153 comments

How To Afford a House These Days

The other day, an MMM reader stopped by and left the following comment on one of my older posts about the principles of FIRE:

“While I still find some of MMM’s advice relevant, it seems like every FI blogger out there worked in tech 20 years ago, pulled down a 6 figure salary and bought a house for a bag of potatoes before 2019.

I wasn’t smart enough to find FI when I was young so I sometimes feel like a lot of their advice is not going to help me or others who don’t already own a home and don’t have six- figure salaries in this post-pandemic world.

 A lot of the ideas given to young folks are “house hack” “buy a fixer upper” but that is still out of reach and/or complex to navigate with current prices and interest rates. Most townships around me do not want you to chop a house up into ADU’s or multiple units. My cousin owns 60 acres of land but he is not allowed to live on a trailer on that land.

 I don’t know what the next generation of FI bloggers will offer, perhaps they are already out there and I just don’t know who they are, but I’d like to hear from them.”

As with every critique of our ideas, I thought about this comment for a while. Tried to determine if there were any Principles of Mustachianism that were genuinely going obsolete, versus the more common side effects of Complainypants and/or Excuse-itis, two afflictions which have been weighing down our critics since the beginning. 

After all, this isn’t the first time FIRE has gone obsolete. Over my retirement I’ve seen it:

  • written off as just a phenomenon of the lucky winners of the 2000 Tech Boom
  • declared obsolete after the 2009 Financial Crisis
  • dismissed as a temporary fluke of the spectacular stock market of the 2010s
  • and explained away as a Covid-era side effect that came from the taste of freedom that people got from remote work.

So what’s the situation right now? 

Our commenter focuses on two things: the solid salaries of tech workers, and the major increases in house prices (and interest rates) in the most recent four years. 

The first one — high salaries in general – is still a factor and I don’t expect that to change. Some jobs just pay more than others, and there’s a lot you can do to increase your income and switch jobs, and I’m all for it. However, ever-increasing income is not my usual focus here on MMM, because I have seen first hand that most people can waste almost any amount of income and still have very little to show for it. 

In fact, the very existence of software engineers and doctors and other high earners who are my age who are still feeling financial stress is proof this: it’s mathematically impossible to earn so much for almost 30 years and not have an absolute shit-ton saved, unless you are also spending an absolute shit-ton of money the whole time.

So instead, we focus on how to streamline your spending and live joyfully and efficiently without compromise. We focus on reducing waste, while maintaining or even increasing all of the other benefits that come from spending money more purposefully. These skills are essential even for the highest earners, but they become even more valuable as you move down the income ladder.

So now for the second issue: housing. Does the state of housing here in 2024 screw up the whole FIRE plan? 

As with any question, let’s start by looking at the data: how much have US house prices actually risen – adjusted for inflation – since 2019? 

It turns out that our own St. Louis Fed makes this extremely useful  information available here.


So there’s our answer: houses “feel” about 25% more expensive right now than they did at the start of 2019 relative to the average salary and the price of everything else. Although interestingly enough,  they are only up about 10% since the last peak in early 2006, a full eighteen years ago! So housing is a blow, but not a FIRE-extinguishing one.

However, this nationwide data masks some much bigger increases in certain popular cities, including my own: Plain old Longmont Colorado now sports a hilariously high $540,000 median home price. This is about triple the price they were when I started writing in 2011, which means houses are much further out of reach for the average person in my area.

House Shopping With Your Middle Finger

The solution to this is the same as most other problems: to stop thinking in the way our culture likes to train us (as a victim of outside forces beyond our control) and go back to thinking like a Mustachian. 

Houses are just like any other manufactured product, and as such they come at a wide variety of prices, subject to supply and demand. 

And just because you happen to live in a certain place (even if you were born and raised there), doesn’t mean you’ll automatically be able to afford to buy a house there. Just as a baby born upon the Apple campus in Cupertino today doesn’t automatically get a new iPhone Pro Max every year. 

With every purchasing decision, you need to go through the same series of choices:

  • Can I afford this thing right now?
  • Do I need/want it enough to buy it?
  • Are there any alternatives to meeting those same needs, and what are their pros and cons?
  • What’s the best way to procure it, after considering all the points above?

So when it comes to houses, you run the numbers, then decide between renting or buying or house hacking. You might start by doing the analysis right in your own city, but also keep in mind that there are lots of other cities and even countries in the world, and there are happy people living in all of them. 

But Wait: I don’t want to move to a whole new place!

At this point, people get defensive. We all have ties to our current location, and the stronger the ties the more difficult it becomes to consider moving. 

But there’s a difference between genuine, positive bonds to a place and just plain old fear of change. So it’s my job to at least make you question your assumptions, because not doing so is what got you where you are, and it’s also what got our country where it is.

And on a country-wide basis,  I notice that our general fear of relocating creates a very irrational pattern of house prices. They are ridiculously high in some places and ridiculously cheap in others. There does seem to be a general correlation between niceness and cost, but not a perfect one (especially since everyone has their own definition of “nice”)

And that’s where the opportunity lies.

Example:

I moved to Longmont in 2005 because it met our young family’s needs at the time, at the right price with homes about $200,000. Today, at the $540,000 price level (houses average about $450 per interior square foot) it has to compete with a much broader range of cities which offer nicer amenities at equal or lower prices. 

Let’s do a hypothetical search using another amazing tool: FRED’s list of the top 1000 metro areas with price per square foot, and plot some of them based on my own judgment of their desirability: 

I’m biased towards Colorado because I have so many ties there, and I also highly prioritize sunny climates. My chart suggests that if I wanted to save money, I might start looking around in Albuquerque, whereas Denver would give me a nicer life in the same price range, and if I were willing to spend more I should suck it up and move to Boulder.

Just for fun, I pulled the data from that same FRED website into a separate google spreadsheet (which I’ll share here) and sorted it by cost per square foot. Then, I highlighted a band of affordable cities with housing centered on the $100 per square foot range, which would mean a 2,000 square foot house is about $200k.

As an added bonus, I added a column to calculate the change in house prices over the past year, just in case it helps us see if a city is on the way up or getting cheaper at the moment.

A chart like this is just a starting point – you’d need to read more about any place and then go visit in person before considering a move. But the idea is to start with data, and do some fun research. 

The Earth Awaits: Casting a Worldwide Net

House prices are a valuable metric, because they influence the cost of living more than almost anything else for the typical Mustachian. After all, biking and nature are always close to free, Costcos are available nationwide, and we probably care less than average about the costs of other services like valets and salons.

But there’s still plenty of value in looking at the bigger picture, considering more data points, and also being open to renting versus buying your housing. For this, I’m a big fan of a FIRE blogger-created site called The Earth Awaits, and we can take it for a test drive right now with the following search criteria:

Geographic area: North America

My total monthly budget: $0-$6000

Family size: 2

Apartment type: Two bedroom (outside city center)

Temperature range: January lows not colder than 10F

The exact parameters don’t matter too much, as long as you don’t make them too narrow. The important thing is the resulting list, which is meant to give you ideas to research further. For example, that first simple search gave me this list:

Hey, that’s interesting. I like how the site shows the population right on the main list, because that provides a big clue to the “feel” of a city. I personally like the feel of a 50k-200k person town, so I might look into Fayetteville, Columbia or Athens. I’ve also been to Chattanooga and really like that place – who knew it was only about as expensive as Columbus Ohio?

So Should I Move?

In the end, your physical environment – the people, access to nature, urban features and the weather patterns – is probably the most important factor to get right in creating a happy life. The cost of living there is only one of the factors, and definitely not the most important one. 

But if you choose carefully, you can probably slide yourself in the right direction along that “Nice for the Price” scale in order to get more from your life. Even if it just means making a move within your own city to live along a walking path, a little closer to work or to the people or places you care about most. 

The key is just to remember that housing is like almost everything in life: It’s a choice that you get to make, and there are great rewards for putting some solid thought and effort into that choice.

Another Fun Example: Doing the Analysis on Tempe/Phoenix Arizona vs Denver

This is a fun exercise, because I’m currently living in the Phoenix area (more on that here)  that is way different than the Denver metro area where I normally live. We can start with the rough measure of housing cost per square foot across each region:

Phoenix: $272

Denver: $299

In other words, pretty close. Denver metro* is about 10% higher on average, but the variations from one neighborhood to another within any major city are much larger than that anyway.

So the other factors are more important. Both are surrounded by beautiful mountain recreation and get lots of sunshine, but the climates are famously quite different. Denver is more compact but Phoenix has nicer towns in the foothills around the outskirts.  In the end it’s just personal preference in weighting these various factors, and right now I kind of like the idea of both (Phoenix in winter but Colorado for the other three seasons)

More Adventurous: Let’s Try This in South America!

Going back to The Earth Awaits, if we repeat our earlier search but in South America, we get results like these:

Many of these spots have nice writeups if you click the “Details” button, and if anything sounds right for you, you can go on to learn much more.

It’s true that moving to a new country comes with all sorts of new learning experiences: citizenship and passports, laws and traditions and driver licenses, and of course having to cross an international border every time you want to return to your home country to visit family. 

But guess what? If this stuff sounds daunting to you, it’s probably a sign that you need to do it more. 

At its core, moving to a new place – even Internationally – is just a series of relatively easy Adulting Puzzles. You type stuff into your computer, read the resulting stuff that pops up on your screen, and make the occasional phone call and visit to an official office. I had to do all the same stuff when moving from Canada to the US, alone and just six years out of high school myself. 

Sure, it can feel like a “hassle” if you think of it the wrong way, but you know what’s a way, way bigger hassle? Living in a not-very-good place for life, or working an extra 15 years just to afford the higher cost of living in your current city, because you’re too scared to do a few weeks of work to make a big move to a better place.

If a rules-and-paperwork-hater like me can do it, almost anyone can.

Your Turn: 

While we covered a few examples of actual places in this article, the real purpose was to explain the thought process behind deciding when and where to move. And there are many of you out there besides me who can do the same thing, but better. And we’d love to hear from you!

If you have some favorite cities and countries for good living, or useful techniques for scoping them out, please share them in the comments. I strongly believe that the more we help each other find the right place and enjoy the planet more thoroughly and more efficiently, the better off we’ll all be. So let’s get moving.

—–

* Denver metro on the Fed site includes all the suburbs rather than just the core city which is much smaller and more expensive, but the same is true for the nicer parts of Phoenix so I figure it’s a fair comparison)

Previous Post:
  • tallpines February 3, 2024, 2:51 pm

    Our neighbours are leaving East Coast Canada for Raleigh, NC because they received job offers which doubled their current income. Good example of being willing to relocate to reap the rewards.

    Reply
    • Mr. Money Mustache February 3, 2024, 4:44 pm

      That sounds fantastic and I’m happy for them! Raleigh is a pretty great location too (it was a close second place to Boulder back when I was sorting through my own job offers back in the day).

      Reply
  • Jonathan February 3, 2024, 3:43 pm

    Good read!

    In our case, I made a chart of prices between adjacent cities and had a pro’s and cons list of each. After looking at the market for a few months I knew it off by heart and spotted an opportunity that I jumped on. My process: When you’ve zoned in your preferred market look more thoroughly into houses that are ”well maintained but needing a touch up ”. Do a bit of a facelift (paint, redo a bathroom) and you have a nice house for 100-150K under listing. The important part is to have an idea of the average cost of different types of renos to see if you still have a good deal compared to market after doing the work.

    Reply
    • Mr. Money Mustache February 3, 2024, 4:43 pm

      Yeah! That’s a whole separate skill but a super valuable one: if you come to deeply understand almost any residential market, you can use that skill to save and potentially make a lot of money.

      I covered some of this way back in 2013 https://www.mrmoneymustache.com/2013/09/04/how-and-how-not-to-buy-a-house/, and while I am out of practice in my current housing market, I still find it fascinating and will dive back in whenever I next decide to buy a new place.

      Reply
  • Alex Latham February 3, 2024, 4:04 pm

    Welcome to phoenix yo!

    Glad that you are still posting so long after you have achieved FIRE.

    If you feel like listening, I have found myself in a weird place in my life:

    I am not working right now (the last 6 months) and struggling to find something meaningful to with my life. Due to following advice from you and others who advocate saving and avoiding debt, I am financially in a place where I can afford to not work for many months or even years – but not indefinitely. Any thoughts/articles/advice on how refocus and find what? Should I just take some random part-time job at a store? Try to start a handyman company and be my own boss? Go get a long-term gov job?

    I am so grateful for the privilege I have to think about what I really want to do, but everyday I feel guilty for not wanting to go out and find a new job. I am loving the freedom to spend more time with wife/friends/family, work on my house/garden, playing games, and choosing exactly how to spend my days. However, I feel this cloud that remains over my head, reminding me that I NEED to make money, and I SHOULD want to do something with my life… yet here I still sit.

    This all probably comes off as pure complainy-pants! I know that’s how it feels when so many others are struggling with so much more in the world.

    In any case, thank you again for your blog – it has had a positive influence in my life. Enjoy the beautiful weather of the Phoenix valley for the next few months :)

    Reply
    • Mr. Money Mustache February 3, 2024, 4:40 pm

      I totally get it Alex – you’re talking about purpose and motivation, which are quite different and more of a “whole human” puzzle than just the nuts-and-bolts nature of financial independence.

      And to be honest, I sometimes struggle with some of the same stuff.

      While I am lucky enough that I *do* have a pretty big sense of purpose and desire to do lots of interesting things (I have a to-do list that is several lifetimes long), I still struggle with getting off the couch sometimes because as you say, there is nobody other than me who is forcing me to do anything at all.

      But, I’ve been retired long enough and experimenting with all of these factors (and reading a lot about human nature an how our brains work and all of that), that I at least know what things work for me. And the pursuit of that even more complicated goal – how to make the most of yourself as a limited human – is kind of the most interesting to-do-list item of all!

      Back to your situation though – I’d suggest giving yourself time to find the new flow (don’t beat yourself up for not knowing exactly what to do yet), but also keep reading, learning, experimenting and trying difficult things. You need to find a way to take the external/forced motivation of a job, and replace it with the even better version that comes from within.

      Reply
      • Steve February 15, 2024, 12:07 pm

        I appreciate this response you gave, MMM. This hits the nail on the head of something I’ve been puzzling over for a while.

        The short version: If I do not feel ‘needed’ by others – do I still have a purpose? Do I, perhaps, need a job to feel needed?

        Often as part of a job, work needs to get done, we do it, and this distracts us from the more existential threats. Even if the feeling isn’t deep, we are needed to do tasks A-G. Of course, work can be a drag and create existential threats on its own, but that is a different dilemma.

        I’m in the teaching profession. On the one hand, I highly regard the profession overall (at least at its best) and feel that I am attempting to participate in some of the most meaningful work that can be done. On the other hand, burnout is a real thing. After years of following a lifestyle that maximizes financial freedom, I could retire very soon. Not as young as someone who did so in tech, but far younger than anyone around me is planning. But the irony is that I originally thought about working a more lucrative career for a time and then ‘semi-retiring’ to teach after that. I skipped the lucrative part and I went straight to teaching. And now that financial freedom is close despite the lower pay…. I wonder, sure I’ve got the flexibility, but the flexibility to do what, exactly? And so I imagine that I may end up in the ‘just one or two more years’ mindset for a great while.

        Beyond purpose in a profession, I believe profoundly that family relations can provide tremendous purpose. But I know many empty nesters (I’m not there yet) who struggle with the same dynamic. When their children are successfully independent, moved out, and busy, the very real feeling of losing purpose is common. I’m not sure what the solution here is.

        All things equal, I would rather be financially stable and have the freedom to search for my purpose than the alternative: to have a singular purpose which is to pay the bills as an indentured wage-earner. Well, this has turned into a bit of a ramble. But I think this is a very important topic that is perhaps under-addressed in the FI world.

        Reply
        • Ted February 15, 2024, 6:01 pm

          Thank you for sharing. Thinking about what Alex, MMM, and Steve wrote, the way you spend your time money should align as best as possible with the people, values, and activities that you love and care deeply about. Everyone is different, so everyone will naturally make different decisions. But everyone SHOULD actually think about it and consciously make those decisions, rather than letting inertia or external pressure dictate their lives for them.

          Reply
    • lurker February 4, 2024, 4:19 am

      read Rest is Resistance
      and join the Nap ministry
      guilty for not making more money????
      you are living your best life
      enjoy it…i just got a cancer diagnosis

      Reply
      • W Dean Pulley February 4, 2024, 10:00 am

        So right, Lurker – I’ve encountered a surprising number of FIRE-curious folks who *can’t* seem to idle the engine, regardless of the fat stacks in their accounts and low to no debt load. Some of it is fear and some of it is habit, but learning to watch a spider weave a web or feel the wind in you face on a bike is a real skill. Balance as always. Best of luck to your in your new journey. I hope the road ahead has some positives, it sounds like you have the right radar to find them.

        Reply
      • Julia February 10, 2024, 2:24 am

        Hi there, lurker,

        I just wanted to say I work with sick people and I see loooooots of them get healthy again after a cancer diagnosis.
        Don’t give up your spirits, just because some doctor sees something on a scan. It’s like they push an unhappiness-button and people just follow. Be your own master over your mental health!!!

        I wish you all the best from my heart!
        Julia

        Reply
    • Sachi February 4, 2024, 7:45 pm

      You might like the book Designing Your Life by Bill Burnett and Dave Evans. They talk a lot about how to find work that you find fulfilling. Another thing you might find interesting to read about is the Japanese concept of ikigai.
      I’m in a similar extended career break before an anticipated big pivot (I’m calling it a mini-retirement), and though I have a general idea of what direction I want to go in after this, I’m going to give myself some serious time to reflect before starting the job hunt in earnest.

      Reply
    • Bryan February 5, 2024, 4:17 am

      Same here Alex. I reached FIRE last July, but as MMM states I now have the problem of finding purpose. I don’t feel guilty about not working, but I need something constructive to do with my time. I thought the same thing…get a random part time job/volunteer just to get out a bit and feel like I accomplished something for the day, etc. I’m an introvert by nature and the friends I do have are working or raising families so it does get very lonely/boring.

      Reply
    • Sammy February 16, 2024, 2:10 pm

      Alex, this literally could be my post, I am in such a similar situation as you!

      Got laid off 7 months ago and have so far only ‘pretended’ to look for work because I really want something different. I’ve explored, started and discarded some side hustles and have toyed with the idea of a part-time store job because we’re at COAST FI, not fully FI, with 2 teens still at home.

      I’m often bored but the alternative of a stressful job makes me feel grateful to have this luxury to take a breather.

      Anyhow, I have nothing useful to add except that it was SO validating to find someone else experiencing something so similar to myself. Thank you!

      Reply
  • Dan February 3, 2024, 4:33 pm

    I’ve felt similar to the OP about this for a while and I appreciate MMM’s thoughtful analysis and response.

    His acknowledgement of the fact that the overall inflation-adjusted US Home Price index masks much much greater increases in many other parts of the country is salient, but I found his follow-on analysis frustrating.

    Yes – absolutely – you are *not* entitled to buy a home in whatever location you want just because you live there and believe that you are is not going to get you to FIRE very quickly if at all. He gives his own experience of geographic arbitrage as a good example of how he was able to move somewhere much less expensive than the big city to achieve his goals faster. Plenty of other FIRE types from the MMM age group did the same thing – they moved to Vermont, Bend, Bozeman etc. because those places were affordable and beautiful. The entire point of FIRE is to have the time to enjoy doing what you love and the most FIRE way to do this is by taking on hobbies in the great outdoors.

    But here’s the thing: over the last ten years – and especially the last five – beautiful places with access to great low-cost outdoor recreation activities almost all fall into the data that the “US Home Price” graph hides.

    Sure you can purchase a home in a climate-ravaged hell-scape or among the rows and rows of flat corn fields this country has to offer for a very reasonable price. Someplace that will make it extremely difficult to do all the many Mustachian things MMM has lauded through the years (biking, parks, outdoors, car-free life, etc.). Food deserts. Bankrupt suburbs or rural towns etc.

    I don’t know that I’ve got better advice for these trying times however. I think if it were me, I would probably find a high-paying job in a city with reasonable rents and ease of a non-car lifestyle (funnily enough, in many cities, rents have actually grown at a fraction the rate of real estate). Seattle, Denver, Chicago, Portland, Philadelphia, DC are decent examples of this. NY, Boston, SF, LA, are not. Spend a decade or so (or however long it’ll take you) putting away as much money as you can and then reassess.

    Maybe home prices will adjust way down everywhere? Maybe rent forever? Americans hate this idea, but the math makes more and more sense IMO in many parts of the country. Or maybe see if you can find a part of the country that will enable you to live a somewhat Mustachian life with low real estate costs. If it were me, I would be looking at the good parts of the Midwest – Michigan, Wisconsin, Minnesota. Places resilient to climate change with low housing costs and ample outdoor activities that maybe aren’t as high-brow as those of the wealthy class but still plenty enjoyable.

    Sorry this was a bit of a rant, but while I think MMM is doing a lot to brush off the vast difference between the geographic arbitrage available to him and that available today, but I do still thing FIRE is possible for those of us in our 20s!

    Reply
    • Mr. Money Mustache February 3, 2024, 5:50 pm

      I dunno Dan – I agree that the “Brand name” hot spots like Bend Oregon have grown expensive, and more trendy and full of amenities as a result. But there are still loads of cute towns next to mountains, rivers and lakes that are not yet discovered. Or in the case of the Southeastern US, which have yet to be RE-discovered in this post industrial era.

      On my recent 800 mile drive from Longmont to Phoenix, my son and I passed through quite a few towns just like this in Colorado, New Mexico and Arizona. I’ve also seen quite a few in Utah and West Texas, and then there’s the entire STATES of Wyoming and Montana which are still mostly empty!

      I think part of the key is to look past the current state of an affordable town or city, and imagine what its future could be once more people discover it. It’s not going to be hip and happening until it has already become expensive, so you have to make your move before these changes happen.

      Reply
      • Dan February 3, 2024, 6:47 pm

        I appreciate the response. And I think you’re right!

        I think imagining the future of what the place could become is the right approach. There are plenty of beautiful mountain towns (and lake towns, and river towns) with potential out there. But in general I still think there are much larger trade offs to those places than there were to a lot of places that were affordable 20 years ago.

        For a lot of people there could be some pretty non-negotiable aspects of these tradeoffs – access to real woman’s healthcare, people accepting of non-straight people, etc.

        I know when I was spending time researching towns with potential and are affordable I came across quite a few with potential!

        Montrose, CO for example seemed to have a lot of what I was after including cheap real estate, but when I visited it was such a big compromise when it came to livability. Full of old angry boomers with dangerous oversized pickup trucks who went out of their way to run me and my bike off the road more than once. Hard to imagine that kind of group voting for a bike lane. Maybe Longmont was similar when you first moved there, but I never got that impression from the blog.

        Honestly I wish there was more of a community of people out here willing to agree to move to one of these beautiful places in huge numbers and make it our own – bike lanes, planned parenthood, beer etc. I think as MMM you probably have the ability to build that kind of community or kick it off (and it seems have already done so in Longmont). I’m sure I’ll find a place eventually.

        Reply
        • MountainMiss February 5, 2024, 10:54 am

          This is a really important point. The PEOPLE in a place are as important as the amenities and price.

          Reply
          • Morgan February 6, 2024, 9:09 am

            Keep looking. I live in a great small city in the Southwest that has great people, access to the outdoors and affordable real estate. Lots of us are transplants from more expensive areas on the west and east coasts. I won’t name the place, but these places are out there.

            Reply
  • The Orchard February 3, 2024, 4:41 pm

    This reminded me of a guy whose story I saw on TikTok. He moved from uber-expensive Washington, DC to southeast Pennsylvania, where he bought a beautiful, historic 8,000-square-foot mansion for the same price as his old DC apartment:

    https://www.msn.com/en-us/money/realestate/man-showcases-his-300000-coal-baron-mansion-in-pennsylvania/ar-AA1knJsl

    It seems like most of the price appreciation is happening in rich, trendy cities. There are still a lot of bargains to be had if you’re willing to move to less-cool areas. Of course, jobs are also easier to find in big cities, but there are so many jobs that can be done over the internet now, that should be less of an obstacle than it used to be.

    The one cautionary note I’d add is to also consider the politics of the place. If I was LGBTQ+, a person of color, or a woman of child-bearing age, there are some states I wouldn’t consider moving to any time in the near future, even if they’re affordable. It’s scary how aggressive some places are getting about denying people’s access to health care and taking away their rights, even the right to travel somewhere else. As Mustachians, we have extra power to vote with our dollars, so we should choose places that care about making people’s lives better.

    Reply
  • DC Tom February 3, 2024, 4:55 pm

    Agree that geographic arbitrage is the answer, but I do think that the objective quality of the places available for geographic arbitrage 20 years ago is vastly different than today.

    One of the big consequences of the internet has been that all the beautiful places of the world (and this country) are simply far better known to everybody. In the 1990s it would have been seen as a very strange decision for somebody from San Francisco to move to (or to even have heard of) Bend Oregon. But now, you wouldn’t blink twice and the real estate market and prices has reflected this “globalization” of local real estate markets.

    Still plenty of great places out there though!

    I would also propose that folks consider renting indefinitely more seriously. While the cost of purchasing a home has risen quickly in the last decade, rent has (generally) not risen nearly as quickly and renting will give you a lot more flexibility if you decide you don’t love where you’re living! It’s also a nice fixed cost relatively to the risks inherent in home ownership. I’ll caveat that this works a lot better in cities than it does in smaller towns (like Bend) where bad zoning / housing policy has led to restrictions on rental housing propping up prices quite a bit.

    Reply
    • Mr. Money Mustache February 3, 2024, 5:40 pm

      Good point about the bad policy – this seems to be the root cause of almost all the expensive housing in US cities. Whenever you have NIMBYs being allowed to complain to their city councils and get them to block the rezoning and building of new housing on land that THEY DO NOT OWN THEMSELVES, you end up with less new housing and potentially higher housing and rent prices due to the artificially restricted supply.

      I prefer the option of almost no zoning, except for making sure the transportation network is designed for people rather than cars – since that is objectively proven to be healthier, happier and cheaper for everyone who ends up living there. It also allows you to fit far more housing.

      Reply
      • Stephen February 5, 2024, 6:40 pm

        So true about the way a city is zoned leading to housing shortages. I am watching a friends house while he is away. He has a 5 bed 3 bath house with 2 car garage that sits on roughly a 1/3 acre. It is just him and his cat when he is home. The house could easily fit 2 full families with the proper setup. However, getting the approval from the city would likely be impossible.

        The larger issue with a redistribution of square footage or other zoning issues would be most people don’t want to buy a multi-family unit. The “American Dream” is not to own a rental unit (for the majority of people), and especially not to rent. Society looks down upon people who don’t own their own homes as failures. It takes a strong independent thinker to not cave to the group think.

        Reply
    • Jim February 6, 2024, 11:54 am

      The point about internet-generated movement is spot on and really significant. I’ve seen this firsthand in my hometown, which has changed dramatically in the past ten or fifteen years.

      As recently as the early 2000s, my hometown was a sleepy seaside town off the beaten path, beautiful but known only by locals and a few others. This was before MapQuest, Google Maps, Zillow, online news, satellite car navigation, etc. If you didn’t already know what it was like there or have a personal connection to tell you, you’d never think to visit or buy property there.

      There had always been a community of wealthy seasonal residents with vacation houses on the water, but the rest of the town was solidly middle class or even high blue collar. The local auto mechanics and construction workers lived in town and socialized with the white-collar locals.

      But that all changed when the town was “discovered” and people from out of town began outbidding everyone else for the houses. The multigenerational continuity that made the community so strong has been broken by my millennial generation, since most of us couldn’t afford to buy the houses in town that our parents bought. It’s gotten so bad that the school is now at risk of closing for lack of kids, since no young families can afford to live there anymore.

      I think that a similar phenomenon is happening at the global level. Housing costs are affected by the (lack of) supply, i.e. NIMBYism, but they’re also affected by demand generated by large-scale immigration. Other things being equal, an influx of new people makes housing more expensive. We see this in some parts of the US, but the effect is stronger in other places like Canada and Australia, where recent unprecedented amounts of immigration have coincided with huge increases in the cost of housing. The internet facilitates immigration by making it much easier for prospective immigrants to see what other places are like and what opportunities are available.

      Reply
  • Colin February 3, 2024, 5:20 pm

    I often say that Philly is an aggressively underrated city if the northeast Megalopolis appeals to you. High speed rail gets you to DC, NY, and Boston. Very reasonable housing prices, and the city is building a ton of new housing stock (but still not enough, rental vacancy rates are too low). You can live in a giant skyscraper condo directly downtown or in a single-family rowhome on the outskirts. You can get a 1200 square foot house for $300-400k in a great neighborhood. Buses and bike lanes abound. Everything is flat and walkable. Good jobs in meds and eds.

    Reply
  • Kathy February 3, 2024, 5:30 pm

    I was shocked to learn you can really buy dirt cheap housing in nice, warm areas of this country. My dad wanted to escape the brutal Illinois winters and found nice mobile home community in winter Haven Florida next to a beautiful Lake. He bought it for $6,000. It has a gate guard at the entrance and rec center building. He only has to pay lot rent of $400 which covers a lot of perks. Many of his neighbors bring him home-cooked meals on the holidays. His double wide is way bigger than my 900 sq foot bungalow in SF. He bought a nice home for what people pay for annual property taxes here. This isn’t a one-off deal. There are a lot of places in his community like this. No, it’s not a beautiful Victorian, but for someone with limited income, he lives a good life. Now he works part time for the local golf course and get to play golf for free.

    Reply
    • Mr. Money Mustache February 3, 2024, 5:35 pm

      Great story Kathy, thanks for sharing. I remember spending some time visiting a Florida mobile home park just like your Dad’s. It was super fun, the neighbors all knew each other and could walk to see each other or to the general store. Lots of laughing and good, simple living. And there’s no reason we can’t build neighborhoods of all housing styles with the same vibe!

      Reply
    • Amsta February 4, 2024, 4:18 pm

      Hopefully a private equity firm or other investor doesn’t buy his specific trailer park, or his area suddenly becomes attractive to the masses so the current landlord starts jacking up the lot rent. I’m from a beach town where lots of retirees have learned this the hard way, and this isn’t an uncommon occurrence these days.

      Reply
  • Calvin February 3, 2024, 5:38 pm

    MMM,

    What good timing! Another way you can do this, as I’ve done, is suck up living in a less-than-desirable place in one’s 20s while amassing the stash necessary to be FI. Then when you’ve gotten to, or near, your FI number, choose a more laid back career in a place you wish to live in for a while (Hawaii, for me), and if you decide you don’t care for it, you have more than enough to move back to the cheaper parts of the country if the grass doesn’t turn out to be greener on the other side.

    Another aspect of this is basic supply and demand. If you wish to live in somewhere like Boston, do not attempt to get the same quantity of housing as one might if you live in a place like Montgomery, AL. When a good is scarce, the economically rational thing to do is BUY LESS OF IT! Yeah, that means maybe an apartment instead of a house, especially if you don’t have enough for a down payment (because PMI is a scam). You can make up some of the extra cost by going car-free, something that tends to be far tougher to do in the cheap parts of the US.

    There’s a really nice graph out there that shows how the average American household size has shrunk by almost an entire person in the last 50 years or so, while the average housing size has only gone one direction, and it ain’t down! The US has bigger homes than almost anywhere on earth, so predictably, they’re going to be more expensive. Older, smaller homes can save you quite a lot.

    Reply
  • Ryan February 3, 2024, 5:56 pm

    We’ve ended up doing similar to what you do. Live in low cost of living Wisconsin for most of the year and escape to Florida for a decent chunk of winter. Going on 6 years of doing this, now with family in tow and it’s been an incredible improvement to our lifestyle. Culdesac was on our list but will have to wait until they have a 2 bedroom available 😀. And international is on the horizon once we feel it will be somewhat manageable.

    Reply
  • matt February 3, 2024, 6:16 pm

    Great to see MMM address this. The main thing that gives me pause about moving to ‘affordable’ areas is biking and drivers’ attitudes to cyclists. I don’t think it’s complainypants not to want to be run off the road, but of course we all have to make our own estimates of danger.

    Reply
    • matt February 4, 2024, 4:17 am

      Even though it’s a hypothetical for me, I solved this problem!

      You can look locations up on the League of American Cyclists, and they’ve done the work to certify many cities/towns.

      https://bikeleague.org/map/?

      Reply
    • Mr. Money Mustache February 4, 2024, 3:44 pm

      Another thing to watch out for is something we might call Irrational Local Driverphobia Syndrome (ILDS):

      Being such an avid bikes-every-day-for-transportation person, I have ridden bikes in dozens or maybe even hundreds of cities around the world. And I’ve noticed two things:

      – it has always worked out just fine. I got where I needed to go.
      – the residents of EVERY. SINGLE. CITY. have said the same thing: “Oh, it’s not safe to ride bikes HERE.. the drivers here are all crazy, and drinking and driving, and texting on their phone, and they hate cyclists.”

      Yes, human-driven cars generally pretty dangerous. But you can mitigate most of that danger by choosing your route carefully, learning bicycle safety and getting lots of practice with bike control through trail and off-road-riding, and very importantly adding super bright flashing lights, front and rear, which you use at all times, sun, rain or shine.

      In other words, although cars are the problem, most (although not all) bike crashes could have been avoided if the cyclist were skilled and vigilant enough to provide double the safety and caution – enough to cover both vehicles.

      Reply
      • H Vlist February 5, 2024, 9:07 am

        Can confirm. In fact, suburban sprawl can offer decent cycling spaces, since the streets are often way wider than necessary. Which creates bike space.
        One thing that works well is to get a bus transit map. Buses go all over the place in the ‘burbs trying to fill their seats, and they need to connect to real places, like shops and schools and colleges. A sprawling Canadian city like Toronto can be crossed, without bike paths, by using transit maps, pretty safely. You get choke points where you need to cross a major road, here and there. And so you need to be vigilant. But then you go back to smooth cruising on wide, empty suburban streets.
        Anyhow, there are solutions!

        Reply
      • Richard February 8, 2024, 10:41 am

        Counterpart for the cycling in “dangerous” cities:

        You probably have some survivorship bias! Just think about how many other financial bloggers can’t say the same because they died by a vehicle/cycle incident!!!

        Anecdotally, of all my friends and family that cycle or commute regularly via bicycling, I’d say about %90 have been hit by car at least once. Some of them minor injuries, but others causing significant brain injuries permanently altering their life.

        Not to say we should live in a bubble and never take any risks, but I refuse to bike on any street that doesn’t at least have a bike lane. In a world with ever increasing size of trucks/SUVs and distracted drivers (tons of data showing crashes on the rise), the risk vs reward is too high for me.
        Thankfully, despite the nimbys complaints (i groan when my parents complain about bike lanes), they are making it safer and safer most places.

        Reply
        • Mr. Money Mustache February 8, 2024, 10:56 am

          That’s an interesting anecdote about biking – and exactly the opposite of my own experience! Maybe only 5-10% of regular cyclists I know have had a run-in with a car. I’ve been doing it almost every day (and some would say pretty recklessly) for 40 years now, and just got back from 10 miles of errands in the extremely bike-unfriendly hinterland roads of Phoenix. It was invigorating!

          I think anecdotes are best discarded in favor of data. And I tried to do this once a while ago, although this article could use an updating with more recent statistics: https://www.mrmoneymustache.com/2012/06/07/safety-is-an-expensive-illusion/

          The summary is that biking is SO GOOD for you, and not really all that dangerous in the big picture, that it has an effectively negative level of danger. i.e. your lifespan and healthspan increase when you do it.

          But, if you’re in a rough urban area you gotta treat it like a hockey game where YOU are the puck and every moving thing is trying to hit you. So have the literal flashing lights installed on your bike in all directions, and have your figurative radar running on high as well, especially at every curb cut and intersection.

          With proper awareness, you should be able to make it almost impossible for a car to hit you even if they are trying to do so (which of course they aren’t), because you’re riding so defensively.

          It sounds harsh, but this is also the same thing it takes to be a good CAR driver and avoid accidents over a lifetime of driving.

          Reply
          • Ethan February 9, 2024, 1:17 pm

            I remember that article. I liked it when it came out, and I wholeheartedly embraced that idea until last year’s car/bike crash opened my eyes. I now see that vulnerability on a much more visceral level. It’s a strange type of cognitive dissidence. Overall, biking is great, and one wreck in >10,000 miles isn’t exactly an everyday occurrence. But it’s more often than I’ve had car wrecks, and that one particular bad day was horrible enough to balance out a whole lot of joyful rides.

            I’m still riding regularly, but it leaves a sour taste in my mouth. Being the hockey puck sucks, regardless of how many flashing lights I carry. I much prefer the emptiness of quiet country roads.

            Reply
          • Matt in Michigan February 11, 2024, 9:20 am

            I share your views on cycling. I’m 51 and have been into bikes my entire life, from early days bmx/freestyle, mountain bike(even entered a few races), road bikes and now primarily bikes for getting things done. I recently got an ebike and it is SO MUCH FUN! However after a lifetime of being my own motor I can’t get over the “cheating” aspect a lot of people seem to bring up regarding ebikes. I know it’s silly, but curious as you get older do you find yourself defaulting to the ebike or do you prefer the acoustic bike yourself?

            Reply
      • Ethan February 9, 2024, 1:08 pm

        Please don’t underestimate the value provided by the built environment. Infrastructure matters.
        Some neighborhoods offer many “safe” bike routes, some offer very few. And it can take a bit of practice to find those routes. As an example, we moved to a new city last year, and found out the roads near our new house are sketchier than we originally realized. More close calls than we had at our old house (and, yes, related ambulance bills).

        We’re likely to move again, to a neighborhood with better infrastructure (now that I have a better feel for the city, I can make a smarter choice). But until then, I have to get creative to with my route choices. And there are parts of my city I’m not sure how to (safely) visit via bike.

        TL;DR – Saying “you can mitigate most of that danger by choosing your route carefully” implies that EVERY origin/destination pair has a safe route option. I’m not sure that’s correct. Decades of building car infrastructure has left many bike deserts, and it’s an interesting challenge figuring out how to get across them.

        Reply
    • Natalie February 4, 2024, 6:18 pm

      If you look you can find them! I moved to a smaller city, about 75k people, but there is a huge bike community here since we are close to the Shennendoah National Forrest and have a university. Because of that there are bike lanes and lockups almost everywhere which is great. If you are into biking I would look for a town that accommodates it!.

      Reply
  • Kathy O February 3, 2024, 6:49 pm

    Six years ago I moved to a new community to be able to retire and buy a house. I have no regrets, but it wasn’t easy leaving my friends and my old life behind. I moved into a friendly community and really put myself out there to find a new tribe and a new partner in life.

    How are you making the transition to Phoenix? Did your son make the move with you? Are you finding people you enjoy? How have you done that?

    Reply
  • Trevor R February 3, 2024, 8:51 pm

    I agree with all of this! Great analysis! I miss the mountains and the ocean and so many other things about my hometown of Vancouver BC… but…moving to Lubbock TX for a job opportunity has worked out just fine as the cost of living down here is like Vancouver in 1984. Specifically, the housing. We paid $208k in 2016 (worth a still affordable $300k today) for a decent place with character in a walkable community near the university. And as a bonus my kids get to go to Buddy Holly’s old school! Anyway, because the housing costs are a relatively small part of our income, a lower middle class family can easily afford the music lessons for the kids and the weekend trips to Santa Fe and Austin etc…as there is simply more margin. Truth be told, i would rather be back in Canada (and will likely end up there eventually) but we visit as often as we can and like you said, there’s something to be said for living in a place that is sunny most of the time. I really enjoy your insight. I wish that you had a podcast. Even if it was just once in a while. The kind where people can call in with their story and you could help guide them with any questions they might have. Similar to your Netflix show. All the best! *and can you believe we need to travel 2 hours to the nearest ice rink- in Amarillo! Another affordable place…

    Reply
  • Charles February 3, 2024, 8:56 pm

    Even better, you don’t even need to move to save a boat load.

    I live near Washington DC, one of the most expensive areas in the world. Average rent in my county is $2,900. FIRE before 30 (my goal) would be pretty unlikely with that kinda payment.

    But so much of that price tag is because a lot of people are living in high rise apartments right in the city centers. Go a few bus stops down, you’ll save $500 a month. Search for deals on Craigslist instead of the big sites, save another $500 a month. Live with roommates, save another $500 a month.

    So I’m spending just about $1,000 per month on housing (with utilities) by using all those strategies.

    P.S. I’m also planning to rent forever, but that’s another story…

    Reply
    • Stephen February 5, 2024, 7:05 pm

      So true on so many levels. Rent drops off dramatically a few miles outside of the downtown core in all the cities I’ve lived in. Granted, the commute time can be pretty bad in some cases. However, the bicycle times are generally still very doable by most. Then there’s always the bus as you say.

      I’m in the rent as opposed to own camp as well. Running the numbers makes it a clear case financially, and I would posit that renting actually improves your life. The home ownership mentality was something marketed to us by the government to increase taxes, and by banks to increase their profit. Seems like most people don’t want to spend the entire year in their city due to weather anyway, so why not just plan on be more nomadic?

      Reply
  • Claire B February 3, 2024, 11:40 pm

    Oh hell, yeah! Siem Reap, Cambodia! It’s a fantastic place to live. I checked The Earth Awaits, but the only listing for Cambodia is Phnom Penh. While Phnom Penh is great and we lived there for a bit, it can’t hold a candle to Siem Reap in terms of affordability, freedom, and the general awesomeness that comes from living side by side with Cambodian people. The long-term visa situation in Cambodia is far and away the easiest to navigate in the SEA region, and because of this, the expat community is diverse. Siem Reap is 5km from the temples of Angkor. Because of its proximity to the temples, Siem Reap has very strong tourism infrastructure – there’s a brand new international airport, basic English is widely spoken, the food scene is ridiculously good, and there’s even a craft beer scene. We rent a modern two-bedroom, three-bathroom house with a rooftop terrace for $300 (USD) per month. Cambodia isn’t for everyone, but there are many of us here who love it and wouldn’t live anywhere else.

    Reply
    • Ella February 4, 2024, 5:16 pm

      My in-laws retired to Siem Riep comfortably on nothing but their SS checks. I might not endorse all the choices, that got them there, but it seems to be going well.

      Reply
  • BlueSkyGreenEarth February 4, 2024, 3:30 am

    This post comes at a particularly relevant moment for me as I am on a weekend trip to a university town where I recently accepted a job that will allow my husband and I to reach FI in about 5 years, when we’ll be in our early 40s. I’m about ready to rescind my acceptance because the housing market is so bad. Renting is not an option because rental prices are very high and priced per bedroom for students, which is fine because we want to buy anyway. The homes we saw are either on/off major roads that wouldn’t allow us to safely walk or bike anywhere, or in the few walkable neighborhoods the homes are in terrible shape and very large. We’re hesitant in buying one of those because we don’t want high renovation costs to derail our FI journey. Do we just wait longer and see what comes on the market? MMM, call me out if I have adopted a complainy-pants, attitude but I’m feeling pretty discouraged here.

    Reply
  • tim February 4, 2024, 6:36 am

    Hi MMM, thanks for the insightful post! Any opinions on Durango, CO? As I’m never lived in CO- I’d love your thoughts- thanks!

    As someone that’s car-free and about to FI, I’m looking for a US city/town that facilitates an active lifestyle and allows me to walk from my apt to backcountry camp/hike whenever I want (without permits/fees) etc. As Durango has the Colorado trail, lots of public land (National Forest, BLM, etc), great bike trails, and the majestic San Juans- it seems like a great option for me. Other cities on my list include: Boulder, Manitou Springs, Flagstaff (AZ), Glenwood Springs, Ouray, Carbondale, and Salida.

    Reply
    • Mr. Money Mustache February 4, 2024, 3:52 pm

      Durango is a gorgeous, perfect little city! But it has definitely already been “discovered” with a median house price between $700-800k.

      It’s also a bit colder than other Colorado cities due to the 6600 foot elevation, and not great for people who like to take direct flights to anywhere, because there are no major airports anywhere in the area.

      Salida has pretty much the same pros and cons, although it’s a much smaller town. (I’ve been spending lots of time in both cities since I have friends who live there).

      But I wouldn’t want to discount any place based on complaints like I’ve just written there. If you really want it, there’s always a way if you can make the right special arrangements.

      Reply
      • tim February 4, 2024, 5:45 pm

        Very helpful thanks MMM! Yes, fair point on the expensive house prices- however, it appears like the rental prices aren’t as unreasonable yet in Durango. After renting for the first year(s) while determining if Durango is a good fit for me- perhaps considering buying small amount of land and building a very small off-grid house could be more strategic/affordable than buying an existing house there?

        For example, Kristina/Matt of @clarityoffgrid seem to have some interesting house-building approaches for their off-grid house build in Durango (https://www.youtube.com/watch?v=RM5izEs7KEg). Or perhaps something similar to Greg Parham’s “Rocky Mountain Tiny Houses” could be smart for me to consider? (https://www.youtube.com/watch?v=TYgbcUbFSk0).

        Please let me know if you had other ideas regarding “the right special arrangements” you mentioned earlier- many thanks!

        Reply
  • Bernard Paulsen February 4, 2024, 6:55 am

    Yes, prices for everything have gone up, including our retirement portfolios, and it’s certainly more challenging to buy a house today than it was in the 2010s. On the same token, I find it refreshing that it still can be one. There’s this young lady on YouTube, Prepper Princess, who by her own admission has “never made more than $53K per year. She now owns two homes outright, one in California, where she lives, and one in Arizona, which she rents out. The latter she bought just a few years ago for around $83K, cash. She is rather extreme in her goal of not spending money, but it gives a good insight in what a certain mindset and the willingness to focus on what matters most in life can do.

    Regarding looking outside the United States, my wife and I decides to retire to Mexico. We can buy a wonderful home in the nicest and most expensive area of Mexico, Lake Chapala, comparable to Lake Como in Italy, for about a third what such a home costs in our neighborhood near Lake Casitas in California. Annual property taxes are about $100 per $100K, so 0.1% (not a typo), and opposed to what the corporate media tells us, weather food, and the people are just top notch, a reason why the expat community there consists of a large number of Canadians and Americans.

    Challenges offer us a pathway to overcome them, so what matters most is that we realize that we can do a great deal to control our own spending and saving patterns. I was dumb for decades, until I saw the light, and MMM has shown me the path. I went from having nothing to show for to millionaire in about 8 years, just by stopping being stupid with money.

    Reply
  • Kevin February 4, 2024, 7:08 am

    I just wanted to thank you. In 2017 i was searching for a way to make my money go further and increase my net worth. I asked bosses friends relatives and none had given me the precise advice I found here. After reading through most of the articles, my wife and I decided to sell our beautiful new Toyota and purchased a 10 year old minivan. She was driving down the street for work that was less than a mile and didn’t need to spend $800 a month on a car for 50k salary. All our investments went into low fee total market mutual funds. Our net worth is 6 times greater than when we started tracking in 2017.

    For young readers, the earlier you start, the better and easier it will be to grow your investments. We were using high interest savings accounts which turned out to be a joke compared to investment options discussed here. I tried meme stocks and crypto coins but nothing worked as well as the consistent low fee funds and keeping our expenses low.

    We’re not fire yet but we feel more comfortable and are able to handle increases in living expenses.

    Thanks MMM!

    Reply
    • Pierre February 10, 2024, 12:28 am

      Nice story. My ears are always buzzing when I hear people “investing” into a good car, which is very often a lease or a several years loan. All that for a machine they will be bored of 2 years down the road.

      Reply
  • figuy February 4, 2024, 8:27 am

    The only problem with some of those cheap cities, is the lack good high paying jobs. I find that some of the slightly larger but still affordable cities offer a little more bang for buck when accounting for wages.
    If you take a look at numbeo (where theearthawaits gets its data from) and look at local purchasing power which takes into account local wages and a lot of “flyover” cities like Cincy, Indy, Des Moines, and KC are near the top.
    Also if you’re a 20 something that doesn’t mind living in small apartments and/or with roommates, some bigger but moderately affordable cities like Chicago or Dallas might offer a faster path to $200k+ in some specialized fields in tech, finance, consulting, etc. Someone could work there in their 20s and early 30s and then have enough stash to buy a house in one of the cheaper cities you mentioned.

    Reply
  • TallAmigo February 4, 2024, 9:34 am

    You see I ended up doing the opposite. I moved from a relatively inexpensive part of central California ( Sacramento) to Palo Fing Alto and I love it. There is a seasonality to life and I am in tech and this is the Mecca for Tech and the Folks who are into it for me and my partner . The ironic thing is the rents here are same as really almost any other place relatively speaking. I rented my Sacramento house for 3700/mo and rented a nice “mid century modern” for 4500/mo all while 3x our income( 700$ essential rent). This place is pedestrian heaven and my kid bikes by herself to school with all the other kids.The weather is amazing.It is a global melting pot of cultures and very smart folks. Renting is best thing you can do in VHCOL areas. Im sure if I dint want a fancy single family home I could have gotten into duplex for 60% of the cost.

    Reply
  • Eric February 4, 2024, 11:28 am

    Good writeup. I’m a fan of a smaller home. I live in a 400sq ft condo with a murphy bed on the beach in the winter and a 800 sq ft place in Omaha during the summer. I rent both on AirBnB when I’m not there and it covers all my housing/utility costs and travel between the two. Becoming a Florida resident saved another 7% of my income. I retired at 39.

    House prices follow inflation over time, homes have just gotten bigger and inflation pretty much doubled everything after the Covid spending: http://www.aei.org/wp-content/uploads/2014/09/houses2-600×409.jpg

    I often say that the only things that I chose to give up in exchange for my freedom was cars newer than 10 years old, a formal dining room, and status symbols(peacock feathers).

    Reply
  • Rhynri February 4, 2024, 1:04 pm

    I will admit I was expecting a different kind of article based on the title – which is on me, not you. With that in mind, can you do a Mustachian look at the very literal meaning of how to afford a house? What loan options make the most monetary sense, whether to sell or rent your old house, bridge loans vs paying down the new loan when the old house sells, loans vs paying out of savings, etc? I’m very curious to see what you have to say about the subject. Also building your own versus being your own general contractor vs buying new. Perhaps a bit much for one article, and I realize you’ve touched on these in other articles, but I figured I’d ask now since the metrics have changed a fair bit. Thanks for all your great advice over the years.

    Reply
  • Emma February 4, 2024, 1:29 pm

    “So there’s our answer: houses “feel” about 25% more expensive right now than they did at the start of 2019 relative to the average salary and the price of everything else. ” — as someone who doesn’t already own a home, I think they feel about 100% more expensive due to this appreciate coupled with high interest rates. Where once a house cost $300K and a $60K down payment, a 3% mortgage would run $1,400/mo. At a $400K list price for the same house after 5 years of appreciation and inflation, now I’ll need an $80K down payment to score myself a $2700/mo payment for the same house that’s got 5 more years of wear and tear on it. Interest rates paired with the housing inflation are where a lot of the hurt is originating for first-time buyers in every city. I’m an extremely diligent saver, moved to (what I thought 5 years ago would be) a cheaper city already, have paid off all of my nearly 6 figures of public university loan debt since starting to read MMM, and I confess that housing still makes me want to bang my head against the wall sometimes.

    Reply
    • Mr. Money Mustache February 4, 2024, 4:03 pm

      Good point about the added cost due to the interest rates! I wrote an earlier post on exactly that and you’re right, the net result is close to a doubling of the monthly payment on a house, between 2019 and today.

      https://www.mrmoneymustache.com/2023/09/04/interest-rates/

      The 30 year mortgage rate is on its way back down again (already dropped a full percent from the scary peak around Halloween: https://fred.stlouisfed.org/series/MORTGAGE30US but that might just add fuel to the fire of rising house prices.

      When you combine these weird market factors, with the fact that vacant lot prices haven’t gone up nearly as much, and building materials are pretty normal again (lumber is back to 2018 prices!), it tilts the balance much more towards my own favorite activity: building new houses from scratch.

      I just wish that it was easy to learn/teach for everyone, or at least that there were more small scale custom home builders out there for hire so it was easy to find and hire them.

      Reply
      • Emma February 4, 2024, 7:02 pm

        “Onerous zoning and approval processes” — so true. The most desirable neighborhoods in my city are over 100 years old, and would be illegal to build today. I don’t want the wild west, but a hundred more quadplex condos with some retail mixed in would be nice.

        Reply
    • Pierre February 10, 2024, 12:38 am

      I definitely appreciate interest rate are getting higher departing from the floor velues they were in recent decades. In Canada some people are running into trouble as mortgage are typically renewed every 5 years. Some folks out there will experience a jump from 2% to 5.5% rate which will most likely increase their minimum monthly payment by 50% or more.

      We were all addicted to so low rates. Looking backward 50 years the currents rates may not really be this high.
      https://fred.stlouisfed.org/series/MORTGAGE30US

      Reply
  • Dave February 4, 2024, 1:30 pm

    I’ve been in IT for close to 40 years, and like a lot of my coworkers majored in something other than Computer Science. I also grew up in the Bay Area, which wasn’t too affordable even then. After a few years of working in Silicon Valley, we moved to Southern California, which at the time was much more affordable and allowed us to purchase our first house. Once the kids were out of the house, we started looking at places to retire, with California being the first choice. I soon realized that you could buy a really nice house in Arizona for about a quarter of the price of something similar in California.

    Reply
    • Renee February 4, 2024, 5:52 pm

      We moved to AZ from CA and now that we’ve been here a while we realize CA is much much nicer. We even live in an area that doesn’t get hellishly hot in the summer (like Phoenix – really hellish)). I wish we had stayed in CA and maybe gone to Sacramento area or further north like Red Bluff. We miss the ocean. Furthermore all the people moving here from CA are driving the prices up so if ya’ll want to move here ya better get going because it isn’t going to last.

      Reply
      • Bryan February 10, 2024, 9:21 am

        Echo your sentiments about Arizona – you pay for what you get. I grew up in CA and have spent a lot of time in AZ. The desert has its own beauty but I don’t like looking at rocks and sand year round. Living in AZ part time during the winter (for North America) is really the way to go, but then you’d need to own two homes and almost double your yearly expenses.

        Reply
  • Republic DC-9 February 4, 2024, 2:07 pm

    My wife and I happen to live in a paid off house in Wisconsin worth about $450K that we built for $326K 11 years ago.

    But this house was built BEFORE I found MMM – had I been a reader of this blog, we would have kept the older new $192K one and been just fine.

    I just tallied up our non-house net worth yesterday and we’re at $1.1M. Hopefully I can early retire very soon (age 48 with a rather high paying job, but one that varies throughout any particular day from “great” to “rage quit”).

    I’m pleased with our more recent progress, but as we try to clear years of clutter, we’re also finding evidence of silly spending in years past in the form of overstuffed closets, bookshelves, model trains, you name it. Many of which are never used, have never been used, and sort of weigh on you. Facepunch!

    And going back further to the start of our marriage, we can both recall our cheap one bedroom apartment, no cable, like 10 audio CDs between us, and our leisure activities being free library books, walking in the adjoining park, and swimming and walking at the YMCA. No restaurant meals, no travel, lots of pasta- and it was great! After getting denied home loans with extreme prejudice (22 years old and 1997 before lending rules became too loose), I tracked every single cent we made or spent on a spreadsheet and within months (6?) we had over $10K saved and bought our first $90K house. I had read “Your Money or Your Life” in college and remembered enough to do that step, though I fell off the wagon later.

    If I could somehow send the 22 year old version of me all of the Mr. Money Mustache Classics articles I would, and I still re-read them on a regular basis to help build my “frugality muscle”. No, I don’t need that silly trinket, just like MMM skipped buying the drinking flask. Yes, there is great joy to be had by giving yourself a haircut or making a low cost homemade pizza or taking a brisk walk outside on a very cold, dark night and marveling at stars and planets (all referenced in various MMM articles).

    Regardless of how high house prices are, or how much money you make, I believe there is great value in practicing Mustachianism. Striving to save as much money as possible by implementing MMM’s advice in these articles will ALWAYS put you in a better place financially and physical fitness-wise than the opposite.

    Thank you, MMM, for writing them – keep ’em’ coming!

    Reply
  • Joseph February 4, 2024, 2:10 pm

    My partner and I just moved from Austin, TX to Spartanburg, South Carolina this January. We were both laid off from our jobs last year, but were fortunate to find job opportunities. It seemed like a win-win with higher earning and lower cost of living combo.

    So far, it’s been a bit of an adjustment moving from a large city to a small town, but I’m really growing to enjoy the calm environment here. People in general seem to be in less of a rush. There’s not as many highways and it’s’ definitely quieter and calmer here. I’m looking forward to exploring more of the parks around the state as there are many beautiful lakes with hiking trails within a 2-hour drive.

    The move was definitely a bit daunting as we didn’t know anyone in the area, and a lot of our friends from school have mostly moved to large cities. I hope we’ll be able to meet a good support community here in the next couple of months. If anyone has any advice for doing so please feel free to share!

    Reply
    • Pat February 15, 2024, 6:44 pm

      Welcome to Spartanburg! I don’t know how many MMM’ers we have, but you certainly aren’t alone.

      Reply
  • Larry February 4, 2024, 2:32 pm

    We did this exact thing in 2010. Moved from DC where we never felt like we could get ahead to Atlanta where everything was less costly but all the same amenities abounded with less snow. With this move we got lucky and timed the housing market and were in a position to buy at the bottom and then refinanced at the bottom a few years later. Now Atlanta has boomed and housing costs have reached new heights making it not a good choice for someone to move here and do what we did 14 years ago. When the kids are off to college in a few years we will leave here for the next Great Adventure, which is what we called our original trip down south.

    Reply
  • Patrick February 4, 2024, 3:18 pm

    I agree I’ve always been surprised how move averse people are. I thought remote work would change that much more than it has.

    But, it *is* difficult for people to move if they have a job that requires a particular physical location. And the cost of leaving friends behind shouldn’t be dismissed too lightly. It’s *not* easy at all to make new friends as an adult. We moved after FI’ing in our 30s and still don’t have a friend group as strong as the one we left behind a few years ago.

    But also what strikes me is the persistent assumption that everyone needs to own a house. I’ve never owned a house and never even lived in one as an adult. I do own a boat however, which is like a tiny house, that we’ve lived on for 7 years. Renting a small apartment is perfectly valid. 

    I would suggest to your commenter that he explore the “tiny house/dwelling” movement. Changing the size of your home is often an even easier way to save than location arbitrage. Humans don’t need really need as much space as they think (many average suburban homes feel “mansion-sized” to me). 

    For example, in my 20s I lived in an 800 sq ft nice apartment and then switched to a 350 sq ft (!!!) studio in a less nice building for a few years, and saved a ton that way.

    Reply
    • Stephen February 5, 2024, 8:15 pm

      Totally agree on the not needing as much space as you think. Five years ago I got rid of the last of my things and moved into my (very) minimalist campervan. Five years ago! Not only did I save a ton of money not paying rent, but I got out and saw some of the country while working. On occasion I watch people’s houses while they are away. I must say, houses are so inefficient with their layout, their size, and the way cities are designed around them (almost necessitating cars) that I don’t think I’ll ever own one. I simply can not endorse a design that isolates people from each other making everyone miserable, while at the same time dramatically increasing the cost of living and pollution. To each their own, I guess.

      Reply
    • Ricky February 6, 2024, 11:12 am

      I guess I’m weird but I have never cared much about having friends. Between family, work, and hobbies, I’m covered. Now if a hobby or interest introduces me to someone interesting I’m open to it but otherwise I’m too busy to just “hang out” with people anymore.

      Reply
  • NJtoFL FIRE February 4, 2024, 3:55 pm

    Great article! We moved from a very high cost of living (Northern NJ, Metro NY) 3 years ago to what was a much lower cost of living, to support our goal of FIRE in the next few years. The primary benefits were no state income tax, much lower property taxes ($10,000 compared to $25,000/yr), and a more active lifestyle with year round great weather. We sold our 4,400 SF house in NJ, took the tax-free proceeds and invested the cash in a number of cash-flowing rental properties, and downsized to a 2,100 SF house which is much more luxurious. We could FIRE now with a modest lifestyle but we enjoy our jobs and spending on certain luxuries. Now, our South Florida area is about 2-3x more expensive but we are in at a lower cost. It is possible to make a move, be happier, more fulfilled, and direct your income to a more intentional, lower cost lifestyle!

    Every wealthy person I’ve ever met has invested in real estate. Everyone says it’s expensive all the time, but generally speaking, over the long term, it’s a good investment and wealth builder. I remember my friends telling me our condo in Hoboken was too expensive in 2013, our house was too expensive in 2016, and the prices I paid in Florida were too expensive. People are going to complain, yet have the newest iPhone, luxury cars, spend a fortune on hair/nails/eyelashes (?), and other nonsense you shouldn’t spend money on unless you have $$!!

    Save your money, invest, move to lower cost of living area that fits your lifestyle. I guarantee that people will eventually follow and in 10 years everyone will say you “got lucky” and nothing is affordable there anymore!

    MMM has provided research and done the hard work for you – take his advice and stop making excuses! Get it done :)

    Reply
  • Jay February 4, 2024, 4:15 pm

    For any Mustachian/Tech Aligned folks, any recommendations for places in Canada?

    Reply
    • CR February 5, 2024, 11:09 am

      Cochrane Alberta, we’re in between Calgary and the Rocky Mountains. Garmin is a large employer here alongside a few other small tech companies (my partner worked for one for years). We also have a good sized group of FIRE’d, or on the path to FIRE, folks. Housing prices are rising quickly (all across Alberta) but I still think it is an affordable place to live with a great lifestyle. Head further East into the prairies for cheaper housing!

      Reply
  • Ella February 4, 2024, 5:02 pm

    I recently bought my first home using the little known hack called “marry an electrician and then get a house with all knob and tube wiring, because no one else will want it due to the wires being old, even though if they were going to burn the house down they likely would have by now.”

    Seems to be going very well thus far, and there is a bus at the end of my street which I can take to the city center in 15 minutes for $2.

    (I will specify that I did not marry the electrician solely because of their career. They have other qualities.)

    Reply
    • Justin February 7, 2024, 10:54 am

      Yup. Homes that need remodeling and new plumbing or electrical can be had for hundreds of thousands less in hotter markets. Having the trade or skills to do the work will save so much money.

      This mentality or approach doesn’t just apply to older homes or homes needing a lot of work though. I’ve done all my own upgrades in the houses I’ve owned, all of which had already been flipped, or built new from stick. This includes adding things like fancy window treatments; trendier/better built hardware, fixtures and lighting; built-in shelving, bookcases, and cabinets; adding frames to simple things like mirrors to give a more finished and polished look; painting with on-trend colors to make the house not look builder grade (beige or grey); adding trendy wallpaper selectively to make the house seem more custom and styled; adding shelving in closets and mudrooms; adding sheds to backyards for storage (some of my houses were very small); adding wainscoting and moldings to enhance the appeal of rooms and hallways that otherwise appear quite plain. I always pay attention to curb appeal. The outside should well painted, with nice color schemes that match the environment. The landscaping should be simple enough to not scare a future owner off, but well kept. Fencing is generally appreciated and should be part of the outdoor appeal–it should compliment the outdoor appeal of your home–it is not expensive to do yourself or hire a fence company to build. The grass doesn’t need to be perfect, but edging and proper mowing are essential. Personally I like to buy a house that has something that can set it apart from the neighboring homes. One house was in a historical section of town that had mostly attached homes. My house was fully detached even though it was small and the setbacks were too. Two of my homes were corner lots providing more sunlight to reach the house and windows, more distance between homes, and a better sense of space and privacy. My current home is elevated nicely off the ground to provide more privacy on the ground floor, more privacy on the second floor (those windows are above most of the neighbor houses), and the height allows a lot of light to enter the basement windows making it feel very livable. Most of the homes around me have basements that have those crappy tiny windows at the top of the walls going it a dungeon feeling, whereas my basement windows are nearly full sized.

      I’ve added probably between $20k and $75k in value to each of my homes in these ways–always spending way less than the value returned by either doing most of the work myself or contracting out after many bids and significant time considering the design. I’ve never had a house sit on the market. All have gone under contract at about ask or over in a few days or less.

      Reply
      • Mr. Money Mustache February 8, 2024, 11:12 am

        I love your advice Justin, thanks for sharing that entire blog post worth of value in just a comment!

        If you see this response and want to share a link to some of your work, please do.

        Reply
      • Artem February 8, 2024, 5:35 pm

        Completely agree here. I have two books: Black & Decker The Complete Guide to Plumbing and Black & Decker The Complete Guide to Wiring. As a rule of thumb, if the home issue is covered in either of these books then I do the work myself. Otherwise, I pay someone. These two books have saved me tens of thousands of dollars.

        Reply
  • Peter February 4, 2024, 5:49 pm

    Thanks Pete for this great post. I’ve been following you since 2016 and continue to find your thoughts challenging, insightful and inspirational. So keep being you and stepping up. You are making a real and positive difference to others lives.

    As for me (don’t hold this against me) I was a financial planner, now retired. I loved my career because it fostered and placed me in an environment to continue learning about money, investing my learnings and helping others on their own journey to realise their ideal lives, underpinned with achieving financial independence.

    Anyways I wont bore you with my journey, aside to say we rented our home in a big city (Sydney), then relocated to a costal regional town in Australia (Cairns). Where we continued to expand and grow our business, without financial pressure i.e. engaging with only those we that were also aligned to our values and were happy to engage our services.
    Last year we sold our business for a premium, I’d say because we’d built a right kind of business and now we’re retired at 52yo.

    I truly believe the world is our oyster and I love to travel.

    I also love Japan, their seasons, nature, cuisine, history, and culture. So much so that I bought an apartment here and renovated it for less than $100k USD. Actually I’m here now writing this before I head into town on a free shuttle bus after which I’m going skiing ($250 USD for a season pass).

    Today my FIRE life consists of travelling between Cairns & Niigata 10 months of the year and the remaining 2 months somewhere else in the world.

    The cost? Holding cost of Cairns & Niigata apartments are total approx $10k USD pa. Another $5k USD for travel/flights/shinkansen etc, $15k USD pa more for day to day living expenses and another $10k USD pa for fun (Fat FIRE).

    My point is and hopefully it also inspires others I’m living comfortably on $40k USD pa, living in two countries, and travelling to other countries too (in March I’m heading to Malaysia, Thailand and Philippines for 8 weeks), this tick all my boxes (nature, beaches, mountains, intellectual stimulation, cuisine, friendships and new adventures).

    Can I afford to be spending more on my current lifestyle? Heck yes. This current lifestyle spending is actually less than 20% pa of my annual investment income. So why didn’t I do all this earlier?

    As to high incomes, yes our clients valued our services and paid us well, however in truth money was/has never been never been my main driver, it was just the result of putting others (our clients) first. So whilst I could have retired at 45yo, I kept going because, heck why not, when you love helping others, they’re happy to pay you, and you have great relationships, this is small business nirvana.

    On a final note, YES YOU CAN relocate even when you are building your career or business, but only do so as long as the relocation helps develop and support your core values and you to express your authentic self; and it is a destination or milestone on your journey to financial independence and aligned to you living your ideal life.

    Just like water stagnating becomes septic over along period of staying still, changing ones environment is not only healthy but at times essential for ones very survival.

    Ok enough dribbling here hahaha, clouds are clearing, think I will go skiing now :)
    Keep up the great posts!
    Peter

    Reply
    • Isaac February 8, 2024, 7:38 pm

      Very cool! Sounds like you are living the dream

      Reply
  • James Alford February 4, 2024, 5:53 pm

    I haven’t seen many articles address clearly an apples to apples look at how affordable housing is compared to 40+ years ago. I always find it interesting when younger individuals such as myself complain that they will never be able to afford a house like their parents. But so many factors have changed. First being the demands that people have for their housing. Compared to generations before houses are huge, their trim levels are way higher, granite/quartz used to be a luxury but now it’s almost like the same people think it’s a right. You can have a nice house, that serves a very utilitarian purpose, is energy efficient and in a good neighborhood in many areas, as you have illustrated. But watching a show on HGTV like House Hunters where everyone has unrealistic wants and demands, for a standard house that has evolved into a modern day reflection of our social media driven, American consumerism, they will never be able to afford that. Way to many people blowing way to much of their salary and still expecting to buy a house with way more features and luxuries than generations before will definitely make it unaffordable.. I am not sure why that is not more obvious.. but I guess hedonic adaption is expanding exponentially from generation to generation in the US.

    Reply
    • Catprog February 24, 2024, 8:22 pm

      The question is this “Are the hom with less luxuries avaliable to buy?” or does an investor see that home, install the features and luxieries and then sell or rent it.

      Reply
  • Dharma Bum February 4, 2024, 6:11 pm

    I am far beyond the point of having to move because of economic reasons, but my children definitely had to face the reality of astronomical house price appreciation in the Greater Toronto Area.
    I advised them to “get outta Dodge” if at all possible, and build a life beyond the familiarity of the city they grew up in.
    Fortunately for them (and happily for me – not because they are away from me, but because it’s economically and financially advantageous for them), they all moved away.
    One of them was fortunate enough to find employment in the U.S., so he’s making almost double the income that he would have in Canada (in the field of medicine), even though the city he’s in is quite expensive.
    It’s also far more exciting for young people to live and work in the USA than in boring old Canada. The opportunities and choice of mobility are seemingly endless.
    So, I agree with MMM – if where you grew up is prohibitively expensive and you’re sticking around just because it’s within your cushy comfort zone, you need to move where houses are significantly less expensive, and figure out how to build a life there.
    Astronomically expensive housing will choke the life out of you.

    Reply
  • Natalie G February 4, 2024, 6:13 pm

    Great question, because it’s relevant at any time, and even better answer.

    What I’ve appreciated about the Moustachian philosophy (at least from what I can tell) is that it doesn’t assume that we humans deserve to get everything we want and right now!

    I’m actually a compulsive debtor in recovery, and reading blogs like this one and books like “Your Money or Your Life,” are very helpful tools for me. My past ridiculous and childish thoughts about money included:

    ~I deserve this
    ~Everyone else is doing it, I should be able to as well
    ~It’s my right
    ~I shouldn’t have to work and save. I shouldn’t have to sacrifice or make difficult choices.

    These thoughts and the silly and financially damaging actions they lead to are not just the affliction of those who are compulsive, but are the foundational philosophy for our consumerist culture.

    Just because I live in the U.S., doesn’t mean I deserve to be able to buy a house; especially when I did NOTHING during my pre-recovery days to save for one.

    The amazing news is, however, that even though I got into recovery and began to practice sound financial principles only 10 years ago, my hubs and I own a great home in a dream location. We went from overspending each month by about $1,500 (today we’d be almost $250,000 in debt – and that doesn’t include interest payments!) to being worth over $1.5 million (this does include the estimated value of our home).

    I work in my dream career and make 2/3 as much money as my hubby, but work 1/4 the time he does (this is the way we both like it).

    All this to say that once you turn the ship around, once you begin to change even the smallest behaviors with money to align with Moustachian ideas, it doesn’t take long at all to see HUGE results.

    Thanks, Mr. Moustache and all who embrace FIRE and principles of financial sanity!
    Natalie :^)

    Reply
  • Natalie February 4, 2024, 6:15 pm

    I did end up moving and found a whole new and better life!

    I had been ‘living’ in San Francisco as a flight attendant in a 3 bedroom with 18 roommates for $375/mo. Since the crew is never there, it wasn’t as uncomfortable but it is the only way that situation worked for the 3 years I did it. I saved a bunch of money and paid off my debts. It also helped socially because our schedules were so wild it was the best way to spend time with people. If I had a bunch of days home I would visit family or friends. My parents were kind enough to store my few items in a spare closet of their house.

    I had begun making an excel of places I thought I would like to live and move to then the pandemic hit and it forced me to move as I was laid off. I made a list of requirements including drivable in 2 hours to a major airport/hub or closer if I commuted (I don’t have to go to work every day). It needed to be affordable housing, community-based, good internet (my parents live in Alabama and it’s not available where they live), things for me to do (entertainment), and in a climate with 4 seasons (Alabama has hot or wet, SFO has damp and less damp). I used best places which has a quiz that also asked some other good questions and I decided I probably wanted some kind of university town so there was 24 hour services (because sometimes I work nights) as that would be good for me. I then converted my Honda crv to a van and road tripped and stayed a few days to a week in each area I was considering. When I got to my current town of Harrisonburg Va I fell in love with it. I moved there and bought a house within a few months for $1,100 a month. It needs work since it was built in 1918 but I enjoy that and it has great bones. I put in my transfer to IAD and love it. I later was able to go to a meet up for board gamers which is one of my favorite hobbies. I made a lot of friends and met my husband. Now that I’m back to flying I find I enjoy being home more because I’m not stressed about money since I moved someplace more reasonable and built myself a whole new community for support.

    Just move and put yourself out there. Most people are too lazy to make new friends, it takes work and practice but it’s not impossible to make yourself a a new home.

    Reply
    • QQQBall February 11, 2024, 7:33 am

      @Natalie,

      That is so weird. We drove around and spent the night there. It was a great surprise! Virginia really wasn’t on the list., but we were really struck how nice it is.As I mentioned in another post, Fayetteville, Arkansas was also a pleasant surprise. Missouri seemed to have the nicest people. The skid plate under our car was badly damaged when I drove over something and many people stopped and offered to help.

      In his book, Paul Terhorst suggested retiring to a State capitol that has a major university,.

      Reply
  • Flux February 4, 2024, 6:49 pm

    Pete,

    I work part time in retail, my wife part time at a library. I found your blog and read every article from beginning to end. We bought a house and have no other debt and currently about 40k invested, not counting our retirement accounts through work, and it started here. I constantly hear comments like the one quoted and continuously have people that make way more than me question how I afford my life. I point them here and know they’re too lazy and married to their excuses they won’t even bother. Everyone loves to complain these days.

    Reply
  • Justin February 4, 2024, 7:27 pm

    I think it’s worth pointing out that “house hacking” does not necessitate breaking your home up into multiple ADUs in the US as you have highlighted through many follower stories on your blog. That being said I hope the broader point you’ve been making since the start of the pandemic will resonate with folks – these swings are long cycles and there are mustachaian activities to participate in even when real estate is off the table. I’m only able to consider moving to the CO area this year after much thumb twiddling in far more affordable Nebraska!

    Reply
  • Sachi February 4, 2024, 7:32 pm

    Love this! While I do feel super lucky to have bought my place in Longmont pre-pandemic, after a few years I realized it wasn’t where I wanted to be anymore. I was tired of winter, tired of grind culture, and ready for a big adventure. I spent a year traveling in Latin America, lowkey looking for a new country to live in, and I ended up loving Colombia. Incredible natural beauty, tons to explore, nice people, and an excellent exchange rate. Currently renting a 1BR apartment in a small, safe, outdoorsy city for $260/mo.
    Hope you’re enjoying winter in AZ, the community you joined sounds awesome!

    Reply
  • Bryan February 4, 2024, 8:34 pm

    Thank you Pete. 8 years ago, we decided to relocate from Massachusetts to Tucson, AZ. The transition came with many challenges, but we have never looked back and are really grateful that we made this choice. We have experienced many benefits, including lower cost of living, sunnier weather, more access to nature, better shopping options, meeting new friends, and more. This is a great article that challenges all of us to take action instead of feeling like the world is against us.

    Reply
  • Lucas February 4, 2024, 8:40 pm

    Imagine my surprise, when scrolling down through the article to see my hometown of fort Madison, Iowa listed near the top of the affordable cities list! 15,000 people. I will say this, there is a reason why the cost is under $100 per square foot: Good paying jobs are scarce, amenities are non-existent, the schools are mediocre at best. Do yourself a favor, don’t save $50,000 on housing to sacrifice far more than that in future earnings. I can’t comment on overall life satisfaction, because, to each their own… It is a somewhat charming riverside city, but please, spend the money to live in a more desirable location. Strike a better balance.

    Reply
    • Chops February 9, 2024, 9:00 am

      Howdy fellow Iowan! Funny to read this as one of my friends just relocated to Fort Madison, IA because of the cheaper housing costs compared to the big city of Cedar Rapids :) where he was living. Of course Cedar Rapids, IA is still way way way cheaper than the East Coast where I moved from in 2015 for my own geographical arbitrage, in no small part because of this blog. But my friend found a good job before he moved to Fort Madison which is key, (he’s an electrician), even cheaper housing than Cedar, and so far is good with the move and likes Fort Madison – exactly your point about to each his own and it being a charming riverside city on the Mississippi.

      Reply
  • Hige Ojisan February 4, 2024, 10:01 pm

    Nice read. I myself have done pretty well with a couple of those strategies: first geoarbitrage in Japan (although I speak the language), then house hacking. We could live for roughly $2k/mo. living downtown in a 2nd-tier Japanese city (Sendai). Safe, convenient, great food. On house hacking, I studied up for years on real estate so I get how that may be daunting to some, but for us it’s turned into living for free for 2 years, then more recently choosing to pay half the mortgage to help out family. It takes work, but it will pay off if you put in the effort.

    To those who still think house hacking is too hard, there’s a simple solution that’s old as dirt: Get a roommate. Get two even. If owning eventually is part of your dream, put whatever you save in housing expenses into a down payment savings account and pull the trigger once ready. After all, house hacking is basically just buying a house and then getting a roommate(s). If you’re reading this, MMM has already given you the tools; the only one capable of stopping you is yourself.

    Lastly, on cheaper markets I’d find livable, on the East Coast I like Baltimore. You definitely have to be careful where you buy, but there’s opportunity for sure. Philly is another great place as mentioned above. I wouldn’t go anywhere near Cumberland (on MMM’s $200k list), but Pittsburgh might also be worth a look.

    Reply
  • Mark February 5, 2024, 7:01 am

    Good article! I would add to the suggestions to look for towns/cities that have Greyhound and related bus access and ideally also Amtrak right now. Additionally, use tools such as realtor.com to look at some of the major environmental risks (flood and fire) of any property being considered; having environmental risk integrated with real estate search engines is a relatively new feature, and unfortunately some of the best “deals” are squarely in the path of danger, from my experience. Finally, check relocation places out in person — ideally arriving without a car (such as by Amtrak or Greyhound) to see how it goes for you.

    Reply
  • Judith February 5, 2024, 7:08 am

    We have just sold our house near Austin, TX and moved our family of 5 to Lafayette, CO. Cost of living is significantly higher here and houses are incredibly expensive. My spouse is transgender and did not feel safe in TX anymore; We had to go. How strange to be political refugees. I never could have imagined us in this position. Due to housing prices in our new city, we have decided to become renters as we continue to pursue FI. Our equity money is going into the market. It feels very odd and countercultural to make this decision, but here we are. After decades of homeownership, have we gone backwards? Or will we be better off? Time will tell.

    Reply
    • Mr. Money Mustache February 5, 2024, 2:35 pm

      Welcome new neighbor! Maybe we’ll see you at one of our events at the MMMHQ Coworking space just up the road in Longmont this spring.

      Reply
  • Joe February 5, 2024, 7:12 am

    We probably should move, not because housing is unaffordable, in fact a massive home is $200k. Due to currency depreciation a home bought for $200k in 2010 is now only $80k. So housing is cheaper, but is a function of a dysfunctional economy.

    However, many friends have moved to other countries because of a weak economy over past 2 decades. But to move it means we need to leave family behind, especially older parents. It is very hard to leave behind family connections, so we stay.

    I guess you just have to be happy with your choices, because everything is a choice.

    Reply
  • Andrew P February 5, 2024, 7:56 am

    As others have said, the first half of this article (the FRED graph of average sales prices across the US) is statistically questionable and has the feel of “see? housing is actually affordable, you’re just wrong to be looking at actual sales prices in your area”. As you mention, it’s a national average, when all RE markets are local, so it’s unclear what it means at all. Another distortion is that the FRED data comes from FHA, which means that it excludes cash sales and sales with jumbo loans. This distortion tends to result in lower home prices than you see when looking at, say, the Case-Schiller data. Even if you average over the whole country.

    But I’m glad I ground through that part because the rest of this has some really practical advice for how to find somewhere to live. There is a classic old Raptitude post “Most Lives are Lived by Default” which suggests that probably your current location is a side-effect of your job, or school, or relationship, and that you could do better if you actively tried to find the “right” location for you. Unfortunately the article provides no advice for _how_ to do this; it mostly suggests moving to a different neighborhood in your current town, with the assumption that you have a good idea of whether you want to be closer/further to nightlife or grocery stores or bike paths or whatever, and you just need to pull the trigger.

    But for somebody who is near-FIRE, or “FIRE except for housing”, it’s hard to figure out where to even start. These resources are a great way to filter for locations that are financially reasonable and also in the right part of the country. Another thing I did was keep an eye on r/financialindependence and r/fatfire to see if anybody posted cool understated places to live. Chattanouga popped up, as did Kansas City MO, and Asheville NC.

    In 2020 I visited a pile of such cities, as well as big ones like Philly and Portland and NYC, by going on AirBNB and finding a spare room that I could rent for a month or more. In the Portland area I wound up doing this for several months in a row, since it’s a huge place and you can change locations dramatically without leaving the metro area.

    When I first started doing this I would always look to stay in whole houses, but this is the wrong approach! Aside from not distorting housing markets by using SFHs as hotels, you actually want to find a place with a host who you can talk to about the city and who can tell you about different neighborhoods. And if you rent spare rooms for long periods, it’s a surprisingly affordable thing to do. Especially as you can often meet people who are willing to let you stay with them without going through a fee-skimming platform like AirBNB.

    This strategy might only be practical for single light-travelling digital nomad types but I encourage anybody to seriously consider it.

    Reply
  • Joel February 5, 2024, 8:58 am

    Thanks for the Albuquerque shoutout! It’s not a perfect place to live, but if you like being outside, it’s hard to do better for what it costs to live here.

    FIRE is often about making different choices than everyone else to emphasize the things that really matter to you. You rent a small apartment close to work instead of buying a McMansion in the exurbs. You bike or walk instead of driving a 3-row SUV. You cook at home instead of eating out. You go to the library instead of the movie theater…

    …and you move to New Mexico instead of Colorado.

    If you’re still working, the national labs are solidly above-average employers that emphasize work-life balance. The outdoor recreation is almost as good as Colorado, and Durango is only a few hours away if you want bigger mountains. There’s a nice airport, a zoo, great museums, and 3 Costcos. The weather is great: cooler than Phoenix in the summer, warmer than Denver in the winter, and sunny almost all the time. Plus, the state is doing lots to support working families, with subsidized daycare and free college tuition.

    So if you’re discouraged about how much it costs to live in Bend or Boulder, make less popular choice and check out New Mexico.

    Reply
    • Chris G February 6, 2024, 4:25 pm

      As a former Coloradoan, newly adopted New Mexican I can reiterate Joel’s statements. NM isn’t perfect but I feel like I have greater access to outdoor recreation here in NM than I did in the Front Range of Colorado, plus much less people to compete with. There are slightly more sunny days, so I can’t complain about that either.

      I’m in Santa Fe, which is pretty comparable to many parts of Colorado regarding cost of living and the weather feels nearly identical to Colorado with our almost 7000′ elevation. Santa Fe punches above it’s weight as a city in regards to culture, restaurants, and museums. There is a good bit of tourism that feeds into that, but the restaurant scene is pretty great. The history of the region keeps me engaged as I continue to learn more about the area.

      I keep eyeballing the affordability of Albuquerque and the offerings of a city that is 5x the size of Santa Fe, but Santa Fe fits the bill for now

      Reply
  • HenryDavid February 5, 2024, 9:18 am

    The key thing, as this article exemplifies, is to EXAMINE both reality, and your own assumptions.
    So much “can’t afford a house” mania is based on vague unexamined feelings, and vague media-based proclamations.
    When you cut through that with a bunch of facts and self-examination . . . the world opens up. As this piece shows.
    In our case, a limiting factor (we thought) was the “must be close to family” idea.
    Then we realized that 1. family members keep making plans and moving without consulting us, so why base our whole lives on their (temporary) locations? 2. once we did the math and realized how often we “see family” it became clear that 3 visits a year with a couple of family events each time would cover all the hanging-out time we do, anyway. YMMV.

    We love to see these people! But in reality, they’re all busy, they move around, and there’s a limit to everyone’s time.
    So now we are free to live mostly in Europe, where we prefer to be (and where it’s cheap to live a great, low-footprint life), and not feel disloyal because of some presumed idea of “being too far away from family.” We see them as much as ever did! Now it’s just during our annual out-and-back migration.
    So yeah: really, truly examine everything that seems to be liming your choices.

    Reply
  • Lee February 5, 2024, 9:19 am

    I think the one thing you missed calling out is how this is especially relevant to FIRE folks who are no longer working. Many of these lower cost cities don’t have the high paying jobs that really helps us along the way.

    Personally I went the route of moving to a small apartment and renting in a HCOL city to maximize my income in my younger years. Now that I’m coming up on 40, I’ve moved to a small town in MN and enjoying the much lower cost of living.

    The other cool aspect of this idea is that you can live in a very neat neighborhood within these type of towns. For example, I’m living in the heart of the historic neighborhood within walking distance of two lakes and downtown for super cheap. If I had done that in any moderate cost of living city, I’d pay 5-10x as much for housing. So while it’s a small town, it’s still very walkable & bikeable because I’m not stuck out in some suburban wasteland.

    Reply

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