So over $36k a year. I'm in Washington, so no income tax. Let's say $100k income, single person. No pre tax deductions and you'll be bringing home $6200/mo. So over 50% of your take home goes to mortgage alone.
In your example, your home prices were roughly 3x-4x your annual income. Compared to your example of prices being 5x.
Also don’t forget about the home mortgage tax deduction, that plus inflation really impacts the cost of home ownership.
I'm in California, so that's pretty much the bare minimum. Maybe if I go way out to the high desert area (we're talking 70+ miles from downtown LA), I see more 300-400k houses for 2 bed/bath. In my area (which is still pretty far from Downtown) it's 600k minimum.
That’s the thing, if it’s a trivial expense then who cares, but when there’s more affordable options it’s hard to imagine why stretching yourself buying a house at that price would be a good idea.
255k for a 1,952 square foot place in Harrisonburg, VA 22802 is far more representative of most of the US’s housing prices. It’s a modest 50k population university town 130 miles from DC so not in the middle of nowhere but still cheap. https://www.redfin.com/VA/Harrisonburg/1036-Meadowlark-Dr-22... Plenty of places listed for less than that or far more, but in general there’s still a lot of options under 300k.
A house is a multi decade investment. Why would I buy a single shack if I want to perhaps have a family one day? Especially in this market? I don't want to own a house for the sake of ownership.
And yes, like anything else in life, you have super cheap deals and super expensive. I was using a very rough median pricing. Especially since the lowest cost houses likely mean you need to do the most work on it. I'm not a carpenter nor a house flipper, so that's not of interest to me (and I imagine many other people in tech).
Median pricing downtown is 1m for 2 Bed/bath. I feel the cost going down to 40-50% for going beyond what is considered LA county (which is huge, but not a 70 mile radius) seems to make sense. I suppose you can keep looking northeast towards Death Valley and find something at 200-300k, but you're legitimately getting towards food desert[1] area at that point. The high desert area is already pretty rural as is, unless you are a true hermit (or a stargazer) I can't imagine going further out and making it a 20+ mile drive to any and everything.
Anyway, buying a house can be an investment but living in a larger one than you need is wasting a productive asset. If you have a 4 bedroom house you can rent out for 4k/month then living in it is costing you 4k/month the same way renting a place for 4k would be. There’s nothing inherently wrong with buying an investment house, but you shouldn’t be out anywhere close to the full monthly cost.
You don't, but I'm talking about a very specific area of a very specific state (one larger than some countries) in a very specific location. One where I was in fact raised. You are free to instead go directly North to Bakersfield where prices rise slightly, or west to Thousand Oaks where prices go back to LA prices. I simply don't recommend East/NE of the high desert unless you are a huge fan of tumbleweeds and dust storms.
>buying a house can be an investment but living in a larger one than you need is wasting a productive asset
I don't really consider an extra room a waste. Even if I end up alone I can use that room as a gym or an office or just as storage (storage costs are also way out of whack these days. Owning an extra room is legitimately cheaper).
There's also the fact that half the rooms isn't equal to half the cost. It's more cost effective to add an extra room if you anticipate a family.
By waste I simply mean it’s consumptive. It’s obvious when you’re spending well above the norm on rent, but it doesn’t slap you in the face in the same way when buying a larger house.