If you bought a home 20+ years ago, could you afford it today?

fuzzybuddy

fuzzybuddy

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Location
The Sticks, Northeast PA.
To me, it was expensive when I bought my place in 1993. Today, I don't think I could to buy it today.
If you bought a home 20+ years ago, could you afford it today? Are you glad you did?
 

I bought that house in 2001 in another town in my county. Everything here was going up and sold immediately and inventory was better in that town. And because of the work I do, finding another job was easy. Of course I now know they were giving loans to people that did not deserve them.

So I bought that house with 20% down, good income and credit. And it was a very unhappy place. I remember (I think) that my house payment was $553.75. That did not include tax or insurance. I have more in the bank now than the sale price of that house when I bought it and I can't seem to buy a decent manufactured home in a park.

After all that, sorry, the answer is no. I could not afford it.
 
No. We're semi retired and without the equity in our paid-off home that we bought nearly 40 years ago. We couldn't afford the price or monthly mortgage of our home (over $6000/month, assuming 20% down payment and 7% interest).

That said, all three of our children bought homes (2 within the last 5 years), even at the high prices of housing in So Cal. Fortunately, they all have interest rates under 3%.

It's a good thing they're happy with their homes because they're trapped by those great rates. At 7%, they couldn't afford their houses if they wanted to buy them now...
 
Yes I could afford my current home now. Even though I'm no longer pulling a paycheck overall I'm in a much better financial position than twenty years ago. Also I never got caught up in the bigger is better house trend, I built a practical home for an affordable price.
 
Probably, because the extra money from lower monthly expenses would have been invested. It costs a lot to keep a home in good order. If we wanted to move to a bigger city with a higher cost of living, we’d couldn’t do it. Vancouver homes are over a million, so it would be a major downgrade if we moved to be close to family.
 
OMG, NO way!
It was 'in relo'(cation)..so we could negotiate.
Now, this community is 'going for'
upwards to $1M.+
 
I could not afford to buy a new home with cash. Given that, at my age, it would not be worth getting a mortgage because the homes are so expensive, the interest rates are up, and I don't think I will live long enough to pay off the mortgage! Not worth it for me.
 
I still have my first house, we bought it in 1990 and I could sell it for 5 times the money. My daughter and her family live there now.
I bought the house next door to it about 8 years ago, and it's worth twice what I paid. I rent this one to my ex-wife.
The house I bought not quite 2 years ago would bring about 50% more than I paid. (or more)
I bought a few acres and an old house about 15 years ago and paid $1100 for it, now the county says it's worth over $75k for tax purposes.
I inherited a small farm where I still live.
Long story short, I couldn't afford any of them right now, but I am paying for the last one.
Got about a year or so to pay on that one, then I'm done buying houses.
 
For what my home is worth today, I sure wouldn’t pay that amount. Affording it and getting my money’s worth are 2 different things.
 
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It's sort of an unfair question. To wit...

People on this forum are retired, semi-retired, or that status is getting mighty large in their front windows, so buying a home now without a huge equity from a previous home is probably a non-starter.

That said, earnings 30+ years ago corresponded with home prices at that time. DH & I never earned the salaries ($130K plus) our children receive, but our house cost far less than what they paid.

Similar situation existed for DH & me and our parents. We paid $135K in 1985 (at 13% interest!), more than twice what my parents paid in 1970 (7%) for a bigger house in a far more upscale neighborhood, and laughably more than my in-laws paid ($8900) for their home in 1953 (4%).

My parents and in-laws were past their big earning years when we bought our home, so the prices shocked them - just as our children's home prices shocked us.

Could I afford to buy this home again? Sure (since it's paid off it would just be a matter of rolling my equity into it). Could I afford it without that equity and only putting down 20%? Of course not.

Then again, my parents and in-laws would have been in the same position about not being able to afford their homes when they were in their early 70s (mid-1990s).
 
Not a chance! I bought this house in 1978 for $40,000 - putting a fairly large down payment into it (my half of the sale of our previous house when my Ex and I divorced). It is worth over $500,000 now. The monthly payment was +/- $350/mo. I doubled the payments on it the last couple of years and paid it off completely in 2002. Too many "businesses" buying up homes and jacking the prices out of sight then renting them at ridiculously high rates now.
 
StarSong said:
It's sort of an unfair question. To wit...

People on this forum are retired, semi-retired, or that status is getting mighty large in their front windows, so buying a home now without a huge equity from a previous home is probably a non-starter.

That said, earnings 30+ years ago corresponded with home prices at that time. DH & I never earned the salaries ($130K plus) our children receive, but our house cost far less than what they paid.

Similar situation existed for DH & me and our parents. We paid $135K in 1985 (at 13% interest!), more than twice what my parents paid in 1970 (7%) for a bigger house in a far more upscale neighborhood, and laughably more than my in-laws paid ($8900) for their home in 1953 (4%).

My parents and in-laws were past their big earning years when we bought our home, so the prices shocked them - just as our children's home prices shocked us.

Could I afford to buy this home again? Sure (since it's paid off it would just be a matter of rolling my equity into it). Could I afford it without that equity and only putting down 20%? Of course not.

Then again, my parents and in-laws would have been in the same position about not being able to afford their homes when they were in their early 70s (mid-1990s).
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Making mortgage payments suck. I took out a 30 yr. conventional mortgage on this home and 12 years later, I paid it off. I just couldn’t see paying all that interest each month. I went into the bank and asked them to do a reamortization of my mortgage, but they wanted to charge me for something, which I forget, so I tokd the banker at his desk, “I decided to pay it off.”

He gave me an “Are you serious look?” You know the kind. I told him I didn’t stutter. I asked him to get the paperwork ready and I will be back whenever you call and tell me it’s ready. If I took all 30 years to pay it off, I would have paid almost 3x’s what I did pay for the home.
 
fuzzybuddy said:
To me, it was expensive when I bought my place in 1993. Today, I don't think I could to buy it today.
If you bought a home 20+ years ago, could you afford it today? Are you glad you did?
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What a great question. My mind set was in the now - my first thought was absolutely. But I had to think about it. We got a great interest rate on this house. Therefore, depends on the interest rate 20 years ago.
 
911 said:
Making mortgage payments suck. I took out a 30 yr. convention mortgage on this home and 12 years later, I paid it off. I just couldn’t see paying all that interest each month. I went into the bank and asked them to do a reamortization of my mortgage, but they wanted to charge me for something, which I forget, so I tokd the banker at his desk, “I decided to pay it off.”

He gave me an “Are you serious look?” You know the kind. I told him I didn’t stutter. I asked him to get the paperwork ready and I will be back whenever you call and tell me it’s ready. If I took all 30 years to pay it off, I would have paid almost 3x’s what I did pay for the home.
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I don't know how or when, but my house will be paid off way before 30 years. Love your post. Thank you for the inspiration!!!!
I love the "did I stutter". Priceless!!!!
 
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Ladybj said:
I don't know how or when, but my house will be paid off way before 30 years. Love your post. Thank you for the inspiration!!!!
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If you want to see sticker shock, just ask your mortgage company to run an amortization chart for you of your mortgage. It sure brought me to reality.
 
fuzzybuddy said:
To me, it was expensive when I bought my place in 1993. Today, I don't think I could to buy it today.
If you bought a home 20+ years ago, could you afford it today? Are you glad you did?
Click to expand...
We bought our first home in 1997. If we had to purchase it for what we sold it for, we wouldn’t have been able to afford it .
 
With people being retired and not in their working years of course most could not. In the past 47 years I have owned 10 homes. Some I could afford now and some not. I have lived in 5 states so prices vary widely.

In 1994 my then husband and I built a new home and it’s in Wichita Kansas. It’s only worth the same price as my small condo in Nevada. Location really matters although the house is much newer and bigger than my condo.
 

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