How Much House Can You Actually Afford (By Salary)

Don't Buy a House Until You Know This. Here's how to calculate how much house you can actually afford. There are a couple of strategies you can use to determine this so I'll cover the best ways.

Knowing how much house you can actually afford is helpful because you don't want to overspend on one of the biggest purchases of your life. If you can't afford the house you're considering then you'll run into financial trouble.

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00:00 Intro
00:49 This is how you should think about it
02:20 How I made my decision
04:40 How to determine if you should rent
06:44 How to determine if you should buy
10:20 How to get a better loan
12:09 So here's what YOU should do...

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[VehicleLivesMatter]

Using the 50/20/30 rule I calculated I could afford 200$/month on rent. Yay.

[jaketorpepper-king]

take home pay is the only thing that should be considered

[takarahayashi]

as someone who was born and raised in the bronx, the best financial I and my family ever did, was to leave NY.

[JWEATHERSBY]

I've seen a ton of these "How much house can you afford?" videos lately (all praise the algorithm - LOL), and this was by far the most thorough of the bunch. Great job breaking down options, discussing cost considerations, and making actual actionable suggestions for people at the end! If I have any friends house hunting for a first home - I'll be sure to kick them this one.

[IamRD]

Median income is usually gross though. There is no way someone making 70k can afford 2900 in rent.

[cachondorider]

I'll just die on the Walmart floor. 😢

[thememe]

I feel like no matter what in todays world its a lose lose situation unless u bought few houses many years ago.... good video 💯

[maxime_vhw]

One ill never get is 'selling for more'. Like yes, but then your homeless. Other house prices went up aswell so does it matter?

[JustMessinJ]

Great video. Haven't seen the logic of buying vs renting broken down so well. So important to understand in today's economy.
I don't live in such an expensive area, so the difference between buying and renting isn't so great. It is cheaper to rent, but because I have two large dogs often dealing with breed restrictions makes it more economical and frankly easier to just buy. So as you stated, it depends on your needs.

[tommyx]

Fall in love with a house, buy the house, raise a family in the house, pass the house on to your children. Who cares what the equity is. Fortify a place to live for future generations

[benjiebarker]

4:29 did you mention that rent increases every year by $100-400. how much will that effect the decision to buy and sell?

[hoobajoobascooba]

Thanks for offering various perspectives on assessing home affordability. Very useful to think through these things before, as you point out, making what will likely be the biggest expense/investment most of us will make in our lives.

Regarding the Investment Return on housing over time, I'm curious what time horizon you are using? I'm on the West coast of Canada which is one region where, depending on time horizon, the rate of return could be argued to be at least 15%-20% PA (with a shorter time horizon, i.e. 5-years, though not so much over the past year). Not saying those are reasonable returns to expect, but the selected time horizon does have an impact. I'm guessing the time horizon used in the video may be around at least 25-30 years?

[bradleywhite]

The one thing that is missing from this is that the landlord can and will increase the rent to market levels.

[LyssieLysse]

Yeah…Until I get 2-3 more raises, I won’t be buying or renting anything right now. I went to a bank and a private lender and they’re telling me 2 different numbers, both of which sounds outrageous. I’m planning on becoming a nomad at this point.

[rockeye]

How TF is anyone going to save 30% for a down payment?!

[mrxiong]

Would had been a great video... but unfortunately, nobody could afford to buy a home now because they too damn expensive

[nathananderson]

This is one of the channels that gave me the courage to start my YouTube channel 10 months ago about self development. Now I have 1, 878 subs and > 2k hours of watch time. I know it’s not comparable with others but I’m still proud I started because I’ve been learning so many lessons that I could haven’t learned without getting started in the 1st place.

[apple]

Huge mistake at 8:34
No, you can thank housing prices being in an unsustainable bubble. PRICE is just as if not more important than interest rates!
Idk why no one seems to grasp that the underlying sticker price of a house matters just as much if not significantly more than your monthly payments.
If all you do is look at monthly payments you’re setting yourself up for failure.

[vitran]

Yes blame interest rate and not everyone trying to make money off homes

[AryaStarkTheExplorer]

You need to put down about 20-50% down payment so it brings the monthly mortgage payment down or you can pay a fee to lower the interest rate.