Anonymous wrote:Assuming you can put 20% down on a house, a 420,000 loan at ~5.5% interest over 15 years is $3,400/month just on the principle. Add in another monthly $150 for insurance and $500 for taxes (which is a very low estimate in any locality that isn’t cheap) that is over 4k/month mortgage.

A family making 100k/year is bringing home maybe 7k/month tops after taxes and health premiums and very modest retirement contribution.

Let's get the spelling and arithmetic right.

A 20% down payment on a $500,000 house is $100,000, leaving a $400,000 principal loan balance.

Now 5.5% of $400,000 is $22,000/year or almost $2k/month. A 15-year amortizing mortgage payment would be $3,268.33/month.

Online paycheck calculators show that a a pre-tax annual salary gives a paycheck of around $6,600/month.

The Bureau of Labor Statistics shows that the average family spends around one-third of budget on housing. One-third of the paycheck would cover interest, but it would take half the paycheck to cover a 15-year payment. I have not even considered taxes, insurance, and maintenance.

Here is the tricky part. I figure the long-run real interest rate is around 3%. With higher interest rates, your house tends to appreciate at the rate of inflation. But there is also taxes, insurance, and maintenance. So I think the real cost of home ownership is around 6% per year, or .5% per month. That is $2,500/month on a $500,000 house, or 38% of of the $6,600 paycheck. That is getting tight. D.C. is a high-tax area, both income and property taxes.

Theoretically, this homeowner might afford the house in a low-tax area if the homeowner does a lot of the maintenance and is "house poor". This will almost certainly require digging into savings to cover insurance and property taxes in addition to the mortgage. In the long-run, the house appreciation will repay it, but you should plan on living frugally for a decade.

Are you in the DMV OP? Garages are not standard in most older neighborhoods. Most houses in our 1940s neighborhood don't have garages, and those that do are small and can barely fit one car....

You should get a roof over your head if there is (and I don’t think there is) a Great Depression coming.

Why does it have to have a 2 car garage?

To do-
—Location and home you can live with.
—If you want specific things like a 2c garage, you’re going to have to sacrifice some other way (location, quality, yard you don’t like)
—figure out your FIXED/NEEDS. What keeps you in work? What keeps a roof over your head and utilities going? Groceries, not restaurants.
—above this number, put it all away. Try it one month and it will be so exciting. You have *everything you need.*

You have almost twice my household income, and I am a homeowner, and I am super comfortable and recognize I have everything I need too.

Stop wasting your hhi. What a gift, you should use it for a home.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Feels impossible to buy a house with a 2 car driveway and a yard unless you have a stable 300k/yr income. I make around this much and am still holding off because I don’t feel secure in my position. I could pay the bills just fine but if income disappears tmrw I’m screwed and my industry is laying people off left and right

With that income you could buy a 500K house and pay it off in just 5 years or less.
If you say you couldn't, then you are wasting so much money somewhere.

100K income family should be able to pay off a 500K house in 15 years with no problem.

Not if they are 2 $50,000 salaries plus they have to pay for daycare for 2 kids.

Well then they should wait until kids are out of daycare. Daycare is an equivalent of a mortgae and no, they can't afford two mortgages on that salary. It's all about choices.

We bought our house in McLean in 2019 for 1.25 mil, our income at that time was 300k, we are paying 2.65% interest and it’s easily manageable. Our income has increased over the years but even at 300k our mortgage was not a problem. I cannot believe how much homeownership landscape has changed in the last 6-7 years.

Honestly, I wouldn’t mind prices stabilizing or even coming down somewhat, current situation is not sustainable for young people. We had no down payment help from parents but the current situation only favors people with sizable family help.

It’s not in our interest to create a society of haves and have nots.

Anonymous wrote:Feels impossible to buy a house with a 2 car driveway and a yard unless you have a stable 300k/yr income. I make around this much and am still holding off because I don’t feel secure in my position. I could pay the bills just fine but if income disappears tmrw I’m screwed and my industry is laying people off left and right

Income is about half of that. We don't have a driveway but have a SFH. Bought 4 years ago. But in today's job environment I wouldn't buy. Wait until things calm down. GL!

And what kinds of houses are there for 500k that you can raise a family in nowadays?

Plenty of mid century cape cods in Rockville for that price.

Good single family homes in this area are now over 1.5 M. You need a lot more than 300k per year to afford a house and start a family.

Buying a house =\= buying a house with a two car driveway and a yard.

Buy a townhome or condo. Live there for several years, roll the equity into the house you eventually want.

If you want a detached SFH in areas with good schools and reasonable commutes, it does seem like 800 to 1M is the threshold. Even in many mid-size markets. And you would need the 300k HHI for the 800k house. So I can see where OP is coming from.

300k isn't a special HHI these days. That's two mid-level managers.

Anonymous wrote:

Anonymous wrote:Feels impossible to buy a house with a 2 car driveway and a yard unless you have a stable 300k/yr income. I make around this much and am still holding off because I don’t feel secure in my position. I could pay the bills just fine but if income disappears tmrw I’m screwed and my industry is laying people off left and right

With that income you could buy a 500K house and pay it off in just 5 years or less.
If you say you couldn't, then you are wasting so much money somewhere.

100K income family should be able to pay off a 500K house in 15 years with no problem.

Not if they are 2 $50,000 salaries plus they have to pay for daycare for 2 kids.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Feels impossible to buy a house with a 2 car driveway and a yard unless you have a stable 300k/yr income. I make around this much and am still holding off because I don’t feel secure in my position. I could pay the bills just fine but if income disappears tmrw I’m screwed and my industry is laying people off left and right

With that income you could buy a 500K house and pay it off in just 5 years or less.
If you say you couldn't, then you are wasting so much money somewhere.

100K income family should be able to pay off a 500K house in 15 years with no problem.

Assuming you can put 20% down on a house, a 420,000 loan at ~5.5% interest over 15 years is $3,400/month just on the principle. Add in another monthly $150 for insurance and $500 for taxes (which is a very low estimate in any locality that isn’t cheap) that is over 4k/month mortgage.

A family making 100k/year is bringing home maybe 7k/month tops after taxes and health premiums and very modest retirement contribution.

That generously leaves 3k for everything else. Oh but childcare is easily 2k/month per kid. Even if you have a SAHP, 3k wouldn’t allow for much of an emergency fund with today’s grocery and healthcare prices. Oh and then guess what, a new HVAC is 10-15k. Need new tires on your car (didn’t even factor in a monthly payment) but there is $800+ gone. Good luck putting together an emergency fund or sending kids to college.

For comparison, I bought a $900k house with a 2.75% loan now worth $1.3M and have a 4k mortgage. We moved up to this from our 500k starter home except that starter home in our old neighborhood is now $900k and now the starter home is most likely the home you’ll be in for a very long time.

Families just starting out today and in such a worse situation than I was as a newly wed/new mom a decade ago.

WHAT? LMAO!

DP. Where’s the lie? Childcare is extremely expensive these days and that doesn’t guarantee quality

I don’t think that PP is in the DC area. $2K per month per kid for childcare is actually on the low end.

Aren't most houses over 800K now? So 250K/year minimum?

Anonymous wrote:

Anonymous wrote:Feels impossible to buy a house with a 2 car driveway and a yard unless you have a stable 300k/yr income. I make around this much and am still holding off because I don’t feel secure in my position. I could pay the bills just fine but if income disappears tmrw I’m screwed and my industry is laying people off left and right

With that income you could buy a 500K house and pay it off in just 5 years or less.
If you say you couldn't, then you are wasting so much money somewhere.

100K income family should be able to pay off a 500K house in 15 years with no problem.

Sure, if one is willing to commit tax fraud and starve his/her children.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Feels impossible to buy a house with a 2 car driveway and a yard unless you have a stable 300k/yr income. I make around this much and am still holding off because I don’t feel secure in my position. I could pay the bills just fine but if income disappears tmrw I’m screwed and my industry is laying people off left and right

With that income you could buy a 500K house and pay it off in just 5 years or less.
If you say you couldn't, then you are wasting so much money somewhere.

100K income family should be able to pay off a 500K house in 15 years with no problem.

You’re smoking crack if you think a 100k salary can handle a 500k house with a 15 year loan at 7% interest.

And what kinds of houses are there for 500k that you can raise a family in nowadays? Small condo or townhouse in a semi sketchy area. Even my townhouse way outside the beltway is worth 600k now it’s ridiculous.

I have 7 houses now, 4 rental ones. We not only did it, but several times over the last 20+ years.

.

Things have changed in 20 years. What were the prices and down payments for your 7 homes? How many kids do you have? How much family contribution did you receive? What’s your HHI?