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Family needs to make $107,700 a year to own a home. Apartment in a moderate-cost area is about $70,000-$100,000/year. Median salary in the US is $59,300 What

by DonnyV 2y ago

Family needs to make $107,700 a year to own a home. Apartment in a moderate-cost area is about $70,000-$100,000/year. Median salary in the US is $59,300 What considered poverty level in the US for: 1 person: $15,060 2 people: $20,440 3 people: $25,820 4 people: $31,200 According to recent data from the U.S. Census Bureau, around 50% of Americans make $70,000 or more annually. That means about 50% of the US can not afford a place to live.

NikolaNovak 2y ago
I'm misinterpreting something here: "Apartment in a moderate-cost area is about $70,000-$100,000/year." Are we saying apartment rental is between 5 and 8 thousand dollars a month? What is the definition of this moderate cost area??
- DonnyV 2y ago
  This is to own an apartment or condo. What your mortgage is a month is going to be different for everyone depending on what they put down.
  - NikolaNovak 2y ago
    Right. I was born in Europe and am still struggling with North American cultural assumption that "place to live" == "own property". Back to the original post I think there are several statistics that apply to different geographical areas or demographics in the same post, leading us to conclusion that half the continent is out on the street, and demonstrating risk of back of the napkin calculations on policy decisions, even if we assume good will and honest effort :-/
    - bpt3 2y ago
      To be clear, the parent poster is not using these terms as a native American would either. He's arguing below that about 50% of the US population is homeless, which is not even close to accurate.
    - gs17 2y ago
      This isn't a "North American cultural assumption", I'm pretty sure most Americans would take that to mean rent too.
    - coliveira 2y ago
      It is not the same, but these are proxy numbers, because rental costs will increase along with owning costs.
    - DonnyV 2y ago
      You have to understand unlike in Europe. We have no safety net. Most peoples whole savings is their home. So owning your home is a big part of having something to retire on and pay bills.
      - BytesAndGears 2y ago
        Actually, very common in some European countries as well. In the Netherlands, you aren’t taxed on your primary residence, but all other wealth has an approximately 2% annual wealth tax. This makes it challenging to accumulate wealth through any means other than a primary residence, which was many of my coworkers’ primary way of saving. Granted, they also have mandatory pensions, which can give you a good income in retirement, but that’s different than wealth accumulation
      - dukeyukey 2y ago
        > We have no safety net Bullshit. American unemployment pays consdeirably more than UK unemployment. Throw on food stamps and housing assisitance on there, and the US might still be below the more generous European countries, but you definitely have a safety net. > unlike in Europe... So owning your home is a big part of having something to retire on and pay bills So what, like the UK? And Ireland? And argaubly all of Europe east of Germany and in Scandinaivia, all places where home ownership is comparable or greater than the US?
        DonnyV 2y ago
        Unemployment is different in every state and is pretty short. I know in NJ its only for 26 weeks. Plus this isn't used for retirement. Have you ever tried getting food stamps or housing. Lets just say its not very easy. Also its setup so that as soon as you start getting a little ahead its taken away. So you end up right back where you started.
        dukeyukey 2y ago
        New Jersey unemployment is 60% of your weekly earnings to a max of $713. UK unemployment (called Jobseeker's Allowance) is up to £90.50/week. $115.30 in dollars.
  - chgs 2y ago
    Median house price is 347k. I find it hard to believe a mortgage on that is 60k a year.
    - bdangubic 2y ago
      $374k at say 7% interest with average property taxes and insurance will be around $4.2k/month. not quite $60k/year but not too far off…
      - dnissley 2y ago
        4.2k * 12 months = 50.4k -- so 20k under the bottom of the large range previously posted (70k-100k/yr)
      - kelnos 2y ago
        I think your number is a bit high. Looking at a few calculators, even if I push the property tax & insurance numbers quite a bit higher than I think is credible, I can't get the numbers past $3800/mo or so. More reasonable seems to be around $3400/mo. So that's $40k-$46k/yr, well below that overinflated $70k-$100k figure quoted upthread. Also your math is off: even at your $4200/mo estimate, that's $50,400/yr, nowhere near your "not too far off" $60k. And that puts it at 30%-50% below the $70k-$100k range, which makes that range laughably inaccurate.
      - chgs 2y ago
        Current 30 year rates about 6.5% which would mean about $2150 assuming about 10% down payment and 340k mortgage over 30 years. That would mean you are paying $2k a month in tax and insurance?!
- datadrivenangel 2y ago
  Downtown SF or NYC.
revnode 2y ago
> That means about 50% of the US can not afford a place to live. So 50% of the US are homeless?
- DonnyV 2y ago
  In some form or fashion yes. Theres a reason why there are so many homeless tent camps everywhere. These people are not choosing to be homeless. They just can't afford a place. But remember a lot of them still have jobs. At Walmart, Amazon Warehouses, etc.
  - aliasxneo 2y ago
    > In some form or fashion yes Can you clarify? Because I'd find it hard to believe that half of Americans are literally homeless. It might make more sense if you're referring to home-owners.
    - redeux 2y ago
      “Half of Americans are facing housing insecurity” is probably closer to the intent but I don’t know if that’s actually true.
  - chgs 2y ago
    170 million people living in tents? Wow.
  - kelnos 2y ago
    Pretty sure half the US isn't living in tents. I feel like I'd notice that, especially living in a city with a larger-than-average homeless population. I agree that homelessness is a problem, but you appear to be arguing in bad faith. If 50% of the US actually "can't afford housing", we'd have $170M people living in tents, and that is demonstrably not the case. I would believe a claim that states that a large portion (maybe 50%, maybe more, maybe less) of the country are facing financial insecurity that makes them feel like their housing situation is precarious. But that wasn't the claim put forth upthread.
dkasper 2y ago
You’re forgetting lots of people rent. Lots of people can’t afford to own, and almost all of them rent. The other factor is dual, or even 3+ incomes in families living together.
- bdangubic 2y ago
  lots of people that can afford to buy many houses rent because it makes very little financial sense (for those who understand slightly-above-basic-math) to own a house in the US
  - forgetfreeman 2y ago
    I wish more people in the US believed that, it'd make my retirement planning so much easier. Incidentally if that statement were even vaguely accurate private equity would most likely not find residential real estate an attractive investment, which they most certainly do. All of my real estate has doubled in value over the last 5 years and through the magic of depreciation I'm on track to get back more in taxes over a 20 year span than the original purchase price of my investment property. Home ownership: shit makes perfect sense to me.
    - kelnos 2y ago
      I think GP was talking about owning a primary residence, not owning investment properties. (I still don't agree with GP's thinking or math, but I don't think you're arguing against what they actually said.)
      - forgetfreeman 2y ago
        I'm talking about owning both primary residence and investment property, both are great.
  - kelnos 2y ago
    That thinking is very location-dependent. Cities and counties across the US vary wildly on the ratio of cost-to-rent to cost-to-own, and that number is sometimes less than and sometimes greater than 1, depending on where you are. A big problem with renting is the capriciousness of the rental market in many places, which you can't solve with "basic math". That plus the availability of the 30-year fixed-rate mortgage in the US means that rental costs can be much more unpredictable than buying. Some people will -- very reasonably -- pay a bit more for peace of mind. And that's before we get into the topic of no-fault evictions, and how that can wreck a family's housing situation, sometimes with not too much notice. Renter protections in the US are not great compared to in many other places, and that can make renting unpredictable and more "costly" in other ways.
hombre_fatal 2y ago
That's not a measure of an economy though. Housing and especially dense affordable housing isn't widely built in the US and the supply is artificially constrained, usually by NIMBY politics.
- reverendsteveii 2y ago
  you're right, it's a measure of access to life's necessities. the point of the comment is that access to life's necessities isn't tied to the economy.
glandium 2y ago
> Median salary in the US is $59,300 > around 50% of Americans make $70,000 or more annually. Wait a second. "50% of Americans making X or more" means X is the median. Does that imply a ton of people are working more than one job?
- rgblambda 2y ago
  Sometimes the discrepancy can be due to non salaried workers (e.g. contractors, business owners) earning more than the median salary.
9rx 2y ago
> Family needs to make $107,700 a year to own a home. I don't see how that computes. The internet suggests that, on the high end, a family will spend around $10,000 on home repairs, maintenance, and insurance, which is in line with my experience. So almost $100,000 in yearly property taxes for a typical family home? Not a chance. I suspect you are thinking of buying a home rather than owning a home, but homes are bought with wealth, not income, so an income figure here doesn't make much sense if that is, in fact, what you are thinking of. If that is not what you are thinking of, I, for one, don't understand what you are trying to say. This figure doesn't seem to have any applicability.
- nomel 2y ago
  > but homes are bought with wealth, not income What do you mean by this? In the US, over 60% of people have a mortgage [1], which almost always means it's coming from some percentage of their income. When you get a home loan, the banks only real concern is your credit score and income. Anecdotal, but I don't know a single person that doesn't have their monthly mortgage scaled to their income, since I don't know a single person under 60 without a mortgage that's coming from their income. [1] https://www.investopedia.com/percent-homeowners-have-mortgage-8680325#:~:text=Key%20Takeaways,of%20homes%20were%20owner%2Doccupied https://www.investopedia.com/percent-homeowners-have-mortgag....
  - 9rx 2y ago
    > In the US, over 60% of people have a mortgage [1] A mortgage is the rental of wealth. It is independent of the home. But, even if we want to conflate them for the sake of discussion, it is still dependent on many variables that does not round to a single number. The rent on a $20,000 mortgage is quite different to the rent on a $200,000 mortgage. Two buyers buying identical homes for identical prices, but who come with different amounts of wealth, will have very different rental payments. A single number is meaningless, even if we assume 100% of people are paying mortgage rent. But, as you point out, ~40% of the people don't have a mortgage, and therefore have no such cost to begin with. The idea that they also need $107K doesn't make any sense.
Buttons840 2y ago
Median age of first time home buyers is now 38, up from 35 last year.
- kelnos 2y ago
  Ok, but what's the longer-term trend? Those two number don't mean much alone.
  - DonnyV 2y ago
    10 yrs ago it was 31
    - Buttons840 2y ago
      It's also a number approaching an asymptote, it can't grow exponentially, or even linearly, so increasing 20% is a big increase.
kelnos 2y ago
> Apartment in a moderate-cost area is about $70,000-$100,000/year. That doesn't even pass a minimum-effort sniff test. I live in one of the most expensive cities in the country, and I'm in your quoted range for a 4-bedroom condo. My sibling lives in a more affordable, but desirable, area and spends a little less than half of what I spend a year, for a single-family home with a good-sized yard that's more than twice the size of my condo. (And they bought last year when interest rates were high.) Your own stats don't even make sense. You claim it costs $70k-$100k/yr for housing, but that to afford a home, a family needs to make $107k/yr? That doesn't make sense. If housing costs that much, that family needs to make north of $200k/yr to afford it. Where are you getting this information?
rascul 2y ago
> Apartment in a moderate-cost area is about $70,000-$100,000/year. No way that's correct.
- DonnyV 2y ago
  Taken from ChatGPT that took it from Fed stats.
  - rascul 2y ago
    Ok?
  - prmoustache 2y ago
    Last timeI asked ChatGPT for something: - it invented numbers (they were erroneous) - it told me that given the nature of LLMs he cannot name his sources nor give me a link to it. This make your statement quite unlikely. Can you link us to the stats directly?
    - DonnyV 2y ago
      https://finance.yahoo.com/news/average-apartment-costs-46-us-110217191.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAK3UEwRSQVCL2Ji_g5UdDbmdjBG_GQvbYHP3YRSn1oXRwLnC_eqbnsDYnFS--GjGjvVteImnu-Unv-rTsJrGTgTGwgTJ5IoK2D1VWIEcLd-7CVjJ_j2DY17IcN2-uSmefKmq89tb-HlW-UEuJiZlW3TuMfiGznrcliaHcYzupSBh https://finance.yahoo.com/news/average-apartment-costs-46-us...
      - rascul 2y ago
        Those numbers are much less than you said. Not sure if I would call all of those moderately priced areas, either. Some of those at least are the most expensive in the country.
DonnyV 2y ago
f.y.i. All stats come from the Fed and were dug up by chatgpt. Also all prices are median, not averages.
- signatoremo 2y ago
  Can you provide the question you asked ChatGPT? Because the number is wildly inaccurate. I own a home and I pay less than $15,000 a year. Tax and maintenance. In a high cost of living area. HN love to look down on ChatGPT, yet are willing to hide behind it when it’s convenient.
  - DonnyV 2y ago
    "how much does a family need to make to own an apartment in the united states"

by DonnyV 2y ago

NikolaNovak 2y ago

I'm misinterpreting something here: "Apartment in a moderate-cost area is about $70,000-$100,000/year." Are we saying apartment rental is between 5 and 8 thousand dollars a month? What is the definition of this moderate cost area??

DonnyV 2y ago
This is to own an apartment or condo. What your mortgage is a month is going to be different for everyone depending on what they put down.
- NikolaNovak 2y ago
  Right. I was born in Europe and am still struggling with North American cultural assumption that "place to live" == "own property". Back to the original post I think there are several statistics that apply to different geographical areas or demographics in the same post, leading us to conclusion that half the continent is out on the street, and demonstrating risk of back of the napkin calculations on policy decisions, even if we assume good will and honest effort :-/
  - bpt3 2y ago
    To be clear, the parent poster is not using these terms as a native American would either. He's arguing below that about 50% of the US population is homeless, which is not even close to accurate.
  - gs17 2y ago
    This isn't a "North American cultural assumption", I'm pretty sure most Americans would take that to mean rent too.
  - coliveira 2y ago
    It is not the same, but these are proxy numbers, because rental costs will increase along with owning costs.
  - DonnyV 2y ago
    You have to understand unlike in Europe. We have no safety net. Most peoples whole savings is their home. So owning your home is a big part of having something to retire on and pay bills.
    - BytesAndGears 2y ago
      Actually, very common in some European countries as well. In the Netherlands, you aren’t taxed on your primary residence, but all other wealth has an approximately 2% annual wealth tax. This makes it challenging to accumulate wealth through any means other than a primary residence, which was many of my coworkers’ primary way of saving. Granted, they also have mandatory pensions, which can give you a good income in retirement, but that’s different than wealth accumulation
    - dukeyukey 2y ago
      > We have no safety net Bullshit. American unemployment pays consdeirably more than UK unemployment. Throw on food stamps and housing assisitance on there, and the US might still be below the more generous European countries, but you definitely have a safety net. > unlike in Europe... So owning your home is a big part of having something to retire on and pay bills So what, like the UK? And Ireland? And argaubly all of Europe east of Germany and in Scandinaivia, all places where home ownership is comparable or greater than the US?
      - DonnyV 2y ago
        Unemployment is different in every state and is pretty short. I know in NJ its only for 26 weeks. Plus this isn't used for retirement. Have you ever tried getting food stamps or housing. Lets just say its not very easy. Also its setup so that as soon as you start getting a little ahead its taken away. So you end up right back where you started.
        dukeyukey 2y ago
        New Jersey unemployment is 60% of your weekly earnings to a max of $713. UK unemployment (called Jobseeker's Allowance) is up to £90.50/week. $115.30 in dollars.
- chgs 2y ago
  Median house price is 347k. I find it hard to believe a mortgage on that is 60k a year.
  - bdangubic 2y ago
    $374k at say 7% interest with average property taxes and insurance will be around $4.2k/month. not quite $60k/year but not too far off…
    - dnissley 2y ago
      4.2k * 12 months = 50.4k -- so 20k under the bottom of the large range previously posted (70k-100k/yr)
    - kelnos 2y ago
      I think your number is a bit high. Looking at a few calculators, even if I push the property tax & insurance numbers quite a bit higher than I think is credible, I can't get the numbers past $3800/mo or so. More reasonable seems to be around $3400/mo. So that's $40k-$46k/yr, well below that overinflated $70k-$100k figure quoted upthread. Also your math is off: even at your $4200/mo estimate, that's $50,400/yr, nowhere near your "not too far off" $60k. And that puts it at 30%-50% below the $70k-$100k range, which makes that range laughably inaccurate.
    - chgs 2y ago
      Current 30 year rates about 6.5% which would mean about $2150 assuming about 10% down payment and 340k mortgage over 30 years. That would mean you are paying $2k a month in tax and insurance?!
datadrivenangel 2y ago
Downtown SF or NYC.

revnode 2y ago

> That means about 50% of the US can not afford a place to live. So 50% of the US are homeless?

DonnyV 2y ago
In some form or fashion yes. Theres a reason why there are so many homeless tent camps everywhere. These people are not choosing to be homeless. They just can't afford a place. But remember a lot of them still have jobs. At Walmart, Amazon Warehouses, etc.
- aliasxneo 2y ago
  > In some form or fashion yes Can you clarify? Because I'd find it hard to believe that half of Americans are literally homeless. It might make more sense if you're referring to home-owners.
  - redeux 2y ago
    “Half of Americans are facing housing insecurity” is probably closer to the intent but I don’t know if that’s actually true.
- chgs 2y ago
  170 million people living in tents? Wow.
- kelnos 2y ago
  Pretty sure half the US isn't living in tents. I feel like I'd notice that, especially living in a city with a larger-than-average homeless population. I agree that homelessness is a problem, but you appear to be arguing in bad faith. If 50% of the US actually "can't afford housing", we'd have $170M people living in tents, and that is demonstrably not the case. I would believe a claim that states that a large portion (maybe 50%, maybe more, maybe less) of the country are facing financial insecurity that makes them feel like their housing situation is precarious. But that wasn't the claim put forth upthread.

dkasper 2y ago

You’re forgetting lots of people rent. Lots of people can’t afford to own, and almost all of them rent. The other factor is dual, or even 3+ incomes in families living together.

bdangubic 2y ago
lots of people that can afford to buy many houses rent because it makes very little financial sense (for those who understand slightly-above-basic-math) to own a house in the US
- forgetfreeman 2y ago
  I wish more people in the US believed that, it'd make my retirement planning so much easier. Incidentally if that statement were even vaguely accurate private equity would most likely not find residential real estate an attractive investment, which they most certainly do. All of my real estate has doubled in value over the last 5 years and through the magic of depreciation I'm on track to get back more in taxes over a 20 year span than the original purchase price of my investment property. Home ownership: shit makes perfect sense to me.
  - kelnos 2y ago
    I think GP was talking about owning a primary residence, not owning investment properties. (I still don't agree with GP's thinking or math, but I don't think you're arguing against what they actually said.)
    - forgetfreeman 2y ago
      I'm talking about owning both primary residence and investment property, both are great.
- kelnos 2y ago
  That thinking is very location-dependent. Cities and counties across the US vary wildly on the ratio of cost-to-rent to cost-to-own, and that number is sometimes less than and sometimes greater than 1, depending on where you are. A big problem with renting is the capriciousness of the rental market in many places, which you can't solve with "basic math". That plus the availability of the 30-year fixed-rate mortgage in the US means that rental costs can be much more unpredictable than buying. Some people will -- very reasonably -- pay a bit more for peace of mind. And that's before we get into the topic of no-fault evictions, and how that can wreck a family's housing situation, sometimes with not too much notice. Renter protections in the US are not great compared to in many other places, and that can make renting unpredictable and more "costly" in other ways.

hombre_fatal 2y ago

That's not a measure of an economy though. Housing and especially dense affordable housing isn't widely built in the US and the supply is artificially constrained, usually by NIMBY politics.

reverendsteveii 2y ago
you're right, it's a measure of access to life's necessities. the point of the comment is that access to life's necessities isn't tied to the economy.

glandium 2y ago

> Median salary in the US is $59,300 > around 50% of Americans make $70,000 or more annually. Wait a second. "50% of Americans making X or more" means X is the median. Does that imply a ton of people are working more than one job?

rgblambda 2y ago
Sometimes the discrepancy can be due to non salaried workers (e.g. contractors, business owners) earning more than the median salary.

9rx 2y ago

> Family needs to make $107,700 a year to own a home. I don't see how that computes. The internet suggests that, on the high end, a family will spend around $10,000 on home repairs, maintenance, and insurance, which is in line with my experience. So almost $100,000 in yearly property taxes for a typical family home? Not a chance. I suspect you are thinking of buying a home rather than owning a home, but homes are bought with wealth, not income, so an income figure here doesn't make much sense if that is, in fact, what you are thinking of. If that is not what you are thinking of, I, for one, don't understand what you are trying to say. This figure doesn't seem to have any applicability.

nomel 2y ago
> but homes are bought with wealth, not income What do you mean by this? In the US, over 60% of people have a mortgage [1], which almost always means it's coming from some percentage of their income. When you get a home loan, the banks only real concern is your credit score and income. Anecdotal, but I don't know a single person that doesn't have their monthly mortgage scaled to their income, since I don't know a single person under 60 without a mortgage that's coming from their income. [1] https://www.investopedia.com/percent-homeowners-have-mortgage-8680325#:~:text=Key%20Takeaways,of%20homes%20were%20owner%2Doccupied https://www.investopedia.com/percent-homeowners-have-mortgag....
- 9rx 2y ago
  > In the US, over 60% of people have a mortgage [1] A mortgage is the rental of wealth. It is independent of the home. But, even if we want to conflate them for the sake of discussion, it is still dependent on many variables that does not round to a single number. The rent on a $20,000 mortgage is quite different to the rent on a $200,000 mortgage. Two buyers buying identical homes for identical prices, but who come with different amounts of wealth, will have very different rental payments. A single number is meaningless, even if we assume 100% of people are paying mortgage rent. But, as you point out, ~40% of the people don't have a mortgage, and therefore have no such cost to begin with. The idea that they also need $107K doesn't make any sense.

Buttons840 2y ago

Median age of first time home buyers is now 38, up from 35 last year.

kelnos 2y ago
Ok, but what's the longer-term trend? Those two number don't mean much alone.
- DonnyV 2y ago
  10 yrs ago it was 31
  - Buttons840 2y ago
    It's also a number approaching an asymptote, it can't grow exponentially, or even linearly, so increasing 20% is a big increase.

kelnos 2y ago

> Apartment in a moderate-cost area is about $70,000-$100,000/year. That doesn't even pass a minimum-effort sniff test. I live in one of the most expensive cities in the country, and I'm in your quoted range for a 4-bedroom condo. My sibling lives in a more affordable, but desirable, area and spends a little less than half of what I spend a year, for a single-family home with a good-sized yard that's more than twice the size of my condo. (And they bought last year when interest rates were high.) Your own stats don't even make sense. You claim it costs $70k-$100k/yr for housing, but that to afford a home, a family needs to make $107k/yr? That doesn't make sense. If housing costs that much, that family needs to make north of $200k/yr to afford it. Where are you getting this information?

rascul 2y ago

> Apartment in a moderate-cost area is about $70,000-$100,000/year. No way that's correct.

DonnyV 2y ago
Taken from ChatGPT that took it from Fed stats.
- rascul 2y ago
  Ok?
- prmoustache 2y ago
  Last timeI asked ChatGPT for something: - it invented numbers (they were erroneous) - it told me that given the nature of LLMs he cannot name his sources nor give me a link to it. This make your statement quite unlikely. Can you link us to the stats directly?
  - DonnyV 2y ago
    https://finance.yahoo.com/news/average-apartment-costs-46-us-110217191.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAK3UEwRSQVCL2Ji_g5UdDbmdjBG_GQvbYHP3YRSn1oXRwLnC_eqbnsDYnFS--GjGjvVteImnu-Unv-rTsJrGTgTGwgTJ5IoK2D1VWIEcLd-7CVjJ_j2DY17IcN2-uSmefKmq89tb-HlW-UEuJiZlW3TuMfiGznrcliaHcYzupSBh https://finance.yahoo.com/news/average-apartment-costs-46-us...
    - rascul 2y ago
      Those numbers are much less than you said. Not sure if I would call all of those moderately priced areas, either. Some of those at least are the most expensive in the country.

DonnyV 2y ago

f.y.i. All stats come from the Fed and were dug up by chatgpt. Also all prices are median, not averages.

signatoremo 2y ago
Can you provide the question you asked ChatGPT? Because the number is wildly inaccurate. I own a home and I pay less than $15,000 a year. Tax and maintenance. In a high cost of living area. HN love to look down on ChatGPT, yet are willing to hide behind it when it’s convenient.
- DonnyV 2y ago
  "how much does a family need to make to own an apartment in the united states"