POLITICS Inflation /General Finance Insanity

Discussion in 'Politicants' started by HCKevinSteele, Oct 30, 2022.

  1. zehr27

    zehr27 8th's VIP

    Yeah I worry the most about the people banking on refinancing. I just don't think it happens anytime soon and if it does its probably because the economy is in really bad shape and at that point it may be too late for those people as they might not have jobs and will likely be stuck in a house with tons of negative equity.
  2. IP

    IP It's just business.

    But people buying houses in which they do not live and can not rent for the mortgage were playing a stupid game of Russian roulette. If you live in the house and can make the payments, you'll be fine in the long run.
    NorrisAlan likes this.
  3. Volst53

    Volst53 Super Moderator

    We stayed in a historical artificially low interest rate period due to China and other developing countries acting as a disinflationary force which let the government and us both live beyond our means.

    this came off the backs of the blue collar working class people here but that times over due to demographics.

    so we have to keep interest higher( 3-5%) as there’s no other boom to bail us out now.
    Other countries are [uck fay]ed because they don’t have the population to rebuild like before after this crash.
  4. justingroves

    justingroves supermod

    Some materials have already jumped that much, if not more, the past two years
  5. Poppa T

    Poppa T Vol Geezer

    Seeing this on a graph is scary.

    We bought our first house in 1979. My VA loan rate made it doable. Took a new job and relocated in 12/30/80 - 1/1/1981. In 1981, we were ecstatic when I negotiated getting the builder's 12% construction loan as our fixed rate 30 yr. Normal rates were north of 13%. His construction loan was coming due and the bank was about to foreclose on him. We were lucky.
  6. IP

    IP It's just business.

    But this would be on top of that.
  7. IP

    IP It's just business.

    Biggest difference is adjusted for inflation, people don't make as much as they used to AND houses are bigger. There is not "affordable housing" built anymore.
    NorrisAlan and HCKevinSteele like this.
  8. justingroves

    justingroves supermod

    I know, I'm saying it's a 60 to 70% increase in total on materials
  9. HCKevinSteele

    HCKevinSteele Well-Known Member

    I was very fortunate to buy my first home at the end of 2020 before prices and rates went through the roof. But I was thinking about comparing my situation and how I'd want/need something bigger once I have kids, and wondering how the outlook for me compares to what my parents faced when they bought a new house right before I was born. So I did the math on the house I grew up in, and it looks like when I was born 30 years ago to afford that house you would have needed to make approximately 2.5 times the median personal income for a male at the time. I'm using personal rather than household median income because my mom quit working not too long after I was born.

    So if I go look at values of new or new-ish home in the same area that would be most comparable to the house my parents bought, it looks like you'd need to make approximately 4-5x the median income for a male. That's just napkin math but even with a little margin for error that is pretty sobering. To me it feels like wherever you fall on the socioeconomic scale, things are probably harder right now (other than in deep recessions perhaps) money wise than they've been in the past 20 or 30 years. Obviously this is fairly anecdotal, I was a baby 30 years ago, but I don't think I'm off base.

    Hell, I was talking to a friend the other day the same age as me who just had his second kid. I'd say he makes roughly 1.75x the US median income. He told me he's not really able to save any money right now. Don't get me wrong, they have a nice home (but they had to live an hour away from his work to afford a nice home). He probably maxes 401k contributions, kid's college plan, etc. He's not complaining because he knows 90% of Americans are truly hurting in a way that he isn't. The overall point he was making was to say hey, I'm more successful than my Dad was at this same point in his life, and it feels like I have far less security or ability to save than he did. And I'd say that's probably a pretty common theme for people that are 25-35 right now. And granted, we are in some crazy times, but the kicker is that it's sort of hard to see things getting measurably better any time soon.
  10. HCKevinSteele

    HCKevinSteele Well-Known Member

    My brother is a builder, he's out on his own now but previously worked for one of the largest (maybe the largest I can't remember) homebuilders in the country. That company builds monster subdivisions of cheaply built cookie cutter homes. From times I've been around the neighborhoods it seems like a good sampling of America, plenty of cops, teachers, etc. And they are paying more than they can truly afford to get a new home that is a piece of shit. The siding is rippled the day you move in. Anything and everything, major and minor, going wrong from the day you move in. Makes me so sad that people are stretching things as far as they can to get a shoddy product. But, that's what's available. To get a 2,500 or 3,000 sq ft house at a price they can "afford", that's how it has to be.
  11. TennTradition

    TennTradition Super Moderator

    The amount we consume now is also fundamentally different than for my parents. I do think as inflation sets in and debt actually costs something that we will see that begin to shift some. It amazes me how many thing my parents still own from when they first got married. And while I know they don’t build appliances like they used to - I’m talking about skillets, bowls, a Coleman cooler (random but comes to mind), a napkin holder (again random), etc etc. It’s a little embarrassing how we churn through things by comparison.
    SetVol13 and NorrisAlan like this.
  12. HCKevinSteele

    HCKevinSteele Well-Known Member

    There's no doubt that's true and it's a contributing factor for sure, but to me it feels like it probably doesn't change the overall picture that much.

    Edit: Since I shared the anecdote about my parents, I'd be remiss if I didn't also mention that there's another layer of spending differences between me and my parents in our 20's, and that's on experiences.

    Traveling for football games, concert tickets, hunting trips, travelling for friend's weddings, eating out, etc. I know I spent far, far more on these things in my 20's than my parents did. In my parents case they bought a house as soon as they got married and were house poor for 6 or 7 years so I'm not sure they really had a choice. Regardless, I'd imagine that may well be true for a lot of people my age and maybe an even bigger difference than just buying random stuff. Though I suppose the exorbitant buying of random stuff takes off once you have kids and a house big enough house to store said stuff.
    Last edited: Jan 24, 2023 at 9:06 PM
  13. zehr27

    zehr27 8th's VIP

    You are definitely in more shit if it's an investment property. Bank never forgets that you owe them money.
    justingroves likes this.
  14. zehr27

    zehr27 8th's VIP

    Walmart/Amazon cheap shit has replaced a lot of well made things of the past. It's easier just to buy cheap and replace later when it wears out.
  15. IP

    IP It's just business.

    Not so easy now.
  16. zehr27

    zehr27 8th's VIP

    100%. Now we get to way over pay for cheaply made shit. It's pretty sweet.
  17. NorrisAlan

    NorrisAlan Founder of the Mike Honcho Fan Club

    Gas jumped 20 cents at my exit over night, up to 3.39 a gallon. For no apparent (to me) reason it has jumped 40 cents in the last week or so. Just up.
  18. IP

    IP It's just business.

    Because you have to pay whatever they say.
  19. warhammer

    warhammer Chieftain

  20. IP

    IP It's just business.

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