Submitted by throwaway83684729 t3_1076hpi in personalfinance
Hey PF - I’m confused by all the conventional wisdom with house affordability. I earn $130k, single income household with a wife and 2 kids (NB & 2yo) in a VHCOL, spend $2700 on rent, and manage to save about $2-3k on any given month in addition to retirement contributions.
I have about $100k saved up for a house down payment + enough to cover fees & a $30k emergency fund, but am stuck mentally against the common sense income %’s for how much should be spent on a house.
Starter 3 bedroom houses 30min - 1hr away from my work are $600-800k, which would be $4-6k/mo for a mortgage. Based on our spending/savings, we should have no problem spending $4-5k on a mortgage while still putting away $1k/mo. However, all the advice I’ve seen is that, at the worst, I shouldn’t be spending more than 30% of my income ($3250) on a mortgage payment.
This disparity is what keeps us from buying a house, and is what has kept us renting for the last 5 years. I don’t really know what else to do to make everything fall within conventional advice for home ownership. I earn more than my peers, and have been rapidly earning more, but I’m fast approaching an income ceiling for my field ($180k), and am feeling like by the time I hit that, houses will be fully unaffordable for even that income.