Borrowing with 0% equity is also often considered a bad idea. If you assume 25% initial equity, you can go 1:4 salary:cheapest available housing.
If you intend to buy a family home, chances are there are two people sharing the burden. If you make $120k and the partner $60, you could borrow $540k, for a total home price of $720k if you have 25% starting equity.
That opens up quite a lot of options.
Personally, though, in the current market, I wouldn't borrow that much. It's quite possible that the biggest housing crash in several generations is just around the corner, and interest rates may very well be 15% within 5 years.
Man, it feels like interest rates SHOULD get to 15% in the next year, but I don't think Powell has the guts to grind the stock and real estate markets into dust the way he's supposed to
For now, he seems committed to raising rates until inflation normalizes. I don't think he's very worried about stock and real estate markets. But at some point, there will be effects in the real economy, and unemployment will start to rise.
Hopefully, inflation will go down at around 5% unemployment. But if he has to continue tightening until unemployment hits 6, 8 or 10%, I suspect he will will be forced to eventuall pivot, even if he doesn't want to.
In that case I'm in need of a significant salary increase... Over here, in a high priced region of Germany, house prices tend to be some at 10x of yearly salaries, which is totally fine.
