Owning a home is a dream for many people, offering stability and a sense of security. But in today’s housing market, even families with high incomes can’t always make that dream a reality. Laura and Samuel Graves, a millennial couple earning $250,000 a year, should be able to afford a home. Yet, despite their high income, they are still renting and waiting to buy. What’s stopping them, and what does their struggle show about the challenges many homebuyers face today?
In many U.S. cities, even earning a lot of money doesn’t guarantee you can buy a house. This is the case for Laura and Samuel Graves, who make $250,000 a year in Portland, Oregon. Despite their income, they can’t find a house that fits their needs and budget.
The housing market in Portland is very expensive, with the average home costing around $540,000. In the area where the Graves want to live, homes cost even more—around $642,000 on average.
High mortgage rates are another problem. Rates are now about 6.47%, much higher than the 3% rates seen a few years ago. This makes homes even less affordable.
Experts say people shouldn’t spend more than 28% of their income on housing. For the Graves, this would mean keeping their mortgage payment around $3,000 a month. But most homes they like would cost them about $5,000 a month—nearly half of their $11,000 monthly take-home pay.
The couple doesn’t want to be “house-poor,” a term used for people who spend so much on their homes that they struggle to afford other things. So, for now, they’re renting an apartment for $2,700 a month while waiting for the right time to buy.
The Graves’ story highlights how middle-class families are struggling with today’s housing market. Even though they earn $250,000 a year, high housing costs in cities like Portland make it hard to stick to a healthy budget.
Financial experts recommend that no more than 28-30% of your income go to housing. For the Graves, this means spending $3,000 to $3,500 a month on a mortgage. But the homes they’re interested in would cost $5,000 a month, far above their budget.
This has forced the couple to make sacrifices. They’re only saving 3% of their income for retirement instead of the ideal 15%. They’ve also changed their children’s childcare plans, using part-time summer camps to save money.
This issue is not unique to the Graves. Many middle-class families across the country face the same problem. Rising home prices and high mortgage rates leave them choosing between buying a home and maintaining financial stability.
In Portland, where average home prices are over $540,000, even families with high incomes like the Graves are rethinking their priorities.
Laura and Samuel Graves have decided to keep renting for now, even though they earn $250,000 a year. They don’t want to overextend themselves financially just to buy a house.
In Portland, where the average home costs more than $540,000, homes they like would require monthly payments of $5,000—much higher than their preferred budget of $3,000 to $3,500.
Instead of stretching their budget, the couple is staying in their $2,700-a-month apartment while keeping an eye on the housing market. They hope that prices will drop, allowing them to buy a home that fits their finances and family needs.
“We don’t want to be house-poor,” Laura said. “We’re waiting for the housing market to become more reasonable.”
While waiting makes sense financially, it’s not easy. They worry that by the time they can afford their dream home, their children might outgrow the need for features like a play area or extra space.
This cautious approach is one many families are taking, choosing financial stability over rushing into a risky purchase. By renting and saving, the Graves hope to eventually buy a home without sacrificing their financial goals.
Even as home prices drop in some places, Portland’s housing market remains very expensive. Several factors keep prices high, making it hard for families like the Graves to buy a home.
One issue is the housing shortage in Portland. While more affordable housing is being built, it’s still not enough to meet demand. Reports show that Portland faces a “perfect storm” of problems: rising interest rates, inflation, and a lack of affordable homes.
The city’s population is growing, but new construction hasn’t kept up. Even though thousands of affordable housing units have been built, there’s still a big gap between what’s needed and what’s available. This drives up prices for the homes that are on the market.
Local zoning laws and high construction costs also add to the problem. While programs like the Inclusionary Housing Program have created affordable units, it’s not enough to keep up with demand.
These challenges explain why Portland’s housing costs remain high, leaving many families stuck renting while waiting for the market to improve.
Tips for Dealing with a Tough Housing Market
For families like the Graves, here are some tips for navigating today’s challenging housing market:
Set a Realistic Budget: Spend no more than 28-30% of your income on housing. Think about other goals like retirement and savings before deciding how much you can afford.
Look at Different Areas: If your ideal neighborhood is too expensive, explore nearby areas that might cost less.
Keep Renting While Saving: If mortgage rates are too high, rent for now and save for a bigger down payment.
Stay Updated on Market Trends: Watch for changes in interest rates and home prices to find the right time to buy.
Check for Assistance Programs: Some areas offer programs that help with down payments or provide low-interest loans.
Get Pre-Approved: Being pre-approved for a mortgage shows sellers you’re serious and ready to buy.
Be Flexible: Consider smaller homes or condos if they fit your budget better.
Co-Buy a Home: Consider buying a home with trusted family or friends to share costs and build equity.
Balancing Goals and Homeownership
The Graves’ story shows how hard it can be to buy a home even for high-income families. Earning $250,000 a year, they must choose between buying a house and staying financially secure.
High home prices and mortgage rates make buying difficult, so they’re renting and saving for now. They hope market conditions will improve, allowing them to buy a home without giving up their financial goals.
Their story is a reminder of the challenges many families face today, highlighting the importance of balancing dreams with financial responsibility.