# Salary Vs Home Price

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In the 80’s and 90’s many people were told to buy as much house as you could afford because home prices just kept going up. The 3x annual salary thing was started by real estate sellers associations and isn’t very good advice. Buying a home really requires an individual to sit down and do the math and completely forget the old rules of thumb.

Salary and Wages vs. Inflation – How to Calculate 06 January 2017 by Ian Webster. It’s important to keep inflation in mind when you consider changes in your salary or wage. The U.S. economy is usually inflationary. Inflation means that prices are increasing everywhere.

A traditional measure of home affordability is for the price to be no more than three times your gross household income. Here, you can see which cities are close to this threshold and which are.

Not only home prices, but prices for health insurance and college have skyrocketed way past the median household incomes. If group health insurance for a family costs \$13,000 per year, and median household income (many which have 2 earners and fewer kids than 50 years ago), is \$50,000 – that is over 25% of the median income.

Notably, the salary of HK\$14m is the vast majority of. Note that our analysis may not factor in the latest price-sensitive.

Methodology. That home payment assumes a 30-year mortgage at current rates, and includes 1% property tax and 0.4% for homeowners insurance. It does not factor in private mortgage insurance, which you’ll owe if your down payment is less than 20% of the purchase price. You should reduce the maximum target if you have other savings needs.

Our Cost of Living Salary Calculator will determine how much more (or less) you need to maintain your same standard of living. We’ll provide a cost of living comparison that includes food, housing, utilities, transportation, health, taxes, and housing cost of living numbers.

Adjusting for inflation you would be surprised what has happened in the last 75 years. The cost of living between 1938 and 2013. The picture in question has prices for living from 1938. It includes important items like a new home, income, new car, rent, and extreme purchasing examples like tuition for Harvard: Source: Reddit