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Horrible advice
Nobody can afford to live anywhere by the logic you spit, 3 years ago. And still today, the same case.
I dont think any houses exist for anyone making under 75k… in California? Not even a manufactured home nowadays… renting is more expensive.
Based on the median household income by age range and following Dave’s rules here, this woman will never be able to afford a house. You’d have to make about $10k more than the median household in the oldest age bracket to be able to afford one of these houses. He suggest you wait or move. What he doesn’t mention is you will be waiting until you are 45 or beyond (if you sacrifice your life to the grind and make 10% more than the median American at the height of their career) or you will be compensated at a lower rate in a part of the country you “can afford” thus meaning you can no longer afford it.
Dave is from a different time. He thinks this woman is trying to shop for a house larger than what she needs. What he doesn’t realize is that these numbers are for houses that are less than 1,000 sqft, some less than 700 sqft. You cannot go smaller than that, especially with a family.
For reference, in OKC (one of the most favorable buying markets in the country) a house of a similar size will run about $185k. Following Dave’s rules and assuming a 10% down payment, this would require earning the median income for the oldest age bracket in the state and at least $35K in cash for a down payment, closing costs, cash reserves, and any menial renovations you’d want to do.
He’s not realizing that saving for a down payment is essentially impossible anymore. With the rampant inflation in bare necessities and no requisite rise in income to match, money just disappears. Compare the ratio of the cost of one Big Mac to median monthly income in 1994 to the same ratio in 2023. The ratio doubled, from .0004 to .0008. The big mac index is a relatively reliable way to measure purchasing power parity. Apply this same ratio to everything else in one’s life and it becomes clear it’s not an issue of saving money or trying to live beyond your means. People are struggling to live by any means. This is not to mention the explosion in price of healthcare. Having that baby probably ran her anywhere from $10-25k out of pocket.
Many young Americans would rather overpay for a property they can accrue equity in rather than overpay for a property that someone else will accrue equity in. This also ignores the rampant inflation in rent price. The place I lived in in 2022 was $1000/month for a 2 bed room 650 sqft. apartment. That same rent is now $1500. Renting isn’t an option. Buying isn’t an option. Where will we all live?
yeah imagine knowing someone on manhatan Isl
400,000 grand is throw-away money
Money would give a homeless person on-the-street