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[quote=Anonymous]OP, your mortgage debt math is wrong. Have you heard of the 28/36 rule: total housing costs (including principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income, and your total debt (including housing) should not exceed 36% of your gross monthly income.

Other guides range from the conservative: you can afford a home price that is 2.5x your annual gross income; 
...
to the less conservative: you can afford a home price up to 5x your gross annual income as long as your total houseing costs (PITI) do not exceed 25-30% of your gross monthly income and you have no other debt.

So the person making 500K in your OP actually can afford between 1.5 to 2.5 million dollar home.

PITI on the million dollar home in your OP will typically be about 6-7K depending on all variables. So that would be about 28% of the gross montly income of a person making roughtly $258,000 gross annual.

If you ask AI it will tell you that the income to afford a million dollar home is between $200K and $250K. Plenty of couples around here make that or more, which is why housing prices are what they are. It is above the median income for DC ($108K), but also $1mil also is above the medain home cost in DC (median sale price $672). So housing is expensive, since the median income has to stretch to meet the median sale price.

But you don't need to earn $500K to buy a million dollar home, as you suggested unless you have a ton of other debt.[/quote]

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