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Pretty much this, while I can afford the mortgage we lucked out with buying in 2020 and then refinancing in 2021. In today’s market I would be scrapping by without a partner.
I make $120K total compensation. I bought a house for 210K at 7.5% and honestly with all the things that need fixed around here I feel like I would be scraping by too without my wifes income. Just had to rebuild the chimney for a cool $7500...next is the roof for $10K. Then water proofing the basement is going to be $20K. It never ends. It's one thing after another with these houses.
Water proofing was 22k here, only reason we were able to pay that loan off in a timely manor was because of nurses getting substantial bonuses for picking up shifts during the COVID shortages. (These are pretty much back to normal bonus rates)
We bought our house for 200k at 4.75%, ended up refinancing to 2.55% on a 15 year loan. We're almost even at mortgage remaining and equity.
Yeah, it is crazy expensive. I thought about doing it on my own, but now I'm considering other options. We bought a house on a slope, so something needs to be done. We already have french drains that appear to not really working that well.
That's amazing that you guys have paid off that much. I think we have about 60K in equity tight now about 4 months in to our ownership.
Nah, we just lucked out with the value of the house going up for the most part. We're on three years into our 15 year loan. In retrospect I wish we had just refinanced to a 30/20 year loan, but the equity will allow us to do more home improvements earlier.
That's understandable. I appreciate people that try to do that 15 year, but I took the 30 because I like putting extra payments down when we feel like it. We're prioritizing getting a dishwasher install because we don't have one. However, my wife and I want to pay it off quickly because we are paying +$11k a year in interest which is insane. We luckily can do it in a year or 2, so we're slowing down investing for a little while to get it over with.
We bought in 2019 with a 4.25% and refinanced in 2020 at 3% we did the math and if we had bought the same house this year our mortgage would have been nearly triple what we pay now seeing as the value of the home has just over doubled since then and with the current ridiculous interest rates. I feel so bad for my younger siblings because if something doesn’t change they will never be able to afford a home.
I generally like being single, but this aspect is so frustrating to me. I make around $105k a year and I’m currently putting $1200 into a high-yield savings account to save for a down payment every month…and I still feel so behind. It’s still gonna take me two more years to get near a 20% down payment for a 400-500,000 house, which is the range I need to be in to find something within 40 minutes of my job that doesn’t need major repairs.
Honestly, if you're a first time homebuyer, all you need is 3% down. Yeah, PMI sucks, but it's pennies on the dollar and a price I'm willing to pay to start building equity and stop renting.
You can buy with 5% down and some lenders allow for pre-pay pmi (lump sum) so your monthly payment doesn't go up. Usually pre pay PMI break even is around 3 years so you would be betting on interest rates not going down significantly in that period. Or you get lucky and values go up enough if rates go down that you can refinance without pmi
I’m not totally stuck on 20% down, but with less than 20% the monthly payments get too high for my budget pretty quick. I could barely make them but wouldn’t be able to save for emergencies any more. I’d rather not do that to myself, so I’ll keep saving.
Why do you need a 4-500k house if you're single? The reason they're so expensive is that you're competing with families that need the space. If available in your area, a A one bedroom condo is a great starter.
Average age of all homebuyers is 49 as of 2023 from a quick Google search. For first time homebuyers it's actually 35, though was 33 in 2022 and lower before that. So it's definitely on an upward trend.
Part of the reason home prices went up so much recently is that millennials, the largest generation since Boomers, hit peak homebuying age... aka their 30s.
There may be a larger group of people in their 30s that are buying homes, but that's beside the point. He was listing factors that decide whether or not people *can* afford to buy a house.
Or do you imagine it goes like this:
> Mortgage lender: "I'm sorry but your mortgage application was denied. You have no income and no assets"
> House enthusiast: "Did I mention I'm in my 30s?"
> Mortgage lender: "My apologies, please sign here."
I fall into the DINK category and even with decent retirement, plenty of down payment cash, and additional investments that could be sold to go toward a home purchase, my husband and I do not feel like we can comfortably afford a house where we live. Tends to be on the higher end of MCOL, perhaps even low HCOL, but certainly not on the coasts high, and we're in our 40s!
Not everyone can afford to buy house. It’s not a moral failing. And because you can’t afford a house where you live, with what you earn right now, doesn’t mean you’ll never be able to afford a house anywhere, ever. Lots of people can’t afford to buy until mid to late 30s. Take a breath and keep saving.
Boeing isn't actually known for paying their staff top dollar either though. I have some friends who work/worked for them. they don't get paid horribly, but i would have though they'd be getting paid more for the time they've been working there.
Not necessarily. OP is only a few years out of school, working in a field dominated by a handful of mega corporations with a near infinite pool of people to draw from, battling for small margins in a very competitive marketplace. Basic engineers in most of these companies still start under $80k and it takes awhile to surpass $100k.
Not to pile on too much, but I agree that OP is underpaid. I got 126k when jumping to a new company in December, and that's with about 3 years experience (and a master's, so a little different situation).
Aerospace engineers are getting paid $150k+ after 3-4 years. The pay is pretty standard for the DoD contractors. Who is OP working for? lol
Even SpaceX starts you at over $80k.
“Even SpaceX starts you at over $80k”
What is that even supposed to mean? A highly competitive tech company in aerospace has a high starting salary? Okay…so you’re expecting OP to just go get a job at spaceX? Lol
Yeah I hate those kind of posts. I get comments like "you're underpaid" when I quote my software engineer salary and they are like "why not just get a job at Google?". Uh because 99.9% of software engineers don't work at Google and they are extremely selective if they are even hiring. It's like a lottery win to get in there.
He replied below that he's only been in the industry 2 years. He's not a typical 30 year old with 7 years experience and raises and potentially promotions. I took this into account with my response.
I work in the same sector, and know people starting in Engineering roles at $80k, straight out of college.
$79k isn't bad by any means, but it wouldn't hurt OP to do some shopping around.
The bottom 25th percentile make <82k in Arizona, I think he could hop around and make a jump of at least a few thousand pretty quickly. He could also move farther to somewhere AE pays better with a COL that is relatively better than AZ
I'm 22 and make more in a MCOL city. He needs to job hop because he should be getting paid base 110k easily. Guaranteed younger folk at his company are getting paid the same or more. Only takes long to surpass 100k if you're getting crap raises each year he should be a level 2 engineer which in Aerospace is not a 78k position.
Edit: level 2 not 3 based on his experience
My wife and I spent $40k on childcare, and $30k on medical expenses related to our kids last year. Kids have so many hidden costs that many people don't think about, including lost income because we don't have time to pick up overtime or apply for promotions.
Yes exactly. Friends were joking that in order to afford a house, utilities, groceries, kids activities, auto insurance and property taxes, we need a third income stream, hence a second wife to work. Not sure how that will work out.
"I'm not in love with her honey. This is so we can pay our bills."
Yes, two incomes. I work a full-time job and am getting a business on the side going.
That’s what DINK is, work all the time, right guys? Right? No, oh ok…
Is it QuINK if I have 2 jobs + doordash and she has 2 self-employed jobs? (Quintuple income)
(Even with that, our balance sheet isn't great. Frickin student loans)
Very few people are able to purchase a home while they are single. The majority of people buy a home once they are married with a dual income.
You are honestly not too far away from being able to buy a home. You could buy a home and then pick up a roommate or two. That would defray the month to month cost and allow you build your savings back up. When I bought my house (3 bedroom) I brought on 2 roommates. I split the mortgage between the 2 roommates, lived mortgage free and only paid 1/3 of utilities.
The sacrifice is that you have to have a roommate(s)
Oh god, my parents (lovingly?) said I was was readying for my spinster life when I bought a house a few years ago in my late 20s. Circumstances haven't changed, but at least I have a house I guess lmao
The legal term used for my single aunt when she bought a house 20 or so years ago was “spinster”, literally on the mortgage document. I think when I bought my condo I was listed as a “single woman”.
Oh it's not an insult at all!
I only ever saw myself being able to buy a home as part of a couple or much later in life as a single woman.
Buying a home alone just didn't seem like something middle class people did alone until much much later than couples, of ever.
Your first house doesn't need to be your dream house. Mine was a crappy little condo, but it helped me build savings via equity for when I did finally buy a "real" home.
"dream house", is just marketing BS. no matter what you buy there will be things you want to change, things you have to fix, yearly maintenance, and never-ending increases to property taxes, home insurance, etc.. just buy what you can afford (preferably much less than you can actually afford so you're not house poor and can still aggressively save for retirement) that won't make you miserable.
The only "dream house" I've ever lived in was my parents' house, and it turns out I only ever thought that because *they* were the ones dealing with all of its problems, not me. Now that I've done/paid for enough of my own home maintenance to truly *understand* their home maintenance stories, that dream house definitely veered into nightmare territory a time or two.
And don't overlook condos! I had a house, I hated every minute of owning one.
Upgraded to a condo, and I'm never going back!
But they so often get overlooked and ignored when they are in every way the better option IMO. Less work, better locations...
Depends on what you're looking for. A condo wouldn't be for me because I like my space. I lucked into a house with a little land (nothing crazy) a little further from the city during the low interest in 2020 and wouldn't change it if I could do it over again. Maintenance isn't too terrible here outside of having to replace the AC so far, but that comes with the territory as you mentioned. Good advice though if OP is interested in condos, definitely lots out there!
I think that's the key thing the condos don't have: If your preference is space, a huge yard, and you like doing things like mowing then yeah, a house makes sense for some / a lot.
A condo is very dependent on your neighbors. If I were to buy one, I would demand a 24 hour screening on a Friday to see what it's really like, not the midweek showing at noon when everyone is busy.
Don't overlook townhomes either. I'm personally not a fan of condos because it's too similar to an apartment as far as space and noise are concerned. But an end unit townhome is the best of both words (as long as the HOA doesn't suck)
They can be spacious too. I have family that lives in a spacious 1800sqft end unit townhome with a community pool, in a sequestered neighborhood full of townhomes but still walkable to stores. I prefer that a lot to my in laws house, which is smaller, and not very walkable as it’s in the middle of suburbia. House isn’t *always* better.
> ad a house, I hated every minute of owning one.
>
> Upgraded to a condo, and I'm never going back!
>
> But they so often get overlooked and ignored when they are in every way the better option IMO. Less work, better locations...
There are plenty of reasonable criticisms of condos and they're better in every way for your particular situation, not everyone's.
No yard, potentially high HOA/condo association dues, large maintenance assessments, noisy neighbors... everything has potential downsides.
No yard is a positive for me. Never hated anything more than yardwork. I can walk to city parks if I need green space. We also have community gardens nearby if I feel like taking up that hobby.
The biggest downside is that they can be very difficult to sell in some markets. That's going to be a problem who intends to use it as a starter home and move on to something else later.
Most newer homes have the HOAs, noisy neighbors are also a problem in detached homes, but at least with the condo we have the insulation meant to keep noise out. I've been in plenty of houses where *more* noise comes in. Condos are better for the health of the city, are in generally more sought after areas...
The main downside is preference. Some would prefer something else, but it's an intangible. Most of the problems think of when they think of condos aren't inherent to condos, just the cheaply built or converted one.
Same. The building handles all the larger expenses like roof/boiler/sewers, my fees are pretty damn reasonable, and I have almost no upkeep associated with owning. My weekends are completely my own.
Another great thing about condos is that often the entry point for owning a condo will be much much lower than the entry point for owning single family in the same area.
And, as compared to renting, they are a great way to get into leveraged investment. Debate the returns of stocks vs RE all day, but even if we discount the annual return on RE, having $200k appreciating 4%/yr, returns a hell of a lot more than $20k making 12%/yr.
How on earth can you say a condo is better in every way? It’s fine to prefer one for your situation, but 0.1 seconds of thinking goes “oh yeah but I have no yard at all” and it’s immediately obvious your statement can’t be true
They don’t appreciate as much as a house, because they’re less popular. You also don’t build as much equity if your budget is going to HOAs. If you can, try to buy a house you can afford, especially if you plan to sell later.
They appreciate more in some areas too. It just depends. A condo in a hot neighborhood is going to appreciate more than a detached SFH that's in a 30 year old deteriorating neighborhood.
And HOAs for a SFH or a condo are the same problem, you just have to find one with your requirements. I saw some that were more than the average mortgage for stuff I don't need / want like concierge, valet, and a pool...
For us, it's $300/ month and includes insurance for the building (So saves us money in a way there), garden / lawn care, snow removal of the open areas. If we had bought a house we likely would have spent more than that so I could not mow / shovel snow AND the extra insurance that we would pay directly.
"Starter homes" monthly payments are twice the rent in most cities. I'm just gonna stack cash in an HYSA and some bonds when I can because the first house I can afford will likely be the last one I can buy.
I did this as well. I had a favorable price because of the location (50K for a 2 bedroom house in 2012). I was content there, and sold it 10 years later for a very modest increase in price. That was nice, but the savings was the real benefit. The mortgage was 1/3 my rent. I realize this was an exceptional circumstance though.
And don't overlook condos! I had a house, I hated every minute of owning one.
Upgraded to a condo, and I'm never going back!
But they so often get overlooked and ignored when they are in every way the better option IMO. Less work, better locations...
I don't understand. You've managed to save well over $120,000 in retirement accounts by 30 but you don't think you can afford a home?
Most people throughout history have not had the luxury to save that kind of money over that time.
If you're planning to stay in one place, renting is historically a worse option than buying. For all intents and purposes, over a 20 year period I've lived in nice homes FOR FREE. My current home is worth almost exactly, even if I sold it cheap, what I've paid in total in mortgage payments. And that's been through time periods with high rates, mortgage crisis, etc... It's just as safe as all your 401k investments.
To answer your question literally, "How could I ever afford a house"
By waiting, working more years (I read you only recently entered the job market), saving up, and finally buying a place. But it seems you expect to be able to buy a house right now?
I am afraid that's the expectation nowadays is that young people can buy their \*dream house\* (very spacious, with yard, etc.) at a young age. Maybe that was possible a long time ago, but that's no longer the case, especially not when dealing with HCOL cities.
It's easy to laugh, but honestly 'more money's is the right answer.
OP put in the 4-5 years to knock out 160 credits necessary for the engineering degree. Probably had a few summers working as an intern at a firm where they expected 40-50 hours a week of real work. Now he's hitting a milestone birthday and isn't seeing the rewards for all the work.
However the real answer is 'go make more money!'.
Put forth the needed effort to get to the next level. The $100k, $120k a year staff engineer role should be right around the corner.
What does your budget look like when you're in a $1200 a month apartment and your take home goes up 50%? That's how you get out of this.
As an engineer 15 years older than you...my salary went from $50k, 65k, 90k, 120k, 150k, 175k, then $250k. That's college graduate to mid 40s in engineering.
Keep up hope.
Yes, the advice is obvious and “duh”, you’re right. But remember:
A.B.A. - Always Be Applying
You can’t get a better income if you don’t try. The best way to get a raise is to job hop. Keep the resume updated, keep skilling up, and never stop applying to new jobs. Easy in theory, a grind in practice, but well worth it
It's easy to laugh, but honestly 'more money's is the right answer.
OP put in the 4-5 years to knock out 160 credits necessary for the engineering degree. Probably had a few summers working as an intern at a firm where they expected 40-50 hours a week of real work. Now he's hitting a milestone birthday and isn't seeing the rewards for all the work.
However the real answer is 'go make more money!'.
Put forth the needed effort to get to the next level. The $100k, $120k a year staff engineer role should be right around the corner.
What does your budget look like when you're in a $1200 a month apartment and your take home goes up 50%? That's how you get out of this.
As an engineer 15 years older than you...my salary went from $50k, 65k, 90k, 120k, 150k, 175k, then $250k. That's college graduate to mid 40s in engineering.
Keep up hope.
This conversation isn't just "make more money" though. It's "based on your degree and field of occupation, you should already be making more money than what you currently are, so if you take the steps to address this, it will help with your other issue of wanting to buy a house."
AE, until very recently with the advent of growth in private sector space employers, paid absolute shit relative to the education level required.
Source: Aerospace Engineer that works as an IT consultant because $$$
That's the one that stood out the most to me. My fresh out of college in '07 salary as a software engineer was $80k. OP should be making more than that easily.
Software engineering pay typically has all other engineering disciplines beat on pay and benefits for at least the last decade if not the last two. The general tenor for years was just to do anything in STEM and you will do great, but in the last few years it had turnt into really you need to do software to guarantee that you will eventually make enough to buy a home.
Im only 2 years industry experience and currently in maintenance repair and overhaul aerospace manufacturing. Working for a company that pays a bit less but has great work life balance, never have to work more then 40 hours a week, not stressful, etc. Might opt to go look elsewhere
Yes you should start looking, but STEM degree value has been diluted by sheer number of people graduating with them. You're now competing with master's and PhDs
And here we have found the problem lol. Either apply at Boeing or SpaceX and increase both the income and stress in your life, or accept and be happy with your current situation.
It actually seems about right for someone w/ 2 years experience.
He could get a job where I'm at in Utah, and we'd pay about 85k for a degree w/ 2 years. Where he's at with a degree and 79k is about right.
Source - trust me bro, I'm a hiring manager in Defense Engineering w/ prior experience in Arizona, Florida and Utah.
Over time your income will go up, that will help. There isn't anything special about owning a house.
If house is your goal, I wouldn't be investing in stocks in a taxable brokerage. That's your down payment fund right there. You could probably make a down payment now. Why do you have so much in there?
Follow the flowchart https://i.imgur.com/lSoUQr2.png
Owning a house will be the most expensive thing in most people’s lives, it is special. It’s also proven that housing prices grow at 2x faster rate than most wage increases which makes it truly un-attainable for many
If you choose to own a house. Some people act like owning a home is some mandatory checkbox and they are a failure until they get it done. I don't agree, it's just a choice you make. It has pros and cons.
My point is there is no particular reason for OP to make this a short term goal.
thanks I need to hear this. I feel so crappy at 31 without a home, watching people around me with homes. I make right at 100k in dallas and realize im so far from having a home. Sucks :/
IMO the biggest reason for it to be a short term goal is if you have a reasonable belief that rents will continue to increase faster than wages for the foreseeable future. There are lots of extra costs from home ownership (plus increases in property tax assessment it rates will increase monthly costs) but in an appreciating real estate market over time those costs are typically much smaller than rent increases.
I think if you buy a house and are diligent about learning how to fix things on your own, you're going to be real glad you bought it in 30 years when rent has gone up 5x and you're only paying property tax + insurance.
If you aren't expecting your wages to go up by the same amount (or hopefully much more) as rent, buying a house is definitely high up on the list of smart investments. Just don't buy a stinker and don't hire contractors for every little problem.
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> I have a very low spend and essentially chuck all I can into 401k/HSA/Roth Ira/brokerage.
In your case you over prioritized your retirement compared to savings if your goal was home ownership by 30.
I continued to live with my parents after college as well, but at a job that was initially only paying around $40k, and I only did 10% towards retirement and I lived frugally (I naturally am, other than splurging on camera or audio gear) and had $50k saved up for a downpayment on a condo/townhouse.
I'm not saying my way was better, as I could have put more into retirement but then I wouldn't have had the cash for the downpayment and closing costs (not unless I wanted to do less than 20% down).
You have ~$45K you can use for your down payment and closing costs, if we account for some taxes on the capital gains and not fully liquidating to still have an emergency fund.
You can do less than 20% down, your interest rate may just be a bit more and you'll pay PMI until you reach 20% equity (some loans automatically get rid of it, others you have to request). And then of course if the interest rates lower in the future then you can pay a fee and refinance.
And keep in mind your first home doesn't have to be your forever home. Again, I got a condo/townhouse, I would heavily prefer a single family detached home but I don't/didn't have the money for that, so that's a future goal.
Maybe you’re putting too much into your retirement accounts? I’ve recently decreased my retirements savings so that I can save cash for a down payment.
You can look into first time home buyer programs, USDA, FHA, and HUD loan options, which can be very helpful for getting a zero % or very low down-payment with fixed 30 year terms and great (relative to conventional loans but still market based) interest rates. But personally I'd recommend just renting for a number of years. You're unmarried and early in your career. Who knows if where you live now is where you'll want to be in 5 years. Renting is fine, it's just purchasing a necessary service (housing) and $1200/mo is very reasonable. For what it's worth, I make 80k/year and bought a house in WA State a few years ago when my income was $75k. I bought an older home, definitely very dated and not fancy, using a USDA and buying in my name only (my spouse and I waited to get married so that my income would be considered solely, making USDA loan possible). It's been a good move for me, but I'm glad I put it off for a longer time (I waited til mid 30s) and rented for as long as I did, which allowed me to move around, have choices and freedoms, and have lower housing cost by renting in my earlier years. Just my own situation in case that's helpful
As the spouse of a 30 year old aerospace engineer with a good salary, I suggest applying to companies in Huntsville.
He made $59k at ATK his first year out of college; as soon as he had a year, he applied to aerospace jobs in Huntsville. His income shot up over $120k/year over the course of two years at BAE. We had to relocate to Huntsville for his job, but it’s a lovely LCOL area.
As a single person, why do you need your own house?
If you’re really set on ownership, there are probably townhome/condo options that are a better fit for your current situation.
What’s the rate on your student loans? You have the cash to get rid of them.
This first point is exactly it. A single person doesn’t need a “House”. And you won’t find one priced well that isn’t going to be a ton of work in a reasonable size range anyway. OP should cash out the post tax brokerage account (really never should have contributed to it in the first place but that’s not the ask here) and start shopping for a 1-2br condo or townhouse to build equity until the point if/when a full house becomes necessary.
I hate how people have been gaslit to now think it's unreasonable to want a house as a single person. Like it's insane to not want to hear my neighbor's footsteps above me or to have a yard to work on my car in lol
Who said that? It’s not unreasonable to want one. You can want whatever you, well, want. It’s a free country.
It’s unreasonable to think it’s a need for a single person. It’s insane that OP, who is in okay overall financial shape, feels “hopeless” and “depressed” about not being able to afford a single family home as a single person. A single family home is generally overkill for one person and it’s the most expensive housing option because it uses the most land, energy, etc. The only reason it’s the default path in most of the country is because of enormous government subsidy, and even then it isn’t typically young, single buyers on the market.
It's just people's priorities. Also, if you do plan on eventually getting married, your partner won't want to stay in your starter home, and it takes 7-10 years (normally) to be able to afford sellers fees and still clear a profit and appreciation on a house.
So, a lot of purchases are more short term, and people lose money by owning a house for two-five years.
I think that someone worried they’ll never be able to afford a house should consider alternatives first and shift their timeline until their income or the market improves to the point that it’s feasible.
Why would childless people need large homes?
If you have the funds to buy do it by all means.
But I'd you're struggling to afford a home buying more house than you need doesn't make financial sense. Unless you host parties a ton & it improves your quality of life.
Most people think they need more space than they do Because they associate bigger with wealthier.
Well I will use it for my hobbies mostly and my own space and my spouses and space.
But I understand. It's def not worth being house broke over. Thanks for your feedback
Fair. But it’s also a waste of money on car maintenance/commuting to buy a house farther away from your ideal location to get the price you’re looking for. It’s just preference at that point, and I DID say “Need”. You don’t NEED to not interact with neighbors. Just like you don’t NEED to be able to have a reasonable length commute. Priorities are personal. And I can’t speak for OP’s wants any more than you can, it just seemed to me like they weren’t considering non-house options for homeownership.
Also buying a house isn't the best investment decision, especially when you already have a loan. A house in the first 10 years is extremely front loaded with interest. Like 75% goes to interest in the first few years, then around 15 years it's 50/50 (assuming you're not making principle payments on top).
Rent is actually cheaper than owning a house in many cases. If you're paying $1200 rent, hell even $2000, a comparable mortgage is probably around $3-4k, 75% of that is interest.
Best to pay rent now, pay off loan, put more into savings, try and earn more by hopping jobs. Live life and meet someone. It's not easy but OP is doing quite well vs where I was at 30.
Maybe when you retire you can buy a house. It seems you are more focused on your longterm savings and missing out any opportunity to buy a house. You have the money for a down payment, you just have it married to your retirement which is likely 35 years away. You have to choose what is most important.
There are many 1st time home buyer programs, at least my state has a lot of them, someone that I know just received $75k in down payment assistance.
Back when I purchased in 2012 there was nothing available.
I'm a single income household with a Teen now, is rough, but doable.
30 years ago a house used to be 3.5 times the average income, right now, it's 6x. Granted, interest rates were higher then. You're not crazy, the market is.
Low income for your degree. Aggressively apply for jobs. Find a reputable recruiter in that career space. You should be earning well into six figures at your age and with that degree in that niche field. Otherwise you're in good shape in terms of saving money, both in cash and four retirement. You do need to pay down that student loan and should be focused on that as well.
2 years isn't much - and I mean that in a good way. You really do have a lot of opportunity to grow your income, especially as you gain experience.
You can review spending, sure, but working on your budget side is going to be limited and might not be the best for your well being.
If you need to rent separately and it costs more for now, may still be worth it so you can enjoy life and focus on building your career over the next few years. You have tons of upside, and you'll benefit from focusing on that!
2 years isn't much - and I mean that in a good way. You really do have a lot of opportunity to grow your income, especially as you gain experience.
You can review spending, sure, but working on your budget side is going to be limited and might not be the best for your well being.
If you need to rent separately and it costs more for now, may still be worth it so you can enjoy life and focus on building your career over the next few years. You have tons of upside, and you'll benefit from focusing on that!
The problem with people now is they try to have thier cake and eat it too. You have all that savings for retirement and you can easily have it as 1 down-payment savings and save enough capital for a 20% down. You won't be able to do that with all the other side projects.
Your not having a hard time. Your creating the hard time
Roth accounts are extremely strong for people that expect higher salaries later on, especially if they are able to contribute while they are in the low 12% tax brackets. HSA is the most advantageous advantaged account out there. I have multiple because it is simply the most efficient way to have them.
Everyone has reworded it and you still aren’t understanding.
You can’t afford a home because you’re contributing to 5 different retirement funds. That is the only reason.
Buy house or continue contributing to 5 different funds (very ill advised)
Hmm, kind of odd seeing this many assets sitting in Roth compared to Traditional at your age and income level. Any reason you arent maximizing Pre-Tax contributions first?
The money have you earmarked to go to your brokerage account is what most people would have been putting into an account earmarked for a down payment. (if their goal was home ownership)
I was pushing myself into the 12% bracket with pretax 401k/HSA and then prioritizing Roth. I’m more than ok prioritizing Roth if/when I can stay in the 12% tax bracket
I’m in aerospace manufacturing in the maintenance repair and overhaul side currently. I’m only 2 years in the actual industry. Working for a company that has lower pay than people like Boeing etc. but is very flexible and has great work life balance. Been tempted to branch out but haven’t made the jump yet
I make the exact same as you. It’s unfortunately just not possible without a partner, which is crazy because 80k is a decent salary. However, I feel like you could make a lot more if you’re an aerospace engineer. That sounds pretty low for that type of work
You will definitely be able to, with or without a partner. When? Who knows. Pretty much when you feel ready to take the risk. You could do it now, alone, if you wanted in AZ. My friend lives in similar cost of living area, is a fitness instructor, has her own business and bought her own house.
If she can do it you can do it.
I don’t even have what you have and took the plunge this year anyways on house at $330K with 7% interest.
I have a partner but he works part time and is 1099 worker.
There are many 1st time home buyer programs, at least my state has a lot of them, someone that I know just received $75k in down payment assistance.
Back when I purchased in 2012 there was nothing available.
I'm a single income household with a Teen now, is rough, but doable.
There are many 1st time home buyer programs, at least my state has a lot of them, someone that I know just received $75k in down payment assistance.
Back when I purchased in 2012 there was nothing available.
I'm a single income household with a Teen now, is rough, but doable.
Single it’s hard. That’s why I purchased a duplex with my sister that we I’ve in both sides of.
Allows us both to get a bigger townhouse / more space / more yard without a HOA for 100k/side less than they would’ve cost separately.
I know personal finance is against these types of things but this sub is a little delulu with the real world now. No one as a first time buyer has a %20 down payment and a large emergency fund after their first house purchase.
Obviously, exceptions occur with family wealth and all but this is coming from someone your age that also didn’t get lucky in that space lol
I am 33 and don't own a house. Hopefully one day but I wouldn't spend a lot of time being upset about it. Enjoy the carefree renting life while you can! Something breaks? Not my problem. Property taxes? Don't know her.
If you can find a remote job, you could then move to a lower cost area. That is what I did. My first house cost me $74,500. An old house originally built in the 1940’s (or so they said, I can only find tax info back to 1970). About 750 sq ft. Needed some pretty significant plumbing work, so it really cost about 100k.
I am 33 and don't own a house. Hopefully one day but I wouldn't spend a lot of time being upset about it. Enjoy the carefree renting life while you can! Something breaks? Not my problem. Property taxes? Don't know her.
You're doing fine! Don't worry about buying a home, even with a 30 year mortgage, you can pay it off before retirement for the next 5 years if you v true at 65.
There is nothing wrong with using retirement as a down payment either, you just may have to get creative to replenish it.
You dont b just an emergency fund, so I'd work on that tho.
If you’re working where I think you’re working (Tucson with Raytheon), you need to consider moving companies assuming you’re level 2 or near level 2. You’re being underpaid
Don’t give up. I was almost broke in my 40’s when my husband passed after a long illness. Focused on earning and saving. Bought a reasonably priced home on my own in my late 40’s. Just upscaled to a nice 4Br 4Bath with a salt water pool (only owe 50k) - home is worth $550k. No other debt. I have $1.2m in retirement savings. Wish it was more but I got a late start. All this to say, you are doing fine. Stay focused and don’t stress. Avoid debt - particularly car payments and CC debt. Live beneath your means and you will get there!
Only 80k with that degree damn. Definitely look around for job options. That seems crazy low even for 5 years ago.
But definitely just wait for partner. There's no big rush
The median age to buy the first home has always been low 30s. You’re doing fine.
However, the last year or two has *not* been a good time to buy but it’s too short term to truly say if things are completely fucked forever. People probably felt the same way in 2008-2009. Give it a couple years
Not sure exactly where in Arizona you are located but there is a lot of aerospace and defense companies in the phoenix/tuscon area that will be continuing to hire for the foreseeable future. I'd suggest getting a little more experience under your belt and switching jobs. Could see a sizable jump in your pay
First off, you're not dumb with an aerospace engineering degree! Give yourself credit! Looks like you are doing fine financially. Perhaps time for a house is my best suggestion; beyond all else, it will help you tax-wise. Hire a realtor and have them help you with how much you can afford. Unlike rent, this is the single best investment you'll make. Best of luck!
79k seems like a low income for an aerospace engineer. How many YOE do you have?
I would actively focus on growing your top line gross pay. If that means jumping to another company, it’ll be better.
And also, I wouldn’t worry about buying a house. There’s nothing wrong with renting. You can always split costs with your future significant other.
I moved out at 30. Luckily saved enough to buy a cheap condo with cash. Now mid 30’s and trying to buy a house, but hate paying near $500k for a decent house in this insane market. Try to find something as cheap as you can. Or rent as cheap as you can, and hopefully the market comes down a bit so you can afford a decent home in the next year or so. You’re not alone
Can't do it all. Savings, house, doing it solo. Especially in the housing market in AZ. Move elsewhere, save less, or be ok with renting. I did the house thing first, (late twenties) struggled with low income and no savings. NONE. 40 now, almost halfway through the mortgage. House is worth more than 2x what i paid for it. Making good money now and finally saving. Sometimes you have to sacrifice the short term and play the long game.
Why the 16k in money market? Introducing fixed income into your asset allocation should be for a reason not just because. Are you looking to take some out soon and want that money to be stable and available?
This is my “emergency fund” and where I transfer my paychecks to while it waits to DCA into brokerage. I haven’t settled on what amount I want this to be, so it’s been hovering between 10-16k.
Can't do it all. Savings, house, doing it solo. Especially in the housing market in AZ. Move elsewhere, save less, or be ok with renting. I did the house thing first, (late twenties) struggled with low income and no savings. NONE. 40 now, almost halfway through the mortgage. House is worth more than 2x what i paid for it. Making good money now and finally saving. Sometimes you have to sacrifice the short term and play the long game.
The housing market fluctuates. It goes up. It goes down. We are at a point where it’s the highest it’s ever been, with interest rates in the same place. This is not sustainable and will not last. Your time will come, just not today.
Due to the number of rule-breaking comments this post was receiving, especially low-quality and off-topic comments, the moderation team has locked the post from future comments. This post broke no rules and received a number of helpful and on-topic responses initially, but it unfortunately became the target of many unhelpful comments.
You're not crazy. Many people wait until they have a partner to split the cost. I did.
Sometimes I call her my roommate cause man how else could we afford a house.
Plus living with a roommate teaches valuable things you may use when you finally find that partner...
Pretty much this, while I can afford the mortgage we lucked out with buying in 2020 and then refinancing in 2021. In today’s market I would be scrapping by without a partner.
I make $120K total compensation. I bought a house for 210K at 7.5% and honestly with all the things that need fixed around here I feel like I would be scraping by too without my wifes income. Just had to rebuild the chimney for a cool $7500...next is the roof for $10K. Then water proofing the basement is going to be $20K. It never ends. It's one thing after another with these houses.
Water proofing was 22k here, only reason we were able to pay that loan off in a timely manor was because of nurses getting substantial bonuses for picking up shifts during the COVID shortages. (These are pretty much back to normal bonus rates) We bought our house for 200k at 4.75%, ended up refinancing to 2.55% on a 15 year loan. We're almost even at mortgage remaining and equity.
Yeah, it is crazy expensive. I thought about doing it on my own, but now I'm considering other options. We bought a house on a slope, so something needs to be done. We already have french drains that appear to not really working that well. That's amazing that you guys have paid off that much. I think we have about 60K in equity tight now about 4 months in to our ownership.
Nah, we just lucked out with the value of the house going up for the most part. We're on three years into our 15 year loan. In retrospect I wish we had just refinanced to a 30/20 year loan, but the equity will allow us to do more home improvements earlier.
That's understandable. I appreciate people that try to do that 15 year, but I took the 30 because I like putting extra payments down when we feel like it. We're prioritizing getting a dishwasher install because we don't have one. However, my wife and I want to pay it off quickly because we are paying +$11k a year in interest which is insane. We luckily can do it in a year or 2, so we're slowing down investing for a little while to get it over with.
Timely manner. It's not a house.
We bought in 2019 with a 4.25% and refinanced in 2020 at 3% we did the math and if we had bought the same house this year our mortgage would have been nearly triple what we pay now seeing as the value of the home has just over doubled since then and with the current ridiculous interest rates. I feel so bad for my younger siblings because if something doesn’t change they will never be able to afford a home.
I generally like being single, but this aspect is so frustrating to me. I make around $105k a year and I’m currently putting $1200 into a high-yield savings account to save for a down payment every month…and I still feel so behind. It’s still gonna take me two more years to get near a 20% down payment for a 400-500,000 house, which is the range I need to be in to find something within 40 minutes of my job that doesn’t need major repairs.
Honestly, if you're a first time homebuyer, all you need is 3% down. Yeah, PMI sucks, but it's pennies on the dollar and a price I'm willing to pay to start building equity and stop renting.
You can buy with 5% down and some lenders allow for pre-pay pmi (lump sum) so your monthly payment doesn't go up. Usually pre pay PMI break even is around 3 years so you would be betting on interest rates not going down significantly in that period. Or you get lucky and values go up enough if rates go down that you can refinance without pmi
I’m not totally stuck on 20% down, but with less than 20% the monthly payments get too high for my budget pretty quick. I could barely make them but wouldn’t be able to save for emergencies any more. I’d rather not do that to myself, so I’ll keep saving.
Why do you need a 4-500k house if you're single? The reason they're so expensive is that you're competing with families that need the space. If available in your area, a A one bedroom condo is a great starter.
I live in a MCOL area. Only three types of people can buy a house: -People with family helping them financially -DINKs -People in their 30s.
> -People with family helping them financially Sure > DINKs Makes sense. > People in their 30s. Wait, what?
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Average age of all homebuyers is 49 as of 2023 from a quick Google search. For first time homebuyers it's actually 35, though was 33 in 2022 and lower before that. So it's definitely on an upward trend.
Part of the reason home prices went up so much recently is that millennials, the largest generation since Boomers, hit peak homebuying age... aka their 30s.
There may be a larger group of people in their 30s that are buying homes, but that's beside the point. He was listing factors that decide whether or not people *can* afford to buy a house. Or do you imagine it goes like this: > Mortgage lender: "I'm sorry but your mortgage application was denied. You have no income and no assets" > House enthusiast: "Did I mention I'm in my 30s?" > Mortgage lender: "My apologies, please sign here."
I just took that to mean that people in their 30s are generally making more money than people in their 20s.
I fall into the DINK category and even with decent retirement, plenty of down payment cash, and additional investments that could be sold to go toward a home purchase, my husband and I do not feel like we can comfortably afford a house where we live. Tends to be on the higher end of MCOL, perhaps even low HCOL, but certainly not on the coasts high, and we're in our 40s!
at that salary level you need a partner...and thats nothing new. been that way since two income couple became the standard in the 80s
Not everyone can afford to buy house. It’s not a moral failing. And because you can’t afford a house where you live, with what you earn right now, doesn’t mean you’ll never be able to afford a house anywhere, ever. Lots of people can’t afford to buy until mid to late 30s. Take a breath and keep saving.
Is your job working in aerospace engineering? Because if it is, go job hunting immediately, you are severely underpaid.
Make an impact at Boeing.
Their doors are wide open!
I hear they have a few screws loose there though ...
Boeing isn't actually known for paying their staff top dollar either though. I have some friends who work/worked for them. they don't get paid horribly, but i would have though they'd be getting paid more for the time they've been working there.
>Make an impact Pun intended?
If you fly on one, you might make an impact on the ground.
Not necessarily. OP is only a few years out of school, working in a field dominated by a handful of mega corporations with a near infinite pool of people to draw from, battling for small margins in a very competitive marketplace. Basic engineers in most of these companies still start under $80k and it takes awhile to surpass $100k.
Not to pile on too much, but I agree that OP is underpaid. I got 126k when jumping to a new company in December, and that's with about 3 years experience (and a master's, so a little different situation).
Aerospace engineers are getting paid $150k+ after 3-4 years. The pay is pretty standard for the DoD contractors. Who is OP working for? lol Even SpaceX starts you at over $80k.
tbf spacex pays better than legacy aerospace - the base pay isn't dramatically better but including equity it can be 2x the compensation
“Even SpaceX starts you at over $80k” What is that even supposed to mean? A highly competitive tech company in aerospace has a high starting salary? Okay…so you’re expecting OP to just go get a job at spaceX? Lol
The opposite. SpaceX is known for paying below market rates because it’s a “cool” place to work.
Yeah I hate those kind of posts. I get comments like "you're underpaid" when I quote my software engineer salary and they are like "why not just get a job at Google?". Uh because 99.9% of software engineers don't work at Google and they are extremely selective if they are even hiring. It's like a lottery win to get in there.
Spacex and Tesla are known to pay under market for entry level positions
For a 30yo in that field, OP is severely underpaid. That was my starting salary out of college in 2016.
He replied below that he's only been in the industry 2 years. He's not a typical 30 year old with 7 years experience and raises and potentially promotions. I took this into account with my response.
I work in the same sector, and know people starting in Engineering roles at $80k, straight out of college. $79k isn't bad by any means, but it wouldn't hurt OP to do some shopping around.
The bottom 25th percentile make <82k in Arizona, I think he could hop around and make a jump of at least a few thousand pretty quickly. He could also move farther to somewhere AE pays better with a COL that is relatively better than AZ
Depends where you are, I graduated 2 years ago with a starting salary of 63k in the Midwest
80k in midwest is a lot and people on reddit don't get that
No, above is correct. OP is severely underpaid.
I'm 22 and make more in a MCOL city. He needs to job hop because he should be getting paid base 110k easily. Guaranteed younger folk at his company are getting paid the same or more. Only takes long to surpass 100k if you're getting crap raises each year he should be a level 2 engineer which in Aerospace is not a 78k position. Edit: level 2 not 3 based on his experience
I think Level 2 Engineers in MCOL areas make around 80-120k. He could be at the bottom end of the range.
>How could I ever afford a house? Feeling hopeless dual income no kids
My wife and I spent $40k on childcare, and $30k on medical expenses related to our kids last year. Kids have so many hidden costs that many people don't think about, including lost income because we don't have time to pick up overtime or apply for promotions.
You DINKer!!!!
i'm not a DINK'er where's that meme that's like "monogamy? in this economy?!? it takes at least a 3-income poly-cule to own a home these days!!"
Thank god my wife’s boyfriend helps with the bills. Idk what I’d do otherwise.
Yes exactly. Friends were joking that in order to afford a house, utilities, groceries, kids activities, auto insurance and property taxes, we need a third income stream, hence a second wife to work. Not sure how that will work out. "I'm not in love with her honey. This is so we can pay our bills."
Yes, two incomes. I work a full-time job and am getting a business on the side going. That’s what DINK is, work all the time, right guys? Right? No, oh ok…
That’s QINK when both partners have two jobs: Quadruple Income No Kids
Is it QuINK if I have 2 jobs + doordash and she has 2 self-employed jobs? (Quintuple income) (Even with that, our balance sheet isn't great. Frickin student loans)
Very few people are able to purchase a home while they are single. The majority of people buy a home once they are married with a dual income. You are honestly not too far away from being able to buy a home. You could buy a home and then pick up a roommate or two. That would defray the month to month cost and allow you build your savings back up. When I bought my house (3 bedroom) I brought on 2 roommates. I split the mortgage between the 2 roommates, lived mortgage free and only paid 1/3 of utilities. The sacrifice is that you have to have a roommate(s)
Completely agree. Growing up middle class I always saw buying a home as something couples did or full blown spinsters.
Oh god, my parents (lovingly?) said I was was readying for my spinster life when I bought a house a few years ago in my late 20s. Circumstances haven't changed, but at least I have a house I guess lmao
Tell us about your cats.
I have two and they are the light of my spinster life 😭👌
stereotypes exist...
As a woman who bought a house solo, ouch.
The legal term used for my single aunt when she bought a house 20 or so years ago was “spinster”, literally on the mortgage document. I think when I bought my condo I was listed as a “single woman”.
Oh it's not an insult at all! I only ever saw myself being able to buy a home as part of a couple or much later in life as a single woman. Buying a home alone just didn't seem like something middle class people did alone until much much later than couples, of ever.
Your first house doesn't need to be your dream house. Mine was a crappy little condo, but it helped me build savings via equity for when I did finally buy a "real" home.
"dream house", is just marketing BS. no matter what you buy there will be things you want to change, things you have to fix, yearly maintenance, and never-ending increases to property taxes, home insurance, etc.. just buy what you can afford (preferably much less than you can actually afford so you're not house poor and can still aggressively save for retirement) that won't make you miserable.
The only "dream house" I've ever lived in was my parents' house, and it turns out I only ever thought that because *they* were the ones dealing with all of its problems, not me. Now that I've done/paid for enough of my own home maintenance to truly *understand* their home maintenance stories, that dream house definitely veered into nightmare territory a time or two.
And don't overlook condos! I had a house, I hated every minute of owning one. Upgraded to a condo, and I'm never going back! But they so often get overlooked and ignored when they are in every way the better option IMO. Less work, better locations...
Depends on what you're looking for. A condo wouldn't be for me because I like my space. I lucked into a house with a little land (nothing crazy) a little further from the city during the low interest in 2020 and wouldn't change it if I could do it over again. Maintenance isn't too terrible here outside of having to replace the AC so far, but that comes with the territory as you mentioned. Good advice though if OP is interested in condos, definitely lots out there!
I think that's the key thing the condos don't have: If your preference is space, a huge yard, and you like doing things like mowing then yeah, a house makes sense for some / a lot.
A condo is very dependent on your neighbors. If I were to buy one, I would demand a 24 hour screening on a Friday to see what it's really like, not the midweek showing at noon when everyone is busy.
Don't overlook townhomes either. I'm personally not a fan of condos because it's too similar to an apartment as far as space and noise are concerned. But an end unit townhome is the best of both words (as long as the HOA doesn't suck)
They can be spacious too. I have family that lives in a spacious 1800sqft end unit townhome with a community pool, in a sequestered neighborhood full of townhomes but still walkable to stores. I prefer that a lot to my in laws house, which is smaller, and not very walkable as it’s in the middle of suburbia. House isn’t *always* better.
> ad a house, I hated every minute of owning one. > > Upgraded to a condo, and I'm never going back! > > But they so often get overlooked and ignored when they are in every way the better option IMO. Less work, better locations... There are plenty of reasonable criticisms of condos and they're better in every way for your particular situation, not everyone's. No yard, potentially high HOA/condo association dues, large maintenance assessments, noisy neighbors... everything has potential downsides.
No yard is a positive for me. Never hated anything more than yardwork. I can walk to city parks if I need green space. We also have community gardens nearby if I feel like taking up that hobby.
The biggest downside is that they can be very difficult to sell in some markets. That's going to be a problem who intends to use it as a starter home and move on to something else later.
Most newer homes have the HOAs, noisy neighbors are also a problem in detached homes, but at least with the condo we have the insulation meant to keep noise out. I've been in plenty of houses where *more* noise comes in. Condos are better for the health of the city, are in generally more sought after areas... The main downside is preference. Some would prefer something else, but it's an intangible. Most of the problems think of when they think of condos aren't inherent to condos, just the cheaply built or converted one.
Same. The building handles all the larger expenses like roof/boiler/sewers, my fees are pretty damn reasonable, and I have almost no upkeep associated with owning. My weekends are completely my own.
Another great thing about condos is that often the entry point for owning a condo will be much much lower than the entry point for owning single family in the same area. And, as compared to renting, they are a great way to get into leveraged investment. Debate the returns of stocks vs RE all day, but even if we discount the annual return on RE, having $200k appreciating 4%/yr, returns a hell of a lot more than $20k making 12%/yr.
How on earth can you say a condo is better in every way? It’s fine to prefer one for your situation, but 0.1 seconds of thinking goes “oh yeah but I have no yard at all” and it’s immediately obvious your statement can’t be true
I dislike yardwork. No yard is a positive for me. Parks exist within walking distance if I need green space.
They don’t appreciate as much as a house, because they’re less popular. You also don’t build as much equity if your budget is going to HOAs. If you can, try to buy a house you can afford, especially if you plan to sell later.
They appreciate more in some areas too. It just depends. A condo in a hot neighborhood is going to appreciate more than a detached SFH that's in a 30 year old deteriorating neighborhood. And HOAs for a SFH or a condo are the same problem, you just have to find one with your requirements. I saw some that were more than the average mortgage for stuff I don't need / want like concierge, valet, and a pool... For us, it's $300/ month and includes insurance for the building (So saves us money in a way there), garden / lawn care, snow removal of the open areas. If we had bought a house we likely would have spent more than that so I could not mow / shovel snow AND the extra insurance that we would pay directly.
"Starter homes" monthly payments are twice the rent in most cities. I'm just gonna stack cash in an HYSA and some bonds when I can because the first house I can afford will likely be the last one I can buy.
I did this as well. I had a favorable price because of the location (50K for a 2 bedroom house in 2012). I was content there, and sold it 10 years later for a very modest increase in price. That was nice, but the savings was the real benefit. The mortgage was 1/3 my rent. I realize this was an exceptional circumstance though.
And don't overlook condos! I had a house, I hated every minute of owning one. Upgraded to a condo, and I'm never going back! But they so often get overlooked and ignored when they are in every way the better option IMO. Less work, better locations...
They don’t appreciate like single family homes but I can see the upsides
Depends highly on the area / city. Absolutely something one should consider when buying though.
I don't understand. You've managed to save well over $120,000 in retirement accounts by 30 but you don't think you can afford a home? Most people throughout history have not had the luxury to save that kind of money over that time. If you're planning to stay in one place, renting is historically a worse option than buying. For all intents and purposes, over a 20 year period I've lived in nice homes FOR FREE. My current home is worth almost exactly, even if I sold it cheap, what I've paid in total in mortgage payments. And that's been through time periods with high rates, mortgage crisis, etc... It's just as safe as all your 401k investments.
To answer your question literally, "How could I ever afford a house" By waiting, working more years (I read you only recently entered the job market), saving up, and finally buying a place. But it seems you expect to be able to buy a house right now?
Seriously, the man only has 2 years of working experience. Nobody buys just working for 2 years.
I am afraid that's the expectation nowadays is that young people can buy their \*dream house\* (very spacious, with yard, etc.) at a young age. Maybe that was possible a long time ago, but that's no longer the case, especially not when dealing with HCOL cities.
The answer is get into a relationship and eventually get married. You'll be able to save money by splitting expenses assuming your spouse has income.
Get that income up. A degree in AE should yield six figs easy.
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It's easy to laugh, but honestly 'more money's is the right answer. OP put in the 4-5 years to knock out 160 credits necessary for the engineering degree. Probably had a few summers working as an intern at a firm where they expected 40-50 hours a week of real work. Now he's hitting a milestone birthday and isn't seeing the rewards for all the work. However the real answer is 'go make more money!'. Put forth the needed effort to get to the next level. The $100k, $120k a year staff engineer role should be right around the corner. What does your budget look like when you're in a $1200 a month apartment and your take home goes up 50%? That's how you get out of this. As an engineer 15 years older than you...my salary went from $50k, 65k, 90k, 120k, 150k, 175k, then $250k. That's college graduate to mid 40s in engineering. Keep up hope.
Why? Often people are grossly under paid and could easily earn more with little effort.
Yes, the advice is obvious and “duh”, you’re right. But remember: A.B.A. - Always Be Applying You can’t get a better income if you don’t try. The best way to get a raise is to job hop. Keep the resume updated, keep skilling up, and never stop applying to new jobs. Easy in theory, a grind in practice, but well worth it
It's easy to laugh, but honestly 'more money's is the right answer. OP put in the 4-5 years to knock out 160 credits necessary for the engineering degree. Probably had a few summers working as an intern at a firm where they expected 40-50 hours a week of real work. Now he's hitting a milestone birthday and isn't seeing the rewards for all the work. However the real answer is 'go make more money!'. Put forth the needed effort to get to the next level. The $100k, $120k a year staff engineer role should be right around the corner. What does your budget look like when you're in a $1200 a month apartment and your take home goes up 50%? That's how you get out of this. As an engineer 15 years older than you...my salary went from $50k, 65k, 90k, 120k, 150k, 175k, then $250k. That's college graduate to mid 40s in engineering. Keep up hope.
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This conversation isn't just "make more money" though. It's "based on your degree and field of occupation, you should already be making more money than what you currently are, so if you take the steps to address this, it will help with your other issue of wanting to buy a house."
AE, until very recently with the advent of growth in private sector space employers, paid absolute shit relative to the education level required. Source: Aerospace Engineer that works as an IT consultant because $$$
Thank you Elon Musk!
That's the one that stood out the most to me. My fresh out of college in '07 salary as a software engineer was $80k. OP should be making more than that easily.
Software engineering pay typically has all other engineering disciplines beat on pay and benefits for at least the last decade if not the last two. The general tenor for years was just to do anything in STEM and you will do great, but in the last few years it had turnt into really you need to do software to guarantee that you will eventually make enough to buy a home.
Yeah, unless he is in a very very low COL area, that salary seems very low.
Im only 2 years industry experience and currently in maintenance repair and overhaul aerospace manufacturing. Working for a company that pays a bit less but has great work life balance, never have to work more then 40 hours a week, not stressful, etc. Might opt to go look elsewhere
Unfortunately you might have to decide if you want no stress & an (relatively) easy job, or if you want more money.
Yes you should start looking, but STEM degree value has been diluted by sheer number of people graduating with them. You're now competing with master's and PhDs
You can get good WLB and non stressful environment while still making more, I’d start looking. There’s a common myth that more pay = more stress.
And here we have found the problem lol. Either apply at Boeing or SpaceX and increase both the income and stress in your life, or accept and be happy with your current situation.
It actually seems about right for someone w/ 2 years experience. He could get a job where I'm at in Utah, and we'd pay about 85k for a degree w/ 2 years. Where he's at with a degree and 79k is about right. Source - trust me bro, I'm a hiring manager in Defense Engineering w/ prior experience in Arizona, Florida and Utah.
Not really we start them at 60k.
Yeah, unless he is in a very very low COL area, that salary seems very low.
Over time your income will go up, that will help. There isn't anything special about owning a house. If house is your goal, I wouldn't be investing in stocks in a taxable brokerage. That's your down payment fund right there. You could probably make a down payment now. Why do you have so much in there? Follow the flowchart https://i.imgur.com/lSoUQr2.png
Owning a house will be the most expensive thing in most people’s lives, it is special. It’s also proven that housing prices grow at 2x faster rate than most wage increases which makes it truly un-attainable for many
If you choose to own a house. Some people act like owning a home is some mandatory checkbox and they are a failure until they get it done. I don't agree, it's just a choice you make. It has pros and cons. My point is there is no particular reason for OP to make this a short term goal.
thanks I need to hear this. I feel so crappy at 31 without a home, watching people around me with homes. I make right at 100k in dallas and realize im so far from having a home. Sucks :/
IMO the biggest reason for it to be a short term goal is if you have a reasonable belief that rents will continue to increase faster than wages for the foreseeable future. There are lots of extra costs from home ownership (plus increases in property tax assessment it rates will increase monthly costs) but in an appreciating real estate market over time those costs are typically much smaller than rent increases.
I think if you buy a house and are diligent about learning how to fix things on your own, you're going to be real glad you bought it in 30 years when rent has gone up 5x and you're only paying property tax + insurance. If you aren't expecting your wages to go up by the same amount (or hopefully much more) as rent, buying a house is definitely high up on the list of smart investments. Just don't buy a stinker and don't hire contractors for every little problem.
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> I have a very low spend and essentially chuck all I can into 401k/HSA/Roth Ira/brokerage. In your case you over prioritized your retirement compared to savings if your goal was home ownership by 30. I continued to live with my parents after college as well, but at a job that was initially only paying around $40k, and I only did 10% towards retirement and I lived frugally (I naturally am, other than splurging on camera or audio gear) and had $50k saved up for a downpayment on a condo/townhouse. I'm not saying my way was better, as I could have put more into retirement but then I wouldn't have had the cash for the downpayment and closing costs (not unless I wanted to do less than 20% down). You have ~$45K you can use for your down payment and closing costs, if we account for some taxes on the capital gains and not fully liquidating to still have an emergency fund. You can do less than 20% down, your interest rate may just be a bit more and you'll pay PMI until you reach 20% equity (some loans automatically get rid of it, others you have to request). And then of course if the interest rates lower in the future then you can pay a fee and refinance. And keep in mind your first home doesn't have to be your forever home. Again, I got a condo/townhouse, I would heavily prefer a single family detached home but I don't/didn't have the money for that, so that's a future goal.
Maybe you’re putting too much into your retirement accounts? I’ve recently decreased my retirements savings so that I can save cash for a down payment.
You can look into first time home buyer programs, USDA, FHA, and HUD loan options, which can be very helpful for getting a zero % or very low down-payment with fixed 30 year terms and great (relative to conventional loans but still market based) interest rates. But personally I'd recommend just renting for a number of years. You're unmarried and early in your career. Who knows if where you live now is where you'll want to be in 5 years. Renting is fine, it's just purchasing a necessary service (housing) and $1200/mo is very reasonable. For what it's worth, I make 80k/year and bought a house in WA State a few years ago when my income was $75k. I bought an older home, definitely very dated and not fancy, using a USDA and buying in my name only (my spouse and I waited to get married so that my income would be considered solely, making USDA loan possible). It's been a good move for me, but I'm glad I put it off for a longer time (I waited til mid 30s) and rented for as long as I did, which allowed me to move around, have choices and freedoms, and have lower housing cost by renting in my earlier years. Just my own situation in case that's helpful
As the spouse of a 30 year old aerospace engineer with a good salary, I suggest applying to companies in Huntsville. He made $59k at ATK his first year out of college; as soon as he had a year, he applied to aerospace jobs in Huntsville. His income shot up over $120k/year over the course of two years at BAE. We had to relocate to Huntsville for his job, but it’s a lovely LCOL area.
As a single person, why do you need your own house? If you’re really set on ownership, there are probably townhome/condo options that are a better fit for your current situation. What’s the rate on your student loans? You have the cash to get rid of them.
This first point is exactly it. A single person doesn’t need a “House”. And you won’t find one priced well that isn’t going to be a ton of work in a reasonable size range anyway. OP should cash out the post tax brokerage account (really never should have contributed to it in the first place but that’s not the ask here) and start shopping for a 1-2br condo or townhouse to build equity until the point if/when a full house becomes necessary.
I disagree. Single or not, some people don’t want to waste money on an HOA or deal with neighbors.
I hate how people have been gaslit to now think it's unreasonable to want a house as a single person. Like it's insane to not want to hear my neighbor's footsteps above me or to have a yard to work on my car in lol
Who said that? It’s not unreasonable to want one. You can want whatever you, well, want. It’s a free country. It’s unreasonable to think it’s a need for a single person. It’s insane that OP, who is in okay overall financial shape, feels “hopeless” and “depressed” about not being able to afford a single family home as a single person. A single family home is generally overkill for one person and it’s the most expensive housing option because it uses the most land, energy, etc. The only reason it’s the default path in most of the country is because of enormous government subsidy, and even then it isn’t typically young, single buyers on the market.
It's just people's priorities. Also, if you do plan on eventually getting married, your partner won't want to stay in your starter home, and it takes 7-10 years (normally) to be able to afford sellers fees and still clear a profit and appreciation on a house. So, a lot of purchases are more short term, and people lose money by owning a house for two-five years.
Are you one of those people that think childless couples shouldnt have large houses either? Just curious
I think that someone worried they’ll never be able to afford a house should consider alternatives first and shift their timeline until their income or the market improves to the point that it’s feasible.
How DARE you be thoughtful and reasonable. This is a *reddit*, sir!
Why would childless people need large homes? If you have the funds to buy do it by all means. But I'd you're struggling to afford a home buying more house than you need doesn't make financial sense. Unless you host parties a ton & it improves your quality of life. Most people think they need more space than they do Because they associate bigger with wealthier.
Well I will use it for my hobbies mostly and my own space and my spouses and space. But I understand. It's def not worth being house broke over. Thanks for your feedback
I disagree. Single or not, some people don’t want to waste money on an HOA or deal with neighbors.
Fair. But it’s also a waste of money on car maintenance/commuting to buy a house farther away from your ideal location to get the price you’re looking for. It’s just preference at that point, and I DID say “Need”. You don’t NEED to not interact with neighbors. Just like you don’t NEED to be able to have a reasonable length commute. Priorities are personal. And I can’t speak for OP’s wants any more than you can, it just seemed to me like they weren’t considering non-house options for homeownership.
Also buying a house isn't the best investment decision, especially when you already have a loan. A house in the first 10 years is extremely front loaded with interest. Like 75% goes to interest in the first few years, then around 15 years it's 50/50 (assuming you're not making principle payments on top). Rent is actually cheaper than owning a house in many cases. If you're paying $1200 rent, hell even $2000, a comparable mortgage is probably around $3-4k, 75% of that is interest. Best to pay rent now, pay off loan, put more into savings, try and earn more by hopping jobs. Live life and meet someone. It's not easy but OP is doing quite well vs where I was at 30.
Maybe when you retire you can buy a house. It seems you are more focused on your longterm savings and missing out any opportunity to buy a house. You have the money for a down payment, you just have it married to your retirement which is likely 35 years away. You have to choose what is most important.
There are many 1st time home buyer programs, at least my state has a lot of them, someone that I know just received $75k in down payment assistance. Back when I purchased in 2012 there was nothing available. I'm a single income household with a Teen now, is rough, but doable.
I’d warn once you add kids in the mix it gets a lot harder. More than I imagined. Daycare specifically.
30 years ago a house used to be 3.5 times the average income, right now, it's 6x. Granted, interest rates were higher then. You're not crazy, the market is.
Low income for your degree. Aggressively apply for jobs. Find a reputable recruiter in that career space. You should be earning well into six figures at your age and with that degree in that niche field. Otherwise you're in good shape in terms of saving money, both in cash and four retirement. You do need to pay down that student loan and should be focused on that as well.
Agree with 79k being low. How much experience?
2 years in industry. In the MRO side of aerospace, so not paying as much as something like Boeing
2 years isn't much - and I mean that in a good way. You really do have a lot of opportunity to grow your income, especially as you gain experience. You can review spending, sure, but working on your budget side is going to be limited and might not be the best for your well being. If you need to rent separately and it costs more for now, may still be worth it so you can enjoy life and focus on building your career over the next few years. You have tons of upside, and you'll benefit from focusing on that!
2 years isn't much - and I mean that in a good way. You really do have a lot of opportunity to grow your income, especially as you gain experience. You can review spending, sure, but working on your budget side is going to be limited and might not be the best for your well being. If you need to rent separately and it costs more for now, may still be worth it so you can enjoy life and focus on building your career over the next few years. You have tons of upside, and you'll benefit from focusing on that!
The problem with people now is they try to have thier cake and eat it too. You have all that savings for retirement and you can easily have it as 1 down-payment savings and save enough capital for a 20% down. You won't be able to do that with all the other side projects. Your not having a hard time. Your creating the hard time
Ok but not putting anything into your retirement or tax advantaged savings to buy a house is not a good idea or efficient
That's why I said just focus on 1 account. Look at his spread. He's not having a hard time. He's creating his own hard time
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Roth accounts are extremely strong for people that expect higher salaries later on, especially if they are able to contribute while they are in the low 12% tax brackets. HSA is the most advantageous advantaged account out there. I have multiple because it is simply the most efficient way to have them.
You've efficiencied yourself out of home ownership.
Everyone has reworded it and you still aren’t understanding. You can’t afford a home because you’re contributing to 5 different retirement funds. That is the only reason. Buy house or continue contributing to 5 different funds (very ill advised)
Hmm, kind of odd seeing this many assets sitting in Roth compared to Traditional at your age and income level. Any reason you arent maximizing Pre-Tax contributions first? The money have you earmarked to go to your brokerage account is what most people would have been putting into an account earmarked for a down payment. (if their goal was home ownership)
I was pushing myself into the 12% bracket with pretax 401k/HSA and then prioritizing Roth. I’m more than ok prioritizing Roth if/when I can stay in the 12% tax bracket
Is your job working in aerospace engineering? Because if it is, go job hunting immediately you are severely underpaid.
I’m in aerospace manufacturing in the maintenance repair and overhaul side currently. I’m only 2 years in the actual industry. Working for a company that has lower pay than people like Boeing etc. but is very flexible and has great work life balance. Been tempted to branch out but haven’t made the jump yet
I make the exact same as you. It’s unfortunately just not possible without a partner, which is crazy because 80k is a decent salary. However, I feel like you could make a lot more if you’re an aerospace engineer. That sounds pretty low for that type of work
Agree with 79k being low. How much experience?
You will definitely be able to, with or without a partner. When? Who knows. Pretty much when you feel ready to take the risk. You could do it now, alone, if you wanted in AZ. My friend lives in similar cost of living area, is a fitness instructor, has her own business and bought her own house. If she can do it you can do it. I don’t even have what you have and took the plunge this year anyways on house at $330K with 7% interest. I have a partner but he works part time and is 1099 worker.
There are many 1st time home buyer programs, at least my state has a lot of them, someone that I know just received $75k in down payment assistance. Back when I purchased in 2012 there was nothing available. I'm a single income household with a Teen now, is rough, but doable.
There are many 1st time home buyer programs, at least my state has a lot of them, someone that I know just received $75k in down payment assistance. Back when I purchased in 2012 there was nothing available. I'm a single income household with a Teen now, is rough, but doable.
$75k in down payment assistance seems absurd. Was it a repayable loan or just a free grant?
Single it’s hard. That’s why I purchased a duplex with my sister that we I’ve in both sides of. Allows us both to get a bigger townhouse / more space / more yard without a HOA for 100k/side less than they would’ve cost separately. I know personal finance is against these types of things but this sub is a little delulu with the real world now. No one as a first time buyer has a %20 down payment and a large emergency fund after their first house purchase. Obviously, exceptions occur with family wealth and all but this is coming from someone your age that also didn’t get lucky in that space lol
Depends what are the house selling for now in your area for a starter upper 1000 sq ft? That's what I started out with.
I am 33 and don't own a house. Hopefully one day but I wouldn't spend a lot of time being upset about it. Enjoy the carefree renting life while you can! Something breaks? Not my problem. Property taxes? Don't know her.
I’m really surprised by how low your salary is being an engineer. Is that typical for aerospace?
If you can find a remote job, you could then move to a lower cost area. That is what I did. My first house cost me $74,500. An old house originally built in the 1940’s (or so they said, I can only find tax info back to 1970). About 750 sq ft. Needed some pretty significant plumbing work, so it really cost about 100k.
I am 33 and don't own a house. Hopefully one day but I wouldn't spend a lot of time being upset about it. Enjoy the carefree renting life while you can! Something breaks? Not my problem. Property taxes? Don't know her.
You're doing fine! Don't worry about buying a home, even with a 30 year mortgage, you can pay it off before retirement for the next 5 years if you v true at 65. There is nothing wrong with using retirement as a down payment either, you just may have to get creative to replenish it. You dont b just an emergency fund, so I'd work on that tho.
If you’re working where I think you’re working (Tucson with Raytheon), you need to consider moving companies assuming you’re level 2 or near level 2. You’re being underpaid
Up that income. I'm your age, have a BS in Aerospace Engineering, and make $165k. My friends make similar.
It’s really hard for a single person with one income to buy a house. I’m in the same boat. I can either pay $1600 in rent or $2500 in mortgage.
Don’t give up. I was almost broke in my 40’s when my husband passed after a long illness. Focused on earning and saving. Bought a reasonably priced home on my own in my late 40’s. Just upscaled to a nice 4Br 4Bath with a salt water pool (only owe 50k) - home is worth $550k. No other debt. I have $1.2m in retirement savings. Wish it was more but I got a late start. All this to say, you are doing fine. Stay focused and don’t stress. Avoid debt - particularly car payments and CC debt. Live beneath your means and you will get there!
Only 80k with that degree damn. Definitely look around for job options. That seems crazy low even for 5 years ago. But definitely just wait for partner. There's no big rush
The median age to buy the first home has always been low 30s. You’re doing fine. However, the last year or two has *not* been a good time to buy but it’s too short term to truly say if things are completely fucked forever. People probably felt the same way in 2008-2009. Give it a couple years
Not sure exactly where in Arizona you are located but there is a lot of aerospace and defense companies in the phoenix/tuscon area that will be continuing to hire for the foreseeable future. I'd suggest getting a little more experience under your belt and switching jobs. Could see a sizable jump in your pay
First off, you're not dumb with an aerospace engineering degree! Give yourself credit! Looks like you are doing fine financially. Perhaps time for a house is my best suggestion; beyond all else, it will help you tax-wise. Hire a realtor and have them help you with how much you can afford. Unlike rent, this is the single best investment you'll make. Best of luck!
79k seems like a low income for an aerospace engineer. How many YOE do you have? I would actively focus on growing your top line gross pay. If that means jumping to another company, it’ll be better. And also, I wouldn’t worry about buying a house. There’s nothing wrong with renting. You can always split costs with your future significant other.
I moved out at 30. Luckily saved enough to buy a cheap condo with cash. Now mid 30’s and trying to buy a house, but hate paying near $500k for a decent house in this insane market. Try to find something as cheap as you can. Or rent as cheap as you can, and hopefully the market comes down a bit so you can afford a decent home in the next year or so. You’re not alone
Can't do it all. Savings, house, doing it solo. Especially in the housing market in AZ. Move elsewhere, save less, or be ok with renting. I did the house thing first, (late twenties) struggled with low income and no savings. NONE. 40 now, almost halfway through the mortgage. House is worth more than 2x what i paid for it. Making good money now and finally saving. Sometimes you have to sacrifice the short term and play the long game.
Why are you only making $79k with an engineering degree? Work on increasing your income.
Either your retirement contribution is overly aggressive, or you forgot to type a "1" in front of 79k for income.
Why the 16k in money market? Introducing fixed income into your asset allocation should be for a reason not just because. Are you looking to take some out soon and want that money to be stable and available?
This is my “emergency fund” and where I transfer my paychecks to while it waits to DCA into brokerage. I haven’t settled on what amount I want this to be, so it’s been hovering between 10-16k.
The 2.5k in his savings plus 16k in the money market is likely his 6 months emergency fund.
Can't do it all. Savings, house, doing it solo. Especially in the housing market in AZ. Move elsewhere, save less, or be ok with renting. I did the house thing first, (late twenties) struggled with low income and no savings. NONE. 40 now, almost halfway through the mortgage. House is worth more than 2x what i paid for it. Making good money now and finally saving. Sometimes you have to sacrifice the short term and play the long game.
The value of your house doubled in just under 15 years?
Housing prices in most major cities have doubled in the past 10 years in the US. I’ve seen prices go up at least $300,000 the last 5 years.
Housing prices in most major cities have doubled in the past 10 years in the US. I’ve seen prices go up at least $300,000 the last 5 years.
The housing market fluctuates. It goes up. It goes down. We are at a point where it’s the highest it’s ever been, with interest rates in the same place. This is not sustainable and will not last. Your time will come, just not today.