How much a family of four needs in annual income to afford a single family home

[tbm5690]

So, this article assumes that everyone's first home is median priced, as opposed to being lower than median because it's a starter home? Am I missing something?

Part of the problem might be first time home buyer's expectations.

 

[Chris142]

They must be expecting the California family to be living in Beverly hills and driving a new Tesla and an AMG,

 

[Pew]

Absolutely not $83k in Illinois unless it's each parent. I make that now and sure as heck not supporting a family of 4 with house, car, and childcare on that unless I want to live 2 hours away from work.

Imo, bad graphic since the cost of living within every state is different with city vs suburb vs rural.

 

[SC Maintenance]

So, this article assumes that everyone's first home is median priced, as opposed to being lower than median because it's a starter home? Am I missing something?

Part of the problem might be first time home buyer's expectations.

No starter homes in the good end of town. Its a sort of Triffen's dilema.

The place everyone wants to live because it has great schools and infrastructure, have no starter homes.

If you try to force starter homes into that area, you add too many users to too diluted tax base - because low income folks can't collect the same level of benefit and pay 1/3 the taxes. So the infrastructure and tax base fail. Reference the inter city in any major city just about. Doesn't happen overnight, but it happens.

 

[tbm5690]

No starter homes in the good end of town. Its a sort of Triffen's dilema.

The place everyone wants to live because it has great schools and infrastructure, have no starter homes.

If you try to force starter homes into that area, you add too many users to too diluted tax base - because low income folks can't collect the same level of benefit and pay 1/3 the taxes. So the infrastructure and tax base fail. Reference the inter city in any major city just about. Doesn't happen overnight, but it happens.

I get not settling for a dump in a bad area...I wouldn't suggest that anyone do that just to own a home. I also think that, in general, expectations can be too high for things like amenities and luxuries. Is a couple willing to buy in an area with decent schools, and an older home that could use some updating, or do they only focus on the newest neighborhoods and the best schools and when nothing else will do blame everything and everyone but themselves for not being able to afford "anything"?

 

[PandaBear]

They must be expecting the California family to be living in Beverly hills and driving a new Tesla and an AMG,

BH ain't all that. Try Atherton.

Anyways, average and median is pointless when you try to average Beverly Hill and Stockton. If you average large cities against each other I can understand, but look at Wyoming. Do you think averaging Jackson Hole and the rest of WY together make sense?

 

[PandaBear]

No starter homes in the good end of town. Its a sort of Triffen's dilema.

The place everyone wants to live because it has great schools and infrastructure, have no starter homes.

If you try to force starter homes into that area, you add too many users to too diluted tax base - because low income folks can't collect the same level of benefit and pay 1/3 the taxes. So the infrastructure and tax base fail. Reference the inter city in any major city just about. Doesn't happen overnight, but it happens.

This.

It is impossible to build a good school district with starter home or affordable home neighborhood. It usually have to start with some upper middle class job hub. People tend to move out when the school rating goes downward and people tend to over bid when the school rating goes up. It is a dilemma for policy maker.

 

[PandaBear]

I get not settling for a dump in a bad area...I wouldn't suggest that anyone do that just to own a home. I also think that, in general, expectations can be too high for things like amenities and luxuries. Is a couple willing to buy in an area with decent schools, and an older home that could use some updating, or do they only focus on the newest neighborhoods and the best schools and when nothing else will do blame everything and everyone but themselves for not being able to afford "anything"?

In many area yes. We have seen people remodeling old homes here way more than moving to a lower rating school for a new home. Those 3.5M homes tend to be 40+ years old and often time 50-60 (remodeled and modernized), and those newer homes in lower rating school are likely less than 10 year old.

This may not make sense to a lot of people from Texas who argue that anything below 2000 sqft is a penalty box and they think it is nuts that they can't buy a 2000 sqft home with a 100k job.

In the end we agree to disagree, that's it.

 

[SC Maintenance]

I get not settling for a dump in a bad area...I wouldn't suggest that anyone do that just to own a home. I also think that, in general, expectations can be too high for things like amenities and luxuries. Is a couple willing to buy in an area with decent schools, and an older home that could use some updating, or do they only focus on the newest neighborhoods and the best schools and when nothing else will do blame everything and everyone but themselves for not being able to afford "anything"?

I am sure there are exceptions somewhere, but I have lived in 3 USA top 20 cities, 2 big towns, and now live in a smaller city (Charleston). There are no older, cheaper fixer uppers zoned in the good schools because if there was someone has already flipped it.

I could see it if somewhere was in decline because of a major industry loss or something, but the schools remained good. However in that case jobs might be a problem.

I agree no one seems to want to compromise at all - on either end. I am just happy my kids are in college.

 

[PandaBear]

I could see it if somewhere was in decline because of a major industry loss or something, but the schools remained good. However in that case jobs might be a problem.

School don't remain good for long if jobs is in decline and industry is lost. Parents of good school districts tend to prioritize their own career as well and won't remain unemployed or stay in a bad job market for long.

 

[GON]

School don't remain good for long if jobs is in decline and industry is lost. Parents of good school districts tend to prioritize their own career as well and won't remain unemployed or stay in a bad job market for long.

One only need look at the well above national average public schools in states like Iowa and North Dakota to know that public school issues are not based in industry, nor on wealth. The public school teachers in Iowa and North Dakota likely make significantly less than public school teachers in places like California, Illinois, and Maryland.

It is the values, standards, and sense of community that make public schools in lower cost of living areas like Iowa and North Dakota exceed the national average. Not industry, not money--- it is a passion and driven expectation by the school districts to provide a foundational education experience for the children in these states.

 

[PandaBear]

One only need look at the well above national average public schools in states like Iowa and North Dakota to know that public school issues are not based in industry, nor on wealth. The public school teachers in Iowa and North Dakota likely make significantly less than public school teachers in places like California, Illinois, and Maryland.

It is the values, standards, and sense of community that make public schools in lower cost of living areas like Iowa and North Dakota exceed the national average. Not industry, not money--- it is a passion and driven expectation by the school districts to provide a foundational education experience for the children in these states.

Income is relative. A teacher making the same income in Iowa is going to live significantly better than a teacher making the same income in Los Angeles. What you probably cannot argue is unemployment tend to correlate to substance abuse (they may cause one another but they definitely correlate). I'm not here to change your opinion, just stating the statistics.

You can argue all you want, I can probably dig deeper into your Iowa and North Dakota's best school and compare against your Iowa and North Dakota's worst school and find the same: job opportunities and school ratings correlates. I went to high school in rural Virginia and urban California. I can see the same thing in both places: the good students and drop outs correlates to family's job stabilities in their corresponding area. Obviously the income of the worse off students' parents in urban California is going to be higher in dollar amount than the better off students' parent in rural Virginia.

Please don't mix things up to skew the statistics. I can guarantee you the better school you mention in Iowa and North Dakota is not an area with "jobs in decline and industry lost".

 

[4WD]

Wow, I cared for my parents for more than 10 years. Gimme my money CA!

That’s what I tell them at work now that the new father gets a month off with pay. J/K with them bcs my older benefits are better …

 

[GON]

Please don't mix things up to skew the statistics. I can guarantee you the better school you mention in Iowa and North Dakota is not an area with "jobs in decline and industry lost".

Nothing mixed up whatsoever and not a single statistic taken out of context.

The US spends more per capita, per student than any other nation in the world. Yet, US public school students continue to underperform the rest of the world. So, we can clearly say that the amount of money spent on US public school students is not the reason for poor performance of US students when compared to the rest of the world

The challenge posed to you is to identify and post why, since it is not money, US public school students underperform when compared to the rest of the world, in basic but necessary skills to be a productive person.

 

[PandaBear]

Nothing mixed up whatsoever and not a single statistic taken out of context.

The US spends more per capita, per student than any other nation in the world. Yet, US public school students continue to underperform the rest of the world. So, we can clearly say that the amount of money spent on US public school students is not the reason for poor performance of US students when compared to the rest of the world

The challenge posed to you is to identify and post why, since it is not money, US public school students underperform when compared to the rest of the world, in basic but necessary skills to be a productive person.

As I said before. In my school district we have same spending per student in multiple school yet significant different result. It is not the spending but the parenting. The desire to enter better school ends up causing the home prices to change, not the other way around. You have confused which one causes the other. You can't fix the school without first fixing the parents.

 

[fdcg27]

Ohio emerges yet again as one of the lowest cost states in which to live.
The problem is that the urban areas where the jobs are have much higher housing prices while the rural areas and small towns have much lower housing prices but a relative paucity of decent paying jobs. Housing prices are a reflection of this.
There is often no reasonable commute to a good job from these rural, small town areas. Fifty miles on an interstate is a whole lot different from fifty miles on rural two lanes, and development does follow roads.

 

[SC Maintenance]

Ohio emerges yet again as one of the lowest cost states in which to live.
The problem is that the urban areas where the jobs are have much higher housing prices while the rural areas and small towns have much lower housing prices but a relative paucity of decent paying jobs. Housing prices are a reflection of this.
There is often no reasonable commute to a good job from these rural, small town areas. Fifty miles on an interstate is a whole lot different from fifty miles on rural two lanes, and development does follow roads.

Ohio actually proves my point that all markets are local, so looking at an entire state is a fools errand.

In Ohio nice places with good jobs have expensive housing costs, per you comment. I believe this, matches here.

Yet Ohio has a net population outflow. In any state where the population is decreasing, it would make sense for housing prices to be depressed as a whole, because supply and demand. It just may not be spread around evenly.

Interesting report on Ohio population from the state. Spoiler alert - it doesn't look good.

https://dam.assets.ohio.gov/image/u...f-Ohio-Population-Projections-Report-2023.pdf

 

[SevenBizzos]

$83k is one bedroom apartment level. It's would be hard to afford a home on $83k with $8k in property taxes every year and rising 6-8% annually.

 

[Capt W]

So, this article assumes that everyone's first home is median priced, as opposed to being lower than median because it's a starter home? Am I missing something?

Part of the problem might be first time home buyer's expectations.

Best response yet! People who are actually ready to buy a home would do well to control expectations, don't buy more than they need, and save a lot more than 10% for a down-payment.

And for those in hopelessly expensive areas without commensurate income? It happens. Move. There are always options.

There are some breathtaking waterfront properties on Ocean Drive a few miles from our home. As a retiree I can't afford a $1.5M+ home on the Gulf. What I can afford - and what we wanted all along - is a nice 4BR ranch two miles inland. Close enough to smell the saltwater, yet easily affordable.

Data shows foreclosures are on the rise this quarter. That's probably not due to the savvy financial decisions of affected mortgagees.

 

[SC Maintenance]

So, this article assumes that everyone's first home is median priced, as opposed to being lower than median because it's a starter home? Am I missing something?

Part of the problem might be first time home buyer's expectations.

That is not what the stats in the article say. Its not about first time home buyers, it just in general. The map says that the median family of 4 does not have enough income to pay for the median home mortgage currently.

The question of course is what percentage of the family of 4 should be able to afford a house at all? Should it be the top 50%? Top 20%?

The issue is the American "dream" is built around home ownership, and realistically the only way for a worker to ever accumulate any wealth at all - otherwise the majority of their income goes to housing costs they will never recoup.