123: Buying a Home Is Almost Impossible Now (And It’s Not Your Fault)

If you feel like homeownership is out of reach, you’re not imagining it.

In this episode, we break down why buying a home today is drastically harder than it was for previous generations and why this has nothing to do with lattes, avocado toast, or bad budgeting. We walk through real numbers, personal experiences, and the structural changes that reshaped the housing market after 2008.

We talk about:

• How home prices have outpaced income
• Why this isn’t a personal finance failure
• The real costs of owning beyond the mortgage
• When renting can be the smarter option
• Practical paths to explore if buying is still your goal

This episode is for millennials who feel stuck, discouraged, or judged for not owning a home yet. The bottom line: it’s not you. The system changed.

If homeownership is something you’re still working toward, we hope this gives you clarity, validation, and a little more grace for yourself.

Subscribe to The Sugar Daddy Podcast newsletter

Explore The Sugar Daddy Podcast Stan Store — Downloadables, tools, and more to level up your money game together!

Head over to our YouTube channel to catch this episode in full video form.

Apply to be a guest on the show.

You can also email us at: thesugardaddypodcast@gmail.com

Connect with us on Instagram
We’re most active over at @thesugardaddypodcast

Chat with Brandon
Want to work together? Learn more about Brandon

Book a free 30-min call to see if it's a fit.

Show us some love, hit subscribe, leave a five star rating, and drop a quick review!

Money, relationships, and the mindset to master both. Hosted by financial advisor Brandon and his wife Jessica, The Sugar Daddy Podcast breaks down how to build wealth, unpack old money beliefs, and have real conversations about love and finances. Their mission? To help couples and individuals grow rich in every sense of the word: emotionally, relationally and financially.

...

Transcript

You’re Not The Problem

Jessica 0:00

Hello? If you're a millennial and feel like owning a home is completely out of reach, you are not crazy. You're living in one of the worst housing markets in modern history. And it's not the lattes. If you're a millennial and feel like owning a home is completely out of reach, you're not crazy. You're living in one of the worst housing markets in modern history. It's not the lattes, it's not the avocado toast, and you're not doing anything wrong. We have friends and listeners who've been grinding for years college degrees, studied jobs, side hustles, and they're still nowhere close to affording a home. If that feels like you, today's episode is for you. Make sure that you tune in, get the boost that you need to know it's not you, and that there's a lot of other factors contributing to the housing market.

Brandon 1:02

Hey babe. What are we talking about today?

Jessica 1:05

Today we are talking about how incredibly expensive it is to buy a home and to be a homeowner.

Brandon 1:18

I feel extremely bad for anyone who is trying to enter the market for the first time because it it's nearly impossible for a lot of people.

Jessica 1:29

Yeah, unless you're getting a huge check from somebody or maybe you have a trust fund that you can access. Like as a normal working person, it's it feels crazy.

Brandon 1:40

Because I can remember, you know, when I purchased my first home, a townhouse back in 2009, and the environment was completely different and you know, completely accessible. Like the amount that I paid for the townhouse, I think it was like$127,000.

Jessica 1:59

Um today I don't know, it's pushing$400.

Brandon 2:03

I'll say$127,000 ain't gonna get you nothing around here. Maybe a shack, if that.

Jessica 2:09

My first house also I bought in 2009. Um it was a hundred and nineteen thousand. I think it was one nineteen eight, um, two bedroom, two-bath, fenced in backyard. It was like a little patio home right under 1,200 square feet. I loved that house. And it was mine, and it had a one-car garage, and all in my mortgage, taxes, everything was like under 680.

Brandon 2:38

Yeah, I want to say um, because mine was a three-bedroom. It was three stories, three bedroom, two and a half bath, around 1700 square feet. And, you know, I think at the time my m interest rate on my mortgage was five percent. And my mortgage, I think I put, I mean, I put down like between five and eight percent, so not a ton. And my mortgage was definitely under a thousand.

Jessica 3:01

Oh, so you had PMI.

Brandon 3:03

Yeah.

Jessica 3:03

Okay, because I know you know how my my mom is, so yeah, your mom doesn't make sense. So um I know that I put down the 20%, but this was also when we had the first time home buyer tax credit, and I know you utilize that as well.

Brandon 3:19

And so that's it was less than 20.

Jessica 3:23

But it was yeah, but it was a chunk that's like$8,000, I think. I wrote the check back to my parents. But um, yeah, that was, I mean, it was a it was a beautiful brand new house. Like I picked the lot and had it built at like 23 years old. There's just no way.

Brandon 3:42

Well, the hardest thing I think nowadays is that you have, you know, baby boomers trying to weigh in on a scenario that they know absolutely nothing about.

Jessica 3:53

They bought their houses for literal acorns.

Brandon 3:55

Like if you think about like if you think about like our parents, and especially like, you know, if the generation above them, if you I mean, if you still have your grandparents around a little bit older, um you were able to raise a family of four with a high school education on a single income.

Jessica 4:14

Which is crazy.

Boomers, Gaslighting, And The Math

Brandon 4:15

You know, majority of families were doing that. And that the idea of someone now raising a family of four with a high school education, unless you are just a phenomenal entrepreneur, and you know, the reality is that that's not the norm at all. That's not going to happen. And you have almost some form of like a gaslighting coming from, you know, the older generation talking about, oh, well, when I was when I was your age, I was able to do this and do that. It must be something wrong with what you're doing, must be something wrong with how you're managing your money, must be wrong with something how you're just living your life in general and spending money on the wrong things. And that's not the case. And honestly, like if I start, I mean, luckily I don't have those conversations, but if someone's having a conversation with me, I'll shut that down real quick. Because it doesn't make any sense. Like I said, listening to people like Dave Ramsey talk about the housing situation now is is is baffling to me. Like, why anybody would pay any attention to that man when it comes to this? Because he's one of those people that is unless you just like being shamed. Unless you like he's one of those people that's gaslighting people. You know, I've watched too many things regarding housing and how he's gaslighting people on the scenario. You're for most people, this is not a budgeting issue. This is not even necessarily a career income standpoint issue. This is coming from inflated cost that for the housing market that, you know, has extremely outpaced the average salary. So, like, you know, to kind of give you some context, uh, we went ahead and looked up some numbers as far as like, you know, I'm 42 years old. And I was like, you know, let me see what it was like for my mom at 42 years old buying a home, which was in 1999. All right. So in 1999, the median US home price was$119,600.

Jessica 6:01

And even that feels well, no, that's about right. Because I think that the house that I grew up in in the States was like$116,117. Yeah. And again, four-bedroom, two bathhouse, two-car garage, yard in a nice neighborhood with the pools and the tennis courts and all the things. Yeah.

Brandon 6:19

And the median in 1999, the median household income was$40,697.

Jessica 6:26

Oh my gosh.

Brandon 6:27

All right. So if you're looking at as far as from like, you know, a home price was about 2.9 times your income. All right, in 1999.

1999 vs 2025: Affordability Gap

Jessica 6:35

Okay. That feels reasonable.

Brandon 6:36

Now let's fast forward to today in 2025. The median U.S. home price is now$410,800.

Jessica 6:46

Wow.

Brandon 6:46

All right. Uh, the median household income is$83,150. So for my individuals out there that are good at math, they might have already figured this out, but for those of us are not that good at math.

Jessica 7:00

I don't know why you're looking at me.

Brandon 7:01

That's so rude. Uh, that turns a home price is now five times your income.

Jessica 7:08

That's that's wild.

Brandon 7:10

So instead of going from, you know, 2.9 times your income in 1999, housing prices is five times your annual income.

Jessica 7:17

Wow. So not to mention all the other expenses that are. Exactly.

Brandon 7:21

This is just housing costs. Right. This isn't talking about your groceries, your utilities, everything else that goes into living life. And this is why I say that this is not an issue caused by us. This is not something you're doing as an individual. This is something that's failing as a US structure. It's failing people.

unknown 7:42

Yeah.

Brandon 7:43

Now, there's plenty of reasons that go into, you know, why this is happening, and we'll definitely dive into those. But the biggest thing I want to make people understand that like you need to understand these numbers because then you need to realize that it's not something that you're doing wrong. Like if you're trying been trying to buy a house over the past few years and you're just, you know, you're not able to because of from a cost standpoint, it's not something that you're necessarily doing wrong.

SPEAKER_02 8:05

Yeah.

Brandon 8:06

And you need to understand that. I mean, going back to, you know, the house that we lived in before this, we bought a house in 2018 in uh Wake Forest, North Carolina, and we paid towards the like November 2018, I believe it was, around there in December.

Jessica 8:21

It was cold, so yeah.

Brandon 8:23

We paid$310,000 for that house. All right. We were in that house almost four years, not even quite four years, I believe. Technically.

SPEAKER_02 8:32

Uh-huh.

Brandon 8:33

Because we sold it in January of 2023. So I guess, you know, four years. Um and we sold it for almost$500,000. So we had almost a$200,000 increase in the value of our home in a matter of four years.

Jessica 8:50

But think about the boomers who were doing that. They're buying the houses for$120,000 and then selling them for$800,000, and we're going to have to be able to do that.

Wild Appreciation And Rate Shock

Brandon 8:55

What I'm about to say is like in from a historical standpoint, housing costs have not gone up that much in a four-year period on average. Like that's insane. And the thing is that we probably, if we had if the house that we're living in now had been completed like a month or two earlier, which would have been on time, we probably could have gotten an additional old wounds. We could have gotten an additional$50,000 for the house.

Jessica 9:15

At least, yeah. Not to mention we had a 2.65 interest rate on that. And now we have a 6.125 interest rate. Yeah. And still waiting for that thing to come down.

Brandon 9:24

And that's another thing for people to understand. Like, you know, interest rates play a huge uh part in how much your mortgage is going to be. You know, like, you know, there's a huge difference from having a 3% mortgage to a 6% mortgage and what that equates to monetarily on a monthly basis.

Jessica 9:40

Yeah. Well, and even I know there are lots of people in the boomer boomer era whose first mortgage was at 11 or 12% interest. But again, the cost of everything else wasn't skyrocketing.

Brandon 9:54

But also with that being said, is that you're getting also, so with a high interest rate, you're also getting um higher interest on your safe money. So as far as in your high-yield savings account, stuff of that nature is all according as well. But the biggest part there is that it didn't cost as much. Right. The costing of housing in comparison to what you were making was a large was a smaller margin.

Jessica 10:18

Yeah. Now it's I mean, any house that we don't that we wouldn't live in, any house that we look at if it wasn't this house currently, we're looking at a million plus for what we would want, which feels insane to even say.

Brandon 10:32

And it's not even like we're like, oh, we're bougie. Like, I mean, you might be bougie a little bit, but like we're not looking at like craziness. Cause like, I mean, bougie is relative.

Jessica 10:39

But listen, these are million-dollar houses and they don't even have a pool. And I'm like, get out of here. Like, where's my pool? Where's my spa? Where's my oasis in the backyard? I'm ready to just sell it all. So listen, I owning a home is so expensive. So, mortgage aside, and like the astronomical rates of everything. All I was just on the phone this morning talking to the termite people, like$185 a year right there, just to keep up the bond. That's not the quarterly payment of, you know,$95 that we pay just to make sure we don't have bugs running around. Like the yard, the bugs, the, you know, if we're trying to do any home improvements, just the regular maintenance that needs to be done, the air filters, all the things, it is just so expensive to be a homeowner. As somebody who's been a homeowner since 2009, I'm over it. I'll be honest, I'm over it. I'm ready to move into a luxury apartment.

Brandon 11:37

So, I mean, even looking at it, like before, you know, let's just go back to when we first bought homes. It was seen if you have the upfront money to have that upfront cost for purchasing a home, it made sense to do so if you're going to stay in that area from a cost standpoint in comparison to renting.

Jessica 11:55

Yes.

Brandon 11:56

That's not necessarily the case anymore. No. Because houses have gone up so much and the cost is so high that that same return is not there anymore necessarily. So, you know, renting can look a lot nicer for a lot of people because it it's not much more per se than owning the home, and you have a lot more flexibility.

Jessica 12:17

And honestly, like for me, my biggest draw to owning is always that I want to customize, I want to paint, I want to put up wallpaper.

Brandon 12:24

She wants to customize everything.

Jessica 12:27

Don't be right.

Brandon 12:27

No, she makes it that's why our home is beautiful. Cause I'm terrible at decorating.

Why Prices Spiked: Supply And Zoning

Jessica 12:31

But but at this stage, like let's say we rented something that was comparable to what we have now as a home, not not an apartment, but like an actual house that we could rent. I would just say, Hey, are you cool with us doing what we need to when it comes to paint? And then fine, I'll pay the$2,000 or$3,000 to have the house painted white at the end of this if that's what you want. It would still be cheaper than doing all the maintenance and paying for all the things that we're currently paying for when it comes to outside of the mortgage stuff.

Brandon 13:00

Yeah.

Jessica 13:01

So like, fine.

Brandon 13:03

Yeah. And, you know, a lot of people are probably asking themselves, you know, what is you know, causing this drastic increase in prices?

Jessica 13:11

What is it?

Brandon 13:12

And there are a few things. All right. So those of us that, I mean, we're our uh main demographic is the millennialslash elder millennial.

Jessica 13:19

So 35 to 44.

Brandon 13:21

So back in 2008. So in 2008, I was 25.

Jessica 13:25

Okay.

Brandon 13:26

God, a long time ago. But back in 2008, um, after that major uh crash, a lot of things changed in the market, all right? So one home builders stopped building a lot of homes. They kind of paused the brakes because everything had crashed. Yeah. So you had less homes, less inventory for people. So that's gonna one cause an increase in the inventory that's around because when you have low inventory, you have the same number of people that are looking to buy homes, but you don't have as many homes to sell. That's gonna drive the price up of the homes that are available.

Jessica 13:55

That's when you hear those competitive things where people are just like foregoing their inspections, putting down crazy due diligence, like offering way over ask. Yeah.

Brandon 14:06

Yeah. So that's, you know, a start to it. Now, also, depending on, you know, high population areas, they started changing some of the actual zoning laws. So what happens is that um they restricted the uh affordable housing um in these high demand areas. So therefore, you don't have as much housing, that would be obviously easier to obtain for people that aren't making a significant amount of money. So therefore, by restricting that, one, you have less inventory overall, then now you have less affordable inventory. You know, so in these areas where you would be able to build, you know, more um uh multifamily homes, you know, whether that's a duplex, triplex, or apartment complex, they restricted those zonings and that's you know, decreased the amount of housing housing that is available overall.

Jessica 14:53

Yeah.

Brandon 14:54

So by increasing the demand, you increase I mean the lessening the inventory. Lessening the inventory, demand increases, price is increased. Now, the issue that we've honestly been having a lot lately is that you have a lot of institutional investors like hedge funds buying up single family homes.

Jessica 15:14

Which is, yeah.

Brandon 15:16

I remember I was uh this is probably about a couple months ago, I was reading an article talking about like in a 40 mile radius of a specific city. I can't remember the name of this, I can't remember what city it was off the top of my head, but within a 40 mile radius, um, one hedge fund owned 40% of the single family homes that were available for rent. 40%.

Jessica 15:37

That's a lot.

Brandon 15:38

So if you own 40%, then you are the drive, so you are your own competitor.

Jessica 15:41

Right, right.

Brandon 15:42

So you could just drive the prices up by yourself. So a lot of people don't realize that, you know, these institutional investors coming in and buying homes, they have the cash to do it. So they're going to drive up the prices. So they might just buy a home, they might buy a few homes in a neighborhood. So for example, say you have a neighborhood, all right? And that uh hedge fund buys 50% of the homes in a new neighborhood that's being built. One, when they're buying that many homes, they're getting a discount to begin with.

SPEAKER_02 16:06

Right.

Brandon 16:07

So they're being able to buy the homes for the homes for less.

SPEAKER_02 16:11

Yeah.

Hedge Funds, STRs, And Squeezed Supply

Brandon 16:11

And a lot of these companies have um multiple branches of their companies. So what they do is they buy up all those homes, they buy them for less, and then they sell it to the other side. So now you actually have a sale and a comp. Even though you didn't really sell that home. But you just increase the price of a regular person who wants to come in and buy up any of the other houses that are available.

Jessica 16:34

Yeah.

Brandon 16:35

So that's a huge issue that a lot of people don't realize is happening. All right.

Jessica 16:39

Mm-hmm.

Brandon 16:43

You're just staring at me.

Jessica 16:44

It makes me think of like, I know that there's about six houses in on our street that were purchased, and you can't see who purchased them because of course they're like under an LLC or something, but I I was told it was like a family from New York. And one person was supposed to move in and then didn't, so then that became a rental, and then the other five were just supposed to be rentals to begin with.

Brandon 17:08

But which I'm I'm all for the quote unquote smaller investor, you know. Like we want to own.

Jessica 17:14

I would never buy five single, like these are not small houses. So five on one street. Like talk about a non-diversified portfolio.

Brandon 17:24

But that does, you know, like I said, I mean, there's pros and cons because like we we obviously want to own rental property and stuff like that. So I'm not going to disparage those who do that.

Jessica 17:33

We do not. You do.

Mental Load And Unfair Comparisons

Brandon 17:34

Yes. But the biggest issue is the hedge funds who just have billions of dollars to spend. And they're like I said, they're a lot of people are like, oh, maybe they're buying commercial real estate. Yeah, they're buying that too, but they're they have heavily invested into single family homes. And a lot of people don't realize that that is a big cause for the um increase in uh home prices. But then also on top of that, you know, um, if you add in like Airbnb, VRBO, a lot of people buying um what would other be otherwise be homes they would rent out long term are now short-term rentals. So let's decrease the available rental properties as well, which once again, less inventory.

Jessica 18:12

There's literally less places to live affordably.

Brandon 18:16

Yeah.

Jessica 18:16

Yeah.

Brandon 18:17

Um, and honestly, like I don't even I I don't even have I don't even know where it's gonna go. Like, because at the rate it's going, this is not sustainable.

Jessica 18:27

Yeah.

Brandon 18:28

Like I can like I said, I remember when, you know, I assume you remember the same thing. We were buying our first home. It was I didn't have that many issues.

Jessica 18:37

No, no.

Brandon 18:38

There was, you know, plenty of inventory and there was plenty of options that were affordable, you know.

Jessica 18:44

Yeah, got my mortgage, got my loan pretty easily. Like, yeah, it wasn't which is crazy because I was a poor teacher and 23 years old. So the fact that they were like, Yeah, sure, you can have this house is kind of wild.

Brandon 18:58

But I felt the same way.

Jessica 18:59

Yeah.

Brandon 19:00

For myself.

Jessica 19:01

Yeah. Hmm.

Brandon 19:02

But like the bigger part of this is how it weighs on people from like a mental standpoint. Because we are in a social media age where everyone's always comparing their life to other people, which I would say everyone does to a certain extent. You know, even as much as we don't try to do that, and that's what we're focused on, to say that you don't do it at all would be a lie. But some other people do it heavily, and you're seeing other people that are around the same age as you. Um, you're thinking maybe they're in the same boat as you as far as from a you know money standpoint, but they have something that you don't have, and you're trying to figure out why. And I know just from like what I do for a living that you can't do that because unless you're able to see behind the curtain, you never know someone's full situation. You know, you might be looking at someone that you think is in the same boat as you, as far as from an education standpoint, around the same age, maybe around the same income, you know, similar job, and you Know, hey, maybe their family gave them$200,000 to put down towards a house.

Jessica 20:03

Maybe it's a family home.

Brandon 20:05

Yeah.

Jessica 20:05

Maybe, yeah. Maybe there was uh an inheritance that came their way from somebody passing away. There's so many situations. I did a post um a little while ago where it's like people need to fill in the but or the and, you know, or the ellipses, whatever you want to call it, where it's like, hey, I was able to save$100,000 because XYZ. I was able to buy this house because I got an inheritance from my late grandmother. I was able to do this home renovation because, and it's like people on, especially on social media, just stand in the I was able to do this, but they leave out the most important part of the story, which is well, how did you how were you able to do that?

Brandon 20:49

And the thing is too, with this housing scenario, you know, compared to somebody who already owns a home, depending on when they bought it, like that's a huge difference. I have, I mean, I met with a potential client and we were looking through her information, and um, she had purchased a home for a little under$700,000 a few years ago, which is now worth$1.5 million.

Jessica 21:08

That's insane.

Brandon 21:09

And she's like, Yeah, I couldn't afford this house now. Like if I had to buy it now, I couldn't afford it.

Jessica 21:15

People are literally like, I would not be able to be in the neighborhood that I'm in. Yeah.

Brandon 21:18

That's so like you can't compare that because timing can be a lot of things in this scenario, especially when it comes to uh purchasing a home. And like, luckily for us, you know, we both had support and help from our family to purchase our first home, which is huge because I didn't have the down payment. Like between um help from my mom and then also the first time home buyers tax credit in 2009, that's how I was able to purchase my my first home. And getting into the market during that time frame at a younger age has significantly helped both of us because we got our money into the market at a good time. Right. And now it's just grown since then. And you know, in comparison to someone, let's just say, like a, you know, a 26-year-old now trying to get into the market, it's not the same thing at all. And I I I I don't even have like an easy answer for people to help them out. Like it's gonna be a matter of really one weighing out. Does it make sense for you to even buy a home right now, like based upon your specific situation?

Jessica 22:13

Right. Well, and then thinking about too all of the additional costs, because again, the mortgage is only one part of the cost. There's so many other expenses that come with being a homeowner that you might not have if you were a renter.

Brandon 22:33

Oh, 100%. And the first thing I would say to people is that most of the time purchasing your first home as your primary residence, often it's not an investment. By definition of what an investment is, it's really not an investment. For most people, it's going to be a lifestyle choice. And you need to determine, hey, is this a lifestyle choice that I want for myself? Or is this a lifestyle choice that I'm being told by others that I should be doing because I'm at a certain point in my life where I quote unquote should be doing this.

SPEAKER_02 23:03

Right.

Brandon 23:03

Like, do you actually want to own a home? Or are your parents telling you you should own a home or your friends telling you you should own a home?

Jessica 23:09

Is social media telling you that renting is throwing away money?

Brandon 23:13

Yeah. That's that's that's one that you hear, oh, renting's throwing away money. No, like you have a roof over your head. You have a place to lay your, you know, lay your head down. Like you're fine. Like it's not throwing away money. You are paying for something that you need.

Jessica 23:26

Right.

Brandon 23:27

So like getting away from that mindset is is huge because I always tell people, like, even if your parents have done good financially, you have to take certain things they tell you with a certain grain of salt because they did it in a different time, different different circumstances. You know, you could do the exact same thing as your parents and not be in the same place.

Jessica 23:50

Not end up with a pension or two retirements or whatever else.

Brandon 23:55

Well, the thing is, is like if you if you're just looking at our generation in comparison to our parents' generation, we are significantly more educated. However, at this given age, say, like just say 42 years old, the average 42-year-old now is making less than the average 42-year-old was making for the boomer generation. Even though we're the most educated, we did what they told us to do. Oh, go to college, get this degree, get that degree. And it hasn't panned out the same way that they thought it would.

SPEAKER_02 24:20

Yeah.

Brandon 24:20

So, like I said, uh take advice from your parents uh to a certain degree when it comes to money, unless they literally do this for a living and are up to date with everything going on that's affecting you in comparison to them thinking, hey, this is what I experienced when I was your age, completely different time frame, completely different circumstances.

Jessica 24:38

Right. Okay. So what do you want to leave people with?

Brandon 24:45

What I want to leave people with.

Jessica 24:46

Is this more of a rip and rant?

Brandon 24:47

I wouldn't say it's a rip and rant.

Jessica 24:49

Okay.

Brandon 24:50

I would say, you know, there are some different things that you need, like there can be creative ways to handle housing costs in general, you know? Um I'm really huge. Like if I could go here's one thing I was saying. Now, obviously, this it has a cost to it. If I could go back in time and redo my first home buy, I would have bought a duplex.

Jessica 25:14

Oh, but that's a strategy that most people are not thinking of. Also, duplexes are not like super available.

Brandon 25:22

What I'm saying is like in certain areas, you can also buy a place that maybe has a basement.

Jessica 25:26

Sure. You can also buy So you want to do a little house hacking.

Brandon 25:29

Yes. 100% house hacking. That can be beneficial, or you could, like I said, has a room that you could rent out because that can offset some of those costs. Sure. So that could be one way that you can go about doing it.

Jessica 25:41

But there's a difference between doing that in your early 20s versus now when people are in their 30s, pushing 40, et cetera. It's like, do I want a roommate? Do I want to find a stranger?

Brandon 25:51

I mean, yes, you have to weigh the you have to weigh all that out. That is part of the. And that's where, like, maybe like like I said, this is also depending upon where you are located in the United States, because certain housing types are more prominent in certain areas than others. So, for example, like, you know, if you're in an area where you can have a basement that has a separate entrance. Yeah. Even if you have a family, you guys are living in the main area, renting out that basement, and they don't have to come through, you know, the main part of the house, that could be a huge help in regards to offsetting costs.

SPEAKER_02 26:20

Yeah.

Brandon 26:20

So you have to kind of weigh those out.

SPEAKER_02 26:22

Okay.

Brandon 26:23

Um, we have some like other options here, and all honesty, I'm not sure how much I wouldn't go into these.

unknown 26:30

Okay.

Brandon 26:30

But co-buying.

Jessica 26:32

Okay. Yeah. No.

Brandon 26:34

I'm not really big on buying, you know, a house with a friend or even a sibling and splitting the mortgage, and like that can get messy. It all depends on your situation. Like, and if that's a route that you're going to go to possibly save money, even if it's your best friend or your brother, your sister, literally treat it as a stranger from a contractual uh legal standpoint. Have everything spelled out in detail of how this transaction and this would work.

Jessica 27:15

It's a no for me.

Brandon 27:18

Now, like, I mean, one that I can I can say is maybe a little bit of a better option because nowadays, especially if you have the ability to work remote. If you have a remote job, and maybe you're living in a place that's a higher cost of living, maybe moving to an area that's a lower cost of living could help you have the option of affording a house. And if you have, you know, a job that's easily transferable or you're working remote, so you can work pretty much anywhere, those are much, you know, options that are available to you know a good amount of people nowadays.

Jessica 27:48

What about the people who are like, nope, I want to own a home. It's time. This is what I know I want. What are some of the options that they should be looking for?

If You Must Buy: Plan The Numbers

Brandon 27:56

Well, first and foremost, we're going to go back to the financial planning aspect. Okay. You need to understand all areas of your current finances. So how much money you have coming in, how much money you have coming out, where is it going? Um, also in your area, how much is the uh average house that you're looking for? You know, what is the cost gonna be? Um, looking at your credit score, what are you looking at from that standpoint?

Jessica 28:17

Finding out debate-to-income ratio.

Brandon 28:19

Finding out what you would be eligible for in regards to a mortgage, how much you're gonna have to put for a down payment. So going through all that to figure out one, is this feasible currently? And if it's not, what changes do I need to make to my financial life in order to get there?

Jessica 28:35

I will also say we've done um episodes on this, and we actually had our mortgage lender or mark our wow, our mortgage broker come on and do an episode. Um, and he actually suggests having that conversation with a mortgage broker, with a lender 12 months before you're ready to actually buy. So especially depending on what market you're in. I know here in this, you know, Raleigh, North Carolina area, uh, the market is very competitive. And so most of the time you can't just be out here just like, oh, I'm just taking a look. You know, it's if you are actively home trying to buy a home and find your house, then you need to be ready. You probably have to be pre-qualified, have that statement ready, et cetera. So you want to start that conversation early and then find out what are the available loan options that you have? Are you gonna have to go with a traditional mortgage? Is it uh, do you have access to an FHA loan? What about a VA loan? Like what options do you have? What do the numbers look like? Maybe you do need to work on your credit score a little bit so that the interest rate can be a little bit more favorable. There are things that need to be in place so that when you are ready and you find your dream home, you can make an offer and sign on that dotted line.

Brandon 29:53

Yeah, and also like depending on your situation and where you're located, you also want to look at, you know, the possibility of down payment assistant programs.

SPEAKER_02 30:00

Yeah.

Brandon 30:00

I have a client who that's how she got her first home a few years ago, and uh, they're all in North Carolina area. Is that she was doing her research and she came across a program that she qualified for that was phenomenal and helped her out. Now they're obviously you need to understand all the rules and stipulations as far as like, hey, a lot of these uh programs do require you to live in the house for a certain period of time. You just can't simply turn into a rental property. You know, you have to be the one living there as your primary residence. But taking a look and seeing if those options are available to you are huge.

Jessica 30:30

Yeah, absolutely. So there are things to do so that you can do your homework to get ready. We've got episodes on it, but I think this one was really more of like a reminder that it's not you.

Brandon 30:42

It's not.

Jessica 30:42

It's not you. This system is you're not doing anything wrong.

Programs, Brokers, And Timing

Brandon 30:46

Yeah, the system is not working the same way because let's be honest, like um, I've seen it numerous times with the boomers uh the boomers want to play it as if they were so smart in their planning when a lot of them weren't doing any planning. They just kind of walked into a good situation.

Jessica 31:00

Yeah, they got lucky.

Brandon 31:01

They got lucky. Whereas, you know, that same uh system isn't available for us. So we have to be smarter about the moves that we're making and how we're doing things.

Jessica 31:10

Mm-hmm. Yeah. So it's not you. And if you want to buy a home, there are resources still to be explored. I mean, I have a cousin who just got a habitat for a humanity house. I know that's a completely different category of home, but she is now a homeowner. And what I love about Habitat is, you know, she had to go through courses and really understand a lot of the elements of the finances and what goes into maintaining a home. And there was a lot of education around that, which I think is fantastic. But there are programs. Um, it's really great to check local banks, maybe your credit unions to see what programs they offer. I know this is more of a back in the day thing, but uh there were programs offered by one of our like uh state credit unions that offered a uh down payment assistance like match if you went through their program for it was like a financial education type program. So there are things, but you have to do your research and you have to look into it. And you know, there might be certain things that you have to do in order to qualify, but they are out there. Again, mortgage brokers can probably walk you through that. Certain realtors are really educated on that as well. And then also, if you are a quote unquote hero, right? If you are a teacher in law enforcement, fire department, a nurse, um, etc., there are programs out there that could also help you, again, with down payment assistance, maybe, you know, taking off a point or two off of interest rates. I mean, they vary from state to state and program to program, but there are programs that are also out here trying to help people who are giving back to the community. So if you're in one of those professions, definitely look into that as well.

Brandon 32:54

Yeah, the the the point that we're trying to make here is that you have to do more research.

Jessica 32:58

Yes.

Brandon 32:58

You have to do more research to find out are there any type of assistance out there that can help you out? But then also, once again, it really starts with knowing all the details of your numbers. A lot of people don't know those numbers. They don't know how much house they can afford. They don't know, you know, with this certain interest rate and this certain down payment, what my mortgage will look like. And those are all numbers that you can get. So you do need to start there.

Final Reframe: It’s Not The Avocado Toast

Jessica 33:23

Yeah. Do your research, get your numbers in order, have the conversation early. Even if you have a great credit score, if you don't know that debt debt to income percentage, if you don't know what the market is looking like right now, what the rates are, what these loans are requiring, have the conversation early. Because if once you think that you're ready, you might have somebody who's actually going to be writing that loan for you saying, actually, you're not, you need another six to eight months. So have the conversation early.

Brandon 33:51

Yeah, and reach out to the professionals to help you out. You know, from a standpoint of looking at the numbers in your own personal financial situation, I can help you out with that. But then also, you know, mortgage brokers to help you out with that. And I was definitely stressing this scenario that with a mortgage broker, this should be someone who is more um provides a uh consultative approach where they are trying to help prepare you and make sure that you understand everything that goes into it, especially as a first-time home buyer.

Jessica 34:14

Yes, absolutely. So we will link to our other episode with David Kane. Uh, there's a lot of really good information on there on how to have the conversation. Again, 12 plus months ahead of when you you think that you're ready to buy a home so that you can be properly prepared. But it's not you, it's not the lattes, it's not the avocado toast. It is the environment that we're in. So keep your head up. And if home ownership is something that you're striving for, we are rooting for you and hope this episode gives you a little bit of uh support and helps you find a little bit of grace for yourself. We'll talk to you soon.