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The 'old American Dream died,' Realtor details salary needed to buy a home, afford a middle class life in 2024 (finance.yahoo.com)

submitted 2 years ago by Blaze@lemmy.zip to c/personalfinance@lemmy.ml

16 comments fedilink hide all child comments

cross-posted from: https://lemmy.ml/post/10623652

TL;DR: Americans now need to make $120K a year to afford a typical middle-class life and qualify to purchase a home. Minimum.

all 17 comments

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[–] Onii-Chan@kbin.social 4 points 2 years ago

Australian here. That's cute.

:'(

[–] Psychodelic@lemmy.world 3 points 2 years ago

It's kind of awesome that this article is just a summary of a tiktok video

[–] sugar_in_your_tea@sh.itjust.works 1 points 2 years ago* (last edited 2 years ago)

People aren't likely to buy a typical middle class home as their first house, they'll usually start in a starter home/townhouse and then upgrade as their family gets bigger. By that point, their house will have appreciated and they'll have built some equity, meaning they can afford a larger house than if they had been renting.

So while the math may be correct given the inputs, I think the inputs don't make sense for most people.

It's probably okay to stretch a bit (say, 40-50% of income) on the first home, since income will likely increase and the payments will stay mostly flat. Just don't expect to buy a new house, new car, and new furniture all within the first 5-ish years.

[–] yogthos@lemmy.ml 1 points 2 years ago

Welcome to the world that neoliberalism built.

[+] Pohl@lemmy.world -10 points 2 years ago (6 children)

Do a search for homes in your area that are between 50 and 75 yrs old. These are the houses of the American dream. They are small and they are cheap. When I look in my town I see dozens that can be bought for less than 100k. We’ve got housing affordability problems to be sure. But also, a person in the 1960s living on a factory wage would have looked at a modern 3k sq ft “middle class” home and thought that the richest guy in town must live there.

Sure my grandfather raised 5 kids on a GM salary, but he did it in a 900 sq foot 3 bedroom, 1.5 bath house. His house is still standing, Zillow says I could expect to pay 115k for it. The average GM line worker today would turn his nose up at it.

[–] Kit@lemmy.blahaj.zone 17 points 2 years ago (1 children)

Challenge accepted. I ran a Zillow search with your criteria and prices range from $260k for a fixer upper to $390k for a recent renovation. I'm in a major city, but it's one of the most affordable in the US. You must be in the suburbs to be seeing those prices. Also bear in mind that the "Zestimate" has no bearing on reality - you need to look at homes that are actually up for sale.

[–] Winter8593@lemmy.world 14 points 2 years ago (1 children)

The only thing around me that's less than 100k are parking spots...

[–] Pohl@lemmy.world -5 points 2 years ago* (last edited 2 years ago) (2 children)

It’s weird, I didn’t say I found those prices in your town. In MY town a 60s palace is ~ 100k and a middle class home as described by the author is 400k

My point is that what is called a middle class home has slid way the fuck up market since the salad days of the 1960s.

[–] Kit@lemmy.blahaj.zone 9 points 2 years ago

You said they're small and cheap. Small is right, but the household income needed to afford the fixer upper is nearly twice the average household income in my city.

[–] CherenkovBlue@iusearchlinux.fyi 2 points 2 years ago (1 children)

Not sure why you are getting down voted. It's true, house size has inflated significantly, and it drives cost. My first home was built in the 1970s and was 1500 sqft, bought for $136k in 2017 (Zestimate is about $200k now). My current one is about 3000 sqft and it's stupidly big, but it's what was available that's not a total fixer upper.

I saw an article in WaPo the other day about house size and affordability, with one couple having a baby on the way and deciding not to move despite "needing" more space. Their house was crammed to the gills with stuff. So. Much. Stuff. I think removal of a lot of the stuff would help free up living space (so did the WaPo commenters).

[–] Uranium3006@kbin.social 2 points 2 years ago

I just cleaned out my apartment and wow just the old shoes that were trash were taking up so much space.

[–] Boinkage@lemmy.world 12 points 2 years ago

These homes in my area are around $250 -$300k. Is it possible... You live in a relatively inexpensive place compared to the rest of the country? But that would mean... What is true for your immediate area and personal experience isn't true for the entire country... No, that can't be right, that would mean that one person in a small inexpensive town isn't the arbiter of real estate truth in this country.

[–] glimse@lemmy.world 7 points 2 years ago

I've been on redfin every day for the past year and there are no houses within an hour radius of me that are under 250k except dilapidated knockdowns. Then everything 250-350k needs 50-100k in work. It sucks ass.

[–] e_t_@kbin.pithyphrase.net 4 points 2 years ago

It depends on the area. My aunt and uncle in Dallas live in a house from the 70s. Three bedrooms, three baths, maybe 2200 sq.ft. They paid, I believe, $800K for it in (roughly) 2015. Many houses in the same neighborhood are of similar vintage, but the asking prices have only gone up. Values are inflated partially because a lot of buyers have the money to tear down the existing structure and build a McMansion in its place. There are dozens of them in the neighborhood.

[–] Uranium3006@kbin.social 3 points 2 years ago

So....where did all the small and cheap homes go? We're bot complaining because we can't afford mcmansions, we're complaining because nothing's affordable. Even the 1 br condos are $300k and have a $400 monthly HOA fee