The Big Move

‘I’m getting cold feet’: I’m single and make $120,000 a year. Can I afford a $500,000 home in Florida?

‘I want to buy my first home soon to avoid being completely priced out of the market, as prices keep going up’

“If I don’t back out now, I won’t get the money back.”


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Dear Big Move,

I’m a single man in Florida, living at my parents’ house and I want to buy my first home soon to avoid being completely priced out of the market, as prices keep going up.

I’ve found a four-bedroom home for $517,000, and the builder will cover closing costs so I have about $6,000 left in incentives to buy down the rate.

I make about $120,000 a year, and have $180,000 in cash and $290,000 in my investment accounts. I have a car loan which costs me $670 a month.

I’ve already given the builder $1,000 to go under contract on the home, and I am expected to give him $24,000 next week for a total of 5% of the home value. I would put 20% down and take out a 30-year mortgage at a rate of 6.125%.

My monthly payment would be about $3,300, including homeowners association fees, home insurance, mortgage payments, and property taxes. 

It seems affordable, but I am still stretching my budget. I’m getting cold feet. If I don’t back out now, I won’t get the money back.

What should I do? 

Aspiring homeowner

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Dear Aspiring,

Decide if you are buying the house because you want to make that investment, or if you are just feeling the fear of missing out? 

With a steady paycheck in the six figures and sufficient funds that you can tap, for not just the down payment on the home, but also towards any other unforeseen expenses — housing-related, or otherwise — your plan to buy this new home seems to make sense on paper.

But if you do the math, you could end up with too much house and a costly mortgage. 

If FOMO is dominating your decision-making, stop and think. You don’t want to be left with a case of buyers’ remorse. (You wouldn’t be alone in that. Up to 93% had buyer’s remorse last year, up from 72% the year before, according to this recent survey.)

You say you want to avoid being priced out, but ask yourself if you really need to buy a home right now? Is this home something you’ve planned for months or years because you want your foot on the property ladder, or because you feel like the market is turning and prices are rising?

At 6.125% for your 30-year with 20% down, and assuming a roughly 1.7% tax and insurance rate, you can more reasonably afford a $475,000 home, estimated Hannah Jones, a senior economic analyst at 

This recommendation comes with you keeping your monthly payment at 30% of your income. 

To afford the $517,000 more comfortably, you would require an annual salary of $130,000 to remain within the 30% rule of thumb, Jones added. But you’re close.

If you put down 20% on the $517,000, which would be roughly $103,000, that would wipe out a considerable amount from your cash savings, leaving just $73,000 as a buffer for any unexpected housing expenses. These could vary, from home repairs to home-related fees like closing costs and more.

As you make about $120,000 a year, your monthly $3,300 housing payment would eat up about 40% of it. Factoring in your car payment, that would leave you with only half your paycheck left over. 

You have to decide if that is enough for your other expenses. Do you have to financially support your parents, whose home you have been living in? 

Home-insurance premiums

Additionally, think about how home-insurance premiums rise over the period that you own the home. Home insurance prices went up 21% between May 2022 and May 2023, according to Policygenius, an online insurance marketplace. You don’t say where in Florida you’re buying, but your flood insurance premiums may also rise significantly

Your taxes won’t increase significantly after you buy the house and get your first bill if you get the Homestead Exemption, as the state caps the maximum increase in assessed value of a house at 3%. 

You could put half your paycheck towards your debts (house and car), and rent out other bedrooms. But you’d also add a full-time gig as a landlord to your day-to-day duties. Are you emotionally prepared to live with strangers as housemates, if it makes financial sense to do so? 

This house will also likely appreciate in value over time, and since the U.S. is still short of two million homes and with millennials continuing to “drive demand in many area” which is pushing home prices up, according to Fannie Mae FNMA, -0.79%, you could pull it off if you plan to sell in the medium- and long-term.  

Could you put that money into other investment accounts, or high-yield funds, or buy an even cheaper house, to grow your stash even further?

Or are you ready to take the leap and get your foot on the property ladder? Your house will likely appreciate in value over time, and we all need somewhere to live. Plus, you will be finally independent and no longer have to live with your parents.

Nerves at this point are natural. Reading between the lines in your letter, you may regret not buying in five years time if the price of his house is out of reach.

There are no guarantees, but if you are in your 30s now, your wages over the next two decades are very likely to increase.

Some details have been modified to protect the privacy of the writer. is operated by News Corp NWS, +0.51% subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.

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