Millennial couple earning $250,000 say they can’t afford a home as prices continue to skyrocket

A millennial couple with two children struggles to find the ideal home in Portland, Oregon, despite earning a combined quarter of a million dollars a year.

Laura and Samuel Graves, both 36, are raising their children in an apartment on the outskirts of the city, but have been looking for a home for the past three years. Company Insider reported.

At first glance, it seems like they can afford a house, their financial situation is clear. Laura Graves works as a financial analyst and Samuel is an electrician, together good for a combined income of $250,000 last year.

But most of the homes they’re interested in would require a mortgage of at least $5,000 a month — nearly half of their $11,000 net income.

According to experts, it is generally best to spend no more than 28 percent of your income on housing. This rule of thumb has become increasingly difficult to maintain, as home prices and mortgage rates have risen sharply over the past four years.

“We refuse to become ‘house poor’ and, like many others, are choosing to take it easy until the housing market is reasonable again,” Laura Graves told Business Insider, referring to the term used to describe someone who has gotten into financial trouble as a result of buying a home.

Until the couple finds a family-friendly home with monthly costs closer to $3,000 to $3,500, they will continue to rent their two-bedroom apartment for $2,700 a month.

There are signs that the US housing market is finally cooling after years of record growth and high borrowing costs.

It appears that prices are dropping in certain areas, particularly Florida, due to a number of factors, including declining demand.

But unlike much of Florida, where home prices are also plummeting amid fears of natural disasters and skyrocketing insurance costs, homes in Portland generally cost the same as they did a year ago, according to Zillow Data.

Houses aren’t cheap in Portland, as it was ranked the 15th most expensive housing market in the country by a government survey. SmartAsset Analysis in June.

The Graves family may ultimately benefit from recent economic headwinds, which have sent mortgage rates to their lowest point in more than a year.

The Federal Reserve is expected to make its first rate cut in more than four years at its September meeting, allowing banks to offer cheaper loans for homes and cars.

However, mortgage rates remain high: the fixed rate for 30 years was 6.47 percent on August 8.

At the height of the suburban homebuying boom in 2020, interest rates were often below 3 percent.

The Graves said they don’t want to move out of Portland, even though they know houses are much cheaper in other parts of the country.

“We tried to move the kids to a cheaper city, but in the end we weren’t happy with that,” said Laura Graves.

The cheaper city was Spokane, Washington, where the couple grew up.

They lived in Portland for six years before deciding to move back to Spokane in 2018, where they bought a house with a monthly mortgage of $2,200.

Laura Graves said she and her husband started missing their jobs in Portland. When her old supervisor offered to double her salary if she moved back, the decision was easy.

They sold their home in Spokane and moved back to the city with their children, ages 7 and 9.

When they first moved back, Laura Graves says they were “a little picky” about looking for a home, not wanting to pay too much for something they weren’t happy with.

According to one analysis, the average home in Portland costs nearly $540,000, making it the 15th most expensive housing market in the country

This southeast Portland bungalow dropped in price by $10,000 on Monday, to $349,900. The 2,300-square-foot condo has four bedrooms and two bathrooms

This three-bedroom, two-bathroom Portland home had a $19,000 price drop in early August. It’s now on the market for $380,000.

With house prices skyrocketing and interest rates rising, they have chosen to save money for years and hope they find their dream home.

The money they put aside for this comes at the expense of their retirement accounts, where the couple only puts 3 percent of their annual income.

They are also confronted with the reality that there is a chronic housing shortage in their city of choice.

According to a housing needs analysis Portland needs 120,000 new homes from the city by 2045. Until then, 5,000 homes must be built annually.

Unless there is a major turnaround, it is unlikely the city will reach this goal, as builders could only build 1,483 new homes in 2023.

However, Laura Graves said she and her husband will continue to monitor the housing market to find a home they like and that fits within their budget.

“Our kids have started talking about how much they want a house and their own rooms,” she said. “We’ll never get those years back. By the time we buy, we won’t even need space for a play set.”