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A lot of people can't afford homes due to inflation, investors, and a housing bubble.
I've read that one way to tell that we're in a housing bubble is that prices are so high that houses are not affordable to the average middle income family, and a large percentage of real estate is being bought by investors rather than owner-occupants.
However, it could be also argued that houses have not been affordable for decades.
no it's not, it's no where near a stretch, let's just forget about the second property, and my wife's income for the time being
from my 90k income, I take home about 5k every month, after max 401 contributions/deductions etc.
my monthly payment for the 720k house is 3.3k piti
so I still have 1.7k to spend monthly on everything for a household of 3, and keep in mind that doesn't even considering whatever my wife or the second property is making from rents. The reality is that I pretty much spent all my income monthly, but my wife's income can be saved 100% for emergencies
You spend over 50% of your take home monthly income on a mortgage? Yes, it is too high. And 1.7 isn't much left over at all with saving for things like eventual new car, roof, etc. in addition to having to buy groceries and other needs.
You have rental property. Okay, that still has a condo fee, taxes and fund for maintenance and that is if you own it outright. Hope the rent is high so you make at least 1000k profit every month.
no it's not, it's no where near a stretch, let's just forget about the second property, and my wife's income for the time being
from my 90k income, I take home about 5k every month, after max 401 contributions/deductions etc.
my monthly payment for the 720k house is 3.3k piti
so I still have 1.7k to spend monthly on everything for a household of 3, and keep in mind that doesn't even considering whatever my wife or the second property is making from rents. The reality is that I pretty much spent all my income monthly, but my wife's income can be saved 100% for emergencies
Quote:
Originally Posted by OtterTrees
You spend over 50% of your take home monthly income on a mortgage? Yes, it is too high. And 1.7 isn't much left over at all with saving for things like eventual new car, roof, etc. in addition to having to buy groceries and other needs.
You have rental property. Okay, that still has a condo fee, taxes and fund for maintenance and that is if you own it outright. Hope the rent is high so you make at least 1000k profit every month.
Funny.
The poster's contributions to the thread indicate a long-term ability to live frugally, and he expresses no complaints or issues.
I predict he knows his financial responsibilities and wherewithal.
Funny.
The poster's contributions to the thread indicate a long-term ability to live frugally, and he expresses no complaints or issues.
I predict he knows his financial responsibilities and wherewithal.
Never count the other guy's money.
I don't really care how he spends his money. The thread was about why people can't afford homes an spending, my posts were directly related to that. That poster was giving advice on spending via his experience and I disagreed. So, he can count other people's money as long as it agrees with your opinion? And if spending 50% of you take home income is "frugal" then I guess all the other personal finance forums and finance experts that advise against it must be wrong, you guys should write a book and revolutionize the home buying process. I mean if a lender says you can afford it, it must true, right?
I don't really care how he spends his money. The thread was about why people can't afford homes an spending, my posts were directly related to that. That poster was giving advice on spending via his experience and I disagreed. So, he can count other people's money as long as it agrees with your opinion? And if spending 50% of you take home income is "frugal" then I guess all the other personal finance forums and finance experts that advise against it must be wrong, you guys should write a book and revolutionize the home buying process. I mean if a lender says you can afford it, it must true, right?
His tag line was:
"so how can you not afford to buy good homes if you make more than me?"
You seem unable/unwilling to grasp that his rental income and his wife's income "100% saved" certainly play into his choices.
And, just a bit ouchy.
I told my nephew when he graduated high school and went into the Navy, "You are going to hang out with a bunch of people making the same money. Some will be broke 24-48 hours after payday.
On a Saturday night, when someone says, 'Let's get some beer and pizza,' some will grin and be able to reach into their pockets and have the ready cash while the broke folks look out the window or at their fingernails. Which YOU are is YOUR choice."
It is amazing what some people can do with their resources, and how some people would be broke if they could print Ben Franklins.
His tag line was:
"so how can you not afford to buy good homes if you make more than me?"
You seem unable/unwilling to grasp that his rental income and his wife's income "100% saved" certainly play into his choices.
And, just a bit ouchy.
I told my nephew when he graduated high school and went into the Navy, "You are going to hang out with a bunch of people making the same money. Some will be broke 24-48 hours after payday.
On a Saturday night, when someone says, 'Let's get some beer and pizza,' some will grin and be able to reach into their pockets and have the ready cash while the broke folks look out the window or at their fingernails. Which YOU are is YOUR choice."
It is amazing what some people can do with their resources, and how some people would be broke if they could print Ben Franklins.
Sure, if that is the story you tell yourself then more power to you. BTW, the income of 125k included the wife's income, he doesn't make the 125k on his own. But hey, you all have magical powers of frugality that manage to elude taxes, health insurance, car insurance, utilities, cost of dependents, routine maintenance and unexpected maintenance, routine medical expenses AND still have a high savings rate. If you think having only 1700k left after paying just one bill is sufficient, then great.
People can "afford" these homes, but afford is obviously a subjective term. You seem to think it is a good idea, I don't. We aren't going to change each other's minds so...
Sure, if that is the story you tell yourself then more power to you. BTW, the income of 125k included the wife's income, he doesn't make the 125k on his own. But hey, you all have magical powers of frugality that manage to elude taxes, health insurance, car insurance, utilities, cost of dependents, routine maintenance and unexpected maintenance, routine medical expenses AND still have a high savings rate. If you think having only 1700k left after paying just one bill is sufficient, then great.
People can "afford" these homes, but afford is obviously a subjective term. You seem to think it is a good idea, I don't. We aren't going to change each other's minds so...
If we disagree that frugality and monetary responsibility are good or bad ideas, we will not find common ground.
I dunno about all that other stuff you fabricated about my thoughts for some reason.
Eh. The day is young.
Last edited by MikeJaquish; 07-20-2021 at 10:09 AM..
no it's not, it's no where near a stretch, let's just forget about the second property, and my wife's income for the time being
from my 90k income, I take home about 5k every month, after max 401 contributions/deductions etc.
my monthly payment for the 720k house is 3.3k piti
so I still have 1.7k to spend monthly on everything for a household of 3, and keep in mind that doesn't even considering whatever my wife or the second property is making from rents. The reality is that I pretty much spent all my income monthly, but my wife's income can be saved 100% for emergencies
Salary = $90K
401K Max = $19,500
Health Insurance (average for one person with co. provided insurance) = ~$2,400
Gross Annual Income = $68,100 or $5,675 per month
Income tax on $68,100 per year in California = $17,293
Net annual income = $50,807
Net Monthly Income = $4,233.92
How is your take-home pay $5000 a month? My guess is that you aren't really maxing out your 401K.
Not counting coastal cities and high cost of living cities, how do most people not afford homes? I used a mortgage calculator, and if a couple has a income of 80k (40k a person), 600 in monthly debt, and a down payment if 10k, they could afford a home of 300k! Even 200k will get you something decent. That’s a pretty nice home in most of America, and making 40k a year isn’t hard. What am I missing?
1. There is contrast for most people between where they want to live and where they could actually afford to live, and where they can afford to buy is not necessarily where they want to live.
2. The distance between where they could afford to buy from where they work is too great to be cost effective. Then there is also the distance to amenities and entertainment.
3. You mention a monthly debt of $600/month. Not sure how you arrived at this number but it surely does not include car payments and/or children. Even if children and car loans are not factored, a person's lifestyle comes into play. Also, health insurance to name a few.
4. Some do not want to buy a home.
5. I am not sure if your mortgage calculator also included home-owner's insurance, that mortgage insurance that first-time home buyers are penalized into paying unless they can afford a sizable down-payment, property tax, HOA and other fees --all of which are rolled into the month's payment. Some escrows also require that you keep a few hundred dollars per month in padding... just in case. So, your $1,000/month mortgage payment in reality is $1,400/month. Or something like that.
6. If the gross income is $80K, what is the net income after taxes and deductions? $56K?
7. Savings accounts and contributions to retirement accounts/investments.
I didn't have much college debt because my parents are poor and I did work study while in school.
I'm not worried a bit about my kid's college funds, first they have to graduate high school, and I believe it's their responsibility to pay for their education when they are 18. they could do what I did and do work study or part time jobs while in school, my parents didn't pay for my college.
My parents were poor too, and I worked my way through college. But read the earlier replies. College tuition has gone up 240% since I went to college. And that's just tuition, not books, fees, room and board, etc. It is simply impossible to just work your way through college now. In district tuition for community college now costs twice as much as I paid for a 4-year state university.
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