I dunno, I "guess" I'm the previous generation. It sucked back when my parents bought their home at 9%, and we thought we got an amazing deal at 6%. Then things happened and interest went down and everybody refinanced a few times as it dropped.
Before we bought a house we rented a bedroom in somebody else's house, then a crappy apartment and bought basically nothing else. It sucked, but we lived below our means and saved up. It took a few years, and then we were in.
I think that two things are simultaneously true:
1 - The housing situation isn't great today and isn't getting better.
2 - The up and coming generation has unrealistic expectations of what it's taken to get into home ownership based on stories from very out of date economic conditions from before the Vietnam war and some strange ideas that they should be able to buy a single family home in the central business district of a big city for 30% of minimum wage.
Here's the tip: Live well under your means, grind hard, commute long distances, rent the cheapest place you can practically live in, and save your money. When you have 20% of a house, buy it, refinance if you can for lower rates, grind hard, commute long distances, and save your money. Turn the growth in equity from that house and the new money you saved to buy either what you want or where you want. This is how it's worked in most medium-big metro areas for at least three generations.
Here's how to action this tip (assuming the Bay Area):
The average 30-year Mortgage Rate since 1971 is 7.76% -- that's your baseline.
20% down on a $800k is $160k -- if you live around the Bay Area, that's your target. Why? That's around the jumbo loan limit for the Bay Area (check your local limits). This is how you get the lowest rate.
I checked, there are plentiful properties under that amount, within commuting distance from San Francisco. Commuting distance should be calibrated at under 90 minutes each way during off-peak traffic conditions. Either travel early or late. I picked both Oakland and Lafayette/Walnut Creek areas.
Assuming you make Bay Area pay as an engineer, it's not unreasonable to assume you bring home more than $100k after taxes. We'll use $100k to make it simple.
Rent should be around 30% of your income. I found plenty of current listings where you can live by yourself within commuting distance of downtown San Francisco that are under $2000/mo. You can always room with somebody, or look for single room rentals.
Looking up some average cost of living indexes let's say it costs about $2500/mo to exist. So we need about $4500/mo.
That leaves us with $46k/yr in raw savings towards that down payment. That's 3.5 years of tough disciplined savings. Voila, you can buy a home.
You said you have student loans? Okay, looks like you did the math, 5-6 years is not unreasonable. Voila, you can buy a property.
Get a roommate, a live in significant other, or a spouse, and you can dramatically reduce these numbers by increasing income and/or lowering living costs. Voila you can buy a property.
Over 3-6 years you'll most likely get raises, bonuses, and other opportunities. Voila you can buy a property.
This pattern has been remarkably persistent since the 70s at least. It sucks, but it's what it is.
Before we bought a house we rented a bedroom in somebody else's house, then a crappy apartment and bought basically nothing else. It sucked, but we lived below our means and saved up. It took a few years, and then we were in.
I think that two things are simultaneously true:
1 - The housing situation isn't great today and isn't getting better.
2 - The up and coming generation has unrealistic expectations of what it's taken to get into home ownership based on stories from very out of date economic conditions from before the Vietnam war and some strange ideas that they should be able to buy a single family home in the central business district of a big city for 30% of minimum wage.
Here's the tip: Live well under your means, grind hard, commute long distances, rent the cheapest place you can practically live in, and save your money. When you have 20% of a house, buy it, refinance if you can for lower rates, grind hard, commute long distances, and save your money. Turn the growth in equity from that house and the new money you saved to buy either what you want or where you want. This is how it's worked in most medium-big metro areas for at least three generations.
Here's how to action this tip (assuming the Bay Area):
The average 30-year Mortgage Rate since 1971 is 7.76% -- that's your baseline.
20% down on a $800k is $160k -- if you live around the Bay Area, that's your target. Why? That's around the jumbo loan limit for the Bay Area (check your local limits). This is how you get the lowest rate.
I checked, there are plentiful properties under that amount, within commuting distance from San Francisco. Commuting distance should be calibrated at under 90 minutes each way during off-peak traffic conditions. Either travel early or late. I picked both Oakland and Lafayette/Walnut Creek areas.
Assuming you make Bay Area pay as an engineer, it's not unreasonable to assume you bring home more than $100k after taxes. We'll use $100k to make it simple.
Rent should be around 30% of your income. I found plenty of current listings where you can live by yourself within commuting distance of downtown San Francisco that are under $2000/mo. You can always room with somebody, or look for single room rentals.
Looking up some average cost of living indexes let's say it costs about $2500/mo to exist. So we need about $4500/mo.
That leaves us with $46k/yr in raw savings towards that down payment. That's 3.5 years of tough disciplined savings. Voila, you can buy a home.
You said you have student loans? Okay, looks like you did the math, 5-6 years is not unreasonable. Voila, you can buy a property.
Get a roommate, a live in significant other, or a spouse, and you can dramatically reduce these numbers by increasing income and/or lowering living costs. Voila you can buy a property.
Over 3-6 years you'll most likely get raises, bonuses, and other opportunities. Voila you can buy a property.
This pattern has been remarkably persistent since the 70s at least. It sucks, but it's what it is.