Addicting
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I’m averaging 225 with 2 kids and a wife working from home. Single guy, on a budget in an older home, should be close to the 150.
Home purchase
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In fairness though, that example doesn’t include a second income earner either.
RealMuddyboots
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It gets a lot worse on fixed income. Retired 2012, built 2,000 sqft ranch style house on 5 acres with 30x40 pole barn in 2004. It was appraised at $290K in 2004, has doubled easily. No way can afford now. I look at it now as a bank account for emergencies going forward. We also protected the value for son with Trust.
Addicting
Well-known member
It also doesn’t take into account how fortunate a mid 20’s person would have to be. 12,500 in the bank, $25 an hour, and reliable car that’s paid for, no other debt.
Oh and healthy because they are not paying for healthcare.
Straight Arrow
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Lucky to buy a house and acreage on the banks of the Gallatin River in 1975 with a VA loan and a note with the generous seller, then mountain acreage in 1980 that challenged the budget for a few years ... but to buy that property today would require an income twenty or thirty times what was made then.
Addicting
Well-known member
Problem is same as point creep. Wages are not keeping up to the market.
Let’s add a second income but then we used the 12,500 on a wedding. The second person wasn’t as fortunate. They have student debt. Because of an ailment they have to have health insurance. Add a second car but this one has a payment.
Is their $22 an hour really going to help?
Where does this couple live?
(And they both need to have health insurance regardless of current state of health in my opinion).
mevertsen
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Health (or lack thereof) was the single biggest issue when I was working. Trying to keep my sick leave up, then spending a week in a far away hospital, travel expenses, incidental, and then making too much to be able to itemize taxes and get any kind of a break.
Now, we are paying for about half of my health insurance (old contract where I retired from helps with some of it), and with the (likely to be going away) tax credits, about 40 percent of my wife and daughter's health insurance, plus my Medicare, dental and vision for all of us.
Medical costs are significant and the biggest budget breaker over the last couple years.
Total is more than our housing (mortgage, taxes, insurance, power, and water). Propane puts the housing expenses higher. If we loose the tax credits for 2026, medical will be 3 to 400 more per month more than all housing costs.
Sorry about the long post, but I guess the point is, making sure you stay perfectly healthy and have good benefits you can transfer into retirement, or have a significant amount saved to pay premiums, can help the most, IME.
Nameless Range
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Bought a 2.5 acre lot in 2012 for $38,000. Built our 3,600 sq ft house that year for $203,000. Did a lot of the work (wood floors, tiling, fireplace, etc) myself. Total of $241K. Refinanced in 2020 at 2.25% and added 60K to the mortgage to finish the basement and some surrounding concrete.
Lots alone in my subdivision now sell for north of $200K, and comparable listings in our neck of the woods would probably put our home at $700-800K.
If we were starting now as we did then, we would be looking further out, at something less, and probably trying to be creative (build a shop/house, and slowly grow it). I don't think an adventure like that would affect my life satisfaction, though.
No, I could not afford to buy my own house.
Lots alone in my subdivision now sell for north of $200K, and comparable listings in our neck of the woods would probably put our home at $700-800K.
If we were starting now as we did then, we would be looking further out, at something less, and probably trying to be creative (build a shop/house, and slowly grow it). I don't think an adventure like that would affect my life satisfaction, though.
No, I could not afford to buy my own house.
Forkyfinder
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25 an hour isnt making ends meet here in Montana, at least very comfortably. Even in most small towns. Itd probably be tight with 1 person and an apartment. Thats 4300 a month - before taxes. Lookin at under 3400 a month with any kind of contribution to 401k and taxes. Still havent bought health insurance - prob least another 250?
Floating on or around 3k a month net income when a tank of gas, bag of groceries, or a fart and a part at the auto parts store is 100 bucks - and rent here is 1-2k. Its a reality im glad i dont experience.
Floating on or around 3k a month net income when a tank of gas, bag of groceries, or a fart and a part at the auto parts store is 100 bucks - and rent here is 1-2k. Its a reality im glad i dont experience.
Gulf of America
Well-known member
I think expecting every kid in their 20s to move to the midwest if they ever want to own a home is pretty damn ridiculous, and would make the intermountain west a lot shittier place for the boomers who got in when it was affordable.
Addicting
Well-known member
His example was in Indiana. So for 250k there it means more rural than city. There just isn’t high paying jobs in rural areas.
I would imagine, if we move it closer to Indy the wage spectrum and availability is better but the cost to buy a house is significantly higher as well for the same dwelling.
Forkyfinder
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Alternate question - could you afford to build it now? Even if the lot were free?
Nameless Range
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I'm out of touch with building costs, but I'd wager it would be tight. I don't know what 203,000 in building costs in 2012 equal today, but I wouldn't be surprised if it weren't double.
As an aside, I spent the better part of 9 months going to work every day, and then working on the house till near midnight every night. That was with one kid. I've got 3 now, and would prefer to never endure that grind again. Unfortunately, I think folks starting out right now in Montana simply have to lower their expectations, get creative, and work their assess off.
If the United States were a big town, Montana is now perceived to be one of the nicest neighborhoods. Unfortunately for those homegrown to the state, we never have been an economically advantageous place.
Addicting
Well-known member
25 + 22 per hour x 160 hours per month = $7520 gross.
28/36 rule for a mortgage is $2105.60
It would take them both to be able to have enough gross income to qualify for a mortgage on the 250k house. The single income with the down payment would only get qualified to $1120.
There are banks that go higher than the 28/36 rule. Some as high as 43%. That would get the single income to $1720. Still wouldn’t be enough to get a mortgage.
28/36 rule for a mortgage is $2105.60
It would take them both to be able to have enough gross income to qualify for a mortgage on the 250k house. The single income with the down payment would only get qualified to $1120.
There are banks that go higher than the 28/36 rule. Some as high as 43%. That would get the single income to $1720. Still wouldn’t be enough to get a mortgage.
Amen !
You can buy a whole farm with a house in the midwest or parts of the south for what some folks pay for a little home on a small property in high cost of living areas.
There are still lots of sub $100k fixer upper homes available too.
Addicting
Well-known member
Where and will it qualify for a mortgage? Highly doubt it.
Straight Arrow
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It would be nice if HT members would post their locations in upper right hand corner. It gives posts much more context and clarity. Thanks in advance, HT members.
Just did a quick Zillow search in the nearest town to us, pop 18k and very quickly found a dozen available homes for under $100k.
Whole lot more than that available for under $200k.
Some of the $200k homes around here look like what my buddies son paid $800k for in San Diego.
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