Home Buying in Eagan>Question Details

Amy Wiger, Renter in Eagan, MN

Since the average Minnesota family makes $58, 000/year, then how can they afford all these homes for sale that I've seen on Trulia for $300, 000

Asked by Amy Wiger, Eagan, MN Sun Nov 3, 2013


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Kim Eisen’s answer
There are thousands of home under $300,000 and even $200,000. Something for everyone in every price range. Thank goodness, no one is average and each person is special ; )

Kim Eisen
Realtor since 1980
(651) 457-HOME (4663)

0 votes Thank Flag Link Mon Nov 4, 2013
As a rule of thumb you can typically purchase 3x your gross income for a house. That is only a $174,000 home at $58,000/year. Just an example (if you don't have debt it is much much different) but far off from $300,000.

As some others have mentioned once you get that high you are typically not looking at the "average" anymore. The household incomes are above $100,000 to go 300k or higher, but most of the time this is also "move-up buyer" territory.

Chris Block
1 vote Thank Flag Link Mon Nov 4, 2013
Thank you! That makes sense.
Flag Sun Nov 17, 2013
Lets look at the numbers -

General guideline is no more than 28% of your income to principle & interest.

$58,000 * .28 / 12 months = $1,353/mo

For a $300,000 home with a 10% down payment on a 30 year loan at 4% interest rate the principle + interest would be $1,289/mo

The numbers work out just fine using your scenario.

If you need any assistance let me know.

Bill Wallace
RE/MAX Advantage Plus
0 votes Thank Flag Link Sun Nov 3, 2013
don't forget taxes, mortgage insurance if applicable, HOA if applicable...
Flag Mon Aug 18, 2014
Who has 30% or even 20% to put down on a house UNLESS, you sell one and use the equity.
Flag Thu May 15, 2014
They typically can't!

The ones that make 75k+ tend to be the ones that buy the homes over 300k
0 votes Thank Flag Link Sun Nov 3, 2013
Average means take all incomes and add them together and divide by the number incomes you started with. That means some people will make $20,000 and some will make $1,000,000. Some people from other states will buy homes in Minnesota too and they could make $2,000,000. So just because the average makes $58,000 that does not mean no one makes more than that, they do.
0 votes Thank Flag Link Sun Nov 3, 2013
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