Housing
Everyone lives somewhere. First, we live with our parents. Then, after college years or a stint in the military, we strike out on our own. Many people live in apartments for awhile until they get married. Some young married couples live in an apartment for awhile until they make that great plunge into home ownership. When I was young, a nice new house could be had for around $15-20,000. At the time that seemed like all the money in the world. Now, it will barely buy a car. The same house now is in the $130-140,000 range. Not only has inflation minimized a young couples chances of home ownership, but the governmental regulations are daunting. Some of the charges are the origination charge (whatever that is), the tax service, the appraisal, the credit report, a flood certification, FNMA LQI Update (?), hazard insurance, mortgage insurance, city taxes, county taxes, PMI/MIP Funding Fee (another?), attorney’s fee for title search, owner’s coverage for title search, government recording charge, and government transfer tax. These closing costs alone can be $5,000 or more. These are in addition to all the inspections that have to be performed, such as electrical, plumbing, sewage and flood plain assessment.
I remember my grandfather telling me that when he started building houses, there was no such thing as an inspection. He did all the wiring and plumbing himself without any inspection by the government. Then, he couldn’t do any of that himself, he had to hire all that done by “certified” electricians and plumbers.
The government has become very intrusive in all aspects of our lives and not always for the better. Of all the people getting money from the aforementioned charges, not one of them drove a single nail in the construction of that house.
Bigger homes were the norm 100 years ago because most homes had three generations living in them and families were larger. As time went on, especially after WWII, the returning soldiers had to have a place to live. Most of them had left as boys and returned as men wanting their own living quarters. At that time, most of the larger homes were divided into apartments and remain so to this day. The cost of painting one of these larger old homes is upwards of $20,000 to correctly paint it in the Victorian style and colors, according to the dictates of the historical district within which it is situated. This can be detrimental to a young couple just starting out. There are other factors that make a new home more attractive to today’s new home buyers. Things such as heat pumps and multiple electrical outlets for all the modern conveniences are not available in the older homes without extensive and expensive costs. For what it would cost to fix up an older home, a new home with all the modern amenities can be had. It’s a tough situation for all concerned and not one that appears ready to be solved any time soon.
