Software engineers: How can you afford a house in America with high-priced home?

https://news.ycombinator.com/item?id=39875006

by jerawaj749 • 2 years ago

9 33 2 years ago

news.ycombinator.com

leed25d2• 2 years ago

VA Loan? No money down.

LemUhuru2• 2 years ago

"No money down" - Sounds too goo to be true, doesn't it?

breckenedge3• 2 years ago

No, it’s how a lot of people get their start. There’s also the FHA loan where people put down 3.5%.

leed25d2• 2 years ago

That's how I bought my house. No money down, 2.65% mortgage

appplication2• 2 years ago

It’s absolutely not to good to be true, it’s one of the best benefits available to veterans. I actually got paid to close with my VA loan (basically a negative down payment). This was a few years ago so the market was different, but it wasn’t uncommon to request e.g. some percent of the purchase price as seller concessions. If the total down payment is 0, anything over closing costs can get paid out to you.

silverquiet• 2 years ago

Do you have to be a veteran to get a loan from the VA? If so, what about people like me who weren't in the military? Especially people like me who were never eligible to even join the military because of a childhood illness?

breckenedge3• 2 years ago

Look into FHA loans.

DamnYuppie2• 2 years ago

Yes you have to be a veteran to qualify for VA loans.

vinyl7• 2 years ago

I'm not sure I understand the whole no money down thing. If you put less money down, then that means that the monthly payment is higher? That's really what's making homes unaffordable. If you can't put 10-20% down or whatever is recommended, then maybe the house just isn't affordable.

giantg23• 2 years ago

The down payment is actually a big issue for many. You can be making enough that you could afford the higher payment, but waiting 5 years to build a down payment could see huge price surges, thus extending how long you need to save.

sp332• 2 years ago

It's harder right now since interest rates went back up. But when they were low a few years ago, a 30-year mortgage didn't have such a huge monthly payment.

Anyway some of the most expensive cities are building more housing, and prices are coming down on average. Remember, you can put in a bid below the asking price.

LemUhuru2• 2 years ago

Gamble and hope to win enough money to buy a house, otherwise rent?

082349872349872• 2 years ago

If it's not for your personal use, do a Section 1031 like-kind exchange of your old, almost as highly-priced, property.

appplication2• 2 years ago

1031 is not for owner occupancy. Of course there are ways around it eventually but it takes a few years to season things and you have to be careful to play by the rules.

Edit: I misread your comment about personal use

breckenedge3• 2 years ago

It’s now cheaper to rent in the top 50 metros in the U.S. than it is to buy. Inventory is low right now and people who have a home at a 3% rate are not going to sell unless they have to. That said, don’t wait for rates to drop if you really want to buy.

https://www.morningstar.com/news/marketwatch/2024032617/rent...

daviddever23box• 2 years ago

Work remotely in a city for which the cost of living is low.

solardev3• 2 years ago

During COVID, a lot of techies who could suddenly work from home ended up flooding smaller rural towns, and shot up the price of housing like 2-3x. It's a bit late now, between the increased prices and the increased interest rates, and many devs can't afford to buy anymore... especially after the layoffs.

Like everything else in America, homeownership is increasingly a privilege reserved for the rich, and everyone else just rents if they're lucky or lives outta their car/van if they can't.

Best case, you work for a FAANG on a 6 or 7 figure salary and buy a house somewhere cheap. But that's pretty rare.

jasonjmcghee• 2 years ago

6 or 7 figure salary and buy a house somewhere cheap

Huh? If you have a 7 figure salary in a single year you’ll have a down payment for a nice house in a lot of places, and in a few, one for a house in Palo Alto.

If you don’t blow your salary you could easily save to buy a house outright in cheaper areas in a few years

solardev3• 2 years ago

True! I was thinking more low-mid 6s.

datascienced• 2 years ago

Seems off. How many devs are there as % of population that moved to a rural area and purchased a house in 2020/21?

solardev3• 2 years ago

Fair question, and would be a fun GIS analysis sometime!

leros2• 2 years ago

I'm a bit confused by this question because it seems like the only people in my area who can afford to buy houses are software engineers, or at least work in tech.

olliej3• 2 years ago

My guess is that they’re senior engineers. If you’re just beginning now even rent is twice what it was when I started, but starting salaries are not. Houses are easily more than twice what I paid as well, so now you have less money left over to save for a much larger down payment to then get a house with a much larger monthly payment, much higher property taxes, and that’s even before interest rate pain.

Not joking in anyway, but if the property taxes on my home were based on the market value not the CA prop13 BS my property taxes now would be more than my mortgage payments. IE even on my current income I could probably not afford my current house, let alone my income from 10 years ago.

How the F is someone starting out today - even in tech, let alone anything else - going to afford a home?

leros2• 2 years ago

I see a decent amount of software engineers, designers, product managers, etc buying $500k+ homes somewhere between 25-30.

giantg23• 2 years ago

I bought a house after about 4 years in the industry. It's going to be less likely to happen in certain markets, especially if you live in high tax states like CA.

ndjshe3838• 2 years ago

Most of the non-remote devs I know who bought places in recent years had to move to the outskirts of a big city if they didn’t want a tiny 1br apartment

Usually like ~1 hour outside the city center

olliej3• 2 years ago

Love to know what high paying software companies don’t have mandatory office attendance?

Also there’s a chasm between “it’s a 1 hour drive each way” and “it’s a 1 hour drive each way during commuting hours”.

The real kicker is the overlap between cheap to live and “we don't think everyone should have the same rights or even right to exist” is high.

softwaredoug• 2 years ago

The answer 100% depends on if you can work remotely

If so, I honestly think the answer is to leave overpriced metros that won’t build housing and move somewhere building a lot of housing and priced better.

giantg23• 2 years ago

Software engineers make significantly above the median salary in most US markets. So it stands to reason that they are more likely to own a home.

JojoFatsani• 2 years ago

Marry someone else who makes good money as well. Get a condo or starter type home, build equity then try and get the forever home.

gcheong• 2 years ago

We couldn't for the longest time but there was a dip in the market around 2012 (which was just about the bottom of the dip) and a house came up for sale by a couple brothers that inherited it and were looking to cash out I guess. We put in an offer for 2% over asking which was accepted. It was all rather serendipitous really.

Software engineers: How can you afford a house in America with high-priced home?

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