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How did Boomers afford to buy a home on minimum wage back in the day? Here’s how 🏡

That Mortgage Guy1:01

Transcription

We did whatever it took. You get out what you put in.

So, 20 years ago, my mom's house was purchased for $112,000. It's a three-bedroom duplex in the center of town, less than 200 steps from the nearest grocery store. A 25-year mortgage for a $112,000 house would cost about $680 a month. Minimum wage at that time was $8.56, meaning that a minimum wage worker made about $1,570 a month. To qualify for a mortgage, the mortgage amount has to be less than 40 percent of your income. That means that 20 years ago, a minimum wage worker could purchase a three-bedroom house in the center of town where I live.

The other half of her duplex just sold a couple of months ago for $780,000. The mortgage on that amount is roughly $4,780 a month. In order to afford that mortgage, your income would have to be above $11,500 a month. That works out to around $2,300 a week or $65 an hour.