Anonymous wrote:I'd guess the mode HHI is 250-300k. Not necessarily the average though, as I think the mode is close to the bottom

This is our HHI, and we are willing to stretch ourselves, but still wouldn't go quite up to $1M. Guess that's why we haven't bought yet because we live in DC. I think if our HHI went to 400 then we'd try to buy the cheapest homes in our hood which are about $1.3

In Arlington this is roughly the buy in point if you want a SFH. This means that some people are stretching and putting every ounce of their income in so they can afford a SFH with a short commute and good schools. While others make much more and are buying well under their means to retire early or have more security. It's totally mixed.

We bought 6 years ago just under $1m, but for a house that needed a lot of work immediately, putting it around the $1.2m investment point. We financed a lot of the improvements with cash from the sale of our starter home. At the the time it was a bit of a stretch for us. Our HHI has grown and our mortgage has shrunk, so now we have a HHI of $500k with a $350k mortgage. Not a bad place to be at 39 yo.

We do think about moving to upgrade, but are happy with our neighborhood and schools. Moving would be a big disruption.

Back to your question. Our HHI is $300K. We have $700K in equity in our current home, purchased in 2000 before the market exploded. We could easily use that and buy a home under $1.5M, and it's tempting as more and more friends move to larger and nicer homes. In our case, we are down to owing $300K on our current home, and refinanced last year such that our monthly payment is ~$2K/mo. We really don't want to start over with an $800K mortgage even though we could afford to.

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Anonymous wrote:lol DCUM people are largely financially illiterate. They treat houses as a liability rather than an appreciating asset, and they brag about their financial illiteracy - oh, we make $1M a year but we only bought a 500k house.

Risk tolerance. You need a much bigger emergency fund and a your savings won’t last as long on a more expensive place in the event of losing your job. My monthly housing costs are 1/10 of my income and I feel very secure.

Good for you! Lol

or bad for him for inflating his money away as if (hyper) inflation these days is not a risk.

Only on DCUM is someone who buys a more modest home than they can afford financially illiterate. There are a lot of folks on DCUM who stretch to buy homes and then waive it other people's faces like it somehow makes them smarter financially. I think it is compensating for something.

Hmm… maybe they ARE smarter judging by the results.

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Anonymous wrote:Wow it is amazing how much people have tied up in their houses.

Compared to total net worth? I agree with you. Essentially these folks are all dependent on their continued gainful employment to fund their lifestyles.

Please explain to me how, as a 41 yo with a family but no family money, I could have a lifestyle that would not be dependent on my continued gainful employment?

Dividends.
Rental income.
Other returns on investments.

You’re an out-of-touch moron. Very few people can live off of those in their 40s (or even 50s) unless they inherited, had high HHI jobs right out of college, or got very very lucky with real estate timing.

I just responded to this. We invested small amounts of money every year in the stock market when we were young and poor.

What you (and other people, you're in good company) don't understand is the immense power of compounding.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:lol DCUM people are largely financially illiterate. They treat houses as a liability rather than an appreciating asset, and they brag about their financial illiteracy - oh, we make $1M a year but we only bought a 500k house.

Risk tolerance. You need a much bigger emergency fund and a your savings won’t last as long on a more expensive place in the event of losing your job. My monthly housing costs are 1/10 of my income and I feel very secure.

Good for you! Lol

or bad for him for inflating his money away as if (hyper) inflation these days is not a risk.

Only on DCUM is someone who buys a more modest home than they can afford financially illiterate. There are a lot of folks on DCUM who stretch to buy homes and then waive it other people's faces like it somehow makes them smarter financially. I think it is compensating for something.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wow it is amazing how much people have tied up in their houses.

Compared to total net worth? I agree with you. Essentially these folks are all dependent on their continued gainful employment to fund their lifestyles.

Please explain to me how, as a 41 yo with a family but no family money, I could have a lifestyle that would not be dependent on my continued gainful employment?

Dividends.
Rental income.
Other returns on investments.

It's so simple! Why didn't I just invest money instead of spending it on food? Pesky stomach grumbles.

That's what my spouse and I did, and we were poor grad students. As in, lamen on sale and crappy rental apartment. Now we have several millions worth of assets.

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Anonymous wrote:It’s a lot of dual income families making $350-$450k, rolling the equity from their starter home into the new home.

This, and with childcare and saving for college, they are barely above middle class.

As a dual income family making about $300k that rolled the equity from our starter home into a new $1.1 million home and also saves for college, no, sorry, you're wrong. Our household income alone makes us well above middle class. Then, of course, there's also the fact that we own a $1.1 million home. Just because we spend most of our money on stuff for rich people (like an expensive home and tax-advantaged college savings) and don't save like rich people doesn't make us any less rich.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:lol DCUM people are largely financially illiterate. They treat houses as a liability rather than an appreciating asset, and they brag about their financial illiteracy - oh, we make $1M a year but we only bought a 500k house.

Risk tolerance. You need a much bigger emergency fund and a your savings won’t last as long on a more expensive place in the event of losing your job. My monthly housing costs are 1/10 of my income and I feel very secure.

Good for you! Lol

or bad for him for inflating his money away as if (hyper) inflation these days is not a risk.

Yes it’s Weimar Germany out there. I just saw a guy pushing a wheelbarrow of dollar bills down the street. You need to get a grip.

Anonymous wrote:DH and I have a HHI of around $500k. We could afford the monthly mortgage of a 1-1.5 million house, but cannot get it together to save for a down payment. Even with saving monthly expenses, and cutting back on trips, it seems so far away to obtain.

10% down on a $1M house is $100K - you can't save that on a $500K income??

Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:Wow it is amazing how much people have tied up in their houses.

Compared to total net worth? I agree with you. Essentially these folks are all dependent on their continued gainful employment to fund their lifestyles.

Please explain to me how, as a 41 yo with a family but no family money, I could have a lifestyle that would not be dependent on my continued gainful employment?

Dividends.
Rental income.
Other returns on investments.

You’re an out-of-touch moron. Very few people can live off of those in their 40s (or even 50s) unless they inherited, had high HHI jobs right out of college, or got very very lucky with real estate timing.

Anonymous wrote:It’s a lot of dual income families making $350-$450k, rolling the equity from their starter home into the new home.

This, and with childcare and saving for college, they are barely above middle class.

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Anonymous wrote:You can't ask this question without asking about family help and/or equity from another house. MANY people in the DC area get assistance from family (inheritances, down payment help on this or a previous starter home that now has equity, etc.). And PP is right that people over-leverage for schools.

Our HHI is $250 with a low NW (no family help and lots of student loan debt) and we'll probably end up having to spend $1m for schools with a 20% down payment, but that would over extend us and make it difficult to catch up on retirement saving.

"Having to spend $1m for schools."

Ok.

How do you feel if I tell you we're getting paid for good schools? Say if you bought in McLean, after your kids are done with schools, your house is worth at least 500k even 1M more. You can then cash in and move to other areas you want.

I don't care what you're doing. Just don't frame it as a necessity. "I can't buy a house worth under $1m because schools!"

Everyone knows that people in less expensive neighborhoods simply don’t send their children to school. Or not the children who matter.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wow it is amazing how much people have tied up in their houses.

Compared to total net worth? I agree with you. Essentially these folks are all dependent on their continued gainful employment to fund their lifestyles.

Please explain to me how, as a 41 yo with a family but no family money, I could have a lifestyle that would not be dependent on my continued gainful employment?

Dividends.
Rental income.
Other returns on investments.

It's so simple! Why didn't I just invest money instead of spending it on food? Pesky stomach grumbles.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:lol DCUM people are largely financially illiterate. They treat houses as a liability rather than an appreciating asset, and they brag about their financial illiteracy - oh, we make $1M a year but we only bought a 500k house.

Risk tolerance. You need a much bigger emergency fund and a your savings won’t last as long on a more expensive place in the event of losing your job. My monthly housing costs are 1/10 of my income and I feel very secure.

Good for you! Lol

or bad for him for inflating his money away as if (hyper) inflation these days is not a risk.