The Housing Market Sucks

I had a tweet go viral this week talking about the housing market. This is what it said:

So, will houses ever be affordable again??

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Let’s look at the numbers:

In 2023, the average starting income for a college graduate is $55,260. This means after taxes, the average college grad is taking home around $3,408 a month.

If we look at the average apartment rent in 2023, it is $1,702 a month.

A quick calculation of $1,702/$3,408 = 49.9% or rounded up to be 50% of their income.

This is crazy. To me, this is not sustainable.

If we look at the housing market, the average home in the US is $416,100. Assuming a 20% down payment + a 30-year 6.75% mortgage, the monthly payments on an average home is $2,160 before taxes and insurance.

Obviously a college grad isn’t buying a $400,000 house right out of school (unless they are making more than the average), but still, the cost of living in the US has grown wild in the last couple years.

For me personally, in just 1 year time, my rent went up 30%. I can tell you one thing, my income did not go up 30%.

So will houses ever be affordable again?

I am not sure. But I can tell you one thing, finding ways to offset the wild price increases in housing, do so.

  • Find a roommate

  • Move to a LCOL area

  • Find a way to increase your income

I wish I had a crystal ball for the housing market, but I don’t. All we can control is what choose to do today. Be smart with your money.

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My Buys This Week:

ETFs: VOO + SCHD +

(x)Tweet of the Week:

I have no words, just frustrating…

Thank you so much for reading & I will see you next week! Until then, keep buying assets & stacking those dividends. 🙂 

- Decade Investor S

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