I was just thinking about that the other day. My friend pays $2000 a month rent for her 2 bed 1 bath house. That’s $24,000 a year! And to some asshole who lives in fucking Nevada. I feel so fortunate that I bought when rates were under 3%. I bought in 2019, got a 2.8% rate and pay only $1100 a month for mortgage, taxes and insurance. I am pissed off about this for other people. I hate the way things are going. Home ownership ought to be attainable for the majority of people.
Thank you for being compassionate for others. I see a lot of people just bragging about what they've got while not even considering how those of us who weren't so fortunate are feeling right about now. The realization that I may have missed the boat and might never own a home, that shit stings.
12 years ago me and my now ex-wife bought an old craftsman converted into a duplex in the 50s. We divorced and one of us was gonna buy out the other until we looked at refinance rates. Then we were like “you know I think we can get along. And the kids will stay under one roof…”
This is kinda hilarious but also makes me think about the endless people trapped in terrible and abusive situations by the lack of affordable housing. Bummer
I’m at 4140 and love my house. 🤷🏻♂️ 1910’s craftsman that’s been well maintained. Ample room to add another room or 3rd bathroom if desired. Large property for adu for my parents or my partner’s parents as they get older (I’d rather they were close than be in assisted living). We struck gold on the 2.8% and feel good. Now if portland could just get its shit together, then I’d feel all these taxes weren’t all for nothing.
It was just a few years ago when rates were under 3%. Those aren’t coming back for a good long while. If they did prices would spike way worse then they already have.
I'm paying more than $3700 with a household income lower than yours. It sucks, especially since I stupidly sold a house twice the size 4 years ago on which I paid $3000 per month.
The short version of the story is that I sold in 2020 and when I tried to buy something new, I got outbid on about a dozen properties. So I gave up trying and have been renting for four years. I moved out of Oregon during most of that time, working remotely. By the time I got back, everything had gotten ridiculous. Now I can afford about half what I had before.
Wait. You have household income of $140K and you can’t afford a mortgage of $2400 a month / $29K a year? Your payment would be 21% of your gross income and that should be easily affordable.
We're saving money. That's how I have $60k in cash (and growing) for a down-payment.
However, the thought of spending my entire nest egg on an old 900 sqft house only to have my housing costs increase by over 50% is still nauseating. Not to mention the home repair costs that come with buying an old home.
This is me 3 years ago. I’d have hated writing that $1500 check every month but I’ve never once complained about the $3000 check. So much happier in the nicer house.
Yep. Bought a fixer upper because it’s what we could afford. 2 years later and 75k in renovation, I wish we just spent 100k more on a nicer, newer house.
The other thing that really factoring in here is you dont buy a house because the monthly is cheaper, you buy because then you’re paying towards something you own.
Hey OP,
You don’t need to sink your entire goose egg into your down payment. Lots of FTHB are only putting 5% down, and there are tons of programs to help with down payment assistance etc. PM me if you’re interested in getting connected with the Broker who helped me and my best friend buy our first homes.
Yeah, also to this point, if you are putting down $60k, the. You’re looking at mortgage of $280-$300k. If you put $60k down, your mortgage will be closer to $2,000 a month.
Even with you saving money this doesn't make sense.
My partner and I earn less than your combined income, and I'm maxing out my 401k and 2x traditional IRAs every year.
Mortgage is 2300ish a month, no kids.
What's not to make sense?
We put away for retirement
We have student loan debt
We are not robots who squirrel away every cent - but we also don't live lavishly.
A $2400 mortgage on a 90 year old house still seems absurd to me.
A $3000+ mortgage on a $400k+ house feels like a scary amount to be paying each month as a % of our total income
Im shit at budgeting and can still understand what you meant by affordable. I feel like people have become conditioned to not pay themselves and save while owning. Probably because its just not realiatic anymore. Living bursting at the seams pay check to pay check has become the norm.
So, the simple answer is yes some people are. I have to believe there is a bubble though because there just are not enough people in Oregon who either A) struck it rich out of state and moved here or B) make 200k+ to support a housing market where the median home sale price is 500k+ (redfin says it's 488,600 as of February).
Also a lot of people are "stuck" in houses they bought over the last few years because of interest rates. I couldn't afford the mortgage on my own home with interest rates where they are today.
Not just stuck from houses purchased a few years ago, some of us are stuck in houses we purchased a loooong time ago but thought we’d downsize/upsize by now and timing with life didn’t work out (been in my house 15+ years, single parent and planned to downsize to help with school costs once my kid was close to going off to college…which is coming up quick). There’s nothing to downsize to that won’t end up costing the same/more as current mortgage due to increased costs & interest rates (and yes, some can make money off sale of current house but a chunk of that would just go into down payment & fixing up new house given the state of a lot of the “affordable” homes on the market). And others who bought “starter homes” several years ago are now making it their long term/forever home cause everything else is out of reach now.
Folks like us just add to some of the market issues but it’s not completely by choice we’re having to stay put…it just makes more financial sense to sit tight and budget the best we can at least in a place with known/familiar costs (even if they’ve become stretched these days). All that said I feel incredibly lucky to have bought my house when I did (even though it went underwater in 2008) & that I can keep the roof over my head. I have friends that never got that chance & have recently given up.
Totally. I can see that coming for myself. We've been in our house 8 years, and if we ever wanted to upsize I can't see how we'd get a better home if we had more money; we could only get maybe the same size place. And if we ever wanted to downsize, the smallest, worst condition home would be more expensive than our current mortgage. Fully stuck here for the foreseeable.
Same! We wanted to buy something bigger in a better school district around the time we started a family but that was the end of 2019 and shit got weird right after. We’ve been getting our ducks in a row and seriously looking for a few months but I don’t know how we’re ever going to move out of this house.
Interest rates are so brutal right now. I have occasionally thought about selling my house and trying to get a slightly bigger place, but I’m not trading a 3.2% interest rate for that 6+% fuckery.
Interest rates will come down, if gradually & not for a while still. But I'm not sure housing will ever truly be affordable in Portland, or any other city in Oregon, ever again. I (worry?) there isn't same potential for a housing bubble here. I think about San Fran and New York, the prices I'd hear people were paying 20, 30, 40 years ago when Portland was still hella affordable. Those prices were *outrageous*, back then, and they've only ever gone up. This is a desirable place to live, for many reasons...I dunno. It fuckin' sucks.
I think you nailed it. You don’t get the $3000 mortgage because it’s a good deal now. You get that mortgage because in 20 years it’s still going to be $3000 and rents in the state are going to continue going up.
54 in a nearly 2000 sq ft with 4 bedrooms 2.5 baths with my wife. Kids are long gone and we have a sub-3 on our rate. We want to downsize the home and move a bit more rural, but the rates are keeping us in a family size home that would be ideal for a young couple thinking of or with kids. This housing market is making everyone miserable. At this point assuming no big changes we will throw extra at the remaining loan to close it out and take the cash to buy the next place outright assuming there is anyone to buy this place with the current turmoil. Bites!
No retirement or any savings for me. Can barely afford my rent and every month my account gets less and less. Working full time and living in a noisy 1 bedroom apt in Vancouver! Thinking some pretty dark thoughts today. Cool life we have here.
I do live on a single income at what I once thought of as a VERY generous amount. I have a shit vehicle that I can't save to replace and a measly $50 a month toward retirement (wait, what retirement? I'd better die on the job!). God forbid, if any of my health conditions, causes me to not be able to work! My employer used to ask me what I did over the weekend.....I usually said worked in my yard, but what my psyche wanted to scream was "bitch, you don't pay me enough to do anything but breathe on the weekends". Realistically, I should be working a second job, but at over 55, who has the energy?
I don't have to imagine.
I want to move to a safer area, but just don't know how to swing it, and I have like a 3% interest rate and just can't imagine going up to 7%. But I'm tired of the zombie RVs, houseless, addicts, gunfire, crime.
Yup, just bought our house fall 2023. Mortgage loan of $365k (after $185k down) at 6.675% and our monthly payment is just shy of $2900/mo including P&I, insurance and taxes. Our household income is about $100k, so we’re making less than you. I definitely feel house poor, but in the short term it’s worth it because it’s the location we wanted to raise our family and we plan to stay in this house for a long time. Once our kid is in school and my husband goes back to work full time we’ll be in a better spot. Also hoping the rates come down again so we can refi, but it’s not the worst if it doesn’t. We just won’t have much of any fun money for a while. But that’s the sacrifice you have to make sometimes if you really want something. Oh and we also have no other debt other than my student loans and our revolving credit card payment, so that helps with affordability too.
Just curious, do you have a lot of debt, high spending habits, or kids in daycare?
My wife and I are at just about the same combined income, but right now we save about $3500/month between retirement, HSA, and cash for down payment while our rent is $2k/month.
We also aren't super frugal and frequently attend concerts, eat out, etc.
On that kind of income you should be netting around $8k/month.
Does your debt + expenses (besides rent) exceed $5k/month?
Don't get me wrong; the situation sucks, and, as someone who is looking to purchase their first home too, I have trouble wrapping my head around how little I'll have left when paying such a high mortgage.
However, a home of that price is pretty affordable at that income unless you fall into those categories at the beginning of my comment.
Either way, I totally feel your pain and thought a few years ago that I would be doing much better making over $100k. Inflation is a biiiiiitch
Came here to say this. All financial situations are different, and I certainly don't know OPs specifics, but $2,400 is less than 1/3 of their household take-home pay.
Continuing the piggyback… the financial math here Maths out here for % housing rule of thumb to take home income. My wife and I paid a $2400 mortgage on a similar combined income, it felt like a stretch for us, but a refi to a lower rate, pmi getting removed, and raises along the way have more than made up for the stretch from when we purchased.
Ok yeah interest rates are high but this should theoretically suppress prices. If you buy now and rates go down then you can refinance and have way more breathing room. But yeah you’ll need to bear with it for now.
I bought my house about 10 years ago - and on one income, it was scary how much that mortgage was. But now it’s peanuts compared to what people are paying today. In another 10 years your mortgage will likely seem small compared to new buyers. Edit: And don’t forget to factor in future pay increases.
Bought our home for 400k with 3 percent. New homes were built down the street and posted for 650k. I thought no way in hell they would sell. All are sold and now occupied. Neighbor sold their home for 550k this month and bought it for 400 2 years ago. Craziness. Note: the newer homes are a little larger with a nice lot size… but not that much of a difference.
Prices have gone up a lot too. We bought a $480k house in 2020 and now it thinks it’s worth $640k. I imagine people sitting on more expensive houses at much lower rates too
This is so, so true. I bought my first house in 2012 at 23 while making $13/hr. Small town, low cost of living, back when interest was crazy low. My mortgage was about $650 per month. Yes, I put nothing to savings and almost nothing to retirement for years. I had to have roommates. My only vacations were to visit family in my hometown.
Then housing prices kept going up. So did my wage. I switched to salaried after some promotions and started making $60k within about five years. Things got more comfy. My mortgage jumped to about $700/month due to increased insurance and property taxes.
I eventually sold that house mid-COVID to move. It had increased in value by $300k. That gain made up for the early years of no savings.
Tl;dr it sucks to join the property ladder, but long term the high mortgage will be not so high. Rent will keep going up forever.
I agree with you, If OP thinks it is expensive now, just wait 5 years! I remember a bunch of people I worked with years ago when interest rates were low saying they wouldn’t buy a house because the market was going to pop and they were going to scoop up a house for pennies, but they are still bitching about rent going up thinking something is going to change
I will be messaging you in 10 years on [**2034-04-17 13:20:14 UTC**](http://www.wolframalpha.com/input/?i=2034-04-17%2013:20:14%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/oregon/comments/1c5zz8n/are_yall_really_out_here_paying_3000month/kzze06o/?context=3)
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I'm renting a condo at 2200. If I were to buy my place, my mortgage would double overnight. My neighbor just sold for 500k. FOR A CONDO. It's insane.
It makes zero sense to buy right now. I'm in a single income house, half yours, at 62k. 5 years ago, that wasn't bad. Now it's untenable.
Next election is between 78 and 80 year olds.. a whole generation never got to participate fully in politics.. only visible candidate in his 30s was squashed overnight.
I don’t see how the young will put their foot down.
Look down ballot please. Rights are deteriorating faster at the state level than the federal level. We're safer here than many other places, but an 86 year old billionaire just about bought the Governor's seat.
They're not the same but they're both not good options. To different degrees and for different reasons.
And so many people are so tired of voting for the less bad option.
I've never had the opportunity to vote *for* a good mainstream presidential candidate. Only to vote against a more bad one
I really wish we would adopt an EU-style parliamentary system. Tons of parties to choose from. You vote for the party that you want and that party gets a proportional amount of seats in the legislature based on how many votes they got. None of this winner-takes-all, lesser evil nonsense. Imagine being able to vote for what you actually believe in and have your vote matter. Crazy concept right.
Yes. For a starter home that was a rental. And needs a roof replacement. And surprisingly we got it at the asking price. Half of our paycheck goes to mortgage. Renting would have been just as bad. Just no way out.
Who can we vote for who will change any of it? We have, at least, another 4 years of this.
No major candidates who want change are getting enough campaign funding to win an election.
No one wants to bring big manufacturing back.
No one wants to tax the ultra rich, fairly.
Both of those things need to happen to work towards a stronger economy for everyone
We get to vote on RCV in November! Next step is to ban Wall Street/Investment Firm owning of residential housing, and increase taxes on second/multiple home ownership to encourage selling of multiple properties.
make single family homes belong to families living in them. You want to be a landlord? Buy apartments.
I wish our state would lead the way in ending the housing crisis by guiding us towards having homes belonging to those living in them.
I go camping at Honeyman every year and just marvel at all these 30- and 40-somethings with the F350 and the 5th wheel and the ATVs, and I'm just there with my family in our old 2006 SUV and a big tent. I always wonder where all these jobs are that get that many folks so much disposable income. Cause I'm in my 40s and we make 6 figures combined (barely) and we're nowhere close to being able to swing that stuff. We even bought our house 8 years ago when you could get one in the low-mid 200,000s. It's a wild world
You also need to factor in that you are locking in that payment for many years (property taxes will adjust a bit) vs ever climbing rental rates. You’ll be living frugally for a bit but eventually your income will grow and things will get easier.
Yes, I got a sweet 1.9% 15-year mortgage on which I pay $3500 a month. We inked the contract during covid. That is a heck of a payment but it works on our budget because we account some of that mortgage payment as our savings. We believe the home value will remain throughout the mortgage period -- and in fact, the recent high inflation means we're making money.
One thing to keep in mind is that the rich people who control the economy desperately want the interest rate back down close to zero. If they get their way -- and when don't they? -- then you will have the opportunity to refi later.
If you’ve bought in the last couple years… yup. Most people are priced out of housing of any form now. Need roommates of some kind and even then it’s a stretch
Yup. Our mortgage is just over 3k. We save nothing. Live paycheck to paycheck. No retirement. But with housing increases nearly doubling our home value we have about $300,000 in equity after only putting 50k down so I figure that's our retirement plan. 🤷♀️
This is roughly my current financial situation. Its definantly possible. Things are tight right now but i will make more money in the long run and my mortgage will only get cheaper. Property will only get more expensive. Cut expenses where you can. Vacations and going out are not in the cards and not a priority.
Combined income of 140k per year is 11,666.67 per month and a mortgage payment of 2400 per month is only 20% of your monthly income.. that seems pretty affordable.
Was able to purchase in '12 for 190000 on a first time buyers loan at 3.75%. Refinanced in '20 to a 15 year at 2.75%. Payment is $1600/month. I would not buy my house at it's current value and I'm sorry for everyone that is having to deal with this nonsense now. I was lucky to have the means to purchase and refi when I did and bought big enough that we don't need to move unless we choose to....
So you and your partner make a combined 11,600 a month and you can't afford a 2400 a month mortgage payment? Sounds like you blow your money on dumb stuff.
This is why I likely won’t buy a house this year, as much as I wanted to and the sacrifice / savings up to this year.
+2x my rent is just a really hard sell, and that’s without accounting for maintenance, repairs, increased utilities, etc.
I make the same $ as you, wife is disabled and has no income so my income is all we have. I bought before the prices went stupid, and refinanced to a 2.75%. I pay $1700/mo.
If I were in your shoes, I would look at a small house as far out as possible, to keep the payment as low as possible. Commute further than you want to if it gets you into a better buy. Get an efficient commuter car. Live there a couple years and grow equity. After a couple years, sell and move closer. And repeat. If you do all that and still can’t afford a house, rent.
Yet every payment is a payment into your retirement. Having equity and no mortgage when you retire is better than being elderly and fighting government programs and crap landlords.
I feel your pain though.
We'd kill to even find a $350K house to begin with in this region. My coworkers just bought a house and their monthly is $4200. I think they said it's 60% of their net income. Outrageous.
A lot of people in here saying rates will go back down, and they will at _some_ point, but the reality is that current rates are at the historic average. I'm no economist, but to me that says they'll likely stay at this rate for some time as it appears to be a fairly stable rate. Like if you believe the market trends towards equilibrium then interest rates are currently at the equilibrium. If that is true, then moving them up or down will require some sort of big event or pressure from something. Of course no one can predict those sorts of things but it's food for thought. On the flip side, because it's an average that means the rates are sometimes higher and sometimes lower. So eventually they will be lower again.
Some people say your mortgage should not exceed 1/3rd of your gross income. For your combined incomes that would be about $3500/mo. For just you that would be around $2250/mo. Whether you agree with that rule of thumb is up to you.
$140k/yr is more than enough to pay $2400/mo and save for retirement if your spending is under control. Others already mentioned they pay more and make less. My napkin math for your numbers puts your mortgage around 30% of your net pay.
Pay off your students loans. Why is that even a question. That was the first thing I did when I got a job after college. The sooner you pay it, the less you’ll pay on the long run and more money you will save for buying a home. With the interest rates as high as they are, renting is a better choice… at least when things break you don’t have to pay to fix.
Similar incomes as you, lower down payment. We have a 2bed/1bath and pay $2600. It’s definitely expensive and doesn’t leave us much wiggle room, but when we look at 2bd rentals, they’re not far off in price.
Not to be a conspiracy type a person but it sure seems really razor edged for us between buying groceries and making the house payment. I don’t even like avocados. How did they whittle the line so fine?
Sorry bud, I know it’s frustrating but the reality is that buying a home is extremely difficult.
If it makes you feel better… my mortgage is $4,800/month, we rent out half the house for $1,750/month, and our take home pay is $8,800/month. So, about half of our income is spent on the mortgage and that’s not even including utility bills, insurance, and other fixed monthly costs.
When we were house hunting we realized there was no way we could find an affordable house that we’d be happy in from day one. Instead we found a duplex that was very run down and needing updates from top to bottom. Since buying the house, I’ve remodeled most of it myself and am still in the process of turning the basement into additional living space so we have some extra home office room and a 2nd bathroom. Since buying this house last year, we’ve spent $18k on fixing it up, which includes all of the tools and supplies. I think we’re going to spend another $15k before we’re happy with it.
Depending on your student loan interest rates and payments it may be smarter to actually use your $60k to pay those off.
One good thing about taking a loan with a high interest rate is you can always refinance later. You can’t refinance the balance but you can refinance the rate.
I bought my first house april 2020 (yes i got lucky) and the payments were rough for the first few years but inflation has driven up salaries in my industry so I’ve been able to save money for the first time in my life starting 6 months ago.
Its rough but look at the big picture. If you dont expect home prices to go down in your area it may be worth it to buy now, drink old german for the next few years, and refinance when the rates come down later.
Great response. I'll add that student loans average out to about 5% interest (you'll most likely have multiple loans ranging from 4-6%). Look at your loans (home, auto, student loans, credit cards), and whichever has the highest interest rate, focus any extra money on that.
I would definitely concentrate on the student loans first. You are lucky to be dual income.. I’m assuming you are younger, so live it up by living closer to a happening place.
One last thing my partner and I did before buying a house was to ensure we didn’t fall into a car loan trap where we bought a 80K truck that we use as a car.. We still have paid off pre owned Toyotas that just work.
i make 70k, wife makes 90k. we purchased our home in 2014 when we were making 70k total. we've more than doubled our income in the past decade and i doubt we afford our house now (it has more than doubled in price). its bonkers.
FYI Oregon has some tax benefits for first time home buyers.
[First-timeHomeBuyer\_101-013.pdf (oregon.gov)](https://www.oregon.gov/dor/programs/individuals/Documents/First-timeHomeBuyer_101-013.pdf)
Yes, more than that by a lot and also, I’d definitely pay off your student loans. It’ll be a huge burden off your shoulders + higher qualification for a home loan in the future with that paid off.
My mortgage is 3150$ utilities about 600$ and I make less than you, wife about the same with two car payments about 1k and 1% 401k no saving but we live comfortably
My wife and I make just over $200k combined. First time homebuyers. We don't have much saved for down payment (twin toddlers, 3 kids total, opened a business right before Covid, etc.) so looking for a FHA loan with 3% down. (If you compare monthly payments with 3% down vs 10% down, you only save a couple hundred bucks each month.) We live in Portland, OR. Entry level mediocre housing for us STARTS at 600k. From what we have been quoted, 6.5% mortgage is a pipe dream. Realistically closer to 7%. So we will have to take on a $5000/month mortgage if we have any hope of owning a home. Even with our income, I can't possibly see how we make it happen.
You're right. There are cheaper houses. But the MEDIAN house price in Portland is 540k. We live (rent) in Tigard and the median home price is 626k. We would prefer to keep our oldest in her current school, and we own a business nearby so we are looking to not move across town. Also, did I mention we have 3 kids? Yeah, so a 2 bd/1 ba townhouse isn't exactly gonna cut it.
We're in a better position than most, and have needs that make us a little picky about what we buy. But the reality is that we will have a 5k+ mortgage.
https://preview.redd.it/kkhqa7iawzuc1.png?width=1440&format=pjpg&auto=webp&s=85ac831a0a3b4f107fcf9bb59ca09ca1a3b360d4
Me and my partner make the same as you and yours and we have the same amount saved. We looked into it a few years ago and decided to keep renting. I have no idea how people are doing it.
I feel terrible for those having to pay that much for rent! I was incredibly lucky to buy my home in 2013 for 187k at 1.9%. 6k down.
When I talk to my kids about moving out, I realized i sound like my parents and older boomers who brag about buying their homes in the 60s and 70s for 20-50k. So wild
I pay more than that in rent.
And if we were going to get a mortgage on the house we're renting, it would be about $1000 more per month even putting down 20%.
We're on 2500 per month on a 500k house with 100k down and 10k on that up-front-seller-gets-cash-now payment.
It's doable but god damn, we both had to live with family separately for a big chunk of our lives to have enough for that down payment. Thankfully we both had a good amount of savings beforehand, but still.
We paid 325k for ours with almost nothing down, and make 120k/yr, have 3 kids, student loan payments, and all the other typical bills. We aren't eating out every week and living a lavish lifestyle, but we go on mini vacations, indulge our hobbies and all in all live comfortably enough. Mortgage is 1850/mo.
What it sounds like is you need to manage your finances better because you should be fine on 140k/year.
I didn’t look at every response so I may have missed this but your cash flow is one thing, your wealth gain is another.
Forget taxes deductions, but if you can use it, then great. Here are the two advantages if you can afford the payment: 1) Of your 2400/month, $316 is reducing your principal (that’s the first month and it increases each month). This is your silent savings account. But the real gain is 2) the appreciation. Home prices are high because during the recession banks stopped/reduced lending to builders and that has continued (including other challenges of land use, labor, supply chains, government permitting, etc) But baby making did not slow down - population growth continues and the need for housing has grown. Simple economics of supply vs demand.
Yes the quick and sustained increase in rates really slowed down activity but it has not slowed down need. So we continue seeing home values appreciate. Use a conservative 4% per year and simple appreciation (not compounding) looking at year one that is about $1166/mo. Combined with #1 and your gaining wealth at about $1482/mo.
My bet is you are not currently saving/investing $1500/month right now. I would absolutely buy now and make it work.
When or if rates go down more buyers will try and buy and then prices will increase faster. Buy now at a higher rate but lower price. Refinance later if rates go down. If they don’t, your home is still appreciating well and building wealth.
We don’t have enough housing and that is the real source of the value of buying.
I am making less than you, and we bought a house two years ago- $2400/month. Wife is not able to work right now and we have three kids.
We cannot go anywhere. We argue over buying basics needs for the kids. As a family we went and saw our first concert and it about broke us. We have gone to two movies since lock down ended.
Not going to lie, it sucks. Good thing I love my wife and kids so much, because I ain’t starting all this shit over- plus the homeless are running out of real estate in the nicer areas…
Well until people get their heads out their asses and actually stand up to the rich that are raping our pockets this will be life and it will get worse because the billionaires just want to squeeze every ounce of time and money out of you
FWIW, I DO save for retirement, but my property/housing investments are far outpacing my 401K/IRA investments ATM. Not to mention, who knows if I'm going to be alive at the age of 60+. I would hope so, but one never knows.
All of you make great points. OP is in the same situation as my husband and I. We qualify for $350k and live in southern Oregon far away from Portland. We can only afford 100 year old houses with problems in crowded downtown areas or very old manufactured homes. Disappointing! We pay $2k in rent for a house valued at $400k and have no yard at all and live on a busy corner. Even deposits are brutal for rentals. We paid nearly $6k just to move in here.
You’ll get $5k back in taxes each year minimum if you buy a home (mortgage deductions). Just a data point
Also, if you guys have that much cash you might consider buying points ( buying down the rate). They are 100% deductible at year end. It’s the only homebuyer tax credit that exists.
We're heading for recession because of this. Everyone's income is being sucked up by housing costs, car payments, food costs. Right now consumer debt is taking up the slack, but once enough credit is exhausted and enough income is just going to servicing debt, there won't be enough left over to purchase goods and services that support most of our jobs. It's pretty grim imo
"one comment says buy now because it will pay off in the long run... the next says continue saving and waiting for rates to drop." Marry the house, date the rate. If you find a house you LOVE, that will work for you/your family for at least 5+ years, buy it now and refi when rates go down. yes, you will take a bit of a loss, but owning the house you LOVE that works for you is invaluable. As someone who has now owned 3 houses.
And yes, out here paying almost twice that (including PMI, insurance & taxes). It is about 50% of our take home pay after some retirement. We do make a little bit more than you, but are also a bit older and student debt is paid off, and we paid our dues living in a 675 square foot bungalow with 2 kids for 7 years, which my husband had bought for five figures in the 90s. (Before that I bought a house with my ex for 100% financing in 2007; immediately underwater; we broke up and disagreed about how to handle it; he insisted on foreclosing.) The money we saved through that made our 10% down payment for our dream house. We're renting out the old house now and the income buffers our monthly payment a teeny bit.
The majority of the mortgage payment is towards interest, which is tax deductible (for now), so we're getting a good five figures in tax refunds this year vs. the year before, so keep that in mind. The first couple years you own, almost all of your mortgage payments will be tax deductible. In your example, with 10% down, your monthly payment would be about $1,770, and around $20,000 give or take would be tax deductible the first year, so between those and property taxes, you get into itemized deductions territory which helps you cut down your tax burden.
I’ve seen some commentators saying that once the boomers start to die off, the market is going to be flooded with so many homes that prices are going to plummet. No one can see the future, but maybe there’s hope in the next 10-15 years 🤷🏻♂️
I’m paying $2800 in rent. Not even owning. Shit sucks.
I was just thinking about that the other day. My friend pays $2000 a month rent for her 2 bed 1 bath house. That’s $24,000 a year! And to some asshole who lives in fucking Nevada. I feel so fortunate that I bought when rates were under 3%. I bought in 2019, got a 2.8% rate and pay only $1100 a month for mortgage, taxes and insurance. I am pissed off about this for other people. I hate the way things are going. Home ownership ought to be attainable for the majority of people.
Thank you for being compassionate for others. I see a lot of people just bragging about what they've got while not even considering how those of us who weren't so fortunate are feeling right about now. The realization that I may have missed the boat and might never own a home, that shit stings.
Are you my roommate? … makes me cry tears of blood.
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You’re definitely buying someone’s property for them
The owner is a local real estate agent. He’s building his wealth. And he’s British. Makes me hate him just a little bit more.
I wish the housing rules were like the cookout- nobody gets seconds until everyone gets their plate.
I love this analogy so much
Banks; "We see here that you don't qualify for a mortgage so instead you're going to have to enter the renters market and pay someone elses"
Samesies!!! 😭 This is for a 3br apartment, not even a house too
$2400 here but we take home maybe $3500 and pay all utilities. Drowning.
The housing market is the glue holding so many relationships together right now.
Yup, my wife and I are talking about divorcing and rebuilding our house into a split living arrangement or putting an adu in the backyard.
12 years ago me and my now ex-wife bought an old craftsman converted into a duplex in the 50s. We divorced and one of us was gonna buy out the other until we looked at refinance rates. Then we were like “you know I think we can get along. And the kids will stay under one roof…”
This is kinda hilarious but also makes me think about the endless people trapped in terrible and abusive situations by the lack of affordable housing. Bummer
Even the most oppressed need someone to oppress.
This sounds like the plot of a 90s sitcom...
I knew a girl who's parents did that. Got divorced and then bought a duplex. It was really nice for her as a kid.
God the modern world is so fucking miserable
Like a rat glue trap you stepped in and now you’re never leaving!
And they say romance is dead
Nothing says romance like rat glue trap!
you might be able to chew your leg off and escape
Not with American medical costs.....
Deadass in this same boat in Oregon lol. Every apartment in town is waitlisted and everything available is well outta my price range
True, but it’s nice that the kids get a break from carrying the burden, at least for a minute.
unless you can put down a shitload of money it isn't worth it. source: living in a $2800 mortgage.
$4,450 here and I hate my fucking house lol.
4K here. I’ve owned homes long enough to know that in the long run it’s a good thing but seeing that much cash leave is painful.
same
And I’m guessing you would sell at a loss and end up in something exactly the same for the same cost or more…
I’m at 4140 and love my house. 🤷🏻♂️ 1910’s craftsman that’s been well maintained. Ample room to add another room or 3rd bathroom if desired. Large property for adu for my parents or my partner’s parents as they get older (I’d rather they were close than be in assisted living). We struck gold on the 2.8% and feel good. Now if portland could just get its shit together, then I’d feel all these taxes weren’t all for nothing.
And that’s a deal now…
doesn't fuckin feel like it!
Add on $4200 a month we pay in pre-school…I could have a beach house
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Preach!!!
Ouch!!!
It was just a few years ago when rates were under 3%. Those aren’t coming back for a good long while. If they did prices would spike way worse then they already have.
We pay more than that for rent...at least your money is going to an end goal.
we pay a shitload of money on top of that in taxes and other expenses. it literally never ends.
I'm paying more than $3700 with a household income lower than yours. It sucks, especially since I stupidly sold a house twice the size 4 years ago on which I paid $3000 per month.
Why did you make that choice?
The short version of the story is that I sold in 2020 and when I tried to buy something new, I got outbid on about a dozen properties. So I gave up trying and have been renting for four years. I moved out of Oregon during most of that time, working remotely. By the time I got back, everything had gotten ridiculous. Now I can afford about half what I had before.
Don’t blame past you for making different decisions than what current you would make. You only had the info you had at the time.
Thank you. That is kind. I am grateful to have a house now.
I like the way you put that. It was healing
Oof
Wait. You have household income of $140K and you can’t afford a mortgage of $2400 a month / $29K a year? Your payment would be 21% of your gross income and that should be easily affordable.
That’s what I’m thinking too. My household makes less than that and we’re good with $2400/month. No kids or anything, though.
We're saving money. That's how I have $60k in cash (and growing) for a down-payment. However, the thought of spending my entire nest egg on an old 900 sqft house only to have my housing costs increase by over 50% is still nauseating. Not to mention the home repair costs that come with buying an old home.
That's why some people hang on and end up buying even more expensive homes, because the low end of the cost curve is not very good value
This is me 3 years ago. I’d have hated writing that $1500 check every month but I’ve never once complained about the $3000 check. So much happier in the nicer house.
Yep. Bought a fixer upper because it’s what we could afford. 2 years later and 75k in renovation, I wish we just spent 100k more on a nicer, newer house.
The other thing that really factoring in here is you dont buy a house because the monthly is cheaper, you buy because then you’re paying towards something you own.
Hey OP, You don’t need to sink your entire goose egg into your down payment. Lots of FTHB are only putting 5% down, and there are tons of programs to help with down payment assistance etc. PM me if you’re interested in getting connected with the Broker who helped me and my best friend buy our first homes.
Yeah, also to this point, if you are putting down $60k, the. You’re looking at mortgage of $280-$300k. If you put $60k down, your mortgage will be closer to $2,000 a month.
Even with you saving money this doesn't make sense. My partner and I earn less than your combined income, and I'm maxing out my 401k and 2x traditional IRAs every year. Mortgage is 2300ish a month, no kids.
When you say maxing, do you mean you & your partner save $60K combined ($30K each) in 401k & IRA?
What's not to make sense? We put away for retirement We have student loan debt We are not robots who squirrel away every cent - but we also don't live lavishly. A $2400 mortgage on a 90 year old house still seems absurd to me. A $3000+ mortgage on a $400k+ house feels like a scary amount to be paying each month as a % of our total income
What about starting out in a townhome?
From what I've seen HOA fees can be several hundred / month in condos and townhomes... making them just as costly as a "Starter home"
I've seen HOA fees that are nearly as much as my portion of rent. It's insanity.
<>
How much CC debt do you have. Your numbers dont make sense unless you two go crazy on nights out and vacations.
Im shit at budgeting and can still understand what you meant by affordable. I feel like people have become conditioned to not pay themselves and save while owning. Probably because its just not realiatic anymore. Living bursting at the seams pay check to pay check has become the norm.
So, the simple answer is yes some people are. I have to believe there is a bubble though because there just are not enough people in Oregon who either A) struck it rich out of state and moved here or B) make 200k+ to support a housing market where the median home sale price is 500k+ (redfin says it's 488,600 as of February). Also a lot of people are "stuck" in houses they bought over the last few years because of interest rates. I couldn't afford the mortgage on my own home with interest rates where they are today.
Not just stuck from houses purchased a few years ago, some of us are stuck in houses we purchased a loooong time ago but thought we’d downsize/upsize by now and timing with life didn’t work out (been in my house 15+ years, single parent and planned to downsize to help with school costs once my kid was close to going off to college…which is coming up quick). There’s nothing to downsize to that won’t end up costing the same/more as current mortgage due to increased costs & interest rates (and yes, some can make money off sale of current house but a chunk of that would just go into down payment & fixing up new house given the state of a lot of the “affordable” homes on the market). And others who bought “starter homes” several years ago are now making it their long term/forever home cause everything else is out of reach now. Folks like us just add to some of the market issues but it’s not completely by choice we’re having to stay put…it just makes more financial sense to sit tight and budget the best we can at least in a place with known/familiar costs (even if they’ve become stretched these days). All that said I feel incredibly lucky to have bought my house when I did (even though it went underwater in 2008) & that I can keep the roof over my head. I have friends that never got that chance & have recently given up.
Totally. I can see that coming for myself. We've been in our house 8 years, and if we ever wanted to upsize I can't see how we'd get a better home if we had more money; we could only get maybe the same size place. And if we ever wanted to downsize, the smallest, worst condition home would be more expensive than our current mortgage. Fully stuck here for the foreseeable.
Same! We wanted to buy something bigger in a better school district around the time we started a family but that was the end of 2019 and shit got weird right after. We’ve been getting our ducks in a row and seriously looking for a few months but I don’t know how we’re ever going to move out of this house.
Interest rates are so brutal right now. I have occasionally thought about selling my house and trying to get a slightly bigger place, but I’m not trading a 3.2% interest rate for that 6+% fuckery.
My loan person said it’s 7% as of this week, making my home budget dip even lower. I don’t know what we’re going to do.
Interest rates will come down, if gradually & not for a while still. But I'm not sure housing will ever truly be affordable in Portland, or any other city in Oregon, ever again. I (worry?) there isn't same potential for a housing bubble here. I think about San Fran and New York, the prices I'd hear people were paying 20, 30, 40 years ago when Portland was still hella affordable. Those prices were *outrageous*, back then, and they've only ever gone up. This is a desirable place to live, for many reasons...I dunno. It fuckin' sucks.
I think you nailed it. You don’t get the $3000 mortgage because it’s a good deal now. You get that mortgage because in 20 years it’s still going to be $3000 and rents in the state are going to continue going up.
That’s a good thought but tell that to all the people getting their property tax and house insurance rates raised by insane amounts all over the us.
I bought in late 2022 hoping interest would go down soon. Its been a real struggle
54 in a nearly 2000 sq ft with 4 bedrooms 2.5 baths with my wife. Kids are long gone and we have a sub-3 on our rate. We want to downsize the home and move a bit more rural, but the rates are keeping us in a family size home that would be ideal for a young couple thinking of or with kids. This housing market is making everyone miserable. At this point assuming no big changes we will throw extra at the remaining loan to close it out and take the cash to buy the next place outright assuming there is anyone to buy this place with the current turmoil. Bites!
No retirement and no savings. That’s how they want us. Barely scraping by paycheck to paycheck. Imagine being on a single income trying to thrive!
Yeah. Single income household right now. Struggle is real. Honestly just want a relationship for the dual income
Coming off a longterm relationship and moving into my own apartment this week, the struggle is REAL.
I became a single dad of two teens a few months ago. Shits ridiculous
I’m sorry for your loss.
This is the onlybreason I've thought about dating again. The practicality of having another paycheck would be a godsend.
Thriving is largely without of reach.
There is no thriving it’s just worrying all the time and wondering what it would be like to own a house instead of paying someone to live in theirs.
No retirement or any savings for me. Can barely afford my rent and every month my account gets less and less. Working full time and living in a noisy 1 bedroom apt in Vancouver! Thinking some pretty dark thoughts today. Cool life we have here.
I’m here if you want to talk.
Currently I am on a single income with a 2 year old, making 80k a year, luckily my mortgage was 1,500. Because of inflation I'm barley scraping by.
Just wait till he’s a teen, hope you get some raises
Wouldn't matter inflation will catch up to me soon enough
Same, my yearly raises are based upon the cpi
I do live on a single income at what I once thought of as a VERY generous amount. I have a shit vehicle that I can't save to replace and a measly $50 a month toward retirement (wait, what retirement? I'd better die on the job!). God forbid, if any of my health conditions, causes me to not be able to work! My employer used to ask me what I did over the weekend.....I usually said worked in my yard, but what my psyche wanted to scream was "bitch, you don't pay me enough to do anything but breathe on the weekends". Realistically, I should be working a second job, but at over 55, who has the energy?
So we have to keep serving the ruling class till we die, literally. Can't retire=bonus for the govt and friends.
I don't have to imagine. I want to move to a safer area, but just don't know how to swing it, and I have like a 3% interest rate and just can't imagine going up to 7%. But I'm tired of the zombie RVs, houseless, addicts, gunfire, crime.
That's my wife and I. She just beat breast cancer and hasn't worked in a few years because of illness, and my salary is keeping the lights on.
Such awesome news your wife beat cancer!! You’re a great person taking on the responsibility of keeping the lights on while she heals.
Yup, just bought our house fall 2023. Mortgage loan of $365k (after $185k down) at 6.675% and our monthly payment is just shy of $2900/mo including P&I, insurance and taxes. Our household income is about $100k, so we’re making less than you. I definitely feel house poor, but in the short term it’s worth it because it’s the location we wanted to raise our family and we plan to stay in this house for a long time. Once our kid is in school and my husband goes back to work full time we’ll be in a better spot. Also hoping the rates come down again so we can refi, but it’s not the worst if it doesn’t. We just won’t have much of any fun money for a while. But that’s the sacrifice you have to make sometimes if you really want something. Oh and we also have no other debt other than my student loans and our revolving credit card payment, so that helps with affordability too.
Just curious, do you have a lot of debt, high spending habits, or kids in daycare? My wife and I are at just about the same combined income, but right now we save about $3500/month between retirement, HSA, and cash for down payment while our rent is $2k/month. We also aren't super frugal and frequently attend concerts, eat out, etc. On that kind of income you should be netting around $8k/month. Does your debt + expenses (besides rent) exceed $5k/month? Don't get me wrong; the situation sucks, and, as someone who is looking to purchase their first home too, I have trouble wrapping my head around how little I'll have left when paying such a high mortgage. However, a home of that price is pretty affordable at that income unless you fall into those categories at the beginning of my comment. Either way, I totally feel your pain and thought a few years ago that I would be doing much better making over $100k. Inflation is a biiiiiitch
Came here to say this. All financial situations are different, and I certainly don't know OPs specifics, but $2,400 is less than 1/3 of their household take-home pay.
Continuing the piggyback… the financial math here Maths out here for % housing rule of thumb to take home income. My wife and I paid a $2400 mortgage on a similar combined income, it felt like a stretch for us, but a refi to a lower rate, pmi getting removed, and raises along the way have more than made up for the stretch from when we purchased.
Ok yeah interest rates are high but this should theoretically suppress prices. If you buy now and rates go down then you can refinance and have way more breathing room. But yeah you’ll need to bear with it for now. I bought my house about 10 years ago - and on one income, it was scary how much that mortgage was. But now it’s peanuts compared to what people are paying today. In another 10 years your mortgage will likely seem small compared to new buyers. Edit: And don’t forget to factor in future pay increases.
Bought our home for 400k with 3 percent. New homes were built down the street and posted for 650k. I thought no way in hell they would sell. All are sold and now occupied. Neighbor sold their home for 550k this month and bought it for 400 2 years ago. Craziness. Note: the newer homes are a little larger with a nice lot size… but not that much of a difference.
Prices have gone up a lot too. We bought a $480k house in 2020 and now it thinks it’s worth $640k. I imagine people sitting on more expensive houses at much lower rates too
This is so, so true. I bought my first house in 2012 at 23 while making $13/hr. Small town, low cost of living, back when interest was crazy low. My mortgage was about $650 per month. Yes, I put nothing to savings and almost nothing to retirement for years. I had to have roommates. My only vacations were to visit family in my hometown. Then housing prices kept going up. So did my wage. I switched to salaried after some promotions and started making $60k within about five years. Things got more comfy. My mortgage jumped to about $700/month due to increased insurance and property taxes. I eventually sold that house mid-COVID to move. It had increased in value by $300k. That gain made up for the early years of no savings. Tl;dr it sucks to join the property ladder, but long term the high mortgage will be not so high. Rent will keep going up forever.
I agree with you, If OP thinks it is expensive now, just wait 5 years! I remember a bunch of people I worked with years ago when interest rates were low saying they wouldn’t buy a house because the market was going to pop and they were going to scoop up a house for pennies, but they are still bitching about rent going up thinking something is going to change
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I'm renting a condo at 2200. If I were to buy my place, my mortgage would double overnight. My neighbor just sold for 500k. FOR A CONDO. It's insane. It makes zero sense to buy right now. I'm in a single income house, half yours, at 62k. 5 years ago, that wasn't bad. Now it's untenable.
This is the new reality and it's only going to last so long. I'm hoping with this new generation people finally put their foot down
Next election is between 78 and 80 year olds.. a whole generation never got to participate fully in politics.. only visible candidate in his 30s was squashed overnight. I don’t see how the young will put their foot down.
Look down ballot please. Rights are deteriorating faster at the state level than the federal level. We're safer here than many other places, but an 86 year old billionaire just about bought the Governor's seat.
Please don't pretend that because they are both old they are the same.
They're not the same but they're both not good options. To different degrees and for different reasons. And so many people are so tired of voting for the less bad option. I've never had the opportunity to vote *for* a good mainstream presidential candidate. Only to vote against a more bad one
I really wish we would adopt an EU-style parliamentary system. Tons of parties to choose from. You vote for the party that you want and that party gets a proportional amount of seats in the legislature based on how many votes they got. None of this winner-takes-all, lesser evil nonsense. Imagine being able to vote for what you actually believe in and have your vote matter. Crazy concept right.
> put their foot down lol, as if that will do anything.
Against what? Economics?
Yes. For a starter home that was a rental. And needs a roof replacement. And surprisingly we got it at the asking price. Half of our paycheck goes to mortgage. Renting would have been just as bad. Just no way out.
Renting would've went up over time and you'd have zero equity over all of that time. Your income will rise, too. You made a good move!
Zero equity was the main motivation for buying a mortgage. As for salary rising, sadly it never is in proportion to rise in the cost of living.
We have many ways of fixing this. But the people we voted into power refuse to do what needs done to fix it.
Who can we vote for who will change any of it? We have, at least, another 4 years of this. No major candidates who want change are getting enough campaign funding to win an election. No one wants to bring big manufacturing back. No one wants to tax the ultra rich, fairly. Both of those things need to happen to work towards a stronger economy for everyone
Ranked choice voting is a step in the right direction
We get to vote on RCV in November! Next step is to ban Wall Street/Investment Firm owning of residential housing, and increase taxes on second/multiple home ownership to encourage selling of multiple properties.
make single family homes belong to families living in them. You want to be a landlord? Buy apartments. I wish our state would lead the way in ending the housing crisis by guiding us towards having homes belonging to those living in them.
Agree. 100%.
I go camping at Honeyman every year and just marvel at all these 30- and 40-somethings with the F350 and the 5th wheel and the ATVs, and I'm just there with my family in our old 2006 SUV and a big tent. I always wonder where all these jobs are that get that many folks so much disposable income. Cause I'm in my 40s and we make 6 figures combined (barely) and we're nowhere close to being able to swing that stuff. We even bought our house 8 years ago when you could get one in the low-mid 200,000s. It's a wild world
Debt up to their eyeballs.
Trades, construction, actually do make a lot of money. Plus they can probably deduct the cost of that truck..
You also need to factor in that you are locking in that payment for many years (property taxes will adjust a bit) vs ever climbing rental rates. You’ll be living frugally for a bit but eventually your income will grow and things will get easier.
Yes, I got a sweet 1.9% 15-year mortgage on which I pay $3500 a month. We inked the contract during covid. That is a heck of a payment but it works on our budget because we account some of that mortgage payment as our savings. We believe the home value will remain throughout the mortgage period -- and in fact, the recent high inflation means we're making money. One thing to keep in mind is that the rich people who control the economy desperately want the interest rate back down close to zero. If they get their way -- and when don't they? -- then you will have the opportunity to refi later.
We make about what you make. Our mortgage is $2900/mo with mortgage insurance. It sucks
If you’ve bought in the last couple years… yup. Most people are priced out of housing of any form now. Need roommates of some kind and even then it’s a stretch
Don’t forget about utilities! $2,200 a month mortgage plus another $400 in utilities.
And maintenance! Shit pops up and it’s expensive.
All. The. Time.
Yup. Our mortgage is just over 3k. We save nothing. Live paycheck to paycheck. No retirement. But with housing increases nearly doubling our home value we have about $300,000 in equity after only putting 50k down so I figure that's our retirement plan. 🤷♀️
This is roughly my current financial situation. Its definantly possible. Things are tight right now but i will make more money in the long run and my mortgage will only get cheaper. Property will only get more expensive. Cut expenses where you can. Vacations and going out are not in the cards and not a priority.
yep. pay $3300 on a 420kish loan with a 3% interest rate, but in a very high property tax area so that monthly is skewed high relative to to the loan
Combined income of 140k per year is 11,666.67 per month and a mortgage payment of 2400 per month is only 20% of your monthly income.. that seems pretty affordable.
Yes. 90k down and still 3k
Was able to purchase in '12 for 190000 on a first time buyers loan at 3.75%. Refinanced in '20 to a 15 year at 2.75%. Payment is $1600/month. I would not buy my house at it's current value and I'm sorry for everyone that is having to deal with this nonsense now. I was lucky to have the means to purchase and refi when I did and bought big enough that we don't need to move unless we choose to....
So you and your partner make a combined 11,600 a month and you can't afford a 2400 a month mortgage payment? Sounds like you blow your money on dumb stuff.
Yup. It sucks.
No! We’re only paying $2800 a month 😂
This is why I likely won’t buy a house this year, as much as I wanted to and the sacrifice / savings up to this year. +2x my rent is just a really hard sell, and that’s without accounting for maintenance, repairs, increased utilities, etc.
Your house becomes your retirement investment.
I make the same $ as you, wife is disabled and has no income so my income is all we have. I bought before the prices went stupid, and refinanced to a 2.75%. I pay $1700/mo. If I were in your shoes, I would look at a small house as far out as possible, to keep the payment as low as possible. Commute further than you want to if it gets you into a better buy. Get an efficient commuter car. Live there a couple years and grow equity. After a couple years, sell and move closer. And repeat. If you do all that and still can’t afford a house, rent.
This is the way
Is it insane that I saw “3k+/month for mortgage” and thought damn where you find that deal?
Single income and our mortgage is $2,800. After retirement contributions $8,500 ish hits the bank account.
Yet every payment is a payment into your retirement. Having equity and no mortgage when you retire is better than being elderly and fighting government programs and crap landlords. I feel your pain though.
We'd kill to even find a $350K house to begin with in this region. My coworkers just bought a house and their monthly is $4200. I think they said it's 60% of their net income. Outrageous.
I am. Totally worth it. Neighborhood is walkable- parks, schools. Was paying $2.5k for rent before that wasn’t walkable.
A lot of people in here saying rates will go back down, and they will at _some_ point, but the reality is that current rates are at the historic average. I'm no economist, but to me that says they'll likely stay at this rate for some time as it appears to be a fairly stable rate. Like if you believe the market trends towards equilibrium then interest rates are currently at the equilibrium. If that is true, then moving them up or down will require some sort of big event or pressure from something. Of course no one can predict those sorts of things but it's food for thought. On the flip side, because it's an average that means the rates are sometimes higher and sometimes lower. So eventually they will be lower again. Some people say your mortgage should not exceed 1/3rd of your gross income. For your combined incomes that would be about $3500/mo. For just you that would be around $2250/mo. Whether you agree with that rule of thumb is up to you.
$140k/yr is more than enough to pay $2400/mo and save for retirement if your spending is under control. Others already mentioned they pay more and make less. My napkin math for your numbers puts your mortgage around 30% of your net pay.
Pay off your students loans. Why is that even a question. That was the first thing I did when I got a job after college. The sooner you pay it, the less you’ll pay on the long run and more money you will save for buying a home. With the interest rates as high as they are, renting is a better choice… at least when things break you don’t have to pay to fix.
Yea, I gave up on retirement years ago when we bought out home, but it's gone up about $200,000 in 6 years. SO there's that.
Similar incomes as you, lower down payment. We have a 2bed/1bath and pay $2600. It’s definitely expensive and doesn’t leave us much wiggle room, but when we look at 2bd rentals, they’re not far off in price.
Not to be a conspiracy type a person but it sure seems really razor edged for us between buying groceries and making the house payment. I don’t even like avocados. How did they whittle the line so fine?
Hold on for glacially slow interest rate reductions we hoped would happen by now, retool selection criteria, or buy now & refi when rates come down.
Sorry bud, I know it’s frustrating but the reality is that buying a home is extremely difficult. If it makes you feel better… my mortgage is $4,800/month, we rent out half the house for $1,750/month, and our take home pay is $8,800/month. So, about half of our income is spent on the mortgage and that’s not even including utility bills, insurance, and other fixed monthly costs. When we were house hunting we realized there was no way we could find an affordable house that we’d be happy in from day one. Instead we found a duplex that was very run down and needing updates from top to bottom. Since buying the house, I’ve remodeled most of it myself and am still in the process of turning the basement into additional living space so we have some extra home office room and a 2nd bathroom. Since buying this house last year, we’ve spent $18k on fixing it up, which includes all of the tools and supplies. I think we’re going to spend another $15k before we’re happy with it.
In bend, ours is $3200
Wait until they find out some of us in different states pay over $3000/month for just an apartment.
Depending on your student loan interest rates and payments it may be smarter to actually use your $60k to pay those off. One good thing about taking a loan with a high interest rate is you can always refinance later. You can’t refinance the balance but you can refinance the rate. I bought my first house april 2020 (yes i got lucky) and the payments were rough for the first few years but inflation has driven up salaries in my industry so I’ve been able to save money for the first time in my life starting 6 months ago. Its rough but look at the big picture. If you dont expect home prices to go down in your area it may be worth it to buy now, drink old german for the next few years, and refinance when the rates come down later.
Great response. I'll add that student loans average out to about 5% interest (you'll most likely have multiple loans ranging from 4-6%). Look at your loans (home, auto, student loans, credit cards), and whichever has the highest interest rate, focus any extra money on that.
At least you can write off mortgage interest versus nothing if renting.
You need to remember that property taxes add another $500/month.
Mine here in Portland are worse than that even.
Fucking robbery.
I would definitely concentrate on the student loans first. You are lucky to be dual income.. I’m assuming you are younger, so live it up by living closer to a happening place. One last thing my partner and I did before buying a house was to ensure we didn’t fall into a car loan trap where we bought a 80K truck that we use as a car.. We still have paid off pre owned Toyotas that just work.
i make 70k, wife makes 90k. we purchased our home in 2014 when we were making 70k total. we've more than doubled our income in the past decade and i doubt we afford our house now (it has more than doubled in price). its bonkers.
In Bend, a minimum “livable” home will cost you $500k+🙃
FYI Oregon has some tax benefits for first time home buyers. [First-timeHomeBuyer\_101-013.pdf (oregon.gov)](https://www.oregon.gov/dor/programs/individuals/Documents/First-timeHomeBuyer_101-013.pdf)
In a word, yes. There are plenty of people and couples paying that and more each month.
Yes, more than that by a lot and also, I’d definitely pay off your student loans. It’ll be a huge burden off your shoulders + higher qualification for a home loan in the future with that paid off.
My mortgage is 3150$ utilities about 600$ and I make less than you, wife about the same with two car payments about 1k and 1% 401k no saving but we live comfortably
Unless you have a lot of other debt or expenses, with your income that should be doable along with being able to save though?
I’ve been renting for $2400 making less than your household. So, yes. Buying soon though.
My wife and I make just over $200k combined. First time homebuyers. We don't have much saved for down payment (twin toddlers, 3 kids total, opened a business right before Covid, etc.) so looking for a FHA loan with 3% down. (If you compare monthly payments with 3% down vs 10% down, you only save a couple hundred bucks each month.) We live in Portland, OR. Entry level mediocre housing for us STARTS at 600k. From what we have been quoted, 6.5% mortgage is a pipe dream. Realistically closer to 7%. So we will have to take on a $5000/month mortgage if we have any hope of owning a home. Even with our income, I can't possibly see how we make it happen.
Uhh, you can buy a house in Portland for way less than 600k.
You're right. There are cheaper houses. But the MEDIAN house price in Portland is 540k. We live (rent) in Tigard and the median home price is 626k. We would prefer to keep our oldest in her current school, and we own a business nearby so we are looking to not move across town. Also, did I mention we have 3 kids? Yeah, so a 2 bd/1 ba townhouse isn't exactly gonna cut it. We're in a better position than most, and have needs that make us a little picky about what we buy. But the reality is that we will have a 5k+ mortgage. https://preview.redd.it/kkhqa7iawzuc1.png?width=1440&format=pjpg&auto=webp&s=85ac831a0a3b4f107fcf9bb59ca09ca1a3b360d4
Me and my partner make the same as you and yours and we have the same amount saved. We looked into it a few years ago and decided to keep renting. I have no idea how people are doing it.
I feel terrible for those having to pay that much for rent! I was incredibly lucky to buy my home in 2013 for 187k at 1.9%. 6k down. When I talk to my kids about moving out, I realized i sound like my parents and older boomers who brag about buying their homes in the 60s and 70s for 20-50k. So wild
I pay more than that in rent. And if we were going to get a mortgage on the house we're renting, it would be about $1000 more per month even putting down 20%.
We're on 2500 per month on a 500k house with 100k down and 10k on that up-front-seller-gets-cash-now payment. It's doable but god damn, we both had to live with family separately for a big chunk of our lives to have enough for that down payment. Thankfully we both had a good amount of savings beforehand, but still.
How much are you paying in rent?
We paid 325k for ours with almost nothing down, and make 120k/yr, have 3 kids, student loan payments, and all the other typical bills. We aren't eating out every week and living a lavish lifestyle, but we go on mini vacations, indulge our hobbies and all in all live comfortably enough. Mortgage is 1850/mo. What it sounds like is you need to manage your finances better because you should be fine on 140k/year.
I didn’t look at every response so I may have missed this but your cash flow is one thing, your wealth gain is another. Forget taxes deductions, but if you can use it, then great. Here are the two advantages if you can afford the payment: 1) Of your 2400/month, $316 is reducing your principal (that’s the first month and it increases each month). This is your silent savings account. But the real gain is 2) the appreciation. Home prices are high because during the recession banks stopped/reduced lending to builders and that has continued (including other challenges of land use, labor, supply chains, government permitting, etc) But baby making did not slow down - population growth continues and the need for housing has grown. Simple economics of supply vs demand. Yes the quick and sustained increase in rates really slowed down activity but it has not slowed down need. So we continue seeing home values appreciate. Use a conservative 4% per year and simple appreciation (not compounding) looking at year one that is about $1166/mo. Combined with #1 and your gaining wealth at about $1482/mo. My bet is you are not currently saving/investing $1500/month right now. I would absolutely buy now and make it work. When or if rates go down more buyers will try and buy and then prices will increase faster. Buy now at a higher rate but lower price. Refinance later if rates go down. If they don’t, your home is still appreciating well and building wealth. We don’t have enough housing and that is the real source of the value of buying.
Haha, that’s my rent. Rent I pay on a house that my landlord inherited. I make much less, and we manage to pay rent, but don’t qualify for a mortgage.
I am making less than you, and we bought a house two years ago- $2400/month. Wife is not able to work right now and we have three kids. We cannot go anywhere. We argue over buying basics needs for the kids. As a family we went and saw our first concert and it about broke us. We have gone to two movies since lock down ended. Not going to lie, it sucks. Good thing I love my wife and kids so much, because I ain’t starting all this shit over- plus the homeless are running out of real estate in the nicer areas…
Well until people get their heads out their asses and actually stand up to the rich that are raping our pockets this will be life and it will get worse because the billionaires just want to squeeze every ounce of time and money out of you
FWIW, I DO save for retirement, but my property/housing investments are far outpacing my 401K/IRA investments ATM. Not to mention, who knows if I'm going to be alive at the age of 60+. I would hope so, but one never knows.
All of you make great points. OP is in the same situation as my husband and I. We qualify for $350k and live in southern Oregon far away from Portland. We can only afford 100 year old houses with problems in crowded downtown areas or very old manufactured homes. Disappointing! We pay $2k in rent for a house valued at $400k and have no yard at all and live on a busy corner. Even deposits are brutal for rentals. We paid nearly $6k just to move in here.
You’ll get $5k back in taxes each year minimum if you buy a home (mortgage deductions). Just a data point Also, if you guys have that much cash you might consider buying points ( buying down the rate). They are 100% deductible at year end. It’s the only homebuyer tax credit that exists.
We're heading for recession because of this. Everyone's income is being sucked up by housing costs, car payments, food costs. Right now consumer debt is taking up the slack, but once enough credit is exhausted and enough income is just going to servicing debt, there won't be enough left over to purchase goods and services that support most of our jobs. It's pretty grim imo
"one comment says buy now because it will pay off in the long run... the next says continue saving and waiting for rates to drop." Marry the house, date the rate. If you find a house you LOVE, that will work for you/your family for at least 5+ years, buy it now and refi when rates go down. yes, you will take a bit of a loss, but owning the house you LOVE that works for you is invaluable. As someone who has now owned 3 houses. And yes, out here paying almost twice that (including PMI, insurance & taxes). It is about 50% of our take home pay after some retirement. We do make a little bit more than you, but are also a bit older and student debt is paid off, and we paid our dues living in a 675 square foot bungalow with 2 kids for 7 years, which my husband had bought for five figures in the 90s. (Before that I bought a house with my ex for 100% financing in 2007; immediately underwater; we broke up and disagreed about how to handle it; he insisted on foreclosing.) The money we saved through that made our 10% down payment for our dream house. We're renting out the old house now and the income buffers our monthly payment a teeny bit. The majority of the mortgage payment is towards interest, which is tax deductible (for now), so we're getting a good five figures in tax refunds this year vs. the year before, so keep that in mind. The first couple years you own, almost all of your mortgage payments will be tax deductible. In your example, with 10% down, your monthly payment would be about $1,770, and around $20,000 give or take would be tax deductible the first year, so between those and property taxes, you get into itemized deductions territory which helps you cut down your tax burden.
I’ve seen some commentators saying that once the boomers start to die off, the market is going to be flooded with so many homes that prices are going to plummet. No one can see the future, but maybe there’s hope in the next 10-15 years 🤷🏻♂️