Affordability Analysis: Is Your Income Keeping Up?

October 26, 2023 By 0 Comments

Do you make enough money to buy a house? On this week’s episode we discuss the rising cost of homeownership and what you can do to make sure your income can keep up. Check out the full episode and if you have questions about how to get started with Homeowner Prep, be sure to reach out to us or drop your question in the comments.

What You’ll Learn from this Episode:

  • Why You May Need A Raise
  • How Much Homes Have Increased In The Last 3 Years
  • Why You May Need To Analyze Your Budget
  • And much more!

Watch The Full Episode On Our YouTube Channel


00:00 How Much You Need To Earn To Buy A Home
00:13 Intro
00:35 Welcome To The Homeowner Prep Podcast
01:35 Yes, Home Prices Are Up! Almost $40K a year…
02:00 Average Household Income Is Down
02:37 Maximize Your Value Where You Currently Work
03:43 It Might Be Time To Change Jobs
04:18 Increase Your Education
05:19 What Does Your Budget Look Like?
05:50 You May Have To Scale Back Your First Home
07:03 Getting Started With Homeowner Prep
07:21 Connect With Us On Social Media
07:53 Outro

“Just because a study comes out saying that it’s harder to buy, doesn’t mean that it’s impossible to buy.”

Eric Hellon

Full Episode Transcript:

A recent study came out showing that the average American needs to make $114,000 a year in order to buy a home, but on today’s episode, we’re going to talk to you about how to make sure that your income is keeping up with the market.

Welcome to the Homeowner Prep Podcast, where every week we educate and encourage aspiring homeowners to help them buy their first home faster. If you aspire to own a home, you’re in the right place. So enjoy. Do us a favor and leave a review, a rating, and be sure to subscribe. Now, let’s get to this week’s episode.

Hello, and welcome to another episode of The Homeowner Prep Podcast. I’m your host, Eric Hellon, and on today’s episode, we’re going to talk to you about making sure that your income is keeping up with the housing market.

We know that a recent study came out by Redfin and it was picked up by a lot of media talking about how much you have to make on average as an American in order to buy the average price home, but the problem that we had with that report was just the fact that in some areas of the country, $114,000 sounds like it is way too much, like It’s not possible, and some folks will actually give up hope in homeownership. And in other parts of the country, we realize that $114,000 just isn’t enough. Home prices are so expensive in these areas that you have to make almost double that in order to buy your first home. So that’s why we wanted to highlight this article and talk to you about how you can make sure that your income is keeping up with the housing market.

The first thing we have to address is the fact that, yes, home prices are up. Home prices over the last three years on average, are up $118,000 throughout this country, so that’s almost $40,000 a year. Now, chances are you probably didn’t get a raise of $40,000 a year so you have to find out, “how am I going to keep up with this increased housing market?”

The second thing to be aware of is that on average, the American household is actually losing money. So back in 2020, the average salary, average household income, was just over $76,000. Today, it’s just over $74,000! So how did we lose $2,000 a year? That adds up. That’s almost $150 a month that you missed out on. Now where did that money go? We don’t know if we don’t have a budget.

So we need to address the fact that, yes, the housing market is going up faster than your income and your income is actually going down. So how do we address this issue? The first thing you have to do is maximize your value where you work. You may think that the cost of living increase and raise is all you’re ever going to get every year, but chances are you can actually earn more and ask for additional raises throughout the year. You have to find out how to do that and there’s plenty of videos online that’ll show you how to talk to your boss, what techniques to use, how to address them. There’s a lot of videos that talk about how to get a raise in your job, so I definitely invite you to check those out online.

But the main thing is you have to show value. When you started out at that job, you had a certain value to that company and over the years, hopefully that value has been increasing and not staying stagnant. Now if your value to the company is just staying stagnant after being with them for multiple years, then you need to address that with yourself. You need to find ways on how to educate yourself, learn additional skills and resources that can be proven valuable to your company. If you can prove that you’re more valuable to the company, you have a greater chance of getting a raise.

Now if you can’t get a raise, maybe you need to change jobs, maybe you need to stay in the same industry, but just work for a different company. There may be opportunities for you to make a shift staying in the same industry, but just changing to a new employer.

Now, if that’s you, you could actually hire different agencies that will take your resume and they’ll pitch you to other companies. These are headhunters if you would. So there’s opportunities for you to do the same level of job at a different company and potentially earn more money.

Now another way is of course to increase your education. A lot of people go back to school, earn additional degrees, and that way they can earn additional income based on the steps that you may have at your job. So if that’s an opportunity that you have, definitely take a look at that as well.

But what if your job just isn’t going to pay you enough money for you to buy a home in your area? Well, unfortunately, you’re going to have to go get another job. You’re going to have to pick up a side hustle, figure out what are the skills and the talents that you have that you can actually make money with. That may be an opportunity for you to earn additional income outside of your traditional working hours and possibly on weekends. You may have to work harder in order to reach your goal of homeownership.

There’s nothing wrong with working hard, having multiple jobs in order for you to obtain your goals, and then once you’re settled in, there may be an opportunity for you to scale it back a little or in that timeframe you may have found a different position. So definitely do the hard work now because time is of the essence.

There’s one major key that I want to bring up. As you think about trying to earn more money and you’re thinking about trying to save money, you need to think about what your budget looks like. Where are ways that you can scale back? What are the things that you can cut out temporarily in order to buy your first home? Look at that budget, analyze it, go over it with your family, and talk about these things. Talking about your spending habits with your family and especially your kids will have a major impact in their financial growth.

Now, after you’ve done all you can to make more money, you’ve done all you can to cut out from your budget, you may have to scale back what you’re looking for in your first home. There have been some major influencers talking recently about finding your first home, the move-in ready starter home. A lot of people have their mindset on a dream home, and they’re on Zillow looking way beyond their budget. But if you can start out with buying something that may be a little smaller, maybe a condo or a townhome, it’ll help you get your foot in the door. Then you can actually enjoy the benefits of rising home prices. At that time, inflation and appreciation will actually be working out in your favor because you own a real asset.

So get your foot in the door as soon as possible. I know you want to buy a dream home, and that will come, but if you can focus on a starter home, a move-in ready home, or even something that you got to put a little sweat equity into, get your foot in the door, buy your first place, and let that appreciation work in your favor.

If you need some help in putting together a game plan on how to maximize your value at work or what steps you need to take in order to buy your first home, that’s what we’re here for. Reach out to us anytime. You can text the word START to 619-848-3700 or you can actually visit us on our website at from there, you can set up an initial consultation, and we can help you put that game plan together to buy your first home.

If you just have a general question or a scenario that you want to run by us, feel free to reach out to us on any of the social media platforms. We tend to get the majority of our questions on our Instagram account @HomeownerPrep.

I hope you got some value from today’s episode. I hope you realize that just because a study comes out saying that it’s harder to buy, doesn’t mean that it’s impossible to buy. So reach out to us, let’s put a plan together and help you buy your first place. I look forward to providing you with some more great content on the next episode, and until then, be blessed.

If you’ve enjoyed this show and got some great value from it, please be sure to rate and review and if you’re checking it out on YouTube, please be sure to subscribe. That really does help us to continue the show and bring in some great guests to help you on your home buying journey.

Connect with Homeowner Prep:

Want to buy a house, but not sure how to get started? Visit our Start Page and we can help you, no matter where you’re at on your homeownership journey. If you enjoyed this episode of The Homeowner Prep Podcast, be sure to subscribe on iTunes and leave a review. It means so much to hear your feedback and we’d love for you to help us spread the word!