How do people survive making 40k a year? (paying, endorse, average)
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My brother lives in Gulfport and he bought a house about 6 years ago for 70k, I think Zillow has it for around 170k today. His wife manages an apartment building and a 2 bed unit rents for 650a month. I also have extended family in NC where housing is also not as expensive. It really depends on location whether you can comfortably live there on it 40k.
I met my girlfriend in 2013 and she was working as a teacher making less than 40k. She owned a home on her own. Granted her budget was tight and she wasn't contributing anything extra to retirement. She didn't have a car payment and went to school on scholarships so no school loans. She did have a few thousand in credit card debt. So it's doable but you have to be smart with your budget.
I've since upgraded her to SAHM. We live in a house with 63k on the mortgage and I should have it paid off by 2025. I make 132, but we run our budget like I make half that. That allows us to invest a lot and hopefully retire in 15 years when I'm 56.
You literally need a minimum of 100k now a days to just live a descent lifestyle... go out here and there. Drive a honda..etc.. but anything less, you will probably struggle .
Don't make such sweeping generalizations. What do you mean by "decent lifestyle"? That will be different for almost everyone you ask. So will their definition of "struggle". FWIW I've never come close to an income of 100K, have lived in fairly high COL areas for most of my career. For much of it I didn't feel it was a struggle. My "requirements" were obviously much different than yours.
For instance the buyer of the house losses title to the house at their death. In the meantime their housing expense was locked-in and an inflation hedge. Basically, the buyer of the house is not a renter and therefor is responsible for all upkeep and renovation.
Or possibly, the situation is an interest-only mortgage. Not a reverse-mortgage but an interest-only mortgage.
That still requires sufficient inventory for the purchase price to be affordable to begin with. If prices are to come down or stagnate long enough for incomes to catch up, supply must exceed demand....and suppressing demand rarely ever works. So it has to be supply. We can't get around this problem.
4% on a $1M home (which in SF is barely a starter home) is still something like $3500/month plus HOA, taxes and insurance, even in an interest-only scenario. That's still $4500-5k a month the buyer needs to pay out every month.
The answer to the OP question is....they live within their means. No bars, no starbucks, no shopping for worthless crap, not getting your nails done...these things some younger people can not do without.
You literally need a minimum of 100k now a days to just live a descent lifestyle... go out here and there. Drive a honda..etc.. but anything less, you will probably struggle .
I managed to get a house in the Austin area back in 2014 while making 40k a year(I was 25) and FF 7 years later.. We just sold it for a great amount. But I would never ever ever pay 500k for the house I just sold loll.. its insanity.
I believe the next generation will be a class of renters, and unless mom and dad are helping (i had no help), they will be really struggling to get something. Unless they are buying a house in a non-desirable area.
You have fallen for the debt trap.
It was - and is - not necessary. Part of your problem is that you think driving a Honda is indicative of some sort of failure or shortcoming.
Lots of luck.
Now, 'scuz me because I'm going to take my wife out to dinner. We can easily afford it because we live debt free. I will drive to the restaurant in our pristine, garage kept '08 CR-V. We bought it used in 2010.
You literally need a minimum of 100k now a days to just live a descent lifestyle... go out here and there. Drive a honda..etc.. but anything less, you will probably struggle .
I managed to get a house in the Austin area back in 2014 while making 40k a year(I was 25) and FF 7 years later.. We just sold it for a great amount. But I would never ever ever pay 500k for the house I just sold loll.. its insanity.
I believe the next generation will be a class of renters, and unless mom and dad are helping (i had no help), they will be really struggling to get something. Unless they are buying a house in a non-desirable area.
That’s nonsense. There are plenty of places to live for far less than $100k. Not every place is like NY or a ,ajar city. It’s all relative. You would probably be better off making $50k in Delaware than $100k in NY.
The answer to the OP question is....they live within their means. No bars, no starbucks, no shopping for worthless crap, not getting your nails done...these things some younger people can not do without.
This is getting to be another silly thread. The answer to OP's question is evident: Tens of millions of people -- and families -- survive on $40K a year. Yes, they don't live in high-cost areas. Yes, they learn to save and live paycheck to paycheck. And they certainly don't rent houses. I've done it.
Perhaps Googling "how to save money" or "how to survive on $40K a year" would give you some pointers.
That still requires sufficient inventory for the purchase price to be affordable to begin with. If prices are to come down or stagnate long enough for incomes to catch up, supply must exceed demand....and suppressing demand rarely ever works. So it has to be supply. We can't get around this problem.
4% on a $1M home (which in SF is barely a starter home) is still something like $3500/month plus HOA, taxes and insurance, even in an interest-only scenario. That's still $4500-5k a month the buyer needs to pay out every month.
Real estate developers can be encouraged to build housing, into various types of government programs, by offering property tax abatements. Also, in the first five to ten years, the landlord can have positive cash-flow while showing a loss on taxes.
Direct subsidies of home-buying could wipe-out the international value of the dollar. That's modern-monetary-theory.
At this point, SF can only go go vertical. City programs do offer small condos starting at about $300000. So really just leave town and go to somewhere more affordable. Of course people are tied to their jobs and to family or friends. People are tied to the regional experience that they know. The building that a small condo is in, could have community facilities and be a reasonable lifestyle.
Running the numbers through an inflation calculator, $40,000 adjusted for inflation was close to what I was making in 1982. Life was grim. I had no debt, and did not smoke, drink, or do drugs, but the amount in my check book was not increasing, and my car was aging. I did not have the money to replace it.
Fortunately, I was able to get a better job where my parents lived, and moved back home until I saved up to buy land and build a house.
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Don't make such sweeping generalizations. What do you mean by "decent lifestyle"? That will be different for almost everyone you ask. So will their definition of "struggle". FWIW I've never come close to an income of 100K, have lived in fairly high COL areas for most of my career. For much of it I didn't feel it was a struggle. My "requirements" were obviously much different than yours.
