[USER]

Hello, i am very frustrated over not being able to afford a house. I live in a VVHCOL. Houses average 1.7M for a 3b/2ba in my area — not even renovated or anything.

I was wondering, how can i even afford to buy something at this point?

28 year old, not married I have a boyfriend who makes more than me, but just pretend we have the same stats so it’s easier to analyze…

annual salary: $175K
HYSA: $70K
BROKERAGE: $55K
ROTH: $100K

CAR: $70K — paid off in full 2022, i regret buything this car at this time…i could have save SOOO much money had i waited.

[Carla]

It’s why I chose a LCOL. Homes of that size go fo $320k for 2200sqft and low taxes. This is after the housing price boom.

Our first home was real cheap and kept moving up for family.

[Sean]

If your car is actually still worth 70k I’d certainly sell that because that means it was an extremely expensive car.

As far as a home, you won’t be able to afford a 1.7 million dollar home on 175k or 350k if you get married and your boyfriend has the same income.

You either rent, or move and buy somewhere else.

[Thomas]

I’m assuming that’s combined numbers for you both….
Move is an option.

Congrats on the RTOH at your age.

You can get a 2/1 home instead. You’re not married, and it appears he ain’t put a ring on it so…. careful.

With that income you can get a 5/4 in Lake County, Florida with 3498 sqft. I know this because I bought it. Just saying. Do your research.

It’s not gonna happen overnight. I looked for 11 months and bought it 18 months old.

[Steven]

Move. This is very easy. Move. Go to a place where $400,000 buys a really nice place and $1.7 million is a real mansion.

this description fits most metropolitan areas in red states.

Most of Texas, Florida, Tennessee, KC, OKC, Omaha, Des Moines, StL…

[John]

I think you’re overshooting by insisting on a 3b/2b. What about a 1b/1b condo first?

[Noa]

Houses average $2.2M where we live. We bought a fixer upper for $750k, bc that was what we could afford (HHI $240k). We are 35/38 married with 2 kids.

I don’t really agree with people telling you to move somewhere cheaper.

If this is where you want to live, just find a way to make it work. A single 28 year old doesnt need 3/2 house.

Buy a 2 bedroom condo. At 28, we were living in a studio apartment in campus housing at my husband’s college and had a NW of 0.

You are far ahead of where we were but you may need to adjust your expectations a bit.

[Michelle]

I used to research for a book author who was a developer. He found that for entry level, it’s easier to start with *buying at entry level*, which isn’t a house.

It’s a condo, townhouse, or small house in a different neighbourhood.

Stay a while and get some equity then sell and move up.

This does mean moving to a less desirable neighbourhood in some cases but it’s a method that works.

[Kira]

We are much further in the game and still rent. Why do you need 3b/2 ba for 2 of you? Start renting a studio.

Also your car is too expensive.

We paid 12k cash for our car 6 years ago.

[Ashley]

You are young. Keep saving. Many people aren’t able to buy a home in their twenties. And if it’s a boyfriend and not husband it doesn’t add in to the equation yet.

I agree that a lower cost of living is your easiest solution.

Maybe explore some areas, see if your company has other locations, look at job listings.

Renovations can be very expensive unless you are handy and have lots of time.

[Christina]

What type of work do you do? Do you work remote or are you used to commuting? What area are you in? I’d look outside your immediate area to see how far out can you afford a home. $1.7M fixer upper sounds like my area in the Bay Area.

I’d not include/consider your boyfriend’s income when it comes to looking at what you can afford to buy.

Yes, combine income to buy if you are married but not if you are just dating.

How much rent do you pay?

RE is not a requirement to reach FIRE and I know a few people who retired early and are perfectly fine with renting.

[Jasmine]

I don’t want to sound dismissive, but choosing to live in a high cost of living area is your choice.

I mean, I’ve always wanted to live oceanfront but I can’t afford it – so I don’t….gotta save.

[Glenn]

$70k for a car in 22 not worth $20k now. $175 a year not bad. Housing look smaller for now you don’t have kids. Get married then look for bigger…

[Cindy]

Where do you live? SF? I’m guessing somewhere in CA. Can you keep saving up for a down payment and possible get a smaller house to start?

Rates will probably drop again by the end of the year.

[Joe]

I can relate on that car line item. dont beat yourself up too much on it. expensive lesson we all needed to learn at some point.

use it as a vehicle to motivate to hustle harder.

pun intended

[Juliett]

You save money. You don’t buy things like a $70k car. You keep driving your trusty 20 year old beater until you buy a house.

No one says you have to buy a house at 28.

Live as cheaply as you can (studio apt) for the next 5 years. Save money.

If you save $80-$100k/year each, you’ll be able to buy a house.

[Jaime]

I’d be very interested in knowing where the VHCOL area is. I live in NYC and buying an actual house in Manhattan will cost several million but you could actually buy a 2BR apartment in nice, safe parts of the Bronx for $200K – $350K (Woodlawn and Riverdale.)

No, it’s not Tribeca but you’re still in NYC with easy access to a huge job market.

I’m sure there are similar options in other HCOL cities.

[Chris]

Honestly the thought of a $1.7M “average” house makes my head spin even as someone pulling in about $50k (gross) per month.
When I was in my mid twenties (I’m 34 now), I considered moving to the DC area.

Problem was, I was already a home owner in NH, and the cost of living in DC is so much higher that I would have had to become a renter.

I stayed in NH and kept buying property and became a millionaire (from a net worth of negative $35k) over the course of 7 years.

I still would not own a property if I had moved to DC, and that is where about a million of my current net worth comes from.

We both have jobs where we can work remotely at least part of the time, and this frees us up to travel to HCOL areas whenever we find ourselves wanting for the appurtenant amenities.

So, we don’t feel that we miss out by not living there full time.

In fact, because our choice of home base allowed us to build a good financial base, we have noticed that we actually get to take better advantage of the amenities in HCOLs than our friends who live there because so much less of our income goes to supporting daily basics.

At any rate, my $0.02 is that the decision to live in an HCOL is financially advantageous for only a tiny sliver of the population (entrepreneurs and the already wealthy who stand to make money through network collocation).

If you are just a worker, you can probably build a higher net worth by moving.

[Mindi]

The vast majority of Americans can’t afford that. Move to a lower cost of living area.

[Jon]

Realize that no one ever FIRE’d from a salary. Find a bigger source of income.

[Sharon]

You unfortunately have 2 options 1. Move or 2. Rent which right now at VVHCOL is usually a better deal than buying now.

Just don’t squander the saving but invest it.

See Ramit Sethi info on buying vs renting.

I would definitely downsize your rental to also have more savings.

[Christine]

You are still young, there is time
You have good savings!
Keep saving for your down payment and don’t buy until you know you can make those payments without a problem

Most people do not buy their first home until they are in their 30s or older

If you are really itching to get a house, move to a lower cost area but you will probably take a pay cut if you change jobs unless you can work your job remotely or find a company that pays the same
Being FI doesn’t mean you have to own, that’s a separate goal

JL Collins calls homes luxury goods and he is right in a way because you still have to pay for maintenance and insurance plus all the regular bills

Being FI is more important

[Isla]

There should be cities nearby that don’t cost as much. For example I work near Silicon Valley.

A lot of coworkers can’t afford that 1.7 million but they are going to places like Mountain House or Lathrop where you can find new construction houses for 600k+ and commute to work.

There’s many outlying cities that are cheaper (ex. Bay Point – 500k, Concord- 600k)

[Author]

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