HCOL - Can I afford 1.75M House?

[uksho]

I think it will be very interesting from now on , mortgage rates will go up , but sellers still want premium , inventory is limited , no one would want to sell and buy a new house at higher price and higher mortgage rate

having said that, in the local market , even though there are barely any houses on market , prices have been reduced recently even by 10-40 K, ( probably just because sellers are getting greedy and listing it higher than it should be , even for this market

It’s like list at any price you want and see if anyone bites .

Even if prices fall slightly , with mortgage rates up , monthly rates might be higher , unless there is a recession and they drop the rates again and you refinance .

[Fugue]

Yes that's pretty much it. Definitely feeling the squeeze from this rise in rates, however if you don't get into something now, even with saving almost all my take home between now and whenever we do end up buying if it's in the 6-12 month time period, we'd really be no better off and possibly even worse off with rates in the 6s. Really kicking ourselves for not being more aggressive back in the fall. When you're at your max budget, everyday the rates come up your max has to come down. Checking out some other neighborhoods at a slightly lower price-point.


To those asking about budget earlier, our monthly expenses over a 6 month period last year when I tracked more accurately, were about $8000. Notably this includes about $3500 in monthly rent.

Really appreciate all the help and feedback it has been tremendously helpful.

This completely changes the answers in the thread though. We were basing answers off of $9000 monthly budget excluding rent. If your actual monthly budget excluding around is more like $5500, then you definitely can afford this. That’s enough breathing room. Tracking numbers accurately is extremely important, changes the picture completely

[Tim]

This completely changes the answers in the thread though. We were basing answers off of $9000 monthly budget excluding rent. If your actual monthly budget excluding around is more like $5500, then you definitely can afford this. That’s enough breathing room. Tracking numbers accurately is extremely important, changes the picture completely

Tracking what you spend and accurate proforma
of what you will spend with the new house.
Hint, your spending will go up.

[Brains428]

You can afford it, but as others have alluded to, it reduces your optionality. That, IMO, is probably the biggest contribution to burnout in our profession- likely all professions, to be honest.

In terms of buying homes at potentially inflated prices with hopes that they'll mean revert. We have no idea if prices of homes will fall substantially. It's all dependent on local market inventory. If you are ready to buy a home and you can afford it, then purchase it.