I bought my first home when I was 25 years old, three years out of college, with a good job, and a low 5 figure college debt. It was that low because I was on a co-op program which paid me a decent wage when not in school, plus I worked a second job at a bike shop, and also did work study. Three jobs. I got the house a day before it was foreclosed on. The front door was kicked in. The owner let the oil tank run out. This was December. The pipes burst and the basement flooded. The fire company shut the power off. It had psychedelic shag carpeting and multiple layers of velour wallpaper throughout. Inspections? Hahahahahaha. You want it, it's yours. I put 5% down and the rest on a one year ARM at 17%. I had $500 to my name after closing. I moved in with an air mattress and a sleeping bag. I very quickly learned how to sweat copper pipes. I studied the electrical code and fixed wiring where needed, and added outlets. Underneath the shag carpets were red oak plank floors. I rented a floor machine and refinished them. Underneath the velour wallpaper were plaster walls. I learned how to skim coat and painted them. The following year I gutted the kitchen, and hired a carpenter to help me move a window and exhaust fan, lay floor tile, and install new kitchen cabinets, countertop, and an oak breakfast bar. A few months later, after I proposed to Mrs. Stomp in the living room, I sold the house for 2.5x what I paid for it and moved to the next town over into a much larger home. I sold the house myself and bought from the new home owner.
All this crap about greed is just that. Crap. Let me ask you, think of some of the GenY and GenZ people that you know. How many of them would do what I did in order to get their first home? I can list the ones I know on one hand. The rest want the perfect 3+BR fairly new home in the perfect neighborhood right from the start. They want perfection now. New cars. Destination weddings. No dirty hands. No compromise.
Beyond this, what is making first home purchases increasingly unaffordable are two things. First, is easy credit through FTHB programs. The mortgages are sold on the secondary market as financial investments. This drives the cost of homes up. Second, is the massive influx of investors snatching single family homes away from owners that want to occupy them. This group includes neighborhood associations, local and regional investment groups, and huge national financial institutions. If they want a home, they will bid with no upper limit. This prices out the regular folks. The main drivers of this are AirBNB, VRBO, and the like. Short term rentals are big business. This market is only regulated at the local level. It will take legislation, and hopefully federal legislation, to fix this. I hope that this happens sooner rather than later. Markets only work with guidelines.
