Looking at starter homes now versus when my parents bought theirs is wild

My folks bought their first place in 1995 for $85,000, a three-bedroom in a decent suburb. They put down 5% and their mortgage payment was less than their rent. I've been saving for two years and for that same money now, I'm looking at a one-bedroom condo that needs work, and I'll need a 10% down payment just to be considered. The whole game changed after the 2008 crash, banks got way tighter. Anyone else feel like they're playing a completely different set of rules?

3 comments

3 Comments

hunt.nora23d agoMost Upvoted

Remember when people said renting was just throwing money away? I used to believe that too. But after seeing what milessmith said about prices outrunning pay, and trying to save for a place myself, I get it now. My parents' mortgage was cheaper than rent, but my rent is half what a mortgage would be on a similar place today. The math just doesn't work like it did for them. Saving for a down payment feels impossible when the price keeps jumping every year.

milessmith24d ago

Wasn't there a report last year showing starter home prices grew three times faster than incomes in the last decade? It feels like the goalposts aren't just moving, they're sprinting away. Your parents' situation sounds like a totally different world, and the stricter lending after 2008 did reset the whole board. Saving feels like running on a treadmill that keeps speeding up, doesn't it?

joelt7023d ago

My cousin just put 12% down on a fixer-upper and his payment is still double my rent. It's a completely different ball game now.

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