I'm talking houses for one. Not condos. Apples and oranges there. And when you're having to take into account commuting distance, it makes a difference where you live.
In the area of LA that i currently work and live in, I can buy a two bedroom condo for about $699,000. It's a nice neighborhood on the west side, but it's still just a condo. Meanwhile, I can find a three bedroom, two bath house out in east LA county, Northern Burbank, or Long Beach for a similar price. Only downside is that puts me about an hour to two hour commute out from where I may need to work. So then you start weighing your options. Commute from a home or live nearby in an overpriced condo.
Both will require anywhere from 10% to 20% down. Fuck 5% as a possibility. Cant likely do FHA cuz it likely wont apply to your full loan value anyways considering national flat ceiling. Cant do 5% via traditional cuz pmi will kill you. Money down the drain. So 10-20%. That's 70-140k upfront. Plus 3-5% closing costs, so be sure to add $20-35k upfront.
So now, let's go on the lower end and assume 10% down with 3% fees. Upfront cost to you is officially around $90k. Not bad, but still difficult. Will take time to save. So you save. Maybe $10k a year, maybe $15k. Really though, you should be saving at least double since home prices are climbing faster than you save. But you try not to worry. The market will come or slow down sometime. It has to, right?
But making that initial leap for a $90k down payment isn't the end of it even. You've got to also consider monthly payment on that. For 699k at 10% down with a mortgage rate of 3.65% with a pmi of 0.625 a year and property taxes/insurance, you're looking at a monthly payment of $4,137.35. Or $49,650.36 a year.
They say it's smart to not exceed 1/3 of take home pay on housing. So multiply that through, that means to be comfortably living in a 2 bedroom condo in this neighborhood or a three bedroom home somewhat nearby, I need to be making ~$150k in post tax income a year. Considering standard tax rates, that's around $192k gross income for the household. Again, not unrealistic if you're a millennial in early thirties and married where both people work corporate jobs. Fuck if either one of you are unemployed though or work low paying service jobs, etc. What are you complaining about, go get a real job. It's not like there was a stagnant job market throughout the last 8 years or anything. But I digress...
Even if I am making that much a year, it still makes it difficult to warrant taking the leap with either a house or condo. For one you end up paying out the nose for a condo in an area you like or kind of like. Alternatively, you can do it for a home in an area you dont really like and where roughly 2 to 4 hours of your day is spent trekking back and forth to work.
Or, you could say fuck it and keep renting at about half the monthly cost to rent while saving more and more money in the hopes that at some point you can actually afford a down payment for house in an area you want to live in at a monthly rate you can afford because your work finally decided to start paying a livable wage for the city you live in. 2 bedroom condos in my neighborhood rent for $2.5k to $3k. Why so much cheaper? Because they weren't massively over priced when they were sold to their landlords 10 or 20 years ago. The $3k rent covers the mortgage and then some.
My point of this rant is basically to say, fuck off on the hate toward people complaining about home prices. It's a real issue for some. Buying a home has a requirement to be somewhat cash rich. Sure, it's doable in some cases if you're willing to uproot your existing life, live off scraps, and spend a third of your live driving to and from work. But truthfully, who the fuck wants that? So you sot, save, and wait. Hoping that at some point down the line maybe you'll be able to make use of all the cash you're sitting on that's always just not quite enough to get you what you actually want or need.