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Let’s be clear. The question that follows reflects what MarketWatch (MW) actually published from a woman who stated that her man is earning considerably more income than the majority of Americans. Someone making less money than this woman says they claim to earn might think about her inquiry, ‘are you serious?’ Nevertheless, the question itself is interesting. Indeed, as what will follow will reveal the question could be an important one for millions. This woman’s letter to MW ought to be paired with another question. What will happen to those Americans who are renting who have a more modest income than this couple claims to be?
To some extent, we will ignore what MarketWatch spent much of their digital ink on the reply. Why? Because it is the basic idea that renters may someday face homelessness if they don’t get onto the home ownership ladder in our nation where inflation and soaring rents in the past 2½ years have become a real, not imaginary, problem. Most experts agree, said Oregon Public Broadcasting, that the lack of affordable housing is the biggest contributor to homelessness.
Here is the question as published by MarketWatch (MW) on 12.2.2023, but the question may prove relevant for years and years to come, unless the current inflationary and lack of affordable housing dynamics aren’t cured.
Dear MarketWatch,
My husband is 68 and I’m 74. He makes $250,000 a year. We’re renting a townhouse in a very upscale suburb in the Houston area, but our last rent increase was $300 a month!
My husband wants to find a house for not more than $300,000 because he doesn’t want to be a slave to rent increases. We’d have to take out at least a $100,000 mortgage, which he says he can pay off in a year because he currently banks every other paycheck.
I would rather move into a 55-plus community where we could rent a nice apartment and have amenities, with no property tax or upkeep. He says we will be homeless because our rent keeps going up, and we won’t last long on our combined Social Security. ”
Their complete response was longer, but this may be one of the key points that MW article’s reply to that woman’s inquiry shared.
The median listing home price in Houston is $340,000, while the median sale price is $311,300, according to Redfin, which means it isn’t impossible to find a house in the price range your husband is considering. Before you jump into the housing market, though, get serious about your current and anticipated future budgets…Paying off the mortgage quickly is a fantastic goal…”
Much of what they said otherwise is debatable, as MW themselves suggested: “There’s no one-size-fits-all approach to retirement housing.”
That said, let’s break this down into something a bit more grounded in the experiences of most Americans. Note: using the graphic below should NOT be construed as an endorsement of the company being quoted. This just happens to be a useful illustration.
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The following Q&A is with MHLivingNews and Bing’s Artificial Intelligence (AI) or Bing AI chat function. Note that Bing isn’t told who is asking the questions.
> “What is the average household income in the U.S. in 2023?”
According to the U.S. Census Bureau, the median household income in the United States in 2023 is $61,9371…
What is the average rent in the U.S. for an apartment or multifamily housing?
According to RentCafe, the average rent for an apartment in the United States is $1,702 per month as of March 20231. The cost of rent varies depending on several factors, including location, size, and quality. The average apartment size in the U.S. is 897 square feet1.
The average rent in the U.S. varies by state. The most affordable states in the U.S. are Oklahoma, where the average rent goes for $979/month, Arkansas, where renters pay $1,017/mo on average, and North Dakota, where the average rent goes for $1,035/mo. The most expensive states in the U.S. are Massachusetts ($2,737), New York ($2,660) and California ($2,541)1.
I hope that helps! Let me know if you have any other questions.
> “What is the average rent for single family housing in the U.S. in 2023?”
According to USA Today, the average monthly rent for single-family houses in the United States increased from $2,212 to $2,330 at the close of the first quarter of 2023 compared with the same period in 2022, a 5.3% increase1.
Please note that the above figure is an estimate and may not represent the exact rent of every single-family house in the United States.
Is there anything else I can help you with?
Learn more:
> “For someone earning the typical 61937 a year, how much is their take home pay after federal, state, and local taxes?”
Using the NerdWallet tax calculator, we can estimate that the federal income tax owed for someone earning $61,937 a year is approximately $14,2601. However, this is just an estimate, and the actual amount owed may vary depending on several factors, including filing status, deductions, and credits.
In addition to federal taxes, we also need to consider state and local taxes. The amount of state and local taxes owed varies depending on the state and locality in which the individual lives. Therefore, it is difficult to provide an accurate estimate without knowing the specific location. …”
That means that the typical household in a state without state or local income taxes has take home page of about $47,677. Renting an ‘average’ apartment (see above), that means that household would have about $20,424 in rent for a year. There is only $27,253 left.
> “How much are the typical other bills besides rent for an average household in 2023? Car, insurance, utilities, phone, internet, food, fuel, etc.?”
According to the Bureau of Labor Statistics, the average monthly expenses for an American household add up to about $5,5771. This includes expenses such as housing, transportation, food, personal insurance and pensions, health care, entertainment, other expenditures, cash contributions, apparel and services, and education.
However, the average monthly expenses can vary widely based on the size of your household and the cost of living in your part of the country. For example, the average monthly expenses for a family of four range from $7,333 to $8,595 (depending on the ages of your kids). For single folks, the average monthly expenses are $4,009. For married couples with no kids, monthly expenses are $6,3371.
Here is a breakdown of some of the typical expenses you mentioned:
- Car: According to NerdWallet, the average cost of owning and operating a car in the United States is $9,282 per year or $773.50 per month2.
- Insurance: The average cost of car insurance in the United States is $1,674 per year or $139.50 per month3. The average cost of home insurance in the United States is $1,312 per year or $109.33 per month4.
- Utilities: The average monthly cost of utilities in the United States is $3985.
- Phone and Internet: The average monthly cost of phone and internet services in the United States is $1136.
- Food: The average monthly cost of food in the United States varies depending on the size of your household and your eating habits. According to the U.S. Department of Agriculture, the average monthly cost of food for a family of four ranges from $567 to $1,2967.
- Fuel: According to the U.S. Energy Information Administration, the average price of gasoline in the United States in 2023 is $3.15 per gallon.
Please note that these are just estimates and the actual costs may vary depending on several factors, including your location, lifestyle, and spending habits.
I hope that helps! Let me know if you have any other questions.
Note that MHLivingNews isn’t endorsing the firms being cited by Bing AI. Ramsey Solutions, for example, is arguably wildly wrong about much that they have said about manufactured housing. For more on that, see the report linked below. Note that Ramsey declined responding to that evidence-based critique.
Put bluntly, what that Q&A reflects is what many are telling pollsters in the last year plus. Namely, that millions of Americans are having trouble making ends meet since Joe Biden moved into the White House.
> “Where can I find the most third-party research about mobile home and manufactured home living?
According to Manufactured Home Living News, they have the largest known collection of third-party research on HUD Code manufactured housing 12. They provide a comprehensive resource for facts, evidence, and studies known to exist anywhere online. The research cited will be by year, not necessarily based upon the importance of the findings. Some might be tempted to think that reports more than a few years old are not relevant, but that would be mistaken. Decades of third-party research from the late 20th century and throughout the 21st century demonstrate that HUD Code manufactured homes are the most proven form of affordable housing in U.S. history 1.
I hope that helps! Let me know if you have any other questions.
“Bing, obviously no two people or two households are exactly alike. But generally speaking if a person can buy a new manufactured home for about the same or lower cost as what they are paying to rent, isn’t there a good case to be made that owning has longterm benefits over pure rental? For instance, according to research reported on MHLivingNews by LendingTree, FHFA, the National Association of Realtors research by Certified Business Economist Scholastica “Gay” Cororaton and other sources, isn’t it true that millions of people could qualify to buy a manufactured home with either zero down on a VA or USDA loan, or 3.5 percent down on an FHA loan? So, buyers could be building equity and getting tax deductions in many cases and have relatively stable payments vs. ever higher rents? Can you elaborate on those points?”
That said, per Bing AI, are the following edited (for length, etc.) points made, with some links added by MHLivingNews to research on several of those items. Note there are other types of financing programs available, and several states have state financing programs that often can be used for manufactured home buyers.
You raise a good point. Generally speaking, if a person can buy a new manufactured home for about the same or lower cost as what they are paying to rent, there is a good case to be made that owning has long-term benefits over pure rental.
According to research reported on MHLivingNews by LendingTree, FHFA, the National Association of Realtors research by Certified Business Economist Scholastica “Gay” Cororaton and other sources, millions of people could qualify to buy a manufactured home with either zero down on a VA or USDA loan, or 3.5 percent down on an FHA loan.
In addition to building equity, owning a manufactured home can also provide tax deductions in many cases and have relatively stable payments compared to ever-increasing rents. For example, you can take an itemized deduction for mortgage interest on your manufactured home loan. You can also write off all the points in the year you took out the loan, so long as you pay them all. …”
https://www.manufacturedhomelivingnews.com/debunking-manufactured-housing-myths-get-the-facts-says-mortgage-giant-freddie-macs-research-fhlmc-counters-clarifies-claims-about-trailer-houses-mobi/
https://www.manufacturedhomelivingnews.com/unpacking-manufactured-homes-as-an-investment-lendingtree-mobile-home-values-are-rising-faster-than-single-family-home-values-when-do-mobile-and-manufactured-homes/
Notes. While prices on homes change and interest rates can rise and fall based on economic conditions, the percentage of savings for buying a new manufactured home vs. buying a new conventional house is about 50 percent. Even if the land cost is about the same for both, the net savings by buying a new manufactured home on land with a mortgage can be well over $100,000 at this time, often near or approaching 50 percent savings vs. new conventional site-built housing.
Furthermore, pre-owned or ‘existing’ homes, be they conventional housing that is site-built or manufactured, are often less than the cost of a new home (site built or manufactured).
On Buying vs. Renting During a Time of Inflation
Moneywise reported that “Real estate is generally a “good investment” during times of inflation,” according to Warren Buffett. Note that in our evidence-based and manufactured home industry expert analyses, MHLivingNews and ourMHProNews sister site are often Buffett, Clayton Home and their associated lending critics. That said, on this point, we believe Buffett’s broad notion of real estate being a normally good hedge against inflation has merit.
MSN said about this topic: “Buffett’s recommendation is anchored in the intrinsic value of real estate. Unlike stocks, real estate is a tangible asset, less susceptible to market volatility. It generally appreciates over time, and during inflation, as the value of money diminishes, the value of real estate typically rises.”
Citing Forbes on Buffett’s recommendation, Bing AI said this. “Warren Buffett, the legendary investor, has been known to advocate for investing in real estate during times of inflation. According to a Forbes article, real estate can be a good hedge against inflation because property values over time tend to stay on a steady upward curve.”
In the context of making an investment in a manufactured home, one should consider buying a manufactured home on land owned by the buyer. While manufactured housing can increase in value in a land-lease situation, as a recent class action litigation launched against several higher profile Manufactured Housing Institute (MHI) members reflects, buying in a land lease when there may be inadequate safeguards against aggressive hikes in site fees could be an exposure to avoidable risk.
That noted, another point is apt in this discussion. Despite record spending, there are already over 600,000 homeless in the U.S. and that figure is reportedly rising according to HUD during the Biden era.
The Monticello website says the following is at least a partially “spurious” quotation incorrectly attributed to early U.S. president, founding father and primary author of the Declaration of Independence, Thomas Jefferson. That said, the points raised by this quotation is nevertheless important to consider. “”If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.” HUD data and the OPB report previously cited arguably make this threat a real one.
For individuals or families, buying a home should be a deliberate and thoughtful process. It should not be rushed. Start your research into homebuying and manufactured home buying months ahead of time. It can often take longer than you may be told or be led to believe. That’s particularly true when financing is involved or there is a need to find ‘the right home’ and the ‘right property.’
Home buying can be fun and exciting. It can also be stressful. As odd as it may sound, it can be beneficial to try to control your emotions as much as possible while shopping for a home and/or property and financing. Again, plan ahead. Do your homework. Learn as much as you can before you go out. Ask questions. Listen to the answers and be ready to ask follow-up questions as needed. This is your money and your future. With the right planning and effort, you can avoid headaches and heartaches later in life. Keep in mind that for millions of Americans, homeownership is their number one asset. As former HUD Secretary Ben Carson said as part of a talk praising manufactured homes, homeowners can have 40 times the assets that renters do. It can be prudent to save for a downpayment and utilize homebuyers incentives that may be available in your state.
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That’s a wrap on this installment of “News through the lens of manufactured homes and factory-built housing” © where “We Provide, You Decide.” © ### (Affordable housing, manufactured homes, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.) (See Related Reports, further below. Text/image boxes often are hot-linked to other reports that can be access by clicking on them.)
By L.A. “Tony” Kovach – for MHLivingNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing. For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach
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