The typical age for first-time homeownership in the U.S over the past decade has generally been between 30 to 32 years. However, it often aligns with the state of the economy, as explained by Economists Outlook. Moreover, I believe the geographical location where people live might play a part too. For example, purchasing a house in rural Iowa is certainly more economical than acquiring one in the suburbs of cities like Chicago or New York.
My spouse and I are past the usual age for initial property acquisition, but we are now seriously considering entering the housing market in our vicinity, a suburb within easy reach of downtown Chicago.
FINDING THE RIGHT HOME – LOCATION MATTERS MOST
What we’ve discovered is the most affordable homes around our area start at about $375,000. They are mostly two-bedroom houses (too small for our family of five) or older properties that haven’t seen upgrades since the 1960s or 1970s – as evidenced by the dusty yellow rotary phone we saw hanging in one such kitchen during our search.
Ready-to-move-in houses stretch beyond our budget, costing between $550,000 and $800,000.
Adding to our stress are the property taxes, which could amount to a minimum of $10,000 annually on a modest home, or even shoot up to an average of $15,000-$20,000.
The thought of having to save up $75,000 for a 20% down payment on a home, which would still need substantial renovations, is overwhelming. And the idea of shelling out $1,000 every month for 15-20 years towards taxes is awe-inspiring.
LIVING COSTS VS. INCOME
Our current inability to afford a house comes from my husband’s status as a post-doc. We hope his income will increase significantly when he lands a tenure-track position in two years.
Living in an expensive area might amount to a pay raise, although this income boost won’t fully offset the high living costs. A raise of $20,000 here might get absorbed by property taxes, disregarding the higher costs of housing, gas, food, and more.
LOCATION-BASED LOYALTIES?
For 13 years, we’ve called this part of the country home. This is where my husband studied for his Master’s, Ph.D., and now completes his post-doc. This is the only place where our children have experienced school.
However, do these deep-seated ties justify staying, considering the financial strain it could put on us for the next two decades, impacting our savings and retirement planning?
Indeed, while location matters, we’re pondering not only shifting within the Chicago suburbs but also moving away from the city and its exorbitant costs. A three-hour drive could relocate us to a more affordable neighborhood, where our dream house could cost less than $200,000 and carry an annual property tax bill of under $5,000.
Is the move worthwhile? I believe it is.
Have you ever moved significantly to lead an economically friendly lifestyle?
(Source: SmartAsset.com)
