Housing Market Nightmare

Mortgage

My fiancé and I have been looking at buying a house (26F & 29M) in the Lake Country area but everything on the market is outrageously expensive! It’s honestly scary.

We have been living with his parents the past 7 months and have saved $50K for a down payment. But we can’t find any house with a good foundation for less than $400k. And houses that do go for $400k, there is always a bidding war and that house ends up being $25k over. At that point the quality isn’t worth it. Keep in mind that for houses like these, we would be paying around $2800-3100 (including principle, interest, property taxes, and insurance).

We have been dabbling with the idea of a new construction home, but those will be at least $3250k+ per month with our $50k down payment. Doing the math, our mortgage would be around 50% of our combined net income.

With our combined salaries, we bring in about $150k gross. Even with a “fixer upper” house, our mortgage would be 40% of our net income.

It’s sad because we want to stay out of renting and know that the best time to buy a house is always yesterday. It’s awful out there. We looked into condos too and you are paying almost the same as a mortgage with HOAs.

A good thing going for us is that we have no debt and have active retirement accounts through our employers. If we were to spend $3250 on a mortgage per month, it would leave us with $800-1000 per month left over. And I have no idea if that’s good or bad! We are childless but plan to want to have kids after our wedding this year.

Has anyone been in our shoes? What did you end up doing and how has it worked out for you?