Yeah, most alarming stat in recent news is some 40% of 25-34 yr old planning to leave bay area in next year. Even if just 1/4 follows through that doesn't bode well.. VCs are seeing startups happening more outside of here as well, too high a cost to do a 'garage startup'
Amazon is right, don't take rent in isolation, see how much house you would be getting and factor the interest and property tax, minus whatever tax credit for the interest. In addition, the shorter your time frame of ownership the larger risk of loss. If job or kids school changes may make your commute painful, you may wish to rent to retain maximum flexibility.
For a 750k mortgage, you are almost putting back 1/3rd of your monthly payments on the loan principle plus the house pricing in the bay area is always increasing. So, u end up in a lot more gain than to loose those 50k in rent. Its always better to have first home whether or not it gives tax benefits.
But there is maintenance cost associated with house every month. You pay property tax, home insurance etc.. One can increase the principle by investment in other business/stocks. It’s not always / no more better.
@op property tax of 15k was already included in the posts above which compared against renting.
@nvidia that is true. The above shared details was for a 750k loan after 20% down (950k property value) on an interest rate of 3.75% for 30 years. With this, I’m almost adding 1/3rd ($1100) back to the principle I’m paying monthly.
You are avoiding one edge at least with 750k mortgage. But in a reasonable school district with reasonable commute it is almost impossible to get 950k single family house. You are either sacrificing on school district or commute.
Well its the 45min bart commute to city for me that adds to the deal. But to put back $1100 each month on principle plus taking in the house appreciation in a good school district outweighs the 20min additional time spent on commute.
Good for you, it comes down to the personal priorities and individual preferences. 2 hours everyday on commute is too much for some. The headache of getting to/from the bart station and strictly following the bart timings etc is bothersome/tiring/stressful...
You're right that was the lower end of middle class. Seems like the median is around 115k or so in Santa Clara County. Still quite a bit out of whack if we are considering supporting the median home prices
Nothing changed for most people as income was too high to get the deduction. If are a lower earner and have 1m dollar house then yes your federal deduction was cut by 250k and California remained at 1m. Tax deductions are icing on the cake though and not why folks buy. Renting is absolutely cheaper, the bummer is just that rent will probably go up whereas a house is fixed forever and prop 13 is amazing :)