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

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

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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 May 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.