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All the young families on my street have a stay at home spouse. All of us earn far less than 180 and bought houses for more than 600. We just figured out how to do it: save and budget. Good luck.
The median income in my area statistically is 37 thousand CANADIAN "avec" higher taxes. The average price of housing in my development is.....drumroll.......1.3 million, and the cheapest new smaller home just built is 400 thou plus. And these are people's second homes.
Some are second or third generation lots, shared or inherited. Some have been "gifted" from the family. Most have been owned for decades. And we don't get to DEDUCT mortgage interest up here. But basically the same things going on everywhere. First and foremost people put their money in their house.
During the credit crunch the price of plumbing, electrical, and lumber didn't go down. Demand is too strong worldwide. So to build that 1.4 million house down the road that just sold......I couldn't do it for that amount if you GAVE me the water view lot, which alone is 700.000. and it's an easy build with road and services right there, and glacial till to move. Easy peasy.
I have credit a bit north of 800, not perfect, but it should be good enough to get the best possible rate from what I’ve seen.
$180k after state, federal, and FICA leaves me around 11,500 net and a 600,000 mortgage after closing costs and PMI will run me about $4,100/month.
The thumbrule of keeping your housing costs st 28% makes it seem like I’ll be over extended at $600,000.
I’ll still have about $88k (but even with no debt) after modest household expenses, an annual vacation, and funding retirement accounts plus 529’s for the kids there’s not much left.
It just doesn’t seem like this is how it’s supposed to be.
If I’m debt free, making 3x median, I don’t think I should be just squeezing by.
What does that leave for anyone else?
Are you not putting 20% down?
I don't know what the property taxes are where you're at, but with 20% down and property taxes at $10k a year, with insurance at $1200 yr on a 30 yr mortgage with interest at 4.5%, your payment would be $3,365, not $4100! With only 10% down your payment would be $3,900.
If you can't afford to put 20% down and can't afford $3,300 a month then you find a cheaper house. Simple as that!
It’s not an ideal radius, it’s a contract stipulation.
Even if it weren’t, I’d be better off going with a spare shift once a week than sitting in an extra 40 hours of traffic a month [just to afford a house in the sticks with really bad schools. My family will be ok, renting is no big deal, I just thought it was really interesting that there are areas like this where median home prices are 10x median incomes, and wondered who really could afford such areas?
I did think it would be nice to finally buy something, have some stability, build the kids a tree house in the yard, build my spouse the amazing kitchen they’ve always wanted, ya know the American Dream.
But I’m priced out, and if the family making $180k/yr is priced out of the suburbs, what does that say for everyone else?
Define "really bad schools." Some areas they are just that, really bad. Some areas it simply means, "there are fewer kids raised by Dr's and CPA's and Engineers and the tests are correspondingly lower." All I'm saying is that you should dig into that a bit and not go exclusively by what greatschools says. If the place is a war zone then you've got problems. If the school serves more kids from disadvantaged backgrounds but is otherwise a stable place where kids can get an education, it bears some thinking about. Or, look into what private schools would cost.
I'm personally frustrated at the lack of mid level, maybe a little over starter home, neighborhoods. It seems you can find cheaper homes but they are ghettos, to get out of the war zone takes $400k+ and $8k a year in property tax and insurance.
I often ask myself who is buying these homes as well, our HH income is fine, but I'd like to find a quiet middle class neighborhood. The money isn't the issue but I just find it crazy and like I'm overpaying especially on the property taxes. Maybe inflation really is that bad, our 250k doesn't go very far anymore.
Where are the folks making 80k-120k living? How are they affording these homes?!? Or is that low income nowadays?
I'm personally frustrated at the lack of mid level, maybe a little over starter home, neighborhoods. It seems you can find cheaper homes but they are ghettos, to get out of the war zone takes $400k+ and $8k a year in property tax and insurance.
I often ask myself who is buying these homes as well, our HH income is fine, but I'd like to find a quiet middle class neighborhood. The money isn't the issue but I just find it crazy and like I'm overpaying especially on the property taxes. Maybe inflation really is that bad, our 250k doesn't go very far anymore.
Where are the folks making 80k-120k living? How are they affording these homes?!? Or is that low income nowadays?
Depends on the state!!
We lived in the Chicago suburbs where it was exactly what you stated, $300-$400k homes with $10k+ property taxes. We had enough! We moved to NW Indiana last year. We purchased a brand new home for $280k (4bd, 2 1/2 ba. 2,400 sq ft, 1/2 acre lot) that is comparable to my home that was $400k in Illinois. Our property taxes are capped (Indiana law) at 1% of our assessed property value, so our property taxes are now $3k instead of $10k! Our schools are actually rated better as well. On top of that, we are only 35miles from downtown Chicago, so we were able to keep our jobs we had making over $120k combined HH income, yet reaping the benefits of a much lower COL state! We had relatives tell us to move a long time ago here and I wish we had listened sooner!!
Granted this can't be done everywhere, but in our case we can work in a higher COL state with higher wages, while living in a lower COL state! Most of my neighbors and people I know here work in Illinois while living in Indiana.
I don't know what the property taxes are where you're at, but with 20% down and property taxes at $10k a year, with insurance at $1200 yr on a 30 yr mortgage with interest at 4.5%, your payment would be $3,365, not $4100! With only 10% down your payment would be $3,900.
If you can't afford to put 20% down and can't afford $3,300 a month then you find a cheaper house. Simple as that!
Nope. Not able to put anything down. Really lucky just to have a positive net worth, most of my friends are deep in educational debt.
I could afford $4,200, heck if we are being honest I could afford nearly double that and still would have a better standard of living than the median American family.
But...
Most couldn’t.
Apparently the country is full of areas where the median family living in an area can’t afford a median home in that area.
That’s crazy to me.
It’s crazy that I technically can’t afford own a home in an area where my family is pulling down 3x the median in the area.
I’m ok with renting, there’s a bit more variety in the rental market where I have to live (I kinda feel like people older buying up properties and renting them out because the rental market is way below the mortgage market, even on new construction).
Define "really bad schools." Some areas they are just that, really bad. Some areas it simply means, "there are fewer kids raised by Dr's and CPA's and Engineers and the tests are correspondingly lower." All I'm saying is that you should dig into that a bit and not go exclusively by what greatschools says. If the place is a war zone then you've got problems. If the school serves more kids from disadvantaged backgrounds but is otherwise a stable place where kids can get an education, it bears some thinking about. Or, look into what private schools would cost.
1 on great schools, 10-20% proficiency on standardized tests, very high poverty rate.
Pretty bad. And that’s definitely something that should be addressed.
Again, couldn’t live there if I wanted to.
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