Hacker News Reader

Comment by tdicola | Hacker News Reader

Given that the median home price is over $1 million if you want to own a home you're going to be paying closer to $4k/month for a mortgage. After taxes that 125k is closer to 90k take home and once you put away more of that for retirement/savings you're looking at only $2k/month to pay all the bills and pay for food. For a single 22 year old it's no problem, but for someone trying to raise a family and support others it will be scraping by.

View on HN

A house is something you can sell. If you need to pay a lot of money to service a big mortgage, that doesn't mean you're worse off than someone paid slightly less somewhere where housing is cheaper. Depending on how much your loan costs you (and property taxes, and everything else), you're still potentially coming out ahead.

Rent is a deadweight loss. OTOH, the cost of a loan combined with the risk of relying on property as your primary lifetime investment may make it worth it.

I see this viewpoint expressed way too often on HN by people who should know better. Mortgages are not all upside. See http://www.nytimes.com/interactive/2014/upshot/buy-rent-calc...

I know mortgages are not all upside. Mortgages do have another effect, not taken into account often enough: they are a forced savings mechanism.

(I rent, BTW.)

Orrrr you could do what normal people do and set up your direct deposit to put a certain percentage into a savings account. Taking on a mortgage because you don't have self-control sounds disastrous. Also, what happens when you need to dip into this "savings account"? Refinance your house?

Well, there seems to be no limit to the price of housing then, $4k is ridiculous. Whenever I see these Silicon Valley salaries I can't help to be envious, but I guess I underestimate the costs...

I grew up in the Bay Area and that sounds about right. To live comfortably while raising a family in a South Bay suburb you pretty much need both parents making six figure salaries.

Reply on news.ycombinator.com