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sephiroth3650 t1_iyd0wfv wrote

Without really digging into your full budget, all anybody can really say are that general recommendations are that you try to stay at or below 3x your gross annual income with a house purchase. Lately, with the housing boom, I've seen people argue that you can go up to 5x your salary in high cost of living areas. But I still think that compresses the budget a ton. So in your case, without knowing more, I'd say that you should shoot for homes under $500k at most, if you're committed to buying something. That mortgage payment, with $25k down, would generate a monthly payment in the ballpark of $4200. With a $175k combined annual salary, your monthly net income would likely be in the ballpark of $10k. That seems affordable, especially knowing your wife will likely increase her income in the next couple of years.

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Walken_Shoebaru t1_iydfe5w wrote

The multiplier is a function of the interest rate. If it dropped to 5x that had to be with sub 3% rates. You're realistically looking at 3-4x right now.

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sephiroth3650 t1_iydildg wrote

Totally agree. The underlying interest rate is a main factor. A $400k mortgage at 3% comes out VERY differently than one at 8%. Those rules of thumb are just generalizations, and as I said, I don't agree with people pushing that shit to 5x. I would say AT MOST you go 3x.

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Walken_Shoebaru t1_iydjwzh wrote

Definitely. This month the median home could not be purchased by the median household income. Idk how often that happens, but it's the situation we're in.

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