Summer of 2001 me and my grandparents visited relatives in the US. Our stay first took us to Virginia for a week, before we were driven half way across the continent to the bustling small town of Newton, IA.
Over the years ive thought about going back, but not got around to it. But i figured id look the place up recently. Googling Newton, IA i got a rundown on the place. The Maytag factory, lifeblood of the community, shut down in the 00s as they moved to mexico or some other shithole. This left the people of Newton to face the recession already reeling. According to a reddit post Newton is known for being a place with nothing to do, except smoke weed and/or cook meth.
So how is the place doing now, must be a good place to score a cheap home being both a small town and not in the best economy
Looking up the house i stayed at in 01 on Zillow, its not currently on the market. Last listed in 2012 at 139k. It has over the last 5 years gone from a estimated 150k to now pushing 240k.
And its the same for every current listing in Newton, IA in the same price range.
This one was estimated at 100k five years ago, just sold for 239k https://www.zillow.com/homedetails/407-W-8th-St-S-Newton-IA-50208/86981175_zpid/
Estimated at115k in 2020, sold for 215k https://www.zillow.com/homedetails/1015-W-3rd-St-S-Newton-IA-50208/86982395_zpid/
Sold for 75k in 2022, then 250k in 2024. Hell of a house flip it looks like. https://www.zillow.com/homedetails/706-1st-Ave-W-Newton-IA-50208/86981045_zpid/
Im glad im not looking for a house in Newton, Iowa.
I tend to agree. I found a mortgage calculator online that seems to have a good estimate and it's looking like 150k with an 8,000 down-payment, 6.5% APY, will come to under $1,400 a month: https://www.mortgagecalculator.org/?q=Ap4SZ-3KX
(Also, the middle class then still got to have the benefit that the mean house was between 1-3 years of the mean income, it's much worse now).
I've often tried thinking about how to help people into homes, even with crummy jobs and incomes like, 35k a year.
It's doable, but it's only do-able through using homes as an investment, very careful spending habits, great saving habits, and swapping out a large cash savings with the use of a debt vehicle itself.
See, lenders care about using mortgages to create passive income. They want to keep you paying, and no one expects you to stay in the same home for 30 years. If you not only take care of your starter home, but take efforts to improve it, sell it, then add that cash to your loan product; the lender will refinance the mortgage you have on that starter home into a new one. You can keep this process going so that you can reliably live in a much more expensive house than you would think your 35k a year could afford, but you have to be very diligent.
Looking at people's credit scores... most are never that diligent.