How much did your parents help you towards your first home of your own?

[Jeannie]

$75k here is about 1/4 of the way to having a 20% down payment.

I'm over here like: $10k down, $290k to go (for a DOWN PAYMENT).

Whoa!!! $1.5 million! Hope that's not a starter home.

 

[kanerf]

None. I did not buy my first house until I was in my 40s. I had spent 13 years in Germany prior to that.

 

[DLgal]

Whoa!!! $1.5 million! Hope that's not a starter home.

Sadly, yes. It is. That would get us an appropriately 2000 sq ft 4bd/2.5-3 bath. And it would likely be considered a condo. Something like this:

https://www.redfin.com/CA/Irvine/16...ent=link&2010988919=variant&813945303=variant

 

[grapefruitjellybean]

$75k here is about 1/4 of the way to having a 20% down payment.

I'm over here like: $10k down, $290k to go (for a DOWN PAYMENT).

Our kids are screwed!

 

[grapefruitjellybean]

Sadly, yes. It is. That would get us an appropriately 2000 sq ft 4bd/2.5-3 bath. And it would likely be considered a condo.

Sounds like we live in the same city.

 

[indimom]

We built our 2 bed, 1 bath home in 1997. I believe it was around $65,000 for the build. We had paid off the 3 acres prior to building the house, so that wasn't included. DH did a lot of the work himself. We sold it in 2003 for about double that.

 

[DLgal]

Sounds like we live in the same city.

It's ridiculous that this is the norm in so many places now.

 

[tvguy]

Whoa!!! $1.5 million! Hope that's not a starter home.

It could be in some parts of the nation. My son and his wife sold the "starter" home in Sacramento for $425,000 and bought a comparable home in Northridge for $950,000 and it needs LOTS of work. But they are public sector workers and they can apparently afford it, because they had no trouble getting a mortgage.

 

[Mackenzie Click-Mickelson]

Sadly, yes. It is. That would get us an appropriately 2000 sq ft 4bd/2.5-3 bath. And it would likely be considered a condo.

Most starter homes aren't that large or have that many bedrooms or bathrooms.

Even realtor(.com) considers a starter home to be generally under 2,000 and lower priced; "While there is no single definition of a starter home, it is generally considered to be less than 2,000 square feet with a lower price tag that makes it available to traditionally cash-strapped, first-time buyers. For this analysis, our data team looked at any home (including single-family homes, condos, and townhomes) under 1,850 square feet."

Rocketmortgage says "A starter home is a smaller home or condominium bought as a first home. Properties typically have two bedrooms or fewer (or are a small three-bedroom)."

The home we lived in as a rental that was a starter home a 1,500 sq ft 2 bed 2 bath although a 3rd room not classified as a bedroom. It was def. built to be a starter home. Although the area it was located at commanded a higher price than if it was located elsewhere.

This is actually the reason why there aren't many starter homes being built because they want the price tag up and the demand for more space and more bedrooms or bathrooms. You just really don't have starter homes much anymore. Small homes are demolished to be bigger and more expensive.

What you are talking about is what I would consider a very pricey mid-level home (for your area mid-level). Having 4 bedrooms especially.

We actually were watching Last Week Tonight and for the LA area it hasn't been considered affordable (meaning paying 30% or less of your income for housing) since before 1979 whereas NYC stopped being considered affordable since 2004. Shocking to me that NYC was so late but let's just say we all know LA is a crazy town in pricing that is hard to compare to the rest of the country, I don't think starter homes have existed in many decades in LA.

 

[NotUrsula]

Latest number on median US single-family home prices (avg is now $414,200 as of last month):
https://fred.stlouisfed.org/series/HSFMEDUSM052N

Latest Census data on US mean household income (the average is still well under $100K):
https://www2.census.gov/programs-su...-series/historical-income-families/f03ar.xlsx

The usual recommendation on home price vs. income is that your home shouldn't cost more than 3X your annual income. If you use that formula, only a minority of Americans will qualify going forward unless they come into a windfall.

PS: We bought our home in the spring of 1993 for $79K; none of it from parents, who at the time were both widows on fixed incomes. It was built in 1934, it is 1100 sq. ft, 1.5 stories + a detached 2 car garage. It's now valued at just around $200K, and it's the only home we've ever owned. (My young next door neighbor told me a couple of days ago that they were moving because they were thinking of having a second child and really needed more space. His home is more than twice the size of mine, which happens to be the smallest on our block. We managed 2 kids there, though their bedrooms are 7' by 8', and 8' x 8', and we only have one bathroom. The homes that DH and I grew up in were under 1000 sqft; perfectly normal at the time for postwar tract homes.)

 

[DLgal]

Most starter homes aren't that large or have that many bedrooms or bathrooms.

Even realtor(.com) considers a starter home to be generally under 2,000 and lower priced; "While there is no single definition of a starter home, it is generally considered to be less than 2,000 square feet with a lower price tag that makes it available to traditionally cash-strapped, first-time buyers. For this analysis, our data team looked at any home (including single-family homes, condos, and townhomes) under 1,850 square feet."

Rocketmortgage says "A starter home is a smaller home or condominium bought as a first home. Properties typically have two bedrooms or fewer (or are a small three-bedroom)."

The home we lived in as a rental that was a starter home a 1,500 sq ft 2 bed 2 bath although a 3rd room not classified as a bedroom. It was def. built to be a starter home. Although the area it was located at commanded a higher price than if it was located elsewhere.

This is actually the reason why there aren't many starter homes being built because they want the price tag up and the demand for more space and more bedrooms or bathrooms. You just really don't have starter homes much anymore. Small homes are demolished to be bigger and more expensive.

What you are talking about is what I would consider a very pricey mid-level home (for your area mid-level). Having 4 bedrooms especially.

We actually were watching Last Week Tonight and for the LA area it hasn't been considered affordable (meaning paying 30% or less of your income for housing) since before 1979 whereas NYC stopped being considered affordable since 2004. Shocking to me that NYC was so late but let's just say we all know LA is a crazy town in pricing that is hard to compare to the rest of the country, I don't think starter homes have existed in many decades in LA.

We are renting an 1800sq ft 3bd/2bath condo.

The same model down the street just sold for $1.25million, but sure, tell me more about how starter homes don't cost over a million in my area.

And the bedrooms are 10x10 shoe boxes...

The types of homes you are talking about as mid level homes are the ones between $2M and $3M. I do not consider a condo with no yard, on a 2500sq foot lot with a shared driveway to be a mid level home.

 

[Mackenzie Click-Mickelson]

We are renting an 1800sq ft 3bd/2bath condo.

The same model down the street just sold for $1.25million, but sure, tell me more about how starter homes don't cost over a million in my area.

And the bedrooms are 10x10 shoe boxes...

The types of homes you are talking about as mid level homes are the ones between $2M and $3M. I do not consider a condo with no yard, on a 2500sq foot lot with a shared driveway to be a mid level home.

I literally didn't tell you that, where did I saw starter homes don't cost over a million? Read my comment again. I said what you're calling a starter home by most definitions isn't a starter home, it's more than that. My mid-level comment is about size and number of bathrooms and bedrooms NOT price. I literally said a pricey mid-level.

Understand we are ALL aware of pricing in LA but for comparison sake when most people talk about starter homes is not what you described irrespective of price. Your area has been overpriced for way too many decades, we KNOW this and we get it.

 

[dvcgirl67]

None. But my DH's parents did pay for college. I had a combination of mostly scholarships and a tiny bit of student loans that I paid off in a year. Not having student loans was helpful for us in building for our future though, so we're thankful to my husband's parents for that.

 

[luv2cheer92]

Now I want to know what everyone paid for their houses.

Bought my first house (a 1800 sq ft 4 bed 2.5 bath, townhouse) in Nov 2020 for 190K. Put 20K down.

 

[DLgal]

I literally didn't tell you that, where did I saw starter homes don't cost over a million? Read my comment again. I said what you're calling a starter home by most definitions isn't a starter home, it's more than that. My mid-level comment is about size and number of bathrooms and bedrooms NOT price. I literally said a pricey mid-level.

Understand we are ALL aware of pricing in LA but for comparison sake when most people talk about starter homes is not what you described irrespective of price. Your area has been overpriced for way too many decades, we KNOW this and we get it.

I don't live in LA.

And the definition of starter home is ALSO "the first home that an individual or family CAN AFFORD to purchase."

 

[Mackenzie Click-Mickelson]

I don't live in LA.

You live in the LA area correct? The metro area?

 

[DLgal]

You live in the LA area correct? The metro area?

All of So Cal is technically the "LA metro area", but the housing market in my area is far more expensive than the "greater LA" metro on average. So, no, I don't consider my area to match up to the numbers posted for the region as a whole. I could like like a king in San Bernardino and Riverside Counties.

I don't know anyone who lives here and considers it L.A.

 

[CyndiLouWho]

Sadly, yes. It is. That would get us an appropriately 2000 sq ft 4bd/2.5-3 bath. And it would likely be considered a condo. Something like this:

https://www.redfin.com/CA/Irvine/16...ent=link&2010988919=variant&813945303=variant

A 2000 SF house is not really a 'starter house'. 2 bed/1 bath 1000-1200 sf might be closer to what I consider starter. I've owned a house (multiple houses) for 30 years and still don't have one that's 2000 sf.

 

[Lilsia]

I find that people often make much better decisions regarding how money should be spent when their money is on the line. We are fortunate enough that we have been able to save enough money to pay for our kids' undergraduate degrees. We do have some stipulations such as they have to work to pay for their spending money and they have to show they have a clear path to a career with their major choices. We're not paying for them to major in underwater basket weaving and then work at fast food when they graduate.

We will buy them one car in high school and we expect them to take good care of it so that it lasts them through college. We expect them to buy the next car. We will give them money towards their down payment for their first home if we can afford to do so for both kids. If they choose to get married, we will match the money they spend on the wedding but we won't pay for the whole thing. My parents did that and we were very grateful. We also were careful with our choices because our own money was on the line.

We will not do any of these things though if they jeopardize our financial ability to retire.

That is not always true about making better decisions. The $10,000 that my parents gave us changed nothing about our lives. And it made us want to pay it forward to our kids because we know how hard it is starting out. I don't see anything wrong with parents helping their young adult children out in life. It is no different then helping them pay for college, or buying them a car. Plus there are plenty of people that pay for things themselves and have no care for them. Have you seen how some people destroy their houses? My SIL and her husband are like that. They both work and have 3 kids but they have completely trashed their $200,000 house. It has nothing to do with someone giving you a gift, it is just how a person is.

 

[Mackenzie Click-Mickelson]

All of So Cal is technically the "LA metro area", but the housing market in my area is far more expensive than the "greater LA" metro on average. So, no, I don't consider my area to match up to the numbers posted for the region as a whole. I could like like a king in San Bernardino and Riverside Counties.

I don't know anyone who lives here and considers it L.A.

That's what your stats are going to be based on though and what they are talking about just like NYC isn't talking about exclusively Manhattan despite us mostly thinking of high housing costs being concentrated there.

In my area my metro numbers get skewed because of the other side of the state line. My county is much higher in pricing but other areas not so much. But in terms of real estate they will consider all of my metro with 14 counties or so.

I could live like a king just over the state line from me..not so in my area. Right now the median list sales price in my county is $415K, the county on the other side from me (technically the largest in the metro) is presently $258,175.

Regardless I think my point was just that for most people what you would be able to get, even if the price tag is way high compared to many areas, is larger and more bedrooms/baths than other and usually isn't what someone pictures when they think of starter home. And the area you're speaking of is a poor example of affordability (not meant to be against you just the larger conversation about pricing), it hasn't been affordable in way too long.

FWIW when I was at the insurance company all of CA high value homes were $2million and up whereas the rest of the U.S. was $1million and up and to my knowledge had been the case in forever. I remember talking to a guy up in northern CA by the coast in a tiny 500 or so sq ft house where he paid $900K or something like that for it, he asked me what my area was like and I was like..well it sure isn't that lol.

I hear ya on lack of ability to afford a home there, I remember in most conversations you stood out for having the situation where renting was by far (relatively speaking) a better financial decision in comparison to trying to go for homeownership. It changed the conversation when talking about what putting money towards X gets you.