OKC Real Estate Market

[OKCRealtor]

^

The government literally helps you make a good chunk of the payment. Mortgage interest & property taxes alone are a huge write off. Renting for anything more than a couple years is absolutely detrimental to wealth creation in most cases.

You can also write off various other improvements & upgrades as well, given their is no capital gains on a primary residence until after $250k or $500k if married that means all of the money & investment into the property grow tax free. This is huge.

[liirogue]

There are only tax deductions for home ownership if you itemize your deductions. 90% of tax payers take the standard deduction, and see no tax benefit from owning a home.

And while rents go up, I would argue that a mortgage payment does as well. While the principal and interest are fixed, taxes and insurance are not. Insurance rates have increased nearly 40% since 2019, and taxes can increase substantially when a home is sold for far more than it previously sold for. An escrow shortage compounds the issue and (temporarily) raises the payment even further. I know multiple people that have been forced to sell because they simply can't afford the increase in their monthly payment.

I am fortunate enough that I could afford to purchase a home if I wanted to. But I have no idea how the average family earning $55k a year is supposed to be able to do it.

[Anonymous.]

Median household income in OK: $62000
Median mortgage payment in OK: $1700

Using 50/30/20 rule for that median person in OK:
$18600 on rent allowed per year which is 1550 per month.

So no, this person according to best budget practices, should not purchase a home.

[Pete]

Median household income in OK: $62000
Median mortgage payment in OK: $1700

Using 50/30/20 rule for that median person in OK:
$18600 on rent allowed per year which is 1550 per month.

So no, this person according to best budget practices, should not purchase a home.

I don't understand your point... Why wouldn't this person pay almost the same in mortgage cost ($1,700) vs. throwing their money away on rent ($1,550)?

The net cost after taxes would be less on the mortgage plus the endless benefits of owning as have been outlined.

And for $1,700/month you can buy a home for about $200K, and there are plenty of those around. Would be a lot better living situation than an apartment at that same price.

[FighttheGoodFight]

I don't understand your point... Why wouldn't this person pay almost the same in mortgage cost ($1,700) vs. throwing their money away on rent ($1,550)?

The net cost after taxes would be less on the mortgage plus the endless benefits of owning as have been outlined.

And for $1,700/month you can buy a home for about $200K, and there are plenty of those around. Would be a lot better living situation than an apartment at that same price.

I'd guess the hidden costs of home ownership. Insurance, property tax and repairs are expensive. Rent has that all wrapped into one.

[OKCRealtor]

^

Pretty much, for the most part it has been cheaper to buy vs rent for a very long time now with exception to last couple years but that will work itself out. I retained about 67% of what I spent payment wise on my first home when I went to sell & if I were to sell my current home I would actually get more than 100% of the payment back over last 6 years due to one paying overage & two appreciation. I just roughly broke down the numbers from my 15 years of personal ownership and I'm retaining a little over $1500/mo of what I paid in mortgage. Not bad.

[OKCRealtor]

I'd guess the hidden costs of home ownership. Insurance, property tax and repairs are expensive. Rent has that all wrapped into one.

Yea but the hidden expense of not owning & paying down an appreciating asset simultaneously is much more expensive than the upfront costs of ownership. It just takes a little more discipline.

[gjl]

Percent of US households that live in a house they own is a little over 65%.

[Jersey Boss]

^

The government literally helps you make a good chunk of the payment. Mortgage interest & property taxes alone are a huge write off. Renting for anything more than a couple years is absolutely detrimental to wealth creation in most cases.

You can also write off various other improvements & upgrades as well, given their is no capital gains on a primary residence until after $250k or $500k if married that means all of the money & investment into the property grow tax free. This is huge.

The standard federal deduction is such that it exceeds most deductable expenses for the majority.

[Bill Robertson]

There are only tax deductions for home ownership if you itemize your deductions. 90% of tax payers take the standard deduction, and see no tax benefit from owning a home.

And while rents go up, I would argue that a mortgage payment does as well. While the principal and interest are fixed, taxes and insurance are not. Insurance rates have increased nearly 40% since 2019, and taxes can increase substantially when a home is sold for far more than it previously sold for. An escrow shortage compounds the issue and (temporarily) raises the payment even further. I know multiple people that have been forced to sell because they simply can't afford the increase in their monthly payment.

I am fortunate enough that I could afford to purchase a home if I wanted to. But I have no idea how the average family earning $55k a year is supposed to be able to do it.

True. Taxes and insurance do raise the mortgage payment. And lately it can be noticeable. For the last few years of us making a $1200 a month house payment we didn't qualify for itemized deductions. For the few years before that we barely did and it saved us very little in taxes. I've owned a house for 45 of the past 46 years but I can understand the reluctance to be a first time buyer now.

[FighttheGoodFight]

Yea but the hidden expense of not owning & paying down an appreciating asset simultaneously is much more expensive than the upfront costs of ownership. It just takes a little more discipline.

I'm not saying it doesn't make sense on paper but based on the fact a ton of people in America have zero in savings makes it hard to come up for unexpected expenses.

[BoulderSooner]

The standard federal deduction is such that it exceeds most deductable expenses for the majority.

yep it will be around 30k for the 2025 tax year for a married couple ..

but it is currently slated to go way way down in 2026 ..

[Pete]

I'm not saying it doesn't make sense on paper but based on the fact a ton of people in America have zero in savings makes it hard to come up for unexpected expenses.

If you have zero in savings with no plan to change this, you will certainly be stuck throwing your money away on rent for the rest of your life.

People have had to scratch for down money for the last 100 years. There has never been a time where lots of people were buying homes without a down payment.


I fully understand that some are truly poor and just trying to get by, that has always been the case for a certain percentage of the population. For everyone else, you HAVE to save money and it simply seems very few people are willing to do that, evidenced by so many driving expensive cars (also often leased), taking lavish vacations, eating out several times a day, running up credit cards, etc.

Buying a home is not an entitlement. It's something every generation has had to work towards and most people start with a home well below what they actually want, and work their way up.

I honestly think the only thing that has changed in the last century is that younger people are not willing to save and begin with a starter home. Absolutely everyone else before them had to do those things.

I've made this point before but young people should take a look at what their parents, grandparents, and great-grandparents did to buy a home. Most of them completely busted their asses to save a little money, then worked like hell to improve the house and eventually trade up.

[FighttheGoodFight]

If you have zero in savings with no plan to change this, you will certainly be stuck throwing your money away on rent for the rest of your life.

People have had to scratch for down money for the last 100 years. There has never been a time where lots of people were buying homes without a down payment.


I fully understand that some are truly poor and just trying to get by, that has always been the case for a certain percentage of the population. For everyone else, you HAVE to save money and it simply seems very few people are willing to do that, evidenced by so many driving expensive cars (also often leased), taking lavish vacations, eating out several times a day, running up credit cards, etc.

Buying a home is not an entitlement. It's something every generation has had to work towards and most people start with a home well below what they actually want, and work their way up.

I honestly think the only thing that has changed in the last century is that younger people are not willing to save and begin with a starter home. Absolutely everyone else before them had to do those things.

I've made this point before but young people should take a look at what their parents, grandparents, and great-grandparents did to buy a home. Most of them completely busted their asses to save a little money, then worked like hell to improve the house and eventually tradeup.

I don't disagree. But it also seems that home buying is an issue in many countries besides America. I'm sure people smarter than me study this. I would guess it comes down to supply and demand, wages, rates, inflation, etc...

[Ginkasa]

If you have zero in savings with no plan to change this, you will certainly be stuck throwing your money away on rent for the rest of your life.

People have had to scratch for down money for the last 100 years. There has never been a time where lots of people were buying homes without a down payment.


I fully understand that some are truly poor and just trying to get by, that has always been the case for a certain percentage of the population. For everyone else, you HAVE to save money and it simply seems very few people are willing to do that, evidenced by so many driving expensive cars (also often leased), taking lavish vacations, eating out several times a day, running up credit cards, etc.

Buying a home is not an entitlement. It's something every generation has had to work towards and most people start with a home well below what they actually want, and work their way up.

I honestly think the only thing that has changed in the last century is that younger people are not willing to save and begin with a starter home. Absolutely everyone else before them had to do those things.

I've made this point before but young people should take a look at what their parents, grandparents, and great-grandparents did to buy a home. Most of them completely busted their asses to save a little money, then worked like hell to improve the house and then tradeup.

Personally I think you're overestimating how many of the "younger generations" are "driving expensive cars (also often leased), taking lavish vacations, eating out several times a day, running up credit cards, etc.". I am someone who bought the cheapest (albeit new) car I could 9.5 years ago and is still driving it, never gone out of the country on vacation, and up until recently never carried a balance on my credit card (and only do now due to necessary expenses) and own my home own (currently on my second house) so this isn't defensiveness on my part.

I was lucky enough to get a decent home at a decent price, cash out year later, upgrade location. If I were in the same position now as I was when I bought my first house years ago I don't think I'd be able to do it again. Obviously there are people at all ends of the "age spectrum" who overspend and undersave and are more focused on keeping up with the Jones rather than planning ahead, but I don't think its as widespread among the younger generations as you seem to perceive.

[Pete]

Other countries are an entirely different matter. Much of what makes America great is our entire economy is set up where almost anyone can own their own home (and car). Go elsewhere and that is not the case.

There are no shortcuts to home ownership (besides rich families who help): You have to save money and be willing to start low on the home totem pole, then continue to work your way up.

Of course it's different in very expensive markets but OKC is the other end of that spectrum and it's very easy these days to move anywhere in the U.S.

[Pete]

Personally I think you're overestimating how many of the "younger generations" are "driving expensive cars (also often leased), taking lavish vacations, eating out several times a day, running up credit cards, etc.". I am someone who bought the cheapest (albeit new) car I could 9.5 years ago and is still driving it, never gone out of the country on vacation, and up until recently never carried a balance on my credit card (and only do now due to necessary expenses) and own my home own (currently on my second house) so this isn't defensiveness on my part.

But you own a home.

We're talking about people claiming they can't and almost none of them fit the lifestyle you have lived, otherwise they could own, too.

[Anonymous.]

I honestly think the only thing that has changed in the last century is that younger people are not willing to save and begin with a starter home. Absolutely everyone else before them had to do those things.

I've made this point before but young people should take a look at what their parents, grandparents, and great-grandparents did to buy a home. Most of them completely busted their asses to save a little money, then worked like hell to improve the house and eventually trade up.

Because the math doesn't support this at all?

The median house of 1960 would cost just $104,619 in 2020 dollars, far below the actual cost of $240,500, meaning housing costs have increased by 129%.

Median household income has only grown by 39% in that same time period, from $49,232 (2020 dollars) in 1960 to $68,703 today.

It is literally both more expensive to afford a home now, and harder to save money. All factors are working against a person today buying a home than compared to their parents and beyond.

[Bill Robertson]

If you have zero in savings with no plan to change this, you will certainly be stuck throwing your money away on rent for the rest of your life.

People have had to scratch for down money for the last 100 years. There has never been a time where lots of people were buying homes without a down payment.


I fully understand that some are truly poor and just trying to get by, that has always been the case for a certain percentage of the population. For everyone else, you HAVE to save money and it simply seems very few people are willing to do that, evidenced by so many driving expensive cars (also often leased), taking lavish vacations, eating out several times a day, running up credit cards, etc.

Buying a home is not an entitlement. It's something every generation has had to work towards and most people start with a home well below what they actually want, and work their way up.

I honestly think the only thing that has changed in the last century is that younger people are not willing to save and begin with a starter home. Absolutely everyone else before them had to do those things.

My parents bought their first house for $5000 for in 1947-8ish. In 1959 when I was 2 they bought the house they died in for around $8000. A considerable amount for the time but not like home prices now adjusted for inflation. Only dad worked, as a printing pressman, and as a kid we still had extra money. Mom eventually went to work part time as an LPN in the late 60s and with that we travelled and bought a lake house at Eufaula and a boat, and dirt bikes. That cannot be done now on 2 common workers pay.
I bought my first house in 1978 for $8k. I didn't stretch at all to buy it. I did very little to it. Sold it a few years later for $15k and bought house #2 for $20k. Didn't do a whole lot to it and sold it for $33k. And so on. I didn't have to skimp or not live the lifestyle I wanted to eventually have a nice house in a nice neighborhood. All along the way I had boats, race cars, motorcycles, went on ski trips, ate out way too much, etc, etc.
It's not that way now. Things are way harder now. Especially for a generation that isn't used to being told no.

[Ginkasa]

almost none of them fit the lifestyle you have lived

I'm disagreeing with this portion. I don't have some national survey results or anything, but anecdotally (which I would consider more valuable than any anecdotal perspective you have as I'm closer to the demographic being discussed) when people my age or younger are not able to buy a home it is not due to living large and wasting cash on luxury. Like I said, if I were 10 years younger and working as a Senior Manager a movie theatre right now with a family of four (which were the conditions I had when I bought my first own) and living the lifestyle I lived then (which was generally below my means), I don't think I could buy that home or a similar home.

Like I said, I don't have any objective data ready at hand, so agree to disagree. Just wanted to get my perspective out there.

[OKCRealtor]

I think we can both say that the last couple of years have made it significantly harder (in the short term) and that nothing has really changed at the same time. Market conditions change with economies but the sacrifices required & general trajectory aren't any different. There are going to be times when it is easier than others. We had an extraordinary period of ultra low rates & housing prices here for well over a decade. Now that we are somewhat catching up to big cities plus last few years it's a lot harder. I always try to educate people on opportunity cost, if they can understand things from that perspective it makes a lot more sense.

I'm a bit of a unicorn with how I've always approached personal finance & I think as I've watched peers and younger siblings and generation there is less and less financial discipline. I can attribute most of what I have now to a lot of sacrifice and not living like everyone else when I was in my 20's. Even when I was low income I still managed to put together a decent net worth over the years but it took consistent disclipline and I started really young compared to most. Even now that I earn and have significantly more for the most part I live under my means. Way under many people I know that aren't in nearly as good of a spot. It just comes down to short term vs long term decisions.

[Timshel]

Yes Tik Tok is what it is (and I refuse to have one myself), but these are good very high level videos explaining why today's situation is "different." I can't find the best video I've seen that explains all the math at a pretty granular level (granted, I recognize this is all very high level and doesn't account for geography, etc.) but these do a decent job. Despite being a millennial, I historically agreed more with the POVs of some of what I'm assuming are members of older generations posting on here that it's largely a matter of prioritizing expenses and lifestyle, but my perspective has definitely changed. While, yes, it is possible for younger people to prioritize homeownership (and I'm in the privileged position to have done so), it is also true that it is materially harder for people of my generation to do so than in the past and the math bears this out (again, at a high level).

https://www.tiktok.com/@fmsmith319/v...377962?lang=en

https://www.tiktok.com/@fmsmith319/v...807790?lang=en

[gjl]

I think we can both say that the last couple of years have made it significantly harder (in the short term) and that nothing has really changed at the same time. Market conditions change with economies but the sacrifices required & general trajectory aren't any different. There are going to be times when it is easier than others. We had an extraordinary period of ultra low rates & housing prices here for well over a decade. Now that we are somewhat catching up to big cities plus last few years it's a lot harder. I always try to educate people on opportunity cost, if they can understand things from that perspective it makes a lot more sense.

I'm a bit of a unicorn with how I've always approached personal finance & I think as I've watched peers and younger siblings and generation there is less and less financial discipline. I can attribute most of what I have now to a lot of sacrifice and not living like everyone else when I was in my 20's. Even when I was low income I still managed to put together a decent net worth over the years but it took consistent disclipline and I started really young compared to most. Even now that I earn and have significantly more for the most part I live under my means. Way under many people I know that aren't in nearly as good of a spot. It just comes down to short term vs long term decisions.

Try being single and no kids until the age of 36 like I did. Still no kids but I did have 2 step kids for 8 years. It is a big reason I have the assets I have today. I know it's not for everyone but it was for me. I'll add that when you do finally get in your forever house and pay off the mortgage it is a great feeling.

[bamarsha]

I don't disagree. But it also seems that home buying is an issue in many countries besides America. I'm sure people smarter than me study this. I would guess it comes down to supply and demand, wages, rates, inflation, etc...

I would say it comes down to personal responsibility (or lack thereof). If you work hard and make good choices, you can own your own home. Yes, it may take some initial sacrifices, but it will be worth it long term.

[Pete]

At any given point in time, it can be harder to buy a home, especially since we are coming off ridiculously low rates that lasted a long time.

Think 7% is high? Rates were at 10%+ from 1975 to 1990, and got as high as 18%.


It still doesn't change the fact that given any current economic situation, you have to save for a downpayment then be prepared to lower your expectations and put in some work so you can get your foot in the door, then all the various forces -- inflation, high rates, high home prices -- are canceled out because you are already in the market.

And if things in fact are increasingly hard on first-time homeowners, you can either complain or come up with a plan to get in ASAP because waiting on the sidelines always makes it worse.