 years ago.

  • Guest

    The problem is simple. House prices are simply too high. 10 or 20 percent isnt that much when a house costs a decent amount. But lets be clear, its nearly impossible to save enough money for a down payment, or to pay off a house in a reasonable term. I am a yong service member who makes a little more than 20 grand a year. with my projections, in 4 years, I can only save close to 50 grand, which isnt anything compared to a $200,000 home.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    The thing that has changed since 2008 is a house is just a home – it’s no longer an easy way to invest money and expect a big return from, it’s just something you will continually sink a lot of money into just for the pleasure of living in it. Which makes it a really expensive venture.

    • guest

      Is a house an investment/asset or a liability?

      I think it’s a liability, just like your car. It depreciates in value over time and you need to use it to get to and from places. Same with a house. It’s value will depreciate over time and only the value of some houses – located in strategically placed location – MIGHT increase over time.

      And it is that word – MIGHT – that makes it a riskier if at all – investment.

  • PaulCJr

    No! No one should buy a home unless they truly want to live in one town for the rest of their lives and know they can keep a well paying job in that city or town for the rest of their lives. Statistics have shown that people that own homes are more likely to be unemployed due to the immobility a home places on its owners. It’s not always as easy to sell a home as it is to move from a rental. Especially in these new global economic times when people need to be mobile to maintain employment, buying a home doesn’t make sense. As a young recently master degree graduate from NYU, I will not be considering purchasing a home anytime soon and maybe never in the future due to the modern demands of following the jobs. 

  • Samantha


    I am 32 – single mom.

    Don’t have a down payment of 20% saved up. (Don’t have any money saved up at this point.)

    Don’t have enough saved for maintenance expenses to fix things in the house WHEN they will break.

    Don’t have the skills nor desire to spend all my free time to take care of the house and its upkeep.

    Rather pay “cheap” rent (cheaper than a mortgage will be) and have wonderful landlords take care of the rest.

    Maybe this will change, but I want to feel comfortable with the idea that house ownership isn’t for everyone, which includes me.

    But I will not jump into home ownership without a significant savings and cash cushion.

    Plus, I saw a lot of my peers get married early, buy a home, to only later get divorced and get stuck trying to sell the house and fight over the separation of assets.

    Thank you

  • twenty-niner

    No, don’t
    buy. Right now central banks are in a liquidity trap, but inflation spike are
    going to force their hands, and they will be forced to raise rates, and
    probably significantly, a la Volker in ’81. Higher rates will force prices
    lower yet. Throw in uncertain futures for Fannie and Freddie and the mortgage
    deduction, which are also propping up prices, and the outlook for housing is

    what banks will never make clear, is that mortgages are completely front loaded
    - you pay interest first then equity; so assuming a 30-year mortgage, you need
    to plan to stay put for about 10 years to have built a modicum of equity. But
    going back to the first point, after 10 years, rates might be at 10% in which
    case, the value of your house will have plummeted.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    One thing that has changed over the past few decades – we’re expected to sign on for a 30 year commitment for an asset in a fixed location, when we don’t expect we’ll be working in the same place 5 years from now.

    • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

      The upshot of this is most people who finance a house never expect to eventually own it outright. Which changes the whole concept of taking on a mortgage.

      People “buy” homes to temporarily live in one, not to own it. And that changes the game.

  • BHA in Vermont

    The “hard times don’t last forever” argument sounds like a housing bubble ready to start.

    Samantha’s comment is right on. If you don’t have the down payment and if you don’t have the money for repairs that WILL be needed, you really DO NOT want to put that anchor around your neck and jump off the ship.

    Then there is the whole question of how long you can keep your job (assuming you have one) that pays enough to afford the mortgage and taxes on a home.

    At this point I don’t see how kids can go to college and get a job that pays well enough to pay off THAT debt, let alone buy a home.

    • Tina

      I’m guessing that a lot of the colleges bought real estate to build their “must-have” spa gyms and spa refectories right when real estate was at its peak.  Tuitions today reflect those choices, still.  At least, that’s what I see around here, so I’m guessing that it happened throughout the country.  So, today’s students and recent graduates  are adversely affected by the profligate choices of the administrators of the recent past.  How many of those administrators had something personal to gain from these choices (like their own real estate to unload while prices were still sky high, etc., etc.)?

  • jim

    Here is my thought to potential future owners. There is NO SUCH THING AS HOME OWNERSHIP. True home ownership does not require “home owners” to pay real estate taxes. As you can be aware, real estate taxes go up every year and nothing is stopping it unless we have a revolution to overthrow the constitution created by our founder fathers who were originally unruly rebels against taxes. Therefore, until people take this awareness across their heads, there will further frustration even if the government is taking initiatives to make “home ownership” possible for the future generation.

    • Anonymous

      While I’m not happy about real estate taxes I do like having the street I live on plowed, the garbage picked up, and so on. The reasons real estate taxes go up is because of this obsession with not wanting to pay income taxes and making them lower. Real estate taxes go up when the state, municipality, city, or town can’t pay it’s bills.

  • MarkVII88

    The key for young homeowners right now, if they can afford it, is to buy a rental property as a first home.  They can build their equity so much faster as long as they are willing to potentially sacrifice on living space for a while.  Meanwhile they can take advantage of the overall high rents to cover most if not all of their mortgage payments.  My wife and I bought a duplex from a family member as a first home in 2004 at the age of 23.  We continued to live in a 900 square foot apartment for 5 years even as we started having kids.  We saved enough money from the rental apartment to be able to build a brand-new home we want to live in for the next 30 years by the time we were both 30 years old.

  • Dh001g

    I am 32. I am married. I grew up in an exurb in the midwest. I have no interest in buying a freestanding house. I live in the city and love being able to get a gallon of milk or egg sandwich from the corner store. I like being able to ride a bike and not having to spend $12,000 a year on a car. I would like to buy a prewar co-op with a common courtyard but renting for now is just fine.

  • Julia

    An early April Fool’s show, Tom?

    I’m 38 with an upper level degree, married, with student loan debt, a stalled out career due to the economy and supporting my husband during his unemployment. Over the last 5-7 years, when we would have been thinking about saving money for a home and children, instead we are worried about how to survive. Period. Buying a home now? So NOT a priority.

  • Anonymous

    Does not mobility and risk trump value? I’m happy to be stuck where I am, in a very, very desirable location, but I am in a position to not worry about mobility. Why would a young person surveying starter homes in look-alike neighborhoods want to stick their shoes in the cement?

  • Guest

    I’m 39.  I make $120k.  And I am in the technology field.  This industry is always in a state a flux, and being at a company for 4 years is a long time.  3 years seems like the usual.

    I haven’t bought a house because if I change jobs due to layoffs, my contract is up, or the company goes bankrupt, I don’t want to be tied to a local job market, especially in the case that the market is locally bad.  I need to cast a much wider net to find the next job.

    • BEEZ

      But those are your individual circumstances and not relative the housing market.

  • James Cassar

    As I am turning 30 and having been recently admitted as an attorney I am considering buying my first home with my wife to be this coming fall.  The only thing holding us back at the moment is the uncertainty of the job market.  While both of us are employed we do not have the certainty for both of our careers to pick a place to settle down.  It isn’t a factor of whether we can afford the house or not.  Houses are cheap!  The question is where can we take root for the long term.  We just don’t know where our careers will take us.

  • BEEZ

    It’s a critical issue for me. I’m probably going to buy this year. Ideally, I’d buy a 2-family that has a “homie feel” where I can start raising my young family.Then when I move on, I can rent out both units, and when I’m retired, it will be paid off. I can only image what the rents would be in 30-40 years. That is a solid retirement plan when combined with 401k, savings, social security,and any other investments.
    Yes, prices are too high, but the difference between a mortage and rent is not much (in Greater Boston at least). It’s actually somewhat negligible depending on your budget. There are also other quality of life considerations to take into account beyond financial. I want my children to have a home not a cramped apartment. If we lived in Manhattan or something, that would be different, but in Boston it’s not unreasonable.
    The problem is finding affordable home in a desirable community. Dynamic, diverse, connected, with quality schools. Unless you are relatively wealthy that is pretty much out of the question.
    My plan: get something modest I can definitely afford, slowly make some improvements, then as my income rises I will be able to either pay it off quicker (double mortage payments for example), and upgrade in the future if I want. I figure if the schools aren’t so great, by buying less than I can afford I’ll be able to send my children to private school in need be, or in ten years when my son is getting close to middle school, we can move to a better city.
    But prices seem to be hitting a low, and rates are so low, when thinking about the future it makes it a hard decision not to try and buy. Even if the price goes down a bit, I’d say I have time to build equity (as Tom just mentioned).
    I don’t agree it has to be somewhere you plan on staying (although that is ideal) “forever”.
    In terms of down payment, I plan to use an FHA loan with 3.5% down. If you can’t save up 10-15k then you probably can’t afford a house.
    Anyways…it’s a lot to think about…any advice from homeowners?

    • BHA in Vermont

       “I don’t agree it has to be somewhere you plan on staying”

      You have to look at the cost of selling. Now in your case, you are hoping to buy a duplex and keep it as rentals when you move on. If you can do that AND buy another house, it can work. SOMEONE has to own the rental housing, right?

      When you sell, the realtor will take 6% off the top. plus you have to pay the lawyer, etc. And you have to pay for the title search and property transfer tax, and the loan origination fees, etc for the new place. That means your property needs to increase in value by at least 10% before you sell just to break even. Unless the market is booming (and you sell before the INEVITABLE bust) that 10% can take quite a few years, especially now with the market being down, or at best flat, for several years.

  • AC

    can you please discuss the relationship of  home cost to transportation cost/travel time?

  • james

    I wish people would stop talking about how low mortgage rates have fallen. For young people and recent college grads who are just trying to find work in the first place, at least for many of my friends in the Boston area, who’s even thinking about trying to buy a home when they’ve got 5- and 6-figure student loan debts?

  • Stillin

    There was talk out of Columbia University, on a ONE PAGE REFINANCE option for people who have never missed a house payment, that is me. Where is this program and why is it not in place, being used as it would put a lot of money out into the economy…many people cannot refinance without good credit which prevents many people who want to take any kind of action.

  • Ulrich

    I work remotely for a company in Oregon but live in a medium sized city in Colorado.  I have enough money to put a 20%+ down payment, but there are several factors that are keeping me from seriously considering buying a house.

    1) If I lose my job, I would likely need to look to a bigger city to get a job.

    2) As of right now, I can pay my bills and put away about 20% of my income in savings and investments.  If I diversify this investment, isn’t that better than investing in one asset like a house?

    3) Considering the above savings, I frankly like that I will get a new appliance if something breaks.  We had a leak in our roof earlier this year, and my landlord payed roughly $10k for a new roof.  I continue to pay the same rent.

    Until I feel more secure in the idea of settling, I don’t think I’ll be buying a house.

  • Chris

    Prices are going DOWN, DOWN, DOWN.

    Why? Because the economy in America is running on empty.

    Wages are falling. Jobs are not secure.

    Home are NOT a good investment when millions en masse are being impoverished.

  • Longfellow’s Evangeline

    I apologize for not knowing all the details, but Virginia refused help recently to help homeowners in trouble.  Virginia is a landlord mind state.  They let real estate that is rental run down and do fake pretty stuff, nothing that helps utilities, to occupy space until the Regency planners can take possession of all property near water or on major roads.  People from the heartland should not let their young relatives in the military occupy rental homes in the Tidewater area, as unless they were recently owned by someone who could upgrade them, they  money will run down the drain on heat and air conditioning, and be called ‘wasteful, and consumptive,’ by the landlords, who are all tucked in tight.  The Landlords of the Regency have had plans for every piece of the Tidewater for at least 30 years.  Do not let your young families from live in the Tidewater.  Cheaper and Safer, to meet off site.  Why have your grandchildren looked down upon when their parents are deployed.  There is nothing for any child in the Tidewater, unless he i in private school.  The Regency looks down on the ‘feckless.’  Help is not coming.  You are on your own.

  • Kaba

    I would love to buy a house. But that is impossible for most young professionals living in the city. Someone remind my boss how much she pays me……..

  • Jim

    It is my understanding that before the 1920″s only 4 percent of Americans owned a home. It wasn’t a part of the “American Dream” until  after the depression. Maybe this idea was just a way to get out of the depression.

  • Guest2

    What im seeing here is simple, for younger people, a home isnt an investment, its something you need to settle down, live for the rest of your life. We dont want to spend the rest of our lives paying off a home loan.

  • John in Vermont

    You presenter says the Fed has thrown everything it can at jump starting the housing market. But banks have taken that Fed financing and put it into refinancing of EXISTING homeowners.

    The biggest problem is that the Fed, starting in the late 1990′s decided that housing would replace manufacturing as the prime engine of the new, service-based, economy. As we’ve seen, you can’t do this because housing depends on the high wages that went along with manufacturing.  Sure some tech and financial services jobs allow for ownership but the vast majority of service sector jobs do not.  It is this wage/housing price imbalance that needs to change.

  • Rd

    I object to the characterization of women As having “shacked up” in the past since they were not as large part of the workplace.

  • Tina

    ONE WAY IN WHICH PARENTS MAY NOT BE ABLE TO HELP:  If I hadn’t “downsized” from small (< 1200 sq ft) to teeny in the early 2000's when prices were way too high, I wouldn't have spent money on real estate commissions at high prices.  If I hadn't moved, I would now have the money to lend my child and child's spouse for a down payment; unfortunately, that money is no longer available, and the value of my house is more than $100,000 less than what I paid for it.  I have to be very careful that I don't owe more than my house is worth.  I cannot be alone in this situation.  

  • llomas

    We live outside Burlington, VT. We are building a barn on our property. We have discovered that with a total of $100,000 investment, we can have an apartment above which we can rent out at $800/mo. A friend of mine who is a broker said there are no investments she can help us with that would give that sort of return on our money… and we’ve increased the value of our property as well! These young people need to think outside the box, but even when they do that, property ownership is still a great investment.

    • BHA in Vermont

      - How much does the creation of the apartment increase the cost of the barn?
      - How much higher are your taxes and insurance?

  • Shawnarihani

    It’s interesting that you’ve noted that the trend for young American’s is getting married older and putting off purchasing property.  Since marrying in 2006, my husband and I (both age 26) have purchased our first home and 4 more as investment.   Capitalizing on the low prices.  We rent them out and they pay for themselves with 30 year mortgages.  We could not have done any of this individually, but together as a married team we are able to acquire so much more.  

  • Jason

    I recently bought my first home at the ripe old age of 24. Where I live in the greater Detroit area it is much cheaper to buy then to rent, and with FHA loans you don’t need a large down payment.

  • Mpompano

    I’m 32 years old and have been in the market for a home with my girlfriend for quite sometime. Up until now we have been priced out of the market, but with interest rates and home prices favorable it seems like we can do this. We have been working with a bank on buying a sort sale home, but the process is a long one. It has taken over 3 months just to get an answer on an initial offer! We are highly qualified buyers, but the banks don’t seem to want to let some of these houses go!

  • Longfellow’s Evangeline

    Sorry, just found out that it is the settlement money from victims of housing crisis that is being thrown into the general fund in Virginia instead of helping a home owner in crisis out.  As I said, it is the Virginia Gentleman way to stay mounted and avoid the poor and try to keep them off the roads and out of sight.  At one time those who were mounted had a duty to warn and spread information that all occupiers of the land needed.  Now the Mounted, Regency Class, only keep their friends and family informed, and do what they can to get the yeoman class out of sight, poor, and occupied with wage slave jobs.  They will occupy needed land until they can bring ‘their businesses in.” This is the Virginia way.  Type your comment here.

  • Tim

    I live in Vermont. It took 18 months of showing my home with only 1 offer. This was a beautiful desirable home in a great location. I was lucky to get back what I put into it after 10 years of ownership. I returned to renting since I think there are better places to park your money. I don’t have to worry about the $1200 per month mortgage, the $10,000 property taxes and all the insurance. When the roof leaks, the landlord is responsible for repairs. I am saving thousands of dollars per month and I can invest those dollars somewhere else. 

    • MarkVII88

       I am very familiar with the VT real estate market.  What I’ve learned is that in the last 3-4 years home values in VT in general have not fallen as dramatically as you would find in other parts of the country that are more widely reported.  Therefore, folks looking to buy your home are expecting some deal of a lifetime that just doesn’t exist in VT.  So they wait to make offers, and homes stay on the market in VT for a long time.  I am sorry that it took you so long to sell your home and I am glad you’re doing well now as a renter!

  • Henry

    Give me a break!  Sure people would love to buy a home but it’s near impossible on the incomes people earn with the expenses people have.  Most of the country is broke – that’s why they’re not buying homes.

  • matt

    In 2008 my girlfriend (now wife) and I bought a foreclosure because it was too good to pass up, plus rent in Boston is too high. We went from a tiny apartment to a single family home and actually saved a ton of money. 
    We were smart enough to make sure we could afford our mortgage on one salary alone if one of us loses a job. Sure enough I have been out of work for over a year but we are still afloat, haven’t missed a mortgage payment, and we’re happy to build equity and credit instead of paying exorbitant rent.

    • Anonymous

      Thank you for being responsible, buying what you can afford and being smart! 

  • Matt from Haverhill

    Both my wife and I have post bachelor education, and our student lone payments are higher than our rent. Your expert said this trend of young people not buying homes has been building for the past 30 years, during which time the cost of an education has skyrocketed. We would love to buy a home, but given the scarcity of well paying jobs and our current debt levels it isn’t going to happen soon.

  • Jan

    With many young people pursuing advanced degrees, especially in a city like Boston, there is a challenge — graduate students are not yet earning a great deal of money, but may be late 20′s and early 30′s hoping to start families in soon. They will soon outgrow a small “starter home”, but can’t yet afford a long-term family home.

  • BHA in Vermont

    Man I hope things work out for Theresa but she sounds just like all the other people who planned on making a ton of money with their house appreciation. She’s expecting $50K? I know people in semi-rural Vermont who bought NEW 7 years ago, improved their house (finished the basement and area over garage) and with an out of state job change sold it for a $40K LOSS last year.

    And if the house Theresa buys is older, she will be AMAZED at how much money she will need to spend on repairs.

    • Theresa

      Thank you! I realize that making a profit is a long shot for some however we have done our research. My dad is a contractor and I know things will work out well for me and my husband in the long run. 

  • Shannon Potter

    My experience has not been so positive. I purchased in 2006 assuming as a first time buyer with a decent job, a small home in a growing neighborhood of Nashville would be a good investment. What I did not anticipate was a stalled economy with no or minimal annual increases in wages. In addition to general cost of living increases (e.g. food and gas) my homeowners insurance tripled over 6 years. I had no claims. The company said, “All rates are going up”. Property taxes have skyrocketed as well; conversely, the value of my home has gone down because several homeowners on the block could not afford their mortgage and went into foreclosure.

  • AC

    restaurants & places to go? how about saving 1+ hours of traffic jams??

  • http://twitter.com/RealEstateCafe Bill Wendel

    Derek’s parting comment about paying rent to build someone else’s equity, or owning your own home and building your own were too simplistic.  Home equity builds slowly which is why one award-winning journalist, educator cautions that real estate agents can profit more than homeowners when it comes time to sell.  So highly mobile young professionals should look NOT JUST at monthly costs in their rent vs buy analysis, as Matt suggests, but ask (1) how long they’d like to live in their new home, (2) how quickly they will build equity, and (3) how much of that hard-earned home equity will be lost to sales costs, real estate brokerage commissions in particular:

    “Eroding Equity the Coffin Nail for Percentage Commissions”

    “The typical mortgaged homeowner has less the 13% equity in the property.  So what happens if they attempt to sell using the traditional percentage commission structure? After commission and closing costs, they might be lucky to net 2% on the sale. With so little cash available, the seller might be tempted to look to the real estate professional assisting him, who stands to pocket more than he does, and suggest that he take a commission-ectomy.”
    Julie Garton-Good, International Association of Real Estate Consultants

  • Glenn Koenig

    1.  $200,000 in Vermont?  There are houses in Orange, Mass for under $50,000!
    2.  But the point is, Real Estate Agents will sell you a house, (and say it’s in a nice location), but you’re really buying a neighborhood, a community.  How are the neighbors?  Cranky? Friendly?  You may find out after you sign that deed!

    • AC

      how are the traffic jams? do i have to spend 20 minutes and $5 in gas for one way trip to get groceries?

      • Gregg


      • BHA in Vermont

         Hmmm, hard to answer :) You can spend 20 minutes to go a few miles in some places and 20 minutes to go 20 miles in others.

        Depending on what and where you drive, $5 in gas can get you 16 miles or 66 miles :)

    • BHA in Vermont

       There are places in VT for under $50K as well.  $50K within 20 miles of Burlington (as the crow flies, the listings include places across the lake in NY) are mobile homes. But there is a 1919 1,200 sq ft house on a quarter acre in Alburgh listed for $49K.  Location, location, location.

  • AC

    because bedrock is 3 to 8 ft below ground (on avg).
    it would cost a fortune

  • twenty-niner

    I know two people who have recently moved, one from California to Virginia, the other from Virginia to NY. Both were severely underwater, and both essentially moved, leaving the keys on the counter. The guy from Virginia got lucky with just a short sale, versus a foreclosure, but had to sign a $40 K promissory note to make the deal go through, on which he plans to renege. The guy from California simply walked out, and has no plans to contact his lender, or mail another payment.

  • Bill Liteplo

    My wife and I bought a foreclosed house (our first home) in MA about a week ago.  We feel we got a great deal but there are certainly risks and frustrations.  On the day of our home inspection the house was flooded due to improper winterization which causes pipes to burst.  While the selling bank fixed most of the damage it was a heart-wrenching experience.  And then last night while dropping some boxes off, I found the boiler had stopped working.  Despite being a mechanical engineer, I found myself completely clueless as to what to do.  Homes should come with manuals!

    • BHA in Vermont

       That would be where this home buying warning comes in: “Before you buy, make sure you have a lot of cash saved up for repairs”.

  • David

    More housing in Somerville? R U kidding? Its already one of the most densely populated communities in the country. Have you tried driving around Somerville lately?

    • AC

      no kidding!

    • CHK61

      I giggled when the guest kept saying how “pretty” Somerville is…I guess he has never heard the term “Slumerville”.  Who knew 10-15 years ago that Somerville would be trumpeted as “the” place to live.  We should have all bought in Somerville when it was affordable, now it rivals Cambridge price-wise.

    • BHA in Vermont

       Ah, but it depends on where you come FROM. If you live in Manhattan, any place with 10′x10′ “yards” looks sparsely populated. 

  • Jay

    Two years ago at the age of 28 I bought a foreclosed condo in East Somerville. I got a great price and my lifestyle didn’t have to change. I still have roommates but now they pay me rent. 

  • David from Lowell

    Lowell is a great alternative to Somerville, Cambridge area.  Downtown museums, restaurants, commuter rail to Boston.  My wife and I bought a 1000sf 3-bedroom house within walking distance to the train station and downtown for 175,000.  Our mortgage, taxes, homeowners insurance combined is less than what we were paying in rent.

  • Rosemary Tambouret

    The Boston Globe had an interesting article recently suggesting that young people should consider buying a two family home, rent one part and use the rent to pay the mortgage.

    • BHA in Vermont

       Good plan if you can find the duplex and afford it.

  • Anonymous

    I am a real estate broker who represents buyers in the Adirondacks.  My advice where ever you are buying:  get the assistance of a buyer broker who is a member of a multiple listing service (this way the fee for the broker is paid by the seller’s broker at closing, as offered on the mls).  A good broker will give you an idea of the target property will appraise, the sales history on the property, how much the taxes will be, and what recent comparable sales are.

    • BHA in Vermont

       Fully agree. Been there, done that.

  • Lhd3unh

    Time to look at building with natural materials… Cob, earthen-dam, staw-bale, reclaimed wood, green roofs…. cheap natural, sustainable, and affordable

  • Andrea

    I bought a home last year in my early 30′s and it was the biggest mistake of my life. I’ll now have to pay nearly as much to sell it as I did on the down payment. I see no benefit to being trapped in one location, let alone forced to remain at the same job all my life in order to pay for it. My advice to others my age is this: renting is freedom.

    • Anonymous

      Selling after 1 year? I find it hard to recoup any of your $$ after such a short time period.

    • Anonymous

      I hear you! I bought a condo in 2004 at age 27. I’ve been trying to sell it for over 2 years with no luck. It’s a loft at 720 sq ft, which many people who are looking think is way too small. I definitely bought at the height of the market and thought I’d have no trouble selling.
      Worst mistake of my life!

      • Nissua

        I’ve heard two similar stories from friends who bought units in Cambridge in 2007. One is trying to pay the place off as fast as he can so he can eventually rent it and move on with this life.

  • Jeannemlucas

    Why is no one talking about job security. With unemployment so high, and the period of time to find work so long, that’ the big risk with homebuying.
    After 10 years of paying Boston rents, We tried moving back to the Midwest where housing is cheaper but the job opportunities are fewer. Now we have a job to go back to in the northeast and are looking at buying. It’s more feasible than it uses to be, but still one has to go pretty far out of town to find something near affordable and safe for a family. And what do you give up for quality of life with an hour and a half commute?
    And you can’t just go building skyscrapers in Somerville, it goalie changes the character of the place.
    Why don’t we have rent control like they do in new york?

  • Stillin

    Number one reason people move…neighbors. I remember this from sociology in college…talkto the neighbors before you sign. In Massena, NY many nice old neighborhoods , including mine, are full of foreclosures and people renting who live very poorly. As in not nice people to live next to due to their habits, parties, noise and drugdealing…not fun. Not worth the money to live there now, neighborhood has gone to crap.

  • Heather

    I’m 29 and my husband and I chose to buy in a more affordable suburb of boston. We have lots of other friends who are young couples who moved out here to buy where they could afford it. They all commute into boston, but can enjoy the small town life of the small communities in which we live. We love owning our own home!

    • Nick

      Exactly. Boston is expensive, but there are many affordable alternatives in great neighborhoods nearby. 

      • BEEZ


        • Realtor Pam

          I have been a broker for 28 years west of Boston. You have to go very far out to get affordable alternatives. Prices still need to fall about 30% before many people will be able to buy. People do not realize just how much exuberance there was in housing prices.  I estimate that about 75% of the homes I show under 500k are run down and have floor plans that do not function for life today. They should be torn down. Not only that they are sitting on way too much land. Zoning laws put into place in the 60′s are the cause of too high prices in the greater Boston area. Many towns need to rezone for smaller housing lots, multi-family dwellings and nice family oriented apartment complexes.

  • Nick

    I think part of the problem is people don’t know about many of the programs than can allow them to afford a house. I’m buying a house for $185,000 with my girlfriend. Our monthly payment will $1350 (less than the cost of most apartments) with a rate of 3.75% and ZERO down. Both of us make less than $35,000 a year. 

    • BHA in Vermont

       I would have a tough time sleeping at night under those circumstances. Hopefully you have a lot more than the suggested ’3 months expenses’ in savings.

  • Anonymous

    Thank you! Buying a home IS a gamble. Getting a degree and getting a job ALSO a gamble. Nothing is guaranteed. 

  • Chris

    I can hardly stand listening to this.

    This country is not going back to growth. NOT GOING TO HAPPEN. 

    Housing is not going to inflate again. THere is a major credit contraction happening. 

    Housing is tied to wages. AND WAGES ARE GOING DOWN.

  • Fred a Northshore Realtor

    Look,  it is not that hard to figure out.  A buyer should buy  when they see a home they like and can afford it ( 30ish percent of income), a seller should sell when they want to move. Everything else is not about housing, it is about talking about housing.  whn homes become more investment than living space then bad things happen, always

    • Anonymous

      Thank you Fred! I think too many people buy houses and think of the ‘investment, profitability’ of it. That’s not  guaranteed.

    • Anonymous

      People should read Thomas Wolfe’s “You Can’t Go Home Again”, as it has a lot about the real estate speculation of the 20′s.

  • Anonymous

    I guess my wife and I were motivated by different reasons when buying. No, we don’t have children so that wasn’t it. We were tired of the apartment life. It wasn’t to turn a profit (though it would be nice). 

  • Anonymous

    We bought a small BRAND NEW home so we wouldn’t have to worry about the problems of an ‘old home’. It’s not huge, but we expect it to be problem free for 5-10 years. 

    • Fred a Northshore Realtor

      good luck with that,  I tell all my buyers that they are not really buying a home they are buying a hobby.  Things brake

    • BHA in Vermont

       Sounds about right – 7 years is when things start to go south. A little here, a little there.

      And you don’t need huge. Huge is frequently a lot of wasted space that costs big bucks to heat/cool with higher property taxes and insurance costs.
      - Hallways are a waste of space unless you live in a museum and the artwork is displayed on the walls. 
      - You can do all the necessary things in a 5′x10′ bathroom that you can do in a 15′x20′ bathroom – and you will have a lot less surface to clean.

  • Elizabeth in RI

    The key to good home purchase decision making is to NOT think of your home as a giant piggy bank, which is what drove a lot of our problems during the past decade. Home ownership is a big step, but if mobility isn’t an issue, and the costs are comparable to renting (with maintenance, tax, insurance etc factored in), it can be a liberating experience. And right now seems like a great time to buy. Just go do your homework first!

  • Ethan Waldman

    I am 27 and will be building a tiny mobile cabin for the cost of a down payment (about $30k). The tiny house lifestyle is not for everyone, but this is the only way I could see owning my own home.

    • BHA in Vermont

       Probably a good plan. Especially if you design it is such a way that you can add on in a PLANNED way, rather than piecemeal. Of course, it wouldn’t be mobile then :)

      But if you still like the land in x years (or find other land you like better), you can put in a “larger house” foundation with a specific footprint for the tiny house so it can be “put down” and add rooms as money allows. In the end, your tiny house might become one of the bedrooms in a larger house. In the meantime, you would have a really nice deck for your tiny house (just make sure there are drains in the foundation basement or you will have a stinky, stagnant mosquito breeding pool under the deck :)

  • Maureenclairewhite

    I used to work for contractor doing home renovations, so I know just how expensive it is to maintain a home- especially in Boston when the housing stock is older.  I wonder if the young couples who think they are saving money by buying rather than renting are taking this into account?

  • BHA in Vermont

    The “big boom” huge profit sales periods are not something to plan on nor can they be predicted.  How many areas/periods existed where you could buy for $50K and sell 5 years later for $250K? That was clearly a sale into a booming market and to make money in that arena, you have to be ready to sell as prices rise AND not plan to buy anything of the same size in the same area to replace it. Otherwise you’ll just move sideways.

  • Sara Rattigan

    To add to what some others have already raised, I think job security is huge in buying a place today, and not even just the unemployment factor or worrying about making payments, but in getting a mortgage. 

    My husband and I recently bought a home in Malden, MA, and while prices are low and we got a decent rate in the end, we weren’t 100% sure we would get the mortgage due to our job situations, even though we had an excellent down payment. My husband was about to change jobs, and I have been self-employed for less than a year. 

    This incredibly limited our options for mortgage provider, and we had a couple places tell us outright it wasn’t even worth applying. We actually felt we had a track record to prove our reliable income, but mortgage providers only care about a steady W-2.

  • John Fairbanks

    My wife and I moved from FL to VA so that I could get a job teaching. I have my M. Ed. and there were NO jobs in FL. My wife got a job here in Waynesboro and I have a good job here so we just bought a house 2 weeks ago! We got an amazing loan called the Chip Loan and this allowed us to purchase a home. We only used my income to get the loan and that allowed us to feel comfortable that we could afford the payments no matter what, especially with my wife working. Our mortgage payment is $50 LESS than our earlier apartment payment in the same city. I could not stomach paying the apartment complex any more $$$

  • thomas

    According to the National Homebuilders Associations website, the average sized home in 1970 was 1400 sq ft and today it is 2700 sq ft. During that same 40 years the average sized family shrank by one person. How does the country justify the doubling of home sizes with less occupants?? I truly believe too many in this country have seriously blurred the lines between needs and wants.

    This country, per person and per household brings home the biggest paycheck in the world an for most it wasn’t enough. They simply bit off more than they could chew. At 43 I have never lived in  home larger than 1000 sq and I find no need for anything bigger. That includes a former marriage with a step daughter; we all had plenty of room.

    Unless people get their priorities straight and decide that the biggest paycheck in the world is in fact enough to live off of. Then individual homeowners are going to repeat history and bite off more than they can chew. And to that thought, where is one homeowner who has lost their home and who is willing to stand up and say, “I made a mistake and bought something bigger than I NEEDED”. More families could have decided to build or purchase a home that only needed one paycheck to pay for. Imagine that, living within your means. If more people had bought homes with that in mind, then one person could loose their job or get ill and laid off and many families would still be in theirs homes instead of bankruptcy court.    

    • CHK61

       I am a 50 year old female and rent a 400 sq foot apartment in the Boston area.  Many people would not be able to do that (too small) but I’ve always lived below my means because I don’t want to work until I am 80.  Due to my relatively cheap rent I have been able to save a lot of money and am financially stable but I worry about the future of the country and how people are going to survive with the rising cost of health care, job insecurity, baby boomers aging, etc.  I’m still not convinced it is a good time to buy, in my case, a condo.  In my parents generation, the breadwinner (usually Dad) worked for the same company for years and retired fairly comfortably with often a pension.  No longer.  My peers who carry huge mortgages look down on me as I still rent and live in a small space but it works for me. 

      • BHA in Vermont

         They’ll be asking to sleep on your couch when they get laid off and lose that house in bankruptcy court.

        • CHK61

          Thanks for your support.  :-)  Yes, their lives are certainly more stressful than mine (I have no debt) but they do have nicer and bigger living spaces.  Yet buying property is one of those rights of passage that (reportedly) qualifies a person as a responsible adult.  There is a stigma to renting – people still want to know “when are you going to buy?”  “Are you going to rent forever?”  People talk about their mortgages, interest rates and refis at parties and if you don’t have one to brag about, you haven’t quite made it as an adult.

          • BHA in Vermont

             You can talk about the plays or concerts you went to while they were figuring out how to pay for their next “keeping up with the Jones” toy.  How many hours a day do they spend AWAKE at their homes? Probably a LOT less than they spend at work making money to pay for them and the vacations they need to get away from the stress of working to pay for the homes. ;)

          • Pam

            Many over 50 are now selling and choosing to rent in retirement, so those people at parties will be in the same boat as you soon. I think opinions are changing especially in the city. People who can afford to buy are actually choosing to rent. One of the reasons why my income as a realtor has gone down each year over the last few years and why I am back in grad school…..

      • Gregg

        They may be peers but they’re not friends. I look up to you, nice work.

      • Pam

        Sold my home after the divorce and now in grad school working towards that PhD, as I have been selling real estate in Greater Boston since 1984 and can no longer make a living wage doing it. I would love to find a 400 s.f apartment in Boston! I congratulate you for living the simple life, which I now prefer to the big colonial in the suburbs, that I once had.

        • CHK61

           I think you can find small apartments but it may take a bit of leg work.  Mine is actually in a great neighborhood in Cambridge.  I feel pretty fortunate.  Good luck!

    • Anonymous

      Thanks for saying that thomas. Makes sense. We bought a small (maybe 1600-1900 sq feet) but very quality build (vs the modulars we’ve seen literally pop up) and everything upgraded. 

  • Modavations

    My inheritence is a property in Newton ,Ma..It was bought for 35,000.00 in 1955.It’s been as high as 850,000.00 and is now around $650,000.00.i THINK bOSTON PRICES CAN EASILY COME DOWN 10-30%.i WOULD NEVER SELL THE PROPERTY,BECAUSE IF Markets rebound,it’s worth real money.God Bless my Daddy

  • Modavations

    Theresa,Theresa,Theresa.Retail is 3.8% on a 30 yr. mortgage.You can do better.If the house was not a distress sale and they accepted your bid,you’re paying too much.Take $150,000.00 in cash and go do the deal.If you’re paying two thousand a month rent in Vt..your daft.If theghome came with “Hot and Cold Running Maids”it’s  a good deal.

    • BHA in Vermont

       Who says it was the first offer? And I believe she said $1,600 for rent which might well be a 2 bedroom apartment depending on where you live. There are 3 bed/3 bath condos in Burlington selling for $800K.

      • Modavations

        You might be right,I thought she said 2000.00.You can rent a lovely 2 bedroom Condo in Belmont for $1600.00.In Belmont there’s no need to lock your doors

      • Theresa

        I was the one that talked on air $1,600 is what I pay for a townhouse in Winooski $2000 is what it costs after heat and electric, so you both are kind of correct, depending how you look at it. Yes it is a nice townhouse but with all the college students in the area it is hard to find anything affordable in the Burlington area. So that is why we are choosing to buy…

  • Modavations

    What’s up with you folks in Vt.Ray in Johnson Vt.went on line and found a felon named Frederick Douglas Manning and put the photo on line.He intimated that this was me and that I am a felon.I’m from Newton,Ma.my family consists of Doctors,owners of Ad.Agencies,Professors…This is as low as i’ve seen it get on NPR.While I’m sure Rays’s Mom is embarrassed,Joe McCarthy is proud.The photo was blocked to me,but I can guarantee I’m much better looking

    • BHA in Vermont

       Hey, don’t lump all of us living in Vermont together as  “you folks in Vt”. One person doing something unseemly should not reflect poorly upon the rest of us.

  • Jane Hodges

    Add to the reading list, by new book on this very topic, Rent Versus Own, shipping today: http://www.amazon.com/Rent-vs-Own-Jane-Hodges/dp/1452102538 

    • Jane Hodges

      I mean “my” new book on this topic…

    • twenty-niner

      We’ve seen 30 years of declining mortage interest rates from a peak of 18.2% in 1981, which has been extremely bullish for housing prices. Throw in the tech-boom of the late 90s, which saw rapid gains in wages, along with the unprecedented relaxation of borrowing standards, and voilà, you have a housing bubble.

      What I have yet to hear one single main-stream housing commentator acknowledge is that interest rates can and will reverse course, and how that could leave current homeowners severely underwater, especially if wages don’t keep pace, which is likely they won’t.

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  • John

    In three years, you will have paid back roughly 5.5% of your loan.  The house you buy today may have lost more than that in value in three years.  Or it could be up??

    Lots of uncertainty….

    • twenty-niner

      Mortgages are front loaded, meaning you pay a lot more in interest in the early years than principal. Let’s look at the math. For $300,000 in principal (no down payment) and a rate of 5%, at the end of three years, you will have paid the following:

      Interest: $44,007.00
      Principal: $13,970.00

      So at the end of three years, assuming the house is worth the same, you’ll have about $14 K in equity, after spending $57.977.00 in mortgage payments, on top of maintenance and taxes. Closing costs vary, but assuming $4K, if you’re lucky, you’ll get $10 K back out of the $60+ K you spent.

      If your’re unlucky like two recent homeowners I know who were forced to relocate for work, you’ll owe the bank money when all is said an done. Bottom line, if your project time span in one location is under five years (my personal number is actually ten), rent.

  • Krista

    I haven’t read The Rent Is Too Damn High, but I am 27 years old and have lived in 6 states since I graduated from college (of my own volition), and I have never paid more than $400 a month in rent. I’m a writer and/or wilderness guide, depending on the year, and I not only can’t afford exorbitant rent, I would refuse to pay it even if I could, like my grandmother refusing to pay full price and instead shopping sales and thrift stores. I understand that my lifestyle is probably not the one that many of my peers would choose, but I think anyone who is throwing away their ability to save money by paying too much for rent is simply not trying hard enough. First of all, you have to be willing to make compromises: if you’re in your 20s and paying off student loans, you don’t really need a dishwasher or a big screen TV, you can live with roommates, you can make do with funky, interesting rental situations that will give you stories to tell when you’re older and living in more comfortable quarters. Also, consider living a little bit farther from work, in a cheaper area, by calculating what you’d save on rent versus what you’d pay for gas. Secondly, get creative. My cheap and interesting rentals haven’t fallen into my lap. I haven’t found them in newspaper or online ads. I network, I actively tell people that I’m seeking something cheap and a little funky, I search in the community for people who have similar interests and I cold call them, explain that I’m new to the area and looking for a place to live, and ask them if they have any leads. In my experience, the best rentals are not advertised. For example, when my boyfriend and I broke up and I could no longer afford our Vermont apartment on my own, I was driving around one day after glumly looking at overpriced, blah rentals, and happened to drive down the most beautiful, charming mountain road that I fell in love with. The next day, I drove back, parked my car at the bottom of the road, and began walking up with my dog. I asked the first guy I saw whether he knew of any rentals available on the road. He pointed to a guy on a tractor and told me to talk to him. I did, and ended up finding the best rental of my life. The owner hadn’t wanted to advertise it because she’d always rented it via word of mouth to trustworthy folks. Moral of the story: be persistent, be creative, and refuse to pay full price, because there ARE other options.

  • Coastal Girl

    Does anyone remember that there is a generation between the Boomers and the Millennials? I’m a Gen-Xer and purchased my first home at 40 after moving around the world – Work and grad school.  My friends are split 50-50 between ownership and rentals.  I would say that my generation is more mobile than the previous as we are not tied to lifetime jobs.  Additionally, most of us will either change or have changed careers.  I also have friends who have moved from ownership to rental and back based on where they are in life. I think the mind-set is generational.  Home ownership is not the end game for all but it is not the impossible dream either.

  • Modavations

    I hope the Hannity Breitbart piece lives up to it’s hype.I’m, gonna pop some popcorn

    • agar

      So…? How was it???

      Aw, the dying legacy of your hero barely lasted one measly news cycle? What a bummer.

  • mikey

    A mortgage is just another chance for the bank to destroy you in some kind of tricks and traps credit product. If you’ve had school loans, credit cards or any other “innovative” financial product in the last ten years then why would you want another one? Secondly, the securitization of mortgages in the derivatives market is what created the housing bubble. Now the major banks have even larger amounts of credit default swaps on European sovereign debt. The result is that everyone is watching the rich get richer and the poor get poorer. It doesn’t take a genius to figure out that we got sold down the river. I don’t care if your the tea party or Occupy Wall Street, everyone understands that the government and business is stacked against them and we are not going back to the innovative society that build the middle class any time soon.  

  • Grooveisgood

    I am 30, single, have a good job in Boston and a decent salary, and would love to purchase a home outside of Boston. I find the challenge is not securing a mortgage, it’s coming up with the down payment. With education loans and a car payment, I am not able to save as much as I would like. I make middle-class income, so I am ineligible for many government down payment assistance programs. Are there any government programs for down payment assistance for a single middle-class stable income person?

    • Oconsh

      In the great state of Tennessee there is a first time home buyers program which covers down payments if you qualify income wise.

  • Youthlib2000

    I’m 31 and would like to buy a home but I always hesitate to because I worry it will be a setback to my career by keeping me in one city, some people such as nurses or teachers can settle in most towns but if you have a highly specialized career it may require constant moves
    To further it along.

  • Tim E

    I’ve become convinced that homes are for living, not for investing.  I’ll buy a home again when it makes sense for reasons of life, not for hopes of getting rich from it.  

    One of your guests advocated building more high-rise living in good neighborhoods.  Yes!  Houston is cheap, but the plentiful housing is spread out.  I’d like to see a U.S. city get serious about building up, so that living downtown where the good action is becomes more affordable.  Spiral, not sprawl.

  • Four Elements

    In the intro, did someone really write “queue” instead of “cue”? Amazing!

  • Jackie

    My problem has been that with the low mortgage rates comes low interest rates on personal savings.  Before the 2008 crash I had a preferred savings account at a local bank that paid about 5% APY.  Now it’s hard to get even a 1% return in short-term CDs.  How am I supposed to save for a down payment and starting expenses with such low rates?   Putting money in the market might be great for long term goals, but not for this.

    I don’t anticipate owning a home until I inherit one or until a few years after interest rates increase.

  • Frank TheUnderemployedProfessi

    One of the big reasons why people are not purchasing houses is simply that they cannot afford to.  A large amount if not the majority of jobs in this country are unstable low-wage jobs which makes it difficult to be able to purchase a house.  According to one report that I’ve read, our nation has lost 10% of its middle class jobs over the past decade.

    Also, young people are paying record-high rates for college tuition and burdening themselves with unprecedented amounts of student loans, which is almost like having a mortgage.  (Many if not most of the new graduates are not finding work in their fields, which means that they’re working poverty-wage jobs.  It’s even been reported that as much as 85% of all new graduates move back into their parents’ homes.)

    Another problem is that increasing gasoline prices (which also raise the price of food and other goods) are sucking up money that people could use to purchase homes; it has to be having a negative effect on the housing market in some sort of a way.  The cost of health insurance and health care is also increasing.

    • twenty-niner

      But the Fed says inflation is in check. Brain hurt now.

  • Tpp52748

    Home ownership is not what it used to be.Today if your lucky enough to have payed off the mortgage the property taxes will force you to move.

  • MinnieDaMulcher

    After poring over the on-line for-sale listings for over six months, my husband & I got a great deal on a 1958-vintage house in Denver (we’d been renting for almost 8 years).  It’s twice the size of our former small (and very cheap) mobile home rental but at only a couple of hundred dollars a month more. Even with the increased utilities and insurance, the total price is still less than renting an equivalent size/condition home.
    We are in our 60s and used a loan against our life insurance policies for the 20% down on a 20-year loan. 
    It’s funny that no one mentioned the problems of being a pet owner and finding affordable rental accommodation – or any accommodation at all.  The mobile home park was one of the few places that had a fenced yard and was more or less accommodating to our cats and dogs.
    And yes, even in a home that passed its inspection with glowing colors, there are a lot of things that need to be done.
    With student loan debt, variable job possibilities and the uncertain economy, I don’t know how a young person or young family could afford to pay the monthly premiums to have decent life insurance policies like we have, let alone save for a down payment and own and maintain a home.
    The irony of it all is that due to the poor economy, two sets of
    children have boomeranged back to live with us, and a third would move
    in if we had any room left!

  • http://www.facebook.com/cbongard Christian Bongard

    My fiancé and I are 25 and 26 and
    we starting to look for a townhouse in the Northern Virginia area. While the prices and mortgage rates are at the lowest point in our lives, first-time priced homes are going too fast for us.  Often we go to an open house, first day on the
    market and it already has multiple offers. 
    We are not ready to look and buy the same day, but as the wedding gets closer and our down payment savings gets bigger we will go ahead and bite the bullet.

     While there are lot of young buyers like us, when looking at places that are not “move-in ready” we do notice a lot of older cash buyers too.

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Sep 15, 2014
In this Thursday, Sep. 11, 2014 photo, Middle Eastern leaders stand together during a family photo with of the Gulf Cooperation Council and regional partners at King Abdulaziz International Airport’s Royal Terminal in Jiddah, Saudi Arabia. (AP/Brendan Smialowski, Pool)

President Obama says he will build a coalition of partners in the Middle East to combat ISIS. We’ll do a reality check on who’s really stepping up for what.

Sep 15, 2014
This Monday, Sept. 27, 2010 file photo shows hikers on the South Kaibab Trail in Grand Canyon National Park, Ariz. (AP/Carson Walker)

Uproar over development plans for the Grand Canyon. We go to the Navajo Nation and the Canyon floor to see what’s at stake.

Sep 12, 2014
In this May 23, 2014, file photo, Janay Rice, left, looks on as her husband, Baltimore Ravens running back Ray Rice, speaks to the media during a news conference in Owings Mills, Md. (AP/Patrick Semansky)

#WhyIStayed. We’re looking at women in and out of relationships of domestic violence.

Sep 12, 2014
President Barack Obama meets with Congressional leaders in the Oval Office of the White House in Washington, Tuesday, Sept. 9, 2014, to discuss options for combating the Islamic State. (AP/Evan Vucci)

The President’s ISIS strategy. The Ray Rice video. Congress is back. Apple’s new watch. Our weekly news roundtable goes behind the headlines.

On Point Blog
On Point Blog
Our Week In The Web: September 12, 2014
Friday, Sep 12, 2014

In which you had varied reactions to the prospect of a robotic spouse.

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Beverly Gooden on #WhyIStayed
Friday, Sep 12, 2014

Beverly Gooden — who originated the #WhyIStayed hashtag that has taken off across Twitter — joined us today for our discussion on domestic violence.

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Tierney Sutton Plays LIVE For On Point
Friday, Sep 5, 2014

We break out Tierney Sutton’s three beautiful live tracks from our broadcast today for your listening pleasure.

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