So, when's a young couple going to be able to buy a home?

[ThomWV]

Let's make up a couple. He's a cop with 5 years on the force, she is just finishing up her first year as a substitute teacher but is hoping for full time work in the next school year. They lived in a rented trailer the first two years of their marriage, the last two have been in a 2 bedroom apartment. They have one child but fortunately through their church they have affordable childcare. Their car is 4 years old and just paid off. They have two credit cards, one with a $1,200 limit ($628.13 remaining available credit at 16.4%) and one with a $6,000 limit of which just over $4,000 is untapped. They have generally made their payments on time, but for several months she was behind on repayment of her student loan ($23,800 remaining balance).

They really want a home of their own. In their small town a modest 3 bedroom house can be had for $100,000 and that is what they have their hearts set on. They had saved $6,700 toward a down payment by monthly contributions ($100 per month after the initial investment) but the value of the account had dropped to half since they received their last statement.

Who is going to give them a mortgage?

Nobody, that's who.

[Benhurst]

1. Owning a home is sooooooooooo New Deal.

The lower classes will rent in the New Order.

[ThomWV]

3. The definition of Ownership Society: Someone else owns it and you get to pay.

Its sort of like the Service Economy, where everyone gets in a big circle and services the person in front of them.

[midnight]

6. Benhurst knows the future.

[MNDemNY]

2. When you save up your 25% down-stroke.

[GreenPartyVoter]

4. Never? That's what we've figured. I'm not working (health issues) and

he's making less than $35K a year. We have debt including payments on 2 cars, although the student loans got paid off finally (13 years after graduating.) We live in a trailer on rented land and have our 2 boys stuffed into the front bedroom. We had considered trying to get a double-wide but the need for a new car came up and so we pushed the idea back for a while.

At this rate by the time we get the newest car paid off the boys will be in H.S. Do we need a bigger house or some $$ to help them go to college? Can they even go to college with the money coming into our house? (I hope they can get truckloads of scholarships but it all depends on how much they apply themselves through high school, I guess.)

I wish that college was like K-12 and paid for via the gov't, like in some other countries. How many young couples could afford to buy houses shortly after graduating if they weren't saddled with the crushing debt of student loans?

[L. Coyote]

5. Banks open on Monday.

I'd say start applying on Monday. Job as police officer should be all it takes to get a bank mortgage loan. D'oh!!

[Jack from Charlotte]

7. There's always someone out there who will self finance....

That's how I bought my 1st home in '79. My sister, too.

There are sellers who are desperate as well. Go find them.

If your example lost half of their down payment account, them they're stupid. It should have been in a CD, bank account of money fund that could not lose it's value. Regardless, the still have $3,500, right?

Nevertheless, find a house that's paid for.... there are many out there. The owner might hold a note for say, 3 to 5 years. So give them $4,000 down payment, finance the remaining $96,000 on a 30 year Am schedule, callable by the seller in 5 years. Seller financing can also save a few thousand in closing costs, as well.

[shireen]

12. it's 2008, and it's not that simple ...

Not all sellers are desperate.

* There are houses on the market that have not budged in asking price because the seller is in no hurry to sell (probably because there's a renter using the house) ... he/she is just waiting for a sucker to come along and purchase an over-valued property.
* For people who have paid off their homes and want to move, it is sometimes more cost-effective to rent the house than sell it.
* For the few "perfect storms" out there, like you've described, the houses get snatched up so fast that it doesn't even show up in the MRIS listing. It's all about connections, and if you're not plugged into the right network of information about great deals like you've described, you're out of luck. One time, I saw two MRIS listings for two reasonably-priced homes, where the description said, "sold before it was listed!" -- the only reason it appeared in the listing was so the agent could brag about it.

Meanwhile, rents are going up. I know. I'm a renter who has to move soon because my complex is being converted to luxury rentals. If I moved from my current bare-bones place to one of the renovated units, my rent would go up more than $400. And the sad/scary thing is that the new rates are normal for any relatively safe neighborhoods in the metro area.

[MedleyMisty]

8. My husband and I bought a house at the end of July

It cost $79,000 and Bank of America gave us the mortgage - 15 years with a fixed interest rate and they paid the closing costs. My husband has some mad good credit - mine's decent, but not quite as good. Mostly because the bills don't have my name on them so I don't have as much credit history. So we just put the mortgage in his name.

We're both 27 - does that count as young?

I think we make something like $40,000 a year combined - I know I make $10.25/hour and he makes a bit more than that.

[stray cat]

9. Even a cheap 1br condo in this region is 300,000 so I need a downpayment of 60,000

[shireen]

10. Check out Shred's income distribution post with graphics

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4168279

Ties in very nicely with your illustration.

[kwyjibo]

11. Don't make up a couple, what about me? I want to buy a house.

I'm 28, I have a freelance job as a graphic designer, although I'm hoping to soon get hired with a salary. My husband has a decent job, but we're going to have a baby in April and he's going to be a stay at home dad. We've never had credit cards, I owe $21,000 in student loans which I just started paying after graduating in May.

A good house in a decent neighborhood in our town is around $150,000-$200,000.

[AwakeAtLast]

13. I was able to buy my first house at 37.

All of my young adult years were spent in a trailer. All of them. One divorce, one child, and one job loss kept me there, and that was during the supposed *good* times (1994-2005). I'm just hoping to hang on the what I've got.

Edited to add: That house was bought with the help of a VA loan after my husband spent a year in Iraq. I would trade the house to have that year back.

[Warpy]

14. Nobody is doing them a favor right now

because we haven't seen the bottom in the housing market, not by a long shot.

What they need to do is concentrate on paying down that debt, once they've saved enough money for a six month disaster cushion. Debt is poison.

Luckily for them, they're in professions that are not vulnerable to offshoring.

However, they're in the position my folks were in. They came of age during the Depression, bided their time during the war, and only bought their first house in their late 30s.

Renting isn't the worst thing in the world. However, if I were them, I'd reconsider that trailer. Those things are much nicer than apartments, hands down.