Buying a house when you're single

[KillerCharlie]

Okay I've posted on other aspects of buying a house, but now I'm having second thoughts.

If you're 26 and single would you buy a medium sized house that takes up a significant portion of your income? I wanted to buy one for quite a while but now I feel like I'm too young. It is an extremely good time to buy and if I buy later I might not be able to afford as much because of prices and rates, but I almost feel like I should enjoy my youth before I'm tied down... wait until I'm married or something, even though financially it's probably better to buy now.

 

[spidey07]

You'll never see a better time to buy a house than right now in your lifetime.

 

[deadlyapp]

I have two very good friends who have purchased over the last year.

If you *plan* on living in the same area for at least 5+ years, its a good idea to buy, but if you are unsure about careers and location, I wouldn't.

 

[ScottFern]

Best time to buy was back in April. You missed out on $8k. I on the other hand gleefully await my $8,000 check from the US Government for my new house!

 

[Corporate Thug]

OP, I'm 26 and (crossing fingers), will open escrow on a condo that I'm going in with my buddy. As deadlyapp said, I have no intention of moving out of the area so I went for it.

 

[irishScott]

If you *plan* on living in the same area for at least 5+ years, its a good idea to buy, but if you are unsure about careers and location, I wouldn't.

This.

 

[Chaotic42]

Define significant. Now is a great time to buy. I got approved at 24 and finally ended up buying at 26. My rent was $860 at my old apartment, and my escrow here is $965 and will only go down since my insurance rates are finally dropping (Katrina).

Just understand that even with only 5% down, closing costs, connection fees, moving expenses, etc are going to be expensive. I think my total costs were something like $13,000.

 

[bobsmith1492]

I bought mine at 23 but it's not a huge chunk of my income by any means. At 500/month I should have it paid down in 18 years.

Look for a starter house - somewhere inexpensive that you can fix up and is in a decent area. You don't need to go buying the biggest place you can afford; better to get somewhere you can easily and comfortably afford and care for, improve upon it, and if you want later to get somewhere bigger (maybe after you're married) you have a good start, hopefully having made some money on your first house.

 

[SarcasticDwarf]

Best time to buy was back in April. You missed out on $8k. I on the other hand gleefully await my $8,000 check from the US Government for my new house!

Sortof. I am in the same boat as the OP. I have been looking around for a nice 3br, 2ba house that is large enough to raise a family in if/when I get married. What happened in April is that you were competing against everyone else who had a hard deadline to get the tax credit. For the first time in two years you were actually seeing two people competing for the same house.

By waiting until after the tax credit expired you have a drastic reduction in buyers and the housing inventory increasing as more houses quickly enter the market.

 

[Chaotic42]

I bought mine at 23 but it's not a huge chunk of my income by any means. At 500/month I should have it paid down in 18 years.

Look for a starter house - somewhere inexpensive that you can fix up and is in a decent area. You don't need to go buying the biggest place you can afford; better to get somewhere you can easily and comfortably afford and care for, improve upon it, and if you want later to get somewhere bigger (maybe after you're married) you have a good start, hopefully having made some money on your first house.

Yes, this is a good point. I bought a 1050ft² house in a nice neighborhood. A really big house might be easier to resell in the future, but all of your costs will increase: Cooling, lighting, property tax, maintenance, etc. Plus, when you get married your wife is going to want her own house that she picks out.

 

[SarcasticDwarf]

Look for a starter house - somewhere inexpensive that you can fix up and is in a decent area. You don't need to go buying the biggest place you can afford; better to get somewhere you can easily and comfortably afford and care for, improve upon it, and if you want later to get somewhere bigger (maybe after you're married) you have a good start, hopefully having made some money on your first house.

A starter house is only a good idea IF you have the ability to sell it and get a larger house relatively easily. In this market and the market we are very likely to have for another five years it will be very difficult to sell the house at anything other than a loss.

Also, depending on the area the price difference between starter and non-starter homes can be pretty minimal.

 

[speg]

Buy now and rent it out?

 

[MJinZ]

Okay I've posted on other aspects of buying a house, but now I'm having second thoughts.

If you're 26 and single would you buy a medium sized house that takes up a significant portion of your income? I wanted to buy one for quite a while but now I feel like I'm too young. It is an extremely good time to buy and if I buy later I might not be able to afford as much because of prices and rates, but I almost feel like I should enjoy my youth before I'm tied down... wait until I'm married or something, even though financially it's probably better to buy now.

Financially, that depends on you entirely.

If every paycheck of yours goes towards paying your mortgage, taxes and bills, then no, you're going to be fucked entirely during an economic downturn and you lose your income for awhile. AKA, your house will get taken from you.

Cost of housing = Mortgage, insurance, maintenance and operations, and land taxes.

If you buy a house for $250K today, you will have likely paid out $500K by the time your mortgage is over, even at a very low sub 5% interest rate. The hope is that your house is worth more than your mortgage by the time its over, otherwise, you ended up and just forced yourself into saving money (which most Americans have trouble doing anyway, which is why most Americans have nearly all of their savings in the value of their homes), with the added benefit of living somewhere a bit nicer than you would have otherwise rented + saved money into the bank.

If you're only spending a portion of your paycheck for the house, and the other 1/2 is able to be put somewhere else, then you're probably in a good position to buy.

 

[dquan97]

Define significant. Now is a great time to buy. I got approved at 24 and finally ended up buying at 26. My rent was $860 at my old apartment, and my escrow here is $965 and will only go down since my insurance rates are finally dropping (Katrina).

Just understand that even with only 5% down, closing costs, connection fees, moving expenses, etc are going to be expensive. I think my total costs were something like $13,000.

I agree, need more details. Also, use this calculator:

http://www.nytimes.com/interactive/business/buy-rent-calculator.html

 

[MJinZ]

I agree, need more details. Also, use this calculator:

http://www.nytimes.com/interactive/business/buy-rent-calculator.html

That's a bizarre calculator.

It assumes you are buying a $200,000 home and then assumes you're going to spend $1100 per month on rent.

You can spend $1100 per month on rent here but the equivalent homes you'll find are $500,000 - $1million. There are no $200,000 homes where I am (Boston Metro area).

 

[Chaotic42]

That's a bizarre calculator.

It assumes you are buying a $200,000 home and then assumes you're going to spend $1100 per month on rent.

You can spend $1100 per month on rent here but the equivalent homes you'll find are $500,000 - $1million. There are no $200,000 homes where I am (Boston Metro area).

I'm trying to think of a way to say this that doesn't sound like an insult, but there's a lot of America out there that isn't the Boston Metro area. Besides, you can easily customize all of the numbers. I find it odd that you can rent a house in Boston for $1,100/mo, but it would cost $500,000 to buy it.

 

[bobsmith1492]

I'm trying to think of a way to say this that doesn't sound like an insult, but there's a lot of America out there that isn't the Boston Metro area. Besides, you can easily customize all of the numbers. I find it odd that you can rent a house in Boston for $1,100/mo, but it would cost $500,000 to buy it.

Agreed. I have a very comfy house just a mile outside a gorgeous medium-sized Michigan city on an acre, half-forest, and it was ~89K. From everything I've heard buying a house in a major city is essentially a no-go unless you're rich...

 

[ScottFern]

Sortof. I am in the same boat as the OP. I have been looking around for a nice 3br, 2ba house that is large enough to raise a family in if/when I get married. What happened in April is that you were competing against everyone else who had a hard deadline to get the tax credit. For the first time in two years you were actually seeing two people competing for the same house.

By waiting until after the tax credit expired you have a drastic reduction in buyers and the housing inventory increasing as more houses quickly enter the market.

I didn't compete against anyone. In fact the sellers dropped their price by $20,000 and I was quite happy with the price. The bank appraisal was actually more than what I paid. So maybe in some areas but definitely not my experience.

 

[SarcasticDwarf]

I didn't compete against anyone. In fact the sellers dropped their price by $20,000 and I was quite happy with the price. The bank appraisal was actually more than what I paid. So maybe in some areas but definitely not my experience.

Yeah, really dependent on market. Where I live about 20% of the houses sold, and all of the ones in my price range that I liked were among those. A much larger city would be different, particularly if you are flexible on where in the city you live.

 

[JS80]

Best time to buy was back in April. You missed out on $8k. I on the other hand gleefully await my $8,000 check from the US Government for my new house!

lol noob. housing prices will now just fall by $8k due to reduced artificial demand.

 

[ScottFern]

lol noob. housing prices will now just fall by $8k due to reduced artificial demand.

LOL, moron.

I didn't compete against anyone. In fact the sellers dropped their price by $20,000 and I was quite happy with the price. The bank appraisal was actually more than what I paid. So maybe in some areas but definitely not my experience.

 

[JEDI]

Okay I've posted on other aspects of buying a house, but now I'm having second thoughts.

If you're 26 and single would you buy a medium sized house that takes up a significant portion of your income? I wanted to buy one for quite a while but now I feel like I'm too young. It is an extremely good time to buy and if I buy later I might not be able to afford as much because of prices and rates, but I almost feel like I should enjoy my youth before I'm tied down... wait until I'm married or something, even though financially it's probably better to buy now.

Buy NOW!
mortgage rates are LOW. houses are cheap. Win/Win

if u can, buy a quad plex. (4 apt bulding). thats the max a bank will give a mortgage for. (anything bigger than 4 apts, and u need a commercial loan)

live in one of the apts, and rent out the other 3 for the price of the mortgage

 

[JS80]

LOL, moron.

lol, idiot, post-tax credit, price would have dropped $28k.

Listing price =/= housing price

Just give up, you're going up against an economist, and you're just a leftwing nutsack douchebag idiot.

 

[mfenn]

That's a bizarre calculator.

It assumes you are buying a $200,000 home and then assumes you're going to spend $1100 per month on rent.

You can spend $1100 per month on rent here but the equivalent homes you'll find are $500,000 - $1million. There are no $200,000 homes where I am (Boston Metro area).

You realize that you can change the numbers right?

The whole point of the calculator is to plug in your values and see whether or not you should buy or rent based on your time horizon...

 

[Bignate603]

When the market crashed in Phoenix I picked up a smaller 2 bedroom home in a great area for $85k. It needs a few odds and ends (painted some stuff, sorted out some small plumbing issues, air conditioner died but it was under warranty) but there was nothing to stop us from moving in immediately. Mortgage, insurance, and taxes are $300 less than I was paying in rent. With the $8k tax credit it was a complete no brainer for me.