Submitted by BoOo0oo0o t3_11886fw in massachusetts
Per https://www.boston.com/real-estate/real-estate-news/2022/08/02/boston-area-attracts-relocating-millennials/?amp=1 the median income in MA in 2022 was $106k for millennial households. I am curious where people making this household income looking to buy their first house in todays market are actually able to afford to buy in MA
I've been considering buying in Northampton or Easthampton but I'm really nervous about the long term prospect of remote work. I work in tech and did just switch jobs to remote with occasional (once or twice a month) sites in Boston. I do wonder if it will last though. Like at Future companies.
Of you’re in tech, remote should not worry you. Even if you had to do Boston in person once or twice a month, it’s very doable.
You can reasonably commute to Springfield or Hartford (or even Worcester, but that's stretching it) if you needed work.
True but Springfield and Worcester aren't exactly tech hubs.
I suppose not, but you also don't need to make as much money out there as in Boston and the immediate area.
There really is no work out there
Maybe it's not Boston, but there are some jobs in software and IT with a smaller and less competitive group of people trying to get them.
Did the jump last year and it’s totally worth it.
Moved from a rental in Medford to our own place in Easthampton. Best decision ever.
I’m looking at land in the Berkshires to build a home that I have absolutely no intention of ever selling or leaving if I can help it. That far west is the only reasonable place we can afford right now.
From the Boston Sunday Globe cover story this weekend.
>Unquestionably, stratospheric housing costs are a major factor in why people leave Massachusetts, especially now. Before the pandemic, a family making $100,000 a year could afford to buy 37 percent of homes available in the state. Today that figure is just 12 percent. In metro Boston, it’s just 6 percent, compared with 34 percent nationally.
To be succinct, if you're making the median income in MA, you are likely not buying a home in MA unless you already own one or have some other source of wealth.
I like how the list of move out states are Florida(retires), New Hampshire a border state, and cali/NY, probably students but two also high income areas. Almost like people don’t uproot their family and social lives plus take a 30% pay cut to go live in the middle of nowhere for slightly less money. People in general do not move due to cost of living they will just deal with it by continuing to rent or cutting elsewhere. These articles gloss over that Millennials are not moving out of MA, they are just continuing to suffer with the ever rising COL burden.
One thing to keep in mind is that salary progression for different folks change at VERY different rates.
A teacher who has two decades of experience in Boston who is close to maxing out their top end pay at $105k (and about to maybe get replaced by a cheaper younger person) is very different from a 30-year old who just got out of grad school and their first job is paying $105k with potential to double that salary in three years.
They will be looking at very different types of houses.
And also…elephant in the room is family wealth and assets that barely show up on your income statement. I know lots of folks who are early retirees and only make $50k per year in dividends. But they have $5-$10m in assets and own their home outright.
Boston also has lots of international money and wealthy parents buying condos (for kids who are students or just to park money as a cash alternative). Seaport is rife with empty condos sold to globally wealthy folks. Same for One Dalton.
Boston is a weird city like that.
Most regular households earning $100k with kids have a shitty commute and live at least 40 minutes away by car.
All very true, however, it looks like this post is specific to millennials so, retirees and teachers with 20 years of experience arent really relevant (although getting close).
x 10 for your point on family wealth. Lately, I feel like that is almost always the missing piece to my "how are people affording this?" confusion
Putting down a huge down payment (like close to 50 percent) is the only way buying a $600k+ home on $110k household income makes any mathematical sense. A lot of people who do this tap into family weath or an inheritance for the down payment.
Absolutely.
Not quite, even with 10-20% down if you’re willing to have roommates then it works out strongly in your favor versus continuing to rent.
Whatever percentage you need to avoid PMI is gonna make the difference. Look it up.
I pay 66/ month for PMI. it’s boring if you have heat great and solid income. it’s 1/50 of my mortgage
PMI is not nearly as big of a deal as people make it out to be. Mine is like $70 per month, I pay more for my cable/internet bill. That's hardly a big deal when you consider what your mortgage will be in most parts of MA anyways.
I don't think there are many situations in a high housing cost state like MA where someone could otherwise afford the mortgage on a house but can't because of the PMI amount.
I was replying to the “10-20% down” comment. Noting that if someone had the option to put 10-20% down, whatever percentage to avoid PMI would save ( for you $70x12=$840/yr ) and be the better option.
Sure, that said I do think in such a crazy housing market you have to consider the opportunity cost of delaying your home purchase to save up the necessary down payment to hit 20%. But yes, if you can already afford 20% then there's no reason not to just put down the 20%.
We bought three years ago and put down around 10%. If we had waited to save up for 20%, we'd still be saving and wouldn't be able to buy yet. Meanwhile, the value of our house has increased by $100,000 in that same timeframe and the interest rates have skyrocketed. We simply wouldn't be able to buy this house today, whereas we could three years ago.
Paying $840 per year for ~6 years to be locked into a sub 3% interest rate mortgage on a house that cost $100,000 less than it would today is absolutely worth it. The difference in list price and interest rates if we bought today would easily exceed the $70 per month we are paying in PMI.
Totally
20% is the amount to avoid pmi, I know because I literally pay pmi
There are loans where you only need 3% to avoid pmi. I know because I only put down 3% and don’t have pmi.
Millennials are 27-42.
Every teacher I know started around 22. But I mostly know teachers who went to BC and local schools and am not as familiar with folks who transitioned into teaching at age 40.
So yes - there are a whole shit ton of 15-20 year teachers in the millennial age range. I wasn’t referring to 65 year olds but I can see how you might read it that way.
And maybe you missed the “early” in the retiree part.
Boston has a stunning amount of folks who made a lot of money in tech and finance (or who have family wealth) and who leave full-time work in their 30’s / 40’s. Especially to have kids. I saw it all the time back when I did big law. (I left full time employment at age 37).
The millennials right in the middle of this median - the ones who actually do make around $105k as a household and who are between age 27 and 42 - are a very diverse and weird mix of folks with all sorts of different economic and family circumstances in my experience. It’s really hard to lump them into one bucket and generalize.
(Two line cooks who are 40 and who make $50k each are very different than a single 27-year old renter who makes $105k at State Street. Etc…)
Im a millennial. I agree with you. I was just noting that salaries of teachers with 20 years experience and (early) retirees wouldnt really skew that median too much since there arent that many millennials in either group quite yet. Even the oldest millennial who started right out of college att 22 would just hitting 20 years now. Although I definitely wasnt thinking early retiree meant 30s/40s, and Im sure youre right that there are way more tech/finance people who leave full time work than I considered. Now I'm curious the % of people in their 30s/40s who were able to do so.
Either way, I agree that its hard to lump everyone in/generalize, particularly when it comes to familial wealth, etc.
I'm a millennial and I graduated college 20 years ago. We're in our 40's now.
I know that millennials are in their 30s-40s. I am one. I wasnt suggesting otherwise.
>Most regular households earning $100k with kids have a shitty commute and live at least 40 minutes away by car.
What's wild is they end up paying a second mortgage on a soul crushing 4+ hour commute instead. I calculated the cost at commuting into Boston from 50 miles outside the city at around $2,000 a month.
It’s expensive being poor
Depending on location, monthly commuter rail passes are much less, and parking at some of the outlying stations is pretty cheap. There is definitely a cost but it can be worth it particularly if you can work on the train.
I make $95K and I'm able to buy a SFH in New Bedford or west of Worcester. If I want to be "closer" to Boston I can just barely afford a basic 1br condo in Lowell.
tl;dr Shit's fucked.
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Older millennial here. Moved to Salem a decade ago when rents and home/condo prices were reasonable (at least compared to Boston, where we had moved from). We rented with the expectation that once we saved up money and were further along in our careers, we would buy a condo or modest home.
Now we make about 150K combined but still live in the small $1500 a month apartment we rented when we were struggling financially. While we could technically afford to buy a condo in the area, we aren't super motivated to do so. Our apartment is small and in an old building, but it has 3 bedrooms (our daughter has one room and we use the 3rd as an office), is RIGHT on the ocean as well as downtown, and comes with free parking and heat/water included. It is just SO cheap for the area and gives us so much more saving and spending money. It's hard to be motivated to spend $500k on a modest fixer upper condo that comes with hundreds of dollars of monthly HOA fees, and be house poor, vs now when housing is such a relatively minor expense for us. Also, living in a walkable downtown and on the ocean, it doesn't matter so much having a small apartment with no yard when you can easily spend most of your day outside your home doing other things in your neighborhood and socializing with others.
My family has lived in and around Salem since immigrating from Italy in 1900. We just love the area, and it is convenient to get to work in Boston. We have looked at other towns on the North and South shore, but we'd have to be moving significantly west in the state to be able to afford buying even a decent condo at this point, never mind a SFH. At this point, although we will at the very least upgrade to a larger apartment in the foreseeable future, we're strongly considering staying in Salem and renting forever, or maybe getting a condo once my boss retires in a few years because she's mentoring me to be her replacement and then I'll get another good salary bump.
My wife and I were not much higher than that when we bought in the suburbs in 2016. Prices were 50-60% of what they are now
😭😭😭
A little PSA: for anyone looking to buy their first home, check out the ONE Mortgage program. It’s a nice little first-time homebuyers loan we have here in Mass and I feel like not a lot of people know about it.
I feel like I'm missing something with that program. I looked into it and with the asset and down payment limits, I wouldn't be able to afford the high mortgage payment.
There isn’t a downpayment limit, just a downpayment minimum. I have the ONE mortgage and I put down about 11%. I agree that 3% would be really hard to pull off with all the other program requirements.
There's a $75K household asset limit, meaning there's a limit to how much you can save for a down payment.
My wife and I are slightly above that median number. We are in Western MA, had our "starter" home in Chicopee for five years and sold that last summer for our "forever" home in Belchertown. Inventory options are certainly better for median household families in this part of the state.
My household income out of college was 115k. We bought a house 3 months later in Springfield. Both of us work in the valley. You don't need to live near Boston to make good money. This was done in 2022.
We had no help from family or friends.
Been in the western MA area for over 30 years. Always had a good paying job, great cost of living and little to no traffic. It's the best kept secret in MA
I hear you on this. My wife and I live in that area and do quite well for ourselves. Yeah there’s not a tech sector or pharma like eastern MA but there are good paying jobs if you want one.
What kind of jobs are out there? I work in pharma and my partner works in tech, so I feel like we’re tied to Boston.
Academic, healthcare. You have your lawyers, accountants, bankers, etc. as well. Nothing as glamorous as Boston but your money goes way further
We bought our first house a couple years ago in Oxford and based the purchase ($340k) on roughly that income. I was working in Framingham and wife in Westminster at the time. A year later, we sold it for $450k. I don't even want to know what it's "worth" now...
I'm a millennial and make almost exactly half of that.
It says households tho
My wife and I combined are in that ball park but not by ourselves
My dog found a $10 on a walk so I guess that's not so bad then
Lay off the skooma...
Time travel to 2012. The inner south shore. I’ve 4x my income and refinanced, quality of life is a wash.
My wife and I make a little under that. We were lucky to inherit ~40k, saved another 40k ourselves and bought in the Taunton area in 2019. House was 325k, we put 20% down and refinanced when rates bottomed out at 3%. Now rates are over double that and our home is valued at over 400k. I don't know how young workers are expected to afford houses now.
In essence, it's luck. Luck to have decent jobs. Luck to find a cheap apartment to save money. Luck to be ready to buy (which at the time felt like the top of the market). And luck to refinance afterwards.
My husband and I are baby millennials. We make a bit more than that and we were able to buy our first house in Western MA for around $250k a few years ago and our mortgage is less than what we were paying in rent before that.
Older millennial here….income is right in that range. We bought in Franklin. Schools were good and taxes are low compared to the area. Husband often works in Boston and Worcester. We didn’t buy at the top of our budget though…we bought the cheapest fixer upper we could. We didn’t want to be house poor. We have five kids and only 1900 sq ft but the layout is great. I really really like franklin a lot. Originally from dorchester and husband is from west Roxbury
It probably isn't the median income millennials who are relocating to Boston..
Yeah but Im asking about MA in general
South of Worcester such as Oxford
You can do 900 sq ft condo in Quincy or similar if you want to be able to commute to Boston
I'm in tech and work remotely. We were initially drawn to Northampton and Easthampton, but ultimately found a truly lovely place in Westhampton, which is more rural, but still just 10 minutes away from Northampton and Easthampton, unlike most of the other Hilltowns which are mostly 20 or more minutes away.
If you happen to be part of the LGBTQ+ community, then look no further. You've found your peeps. This is the place you want to be, hands down.
A huge bonus for Westhampton if you have little kids is that the elementary school is ridiculously good (rated 9 on GoodSchools).
Feel free to DM me if you want to chat more about this area.
Fitchburg/Leominster ended up the most attractive option for me. I also like things a little more rural and I don’t mind the “old mill town” vibe that people love to bitch about. Still paid 300k for a house that is…. probably not worth 300k
Late Gen X/Millennial couple here: we bought a house in Chelmsford RIGHT before COVID seriously hit in March 2020. Our house value has gone up over $100k since then - I don’t think we could have afforded the house if we were buying today.
Household higher than that and went to NH. Anything inside of 495 north of Boston the last two years had crazy prices for places that needed a ton of work.
We just bought in Ludlow last may. Very close to the pike which is nice for commuting. The town is in the middle of renovating their mi district which gives me a good amount of hope for future value.
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That's a little higher than our income but we bought in Attleboro in 2021. Couldn't afford the house today because of inflation and interest rates. Also we're older millenials- rapidly approaching forty. Commuting to Boston is a nightmare, but we both wfh as much as possible, and we have more space for what we were paying for rent in Quincy. Pretty sure the rent will hve increased in the interim too.
Oxford.
That number is pretty close to my household income, we live in Westfield.
Dude middleboro is blowing up and nearby wareham. Theres like actual traffic now. The new commuter rail will make this town boom and I hate it. Just wanted to eat breakfast and buy a gun at the same place we can /s
Townsend and belchertown are cheap
We bought in the Merrimac Valley and tbh we probably paid too much but beats living in a rotting 1 bedroom in Allston.
I make a little above that.
Bought my home a few years ago in Somerset for 265k. My house is valued today at 500k and I wouldn't feel comfortable spending that much.
I dont know how anyone does...
My mom is a little above this. I’m making a timeline to purchasing land to build a house because I handle all the household finances (I’m a math person) Notice what I said there. I have no intention of buying an existing home.
I can get a piece of land that is several acres for 50-90k in western MA (we’ve been living and renting in the Boston area due to my father dying and losing that income) and then build a nice house on it for 300-500k and the construction loan for that would be between 1400-1800/mo.
Buying a home outright would run me no less than 3500/mo and we’re currently paying 2375/mo rent. I have no intention of going higher than what we’re paying for rent, especially when only about $500 of that $3500 payment goes to the actual principal. The vast majority is fucking interest. I’ll be paying over a million in interest over 30 years for a 500k home. Which, looking at the market rn, is the price of a severe fixer upper these days.
I’d also like to point out that the 3500 figure was WITH a 200k down payment that it would take us 5 years of pretty rigorous saving to accomplish. I’m talking next to no travel, almost never eating out, or excess spending, etc. My mother worked 25 years in the same place to finally live comfortably but if we want a home, she can’t actually ever enjoy living comfortably.
My mother is close to retirement and moving out west is a big decision because I’m disabled and can’t drive, thus I’ll be isolating myself a lot, but I feel it’ll probably be a worthwhile move for the price. There’s no affordable land in Eastern MA that I can easily find.
It’s amazing that during the pandemic my mother got the promotion that puts us in a comfortable living situation, yet I can’t foresee a future of ever getting a home that won’t require moving to the middle of isolation.
TL:DR Household makes above the median, has no hope of buying a home in the next 5 years. The house we can foresee after 5 years will have to be in the middle of absolute nowhere and built ourselves.
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28M here, wife and I make roughly $200k pretax household. We bought in Hudson for around 500k, 20% down. Half the down payment came from equity in our first house that we bought in 2019 for 280k at 3% down
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Hopefully your wealth management is strongly advising their clients not to use all retirement savings and rainy day funds to purchase a house…right?
2bed2bath condo in quincy
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Single household millennial here. Make 80k and bought a Leominster house for 250k. Made about 10k worth of house updates. I’d also say I am very, very lucky.
Woostah County
Purchase in Littleton in 2021 making just under 100k household. Now making around 140k.
We love it. On a good day, only about 45 minutes from Boston and Worcester, 20 from Nashua, 15 to Lowell.
Also, with the student loan pause, I qualified for PSLF this year and haven’t paid on my loans in almost three years. Honestly the pause made this all possible.
We’re not.
My household income was about $320k last year. We bought in West Roxburry about a year ago, just before interest rates went up.
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WilcoLovesYou t1_j9fsmri wrote
My wife and I make right around that, a little bit higher, and moved out to the Berkshires. Got a nice house for a great price. We both work remote, so it really doesn't matter where we are. We're very very lucky to have that luxury.