Tiny house as a first home solution for my son?

[MossRoad]

I think my first and only mortgage was 10.5%.

Our first was 12.5% after we paid 3 points.
Our next was 6%.
Haven't had one now since 1995.

But we do have a home equity loan for just in case. Always pay it off fast if we use it. It is considered a mortgage, so it brings a property tax benefit. As long as we pay less interest than we save in taxes every year, it's free loan.

 

[2manyrocks]

In 1995, the median home price was $130,000 and the median real CPI adjusted weekly full time wage was $313. Today, the median home price is $440,300 and the median real weekly full time wage is $358.

The CPI index for housing was 146.600 in August, 1995 versus 304.506 in August, 2022.

Roughly estimating, housing costs have doubled since 1995 while real wages have grown 14.38%.

Median Sales Price of Houses Sold for the United States

Graph and download economic data for Median Sales Price of Houses Sold for the United States (MSPUS) from Q1 1963 to Q2 2025 about sales, median, housing, and USA.

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Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over

Graph and download economic data for Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over (LES1252881600Q) from Q1 1979 to Q2 2025 about full-time, salaries, workers, earnings, 16 years +, wages, median, real, employment, and USA.

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Consumer Price Index for All Urban Consumers: Housing in U.S. City Average

Graph and download economic data for Consumer Price Index for All Urban Consumers: Housing in U.S. City Average (CPIHOSNS) from Jan 1967 to Sep 2025 about urban, consumer, CPI, housing, inflation, price index, indexes, price, and USA.

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[deezler]

^ dang. I've long wondered about how y'all were even able to buy property back in the 80s with mortgage rates up in the teens. My first condo purchase in 2006 was 4.5%. Then got some land and built our home in 2015, paid it down a ways and refinanced to 2.9% for a 20-year term. Now I can stop using any space in my brain to consider further refinancing, at least.

 

[MossRoad]

^ dang. I've long wondered about how y'all were even able to buy property back in the 80s with mortgage rates up in the teens. My first condo purchase in 2006 was 4.5%. Then got some land and built our home in 2015, paid it down a ways and refinanced to 2.9% for a 20-year term. Now I can stop using any space in my brain to consider further refinancing, at least.

Simple. The first house we bought in 1985 was $20K. I was making $7.50 per hour. So was my fiancé. So two people making $30k combined.

We borrowed $18K. 30 year mortgage payment was $256 per month, which included taxes and insurance through an escrow account, mandated by the mortgage company.

$256 x 12 months = $3,072 per year.

That was just 10% of our combined income.

We made double mortgage payments every month, so 20% of our income went to housing. Double payments cut the 30 year mortgage down to less than 5 years.

 

[riptides]

^ dang. I've long wondered about how y'all were even able to buy property back in the 80s with mortgage rates up in the teens. My first condo purchase in 2006 was 4.5%. Then got some land and built our home in 2015, paid it down a ways and refinanced to 2.9% for a 20-year term. Now I can stop using any space in my brain to consider further refinancing, at least.

I worked overseas for two years on government business to save money for a down payment and interest rate buy down.

IIRC I managed to snag a mortgage rate of 10 percent on a 105k purchase. 1986.

 

[JasperFrank]

For many years in my area, there were no permits or code compliances needed for livable spaces below a certain footage. In the late nineties there was an explosion of people building tiny homes. Some with just composing toilets. I'll have to ask some of my old friends how and if their places were grandfathered. Cause no one can do that now. Its the same permits and code compliance, no matter how big or small the "dwelling" is. Some exceptions are still allowed for manufactured homes and tiny houses built on trailers. But stick built tiny homes on foundations have to follow all the same rules as any other permanent dwelling structure.

 

[2manyrocks]

If we adjust the 1995 median home price of $130,000 for inflation from August, 1995 to August, 2022 using the inflation calculator, the inflation adjusted price would be $251,813.15. Compare that to the actual median home price today of $440,300. CPI Inflation Calculator

30 year mortgage interest at 3% set off a buying frenzy that pushed prices up and drew in investors looking for quick returns when they saw they could double their money in a few months.

I wish young adults understood why and how this happened to them.

 

[scaredychicken]

imo - Tiny Homes are a bandage, not a solution. Very Temporary. (personally, I think an RV is a better option)

unless of course your entire family unit, chooses that lifestyle

I could go on, but that's the bottom line

 

[2manyrocks]

I think that sums it up pretty well because many are looking at tiny homes simply because they can't afford traditional housing.

 

[deezler]

In my part of Michigan, any trendy walkable neighborhood is now commanding 400+ thousand dollars for starter homes. We're talking 100 year old, 2 bed, 1 bath 900sq ft cottages with no garage. For four hundred thousand dollars..., just because the neighborhood is desirable. It's hard to imagine a young couple with two good incomes being willing to go that deep into debt just to be able to walk downtown to restaurants, but its been like this for years now. Lotta house-poor folks. But also a lot of 6 figure tech, engineering and academia jobs.

 

[2manyrocks]

Had to drive through an area of Nashville that used to be settled by German immigrants in the mid 1800s, changed into misc. businesses, and now several blocks are multistory condos and apartments occupied by 20 somethings. A friend's son thought he got a good deal paying $350,000 for one of those condos. Appears to be the same story of young folks willing to pay a heck of a lot just to be able to hang out in the local restaurants based on the crowds on 8th Avenue on a Monday, not weekend evening. Used to be that hardly anyone wanted to live in that area.

Wonder how they are going to feel about buying those condos once they get some age on them and they start having to pay assessments or they have children and start looking at the school situation.

 

[oosik]

Social interaction between your immediate family and your sons family will be a large concern. Even if only for a short while. Is their being located on your property a short term expedience or a long term solution. Difficult situation - not an easy answer.

 

[NoTrespassing]

In 1995, the median home price was $130,000 and the median real CPI adjusted weekly full time wage was $313. Today, the median home price is $440,300 and the median real weekly full time wage is $358.

The CPI index for housing was 146.600 in August, 1995 versus 304.506 in August, 2022.

Roughly estimating, housing costs have doubled since 1995 while real wages have grown 14.38%.

Median Sales Price of Houses Sold for the United States

Graph and download economic data for Median Sales Price of Houses Sold for the United States (MSPUS) from Q1 1963 to Q2 2025 about sales, median, housing, and USA.

fred.stlouisfed.org

Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over

Graph and download economic data for Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over (LES1252881600Q) from Q1 1979 to Q2 2025 about full-time, salaries, workers, earnings, 16 years +, wages, median, real, employment, and USA.

fred.stlouisfed.org

Consumer Price Index for All Urban Consumers: Housing in U.S. City Average

Graph and download economic data for Consumer Price Index for All Urban Consumers: Housing in U.S. City Average (CPIHOSNS) from Jan 1967 to Sep 2025 about urban, consumer, CPI, housing, inflation, price index, indexes, price, and USA.

fred.stlouisfed.org

I'd like to see an apples to apples study. Pick houses that sold in that 1990's that also sold again in the 2020's. The houses must not have significant improvements. For instance, the house I bought in the mid 80's doubled in value in about 4 or 5 years because we made major improvements right before selling it. Those included a new roof and gutters, new carpet, insulating the garage, and new paint inside and out.

How has the median square footage changed in the last 30 years, number of baths, appliances, networking setup, etc. I know kitchens and baths have really changed along with their price tags.

I agree you have a valid point but there may be more to this story than meets the eye.

 

[MossRoad]

Had to drive through an area of Nashville that used to be settled by German immigrants in the mid 1800s, changed into misc. businesses, and now several blocks are multistory condos and apartments occupied by 20 somethings. A friend's son thought he got a good deal paying $350,000 for one of those condos. Appears to be the same story of young folks willing to pay a heck of a lot just to be able to hang out in the local restaurants based on the crowds on 8th Avenue on a Monday, not weekend evening. Used to be that hardly anyone wanted to live in that area.

Wonder how they are going to feel about buying those condos once they get some age on them and they start having to pay assessments or they have children and start looking at the school situation.

We were in Nashville a few days ago. Same thing is happening in every large city: Gentrification.

Gentrification - Wikipedia

en.wikipedia.org