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Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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My first home was under 2x salary, and I was making $2.35/hr
nearly 30 homes / properties later... still seems like good idea to me (Current salary = ZERO since retired @ age 49... about 15 yrs later than planned)
i have a simple conversation with coworkers about trailer homes all the time. if you could just leave the ego behind, households that make 60k/yr could own a trailer on a large lot of land and have next to zero mortgage and afford better things. but its part of the 'american dream' to have a suburb house with a white fence that they cant afford. its a status issue, people think they will be frowned upon for living in a cabin or trailer and not having mortgages. the ones that dont care about what others think will be the ones living it up.
I can see your point here. But you are leaving out one part of it: Some people simply do not want to live in a trailer or a cabin. This isn't due to any kind of "status" issue; it is just a personal choice. For many of us, our home is where we live, and I want to live in a domicile that I enjoy being in and that has the amenities that I want. Would I overspend on a house? No. The house we bought 5 years ago cost less than half of what we could have realistically afforded. But at the same time, I would never give up having certain features or amenities in my house that I want just to save a few bucks either.
I hear this rule of thumb all over. Use 2.5x your HH salary as a rule of thumb. If you are a single person in this economy, making $50,000 per year, then the maximum house you could afford is $125,000. That doesn't buy much. How do couples do it when one parent stays home? I really don't understand how we can have so many houses priced $250,000+ in the US? That would be an income of $100,000. That's doable for a couple in their mid to late 30's, but anything younger than that you're probably not going to break $100,000 take home pay as a couple unless you're either a lawyer, doctor, or engineer.
The median home price in my area (Eastern Massachusetts) is $393k and the median household income is $71,000. A ratio of 5.5, go figure...
BTW what's wrong with not being able to purchase a home until you're in your 30's? The median age of a first-time homebuyer in Boston is 38.
Location: RI, MA, VT, WI, IL, CA, IN (that one sucked), KY
41,936 posts, read 36,981,862 times
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Quote:
Originally Posted by Parsec
The median home price in my area (Eastern Massachusetts) is $393k and the median household income is $71,000. A ratio of 5.5, go figure...
BTW what's wrong with not being able to purchase a home until you're in your 30's? The median age of a first-time homebuyer in Boston is 38.
I'm surprised it is that low (the median house price)! I'm in Somerville and looking to buy for the first time at 42. Late 30s / early 40s is indeed the norm.
I'm looking for a condo (salem, or maybe lowell) that will be in the $125/150 range, and there is slim pickings.
I bought my first home with cash. It is a small house on 15 acres in Tennessee. It gives me peace of mind to know all I have to pay to live here is tax and insurance. I don't care about school districts or having nearby restaurants or shopping.
I guess it is all about priorities. I look at subdivisions as just about the WORST way you could possibly live. Neighbors within ten feet of your home.......
That's fine for some people, but most of us have kids to raise. If giving them a good education and opportunity in life means having a neighbor, I'll gladly take TWO neighbors.
I'm surprised it is that low (the median house price)! I'm in Somerville and looking to buy for the first time at 42. Late 30s / early 40s is indeed the norm.
I'm looking for a condo (salem, or maybe lowell) that will be in the $125/150 range, and there is slim pickings.
That's the number I got for September 2013 from the NAR (realtor.org). It includes everything inside 495, which includes some very far-flung and cheap exurbs like Amesbury plus the ghettos of Brockton and Lawrence.
BTW, how did you do this past week in 15 degree weather without a winter jacket?
i have a simple conversation with coworkers about trailer homes all the time. if you could just leave the ego behind, households that make 60k/yr could own a trailer on a large lot of land and have next to zero mortgage and afford better things. but its part of the 'american dream' to have a suburb house with a white fence that they cant afford. its a status issue, people think they will be frowned upon for living in a cabin or trailer and not having mortgages. the ones that dont care about what others think will be the ones living it up.
I don't see how you can be living it up while living in a trailer though
I am figuring that once wife has finished college (RN) we should be able to afford a house priced around $287k according to this scale. Amazing considering we were both making less than $10/hr 5 years ago.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,735 posts, read 58,090,525 times
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Quote:
Originally Posted by bad93ex
I am figuring that once wife has finished college (RN) we should be able to afford a house priced around $287k according to this scale. Amazing considering we were both making less than $10/hr 5 years ago.
As tempting as it is... afford a house priced around $287kDon't do it... (the end of frugality for many yrs...). BE wise... a house not always wise (and is OFTEN not wise, especially at 2.5 the annual income of 2 ) Poof... one of you could get sick or injured or fired / outsourced... or die.
We always made it a point to never count the income of the spouses job (usually PT if at all), or the 2nd and 3rd job or either.
But selling the kids or their wayward grandparents that we were caring for...
YMMV
As a physical therapist, I hear horror stories all day about strokes, brain injuries, car accidents, etc; and people who lose their homes as a result. We recently bought a small house we can pay off on one income. For us the kids are grown and moved out, so we didn't need a big house. Everyone asks us when we will get a bigger house. We really don't need it, 2 people in a 3bed/2bath 1100 sq ft house is plenty. And the peace of mind it gives us is worth every penny!
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(the end of frugality for many yrs...). BE wise... a house not always wise 
