The Expert Podcast

We've covered this in a couple other videos of how much it takes to buy a house of a certain value where really mom would have to be a millionaire to buy certain houses But here's some math that was done by a third party which validates some of this. how much do you need to earn? To buy a $400,000 house and 400,000 is picked because that's about the median price of a house. And you might be surprised at how much it takes. To comfortably buy a house of that price Let's take a look at the math. According to this analyst…It says. that. Your net take home pay should be between 10 $11,000 per month to four to $400,000 house. As an annual salary. That is between 1 65 and 1 95. Depending on what state you're in and your taxes and other things. So roughly 200 grand or close to it to buy a $400,000 house. 200 grand is a significant income There's lots of people who make that and more, but there's also a lot of people who make less than that. So here's the calculate. The average monthly payment for $400,000 house is 3 0 3 7. That's based on a down payment of 7%, which is pretty low. And interest rate of 6.6 which is probably going to go higher. Tax rate of 1% There's some states that have tax rates of 2%. Homeowner's insurance at one 40 a month That's probably a little bit low. And then PMI of half a percent. it's also based on the idea that your mortgage payment should be no more than 28% of your gross income. So. this may or may not apply to every person If you have a lot of other debts a lot of car payments, Maybe a student loans you might want to make that lower. if you have. Less debt or lower. lifestyle costs You maybe can go a little higher. also the, the mortgage payment for $400,000 house can vary depending upon if you have a bigger down payment or if you're able to get a lower rate But what about rates or rates? likely to keep climbing before they start heading lower? The federal reserve is probably going to announce more rate hikes. It's possible They will get closer to 9% though before they come down they will never be where they were in 2021 So anybody waiting for that three or 4%? That's probably not going to happen anytime soon. What about the pricing How was 400,000 compared to what you can expect to buy a house for Well that's almost exactly what the medium home sales price was. In 2022 nationwide Now there's some markets that, it's easy to find a house for under 400, but there's a lot of places that 400 gets you Nothing. And most of the Metro areas in California you can't find anything for 400,000, much less livable. And in some areas you can maybe find something in the threes but it may not be something substantial So this gives you some idea of what you're looking at in the housing market. And like we've said before, Yeah. There's many examples of being able to get a house in the two to two 50 range. That's at least livable. That'll get you out of rent. And start that ladder of climbing of home equity and home ownership.