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Affordable Housing Opportunities: States Where You Can Purchase a House on a Salary Below $70,000

Housing prices have surged in recent years, leaving first-time consumers with limited options. High lending costs and mortgage interest rates have prompted reluctance among consumers.

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Affordable Housing Opportunities States Where You Can Purchase a House on a Salary Below $70,000
Source: Wikipedia

Affordable Housing Opportunities: Over the past four years, housing prices have increased, leaving first-time consumers and those seeking more affordable options with an ever-decreasing selection. Moreover, lending costs have risen to levels not seen in decades, and mortgage interest rates are at an all-time high. As a result, many individuals are hesitant to purchase a home at this time.

Those who purchase a home in this market will almost certainly have the ability to refinance their mortgage when interest rates decline, ensuring that they are not obligated to pay the current average interest rate of 7.1 percent for the life of the loan on a thirty-year mortgage.

A taxable annual income of $60,000 may be enough to buy a property in most states, excluding Hawaii and California, because people can afford monthly payments and are willing to take on a higher interest rate.

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How did this calculation come to be?

This was calculated by removing six percent from Zillow’s March housing price data, which showed the average first-time purchaser down payment. The mortgage value is divided by thirty, the duration, and twelve to get the monthly payment. Divide $60,000 by twelve to get monthly income.

Financial experts advise consumers to spend no more than one-third of their income on housing. $5000/one-third = $1,666.67. By subtracting $1,666.67 from the mean monthly payment for an initial-time homeowner, we found that in most states, a property can be purchased for under $60,000 with a 4% mortgage rate. The ability to afford monthly payments does not indicate the ability to buy a home.

Most importantly, one must save for a down payment.

Many prospective homeowners struggle to save enough for a down payment, not monthly payments. In 2022, tenants paid 32% of their income on housing, while homeowners spent 17%, according to the Federal Reserve. In a Fed study, 18% of respondents predicted a fund below $100 and 14% below $499 for emergency expenses.

Suppose one-third of households have insufficient funds to cover a $500 emergency expense. Consequently, a considerable proportion of the populace sets aside negligible to nonexistent amounts of their monthly earnings. It is nearly impossible to save sufficient funds for a down payment under the current economic climate.

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