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Chippopotanuse t1_j9fr33y wrote

One thing to keep in mind is that salary progression for different folks change at VERY different rates.

A teacher who has two decades of experience in Boston who is close to maxing out their top end pay at $105k (and about to maybe get replaced by a cheaper younger person) is very different from a 30-year old who just got out of grad school and their first job is paying $105k with potential to double that salary in three years.

They will be looking at very different types of houses.

And also…elephant in the room is family wealth and assets that barely show up on your income statement. I know lots of folks who are early retirees and only make $50k per year in dividends. But they have $5-$10m in assets and own their home outright.

Boston also has lots of international money and wealthy parents buying condos (for kids who are students or just to park money as a cash alternative). Seaport is rife with empty condos sold to globally wealthy folks. Same for One Dalton.

Boston is a weird city like that.

Most regular households earning $100k with kids have a shitty commute and live at least 40 minutes away by car.

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pccb123 t1_j9fudjz wrote

All very true, however, it looks like this post is specific to millennials so, retirees and teachers with 20 years of experience arent really relevant (although getting close).

x 10 for your point on family wealth. Lately, I feel like that is almost always the missing piece to my "how are people affording this?" confusion

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UltravioletClearance t1_j9fwewt wrote

Putting down a huge down payment (like close to 50 percent) is the only way buying a $600k+ home on $110k household income makes any mathematical sense. A lot of people who do this tap into family weath or an inheritance for the down payment.

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occasionally_ganache t1_j9fxm8i wrote

Not quite, even with 10-20% down if you’re willing to have roommates then it works out strongly in your favor versus continuing to rent.

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Ready-Interview-9809 t1_j9gi79v wrote

Whatever percentage you need to avoid PMI is gonna make the difference. Look it up.

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rakdoc t1_j9guwku wrote

I pay 66/ month for PMI. it’s boring if you have heat great and solid income. it’s 1/50 of my mortgage

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WinsingtonIII t1_j9hftbv wrote

PMI is not nearly as big of a deal as people make it out to be. Mine is like $70 per month, I pay more for my cable/internet bill. That's hardly a big deal when you consider what your mortgage will be in most parts of MA anyways.

I don't think there are many situations in a high housing cost state like MA where someone could otherwise afford the mortgage on a house but can't because of the PMI amount.

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Ready-Interview-9809 t1_j9hjaoi wrote

I was replying to the “10-20% down” comment. Noting that if someone had the option to put 10-20% down, whatever percentage to avoid PMI would save ( for you $70x12=$840/yr ) and be the better option.

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WinsingtonIII t1_j9hpvle wrote

Sure, that said I do think in such a crazy housing market you have to consider the opportunity cost of delaying your home purchase to save up the necessary down payment to hit 20%. But yes, if you can already afford 20% then there's no reason not to just put down the 20%.

We bought three years ago and put down around 10%. If we had waited to save up for 20%, we'd still be saving and wouldn't be able to buy yet. Meanwhile, the value of our house has increased by $100,000 in that same timeframe and the interest rates have skyrocketed. We simply wouldn't be able to buy this house today, whereas we could three years ago.

Paying $840 per year for ~6 years to be locked into a sub 3% interest rate mortgage on a house that cost $100,000 less than it would today is absolutely worth it. The difference in list price and interest rates if we bought today would easily exceed the $70 per month we are paying in PMI.

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occasionally_ganache t1_j9gjrev wrote

20% is the amount to avoid pmi, I know because I literally pay pmi

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Cupcake-Mountain t1_j9iyd0s wrote

There are loans where you only need 3% to avoid pmi. I know because I only put down 3% and don’t have pmi.

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Chippopotanuse t1_j9fxem8 wrote

Millennials are 27-42.

Every teacher I know started around 22. But I mostly know teachers who went to BC and local schools and am not as familiar with folks who transitioned into teaching at age 40.

So yes - there are a whole shit ton of 15-20 year teachers in the millennial age range. I wasn’t referring to 65 year olds but I can see how you might read it that way.

And maybe you missed the “early” in the retiree part.

Boston has a stunning amount of folks who made a lot of money in tech and finance (or who have family wealth) and who leave full-time work in their 30’s / 40’s. Especially to have kids. I saw it all the time back when I did big law. (I left full time employment at age 37).

The millennials right in the middle of this median - the ones who actually do make around $105k as a household and who are between age 27 and 42 - are a very diverse and weird mix of folks with all sorts of different economic and family circumstances in my experience. It’s really hard to lump them into one bucket and generalize.

(Two line cooks who are 40 and who make $50k each are very different than a single 27-year old renter who makes $105k at State Street. Etc…)

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pccb123 t1_j9g37o1 wrote

Im a millennial. I agree with you. I was just noting that salaries of teachers with 20 years experience and (early) retirees wouldnt really skew that median too much since there arent that many millennials in either group quite yet. Even the oldest millennial who started right out of college att 22 would just hitting 20 years now. Although I definitely wasnt thinking early retiree meant 30s/40s, and Im sure youre right that there are way more tech/finance people who leave full time work than I considered. Now I'm curious the % of people in their 30s/40s who were able to do so.

Either way, I agree that its hard to lump everyone in/generalize, particularly when it comes to familial wealth, etc.

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Electrical_Media_367 t1_j9icuar wrote

I'm a millennial and I graduated college 20 years ago. We're in our 40's now.

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pccb123 t1_j9jkzq6 wrote

I know that millennials are in their 30s-40s. I am one. I wasnt suggesting otherwise.

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UltravioletClearance t1_j9fwds4 wrote

>Most regular households earning $100k with kids have a shitty commute and live at least 40 minutes away by car.

What's wild is they end up paying a second mortgage on a soul crushing 4+ hour commute instead. I calculated the cost at commuting into Boston from 50 miles outside the city at around $2,000 a month.

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ladybug1259 t1_j9jeucd wrote

Depending on location, monthly commuter rail passes are much less, and parking at some of the outlying stations is pretty cheap. There is definitely a cost but it can be worth it particularly if you can work on the train.

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