Anonymous wrote:I started a thread last week asking about home affordability and like most posters here the general consensus is that I’m going to buy anyway. We have good jobs and I want a house. I realize that it’s possible that we sell in ten years or so due to unforeseen financial circumstances but the truth is that you can’t predict the future. There could be another global pandemic in two years and rates could go back to 2.5% again - you never know! Follow your heart. Be prudent with your money in terms of your budget but your kids are only this age once so our take is to prioritize a comfortable home for the next decade and then sell if it becomes too much down the road. We also aren’t real travelers and believe in state schools for college so those decisions we weighed as well. People are always going to tell you that they wouldn’t take these risks but either they are lying or no fun! Enjoy your life!!

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Pondering buying a single family house. We currently own a town house. Early 30's, 2 kids, wife stays home. I make 250k in tech.

Current PITI/HOA is $2200 combined with a mid 2% rate.

Our assets:

Town house equity is roughly 230k.
450k in retirement accounts
45k in an HSA
390k in brokerage (not much in gains, most of this I recently put in from an inheritance, so minimal tax from selling)
25k in cash

We don't need to buy a bigger house right now but in 5 years I think we'll wish we did, when our kids are older. Given that tech is unstable with layoffs I'm hesitant to make a big purchase and wipe out our savings but I'm also afraid of being priced out of larger houses in the future if we wait. The houses we would aim for are around $1M.

I think your mistake here is making a giant financial decision based on a flimsy prediction of the future - that you will need a bigger house and that you will be “priced out.” Both of those assumptions are really, really poor ways to make the biggest financial decision of your life, a home purchase.

You probably need to meet with a financial planner to better understand your financial situation and set out some goals. For example - the decision is going to look completely different based on whether your wife wants to go back to work, your college aspirations for your kids, your willingness to move further away from your job and commute further and the impact on your QOL of a long commute, and your preferences on public school zones. Most of the people around here who take on a big leap in housing costs at your stage of life do it specifically because they want to access a school pyramid their kids will attend from ES-HS.

With the financial planner you can also map about the impact of different spending and investment choices. For example maybe putting more money into real estate vs the stock market makes sense for you overall. But you need to know exactly the risks and benefits of that choice.

At the end of the day, I find it really hard to justify doubling your fixed costs when you don’t have to.

OP here.

Thanks, this is helpful. Part of it is school related, our ES is decent but the MS/HS are mediocre.

We’re also just a bit tired of living in our townhome.

I agree that worrying about being priced out is a bad way to make major financial decisions. Part of this is due to our experience in 2019 being too conservative with our home purchase and buying a TH when in hindsight if we had stretched a bit and bought a SFH in the 700-800k range we would have come out just fine. Being too cautious with money has only come back to bite me in the end.

Anonymous wrote:You don’t make enough and you don’t have enough. I’m surprised by how poor some people are.

Anonymous wrote:Pondering buying a single family house. We currently own a town house. Early 30's, 2 kids, wife stays home. I make 250k in tech.

Current PITI/HOA is $2200 combined with a mid 2% rate.

Our assets:

Town house equity is roughly 230k.
450k in retirement accounts
45k in an HSA
390k in brokerage (not much in gains, most of this I recently put in from an inheritance, so minimal tax from selling)
25k in cash

We don't need to buy a bigger house right now but in 5 years I think we'll wish we did, when our kids are older. Given that tech is unstable with layoffs I'm hesitant to make a big purchase and wipe out our savings but I'm also afraid of being priced out of larger houses in the future if we wait. The houses we would aim for are around $1M.

Anonymous wrote:

Anonymous wrote:Pondering buying a single family house. We currently own a town house. Early 30's, 2 kids, wife stays home. I make 250k in tech.

Current PITI/HOA is $2200 combined with a mid 2% rate.

Our assets:

Town house equity is roughly 230k.
450k in retirement accounts
45k in an HSA
390k in brokerage (not much in gains, most of this I recently put in from an inheritance, so minimal tax from selling)
25k in cash

We don't need to buy a bigger house right now but in 5 years I think we'll wish we did, when our kids are older. Given that tech is unstable with layoffs I'm hesitant to make a big purchase and wipe out our savings but I'm also afraid of being priced out of larger houses in the future if we wait. The houses we would aim for are around $1M.

I think your mistake here is making a giant financial decision based on a flimsy prediction of the future - that you will need a bigger house and that you will be “priced out.” Both of those assumptions are really, really poor ways to make the biggest financial decision of your life, a home purchase.

You probably need to meet with a financial planner to better understand your financial situation and set out some goals. For example - the decision is going to look completely different based on whether your wife wants to go back to work, your college aspirations for your kids, your willingness to move further away from your job and commute further and the impact on your QOL of a long commute, and your preferences on public school zones. Most of the people around here who take on a big leap in housing costs at your stage of life do it specifically because they want to access a school pyramid their kids will attend from ES-HS.

With the financial planner you can also map about the impact of different spending and investment choices. For example maybe putting more money into real estate vs the stock market makes sense for you overall. But you need to know exactly the risks and benefits of that choice.

At the end of the day, I find it really hard to justify doubling your fixed costs when you don’t have to.

Anonymous wrote:Pondering buying a single family house. We currently own a town house. Early 30's, 2 kids, wife stays home. I make 250k in tech.

Current PITI/HOA is $2200 combined with a mid 2% rate.

Our assets:

Town house equity is roughly 230k.
450k in retirement accounts
45k in an HSA
390k in brokerage (not much in gains, most of this I recently put in from an inheritance, so minimal tax from selling)
25k in cash

We don't need to buy a bigger house right now but in 5 years I think we'll wish we did, when our kids are older. Given that tech is unstable with layoffs I'm hesitant to make a big purchase and wipe out our savings but I'm also afraid of being priced out of larger houses in the future if we wait. The houses we would aim for are around $1M.

Anonymous wrote:

Anonymous wrote:I would never ask this kind of advice on this site. Responses are soooo conservative. You will just feel poor and you are not. They are literally telling you that you are poor, and you are not. We have lower hhi and bought slightly lower and are fine. We’ve been fine for many, many years.

Because this board is full of smug old people who bought their 7 figure house for 1/4 the current price 20 years ago and sneer at anyone of actual child rearing age who wants their kids to grow up in a nice environment for needing to take out any kind of mortgage, no matter how manageable the payment. They’re illogical and out of touch. It’s the quintessential boomer mindset.

Anonymous wrote:I would never ask this kind of advice on this site. Responses are soooo conservative. You will just feel poor and you are not. They are literally telling you that you are poor, and you are not. We have lower hhi and bought slightly lower and are fine. We’ve been fine for many, many years.

Anonymous wrote:

Anonymous wrote:Responses here are blatant trolling or ridiculously conservative/illogical.

No, someone in their early 30’s with over 1M net worth is not poor.

No, they do not need an 8k/ month mortgage since they have way more to put down than most people buying a 1M house at this age. We’re talking 3-4k a month, completely doable on 250k salary, and they have 30+ years left to work to build up retirement savings and college savings.

People here are dumb as rocks

The big issue, as alluded by a few other posters, is that this is one income. I don't know what tech really means here. He does make an excellent income for someone in his early 30s and that implies room for growth but tech is a field I know nothing about so I don't what his growth potential is like, or his ability to quickly find a new job if he gets unexpectedly laid off. On a single income I would not want to be trapped into a large mortgage and I'd also like to keep as much in easily accessible funds for the same reason rather than tying it all up in equity.

I have a smallish house I want to sell and upsize but between a 2.7% mortgage and that I'm also a single income household, I have held back. I like sleeping easily at night also knowing if I get laid off, the mortgage is affordable and there's plenty of money in the bank to tide things over till I find another job, even if it takes a year. In OP's feet, I would not be looking to upsize until wife is back in the workforce, bringing in the security of a second income.