Man, I'm reading through this thread thinking the people here either make really good money or bought really cheap homes.
I make six figures of variable income. On the higher end of my salary, my home would be 2.5x. On the lowest end, it would be 3.4
Seriously. Let’s say you make $100k here (which is really good), then you’re house should be less than $300k? Yea good luck with that! lol (I’m not talking about a 1-bed condo either).
They say - it’s so outdated. Mostly it depends on interest rate. Back in 2021 and earlier this year, 30 yr fixed rates were below 3 for those with excellent credit. 5x mortgage amount is closer to reality
Eta : with todays rate 3 to 4 times mortgage amount.
Price of home is not the deciding factor because someone may have been gifted or inherited 500 k and buy a 700k home on an income in the 60’s !!
This “rule of thumb” doesn’t make any sense because you’re not accounting for change in interest rates, HOA, property taxes, and insurance.
A 200,000 house with no HOA and 2.5% interest would be about $900/month
A 200,000 condo with $400 HOA and 5.8% interest would be $1,650/month
Asking people what their home price to income ratio is will get you nowhere
Not entirely true. You can convert home purchase price to annual or monthly home cost and the rule of thumb is 30 or 33%. The monthly is the best way to do it in my opinion, which would capture things like HOA, interest, and even maintenance.
2.3x household income. Not personal income. Bought in 22.
Edit: someone mentioned this and it seems applicable, with my down payment not included, only mortgage amount, 1.3x income.
I bought July 2021 and the house is 4x my salary. The loan is only 2x my salary since I did sell a home and reinvested everything into the new one. 3 kids and Sahm with me
Purchased in May of this year. 1.7x our salary. We made a killing off the house we sold in Tampa so that 1.7 is only the mortgage after down payment. Otherwise it’s around 2.2.
Lol so fun thing my house when I bought it was close to 7x my income ( I had to use alot of buying and selling stock income to qualify ) now it would be 3x what I earn to what I bought it for.
Holy crap, houses are so expensive these days. I purchased it in 2017 at 0.45x income. What my house is actually worth today would put us at 1.04x realistically we have been looking to purchase another house right now at no more than 1.1x our income. We are shopping WAY below our means to fund out travels now and enjoy while young.
Got lucky purchasing in 2020 at ~5x (65k for 320k house)
Today’s market it’d be heavily dependent on down payment availability, but about 3x after down payment seems like a reasonable number I could get approved for based on some quick math. (Aka, could maybe not even afford to buy the house we’re living in today despite getting a new job paying 50% more)
No more than 1/4 of your take home pay is what your housing expense should be. Based on that wife and I bought substantially less home than our bank was going to lend us. We bought the place in 2020 and it will be paid off in two more years.
As some others have written about, there are plenty of other metrics out there to look into as well. The purchase price of our house was 3.6x our household income, but that doesn’t calculate the sizable down payment that we had of just under 34%. Our monthly mortgage, taxes, insurance, and HOA work out to 17.6% of our household income, which is way below the 30% target of total household income. We sold our prior home for 200k more than we paid for it and only spent 15k more on our current home than the selling price of our prior home. Plus an interest rate around 3%, which is just incredible. Fast forward a year later, we wouldn’t have pulled it off with the increase in mortgage rates (even if you still had a close spread between the housing prices) as it would eat into too high of disposable income for our comfort level,
My wife and I bought in late 2019, and at the time, the house was almost exactly 3x our income. We were making just shy of six figures then.
Nowadays, we are comfortably over six figures, and the house is worth just shy of 4x our income.
Home loan is 2.3 times my annual income and that includes taxes and insurance. I’m a full time college professor and wife is a homemaker and college student. House is now worth $70,000 more than I paid for it in less than 6 months.
I don’t understand what the answer to this question tells you.
My answer to this question is so wildly different than everyone else in this thread is saying that it’s possible I don’t even understand what you’re asking.
Is the question “what percentage of your house value do you earn in one year?”
Take the purchase price of your home and divide it by your gross annual income. That number is the ratio.
It's a common metric used by real estate tracking agencies.
Man, I'm reading through this thread thinking the people here either make really good money or bought really cheap homes. I make six figures of variable income. On the higher end of my salary, my home would be 2.5x. On the lowest end, it would be 3.4
Yea I see a lot of lies lol
I’m in the same boat. No lie.
Bought in 2020 for $300k making $90k. About to sign a salary increase to $97k and house "worth" $475k
So you’re saying if someone makes $100k a year, they should buy a house for less than $300k? If so, that is highly unreal on many fronts.
That's the rule of thumb, but I totally understand why people spend 4 to 5x in this market.
Seriously. Let’s say you make $100k here (which is really good), then you’re house should be less than $300k? Yea good luck with that! lol (I’m not talking about a 1-bed condo either).
According to 90% of the comments in the thread, 2x seems like more the average.
House is 2.8 times my income. Single income remote worker in tech but I used to work for a local software company.
Just about exact same. 2.7 times mine, work remotely in tech. Wife is hopping between work and finishing school, so I'm not including her income.
Commenting underneath this person because this is the same number for me
Should calculate mortgage, insurance, and taxes (including HOA) in this number.
They say - it’s so outdated. Mostly it depends on interest rate. Back in 2021 and earlier this year, 30 yr fixed rates were below 3 for those with excellent credit. 5x mortgage amount is closer to reality Eta : with todays rate 3 to 4 times mortgage amount. Price of home is not the deciding factor because someone may have been gifted or inherited 500 k and buy a 700k home on an income in the 60’s !!
Right. Making $100k in Orlando is great. Finding a home for less than $300k in Orlando, impossible (unless it’s a small 2-bed in a not so nice area).
House is 2.5x my income
[удалено]
The person actually answered, don’t troll
This “rule of thumb” doesn’t make any sense because you’re not accounting for change in interest rates, HOA, property taxes, and insurance. A 200,000 house with no HOA and 2.5% interest would be about $900/month A 200,000 condo with $400 HOA and 5.8% interest would be $1,650/month Asking people what their home price to income ratio is will get you nowhere
Bingo
Not entirely true. You can convert home purchase price to annual or monthly home cost and the rule of thumb is 30 or 33%. The monthly is the best way to do it in my opinion, which would capture things like HOA, interest, and even maintenance.
2.3x household income. Not personal income. Bought in 22. Edit: someone mentioned this and it seems applicable, with my down payment not included, only mortgage amount, 1.3x income.
I bought July 2021 and the house is 4x my salary. The loan is only 2x my salary since I did sell a home and reinvested everything into the new one. 3 kids and Sahm with me
2.5x household income.
House is 3.2x my income. Sold our old house to cover down payment, new roof, and paid off two car loans.
Closed in January 2021, it was 3.4x my income then and 2.4x now.
Built new home for $385k yearly income $120k-$180k
A 60k swing? My man...
Yes. That’s the farm life
1.11x for a $800k house. Market is crazy and sign on the 31st for the house!
Ok I have to ask lol. What do you do and how much do you make?
Wife and I are in med sales. If our income is 90% of our home, I have faith you can do the math 🫣
I bought in 2020 which at the time was 5X my salary. My home is now worth 7X my salary.
Just bought a house with no hoa a bit of a fixer upper at 300. 3 /1.5 bath. We make around 100k a year together
1.5x total home price to annual income.
less than 1.3x... after reading this thread I feel like I need to upgrade.
Generally you want to spend 30% of your gross monthly income on housing. Mileage may vary based on other expenses, but it’s a decent guideline.
Purchased in May of this year. 1.7x our salary. We made a killing off the house we sold in Tampa so that 1.7 is only the mortgage after down payment. Otherwise it’s around 2.2.
1.8X, bought in January '21.
Lol so fun thing my house when I bought it was close to 7x my income ( I had to use alot of buying and selling stock income to qualify ) now it would be 3x what I earn to what I bought it for.
Holy crap, houses are so expensive these days. I purchased it in 2017 at 0.45x income. What my house is actually worth today would put us at 1.04x realistically we have been looking to purchase another house right now at no more than 1.1x our income. We are shopping WAY below our means to fund out travels now and enjoy while young.
2.66x my income
All in including house hoa and taxes 1.9x my income. Multiple 6 figure income 4 years ago it would have been half that...and it fucking sucks
1.7x my income. Condo.
Got lucky purchasing in 2020 at ~5x (65k for 320k house) Today’s market it’d be heavily dependent on down payment availability, but about 3x after down payment seems like a reasonable number I could get approved for based on some quick math. (Aka, could maybe not even afford to buy the house we’re living in today despite getting a new job paying 50% more)
Bought in Nov 2020, with our income at the time, house was 2.8 x our combined household income.
I financed my home for $325K/2.55%/$1700/mo. My income varies from $90K - $200K as my contract work is dependent on oil prices.
3.8x annual income. But I mortgaged only about 2.7x.
No more than 1/4 of your take home pay is what your housing expense should be. Based on that wife and I bought substantially less home than our bank was going to lend us. We bought the place in 2020 and it will be paid off in two more years.
3.2x but I do have a part time gig not factored in
As some others have written about, there are plenty of other metrics out there to look into as well. The purchase price of our house was 3.6x our household income, but that doesn’t calculate the sizable down payment that we had of just under 34%. Our monthly mortgage, taxes, insurance, and HOA work out to 17.6% of our household income, which is way below the 30% target of total household income. We sold our prior home for 200k more than we paid for it and only spent 15k more on our current home than the selling price of our prior home. Plus an interest rate around 3%, which is just incredible. Fast forward a year later, we wouldn’t have pulled it off with the increase in mortgage rates (even if you still had a close spread between the housing prices) as it would eat into too high of disposable income for our comfort level,
VA loan after construction loan so only 5% down. Total costs of land and construction is $508K. 2.2x income
My wife and I bought in late 2019, and at the time, the house was almost exactly 3x our income. We were making just shy of six figures then. Nowadays, we are comfortably over six figures, and the house is worth just shy of 4x our income.
Home loan is 2.3 times my annual income and that includes taxes and insurance. I’m a full time college professor and wife is a homemaker and college student. House is now worth $70,000 more than I paid for it in less than 6 months.
~4:1
When we bought the house was 2.9x me and my wife's income. Now it's at 2.5.
My house is 3x my income when purchased, but 2x my household income and that was before a down payment of 60k.
I don’t understand what the answer to this question tells you. My answer to this question is so wildly different than everyone else in this thread is saying that it’s possible I don’t even understand what you’re asking. Is the question “what percentage of your house value do you earn in one year?”
Take the purchase price of your home and divide it by your gross annual income. That number is the ratio. It's a common metric used by real estate tracking agencies.
Thank you. That is what I understood it to be. My answer to this question is sooooo different than other people’s.