Millennial couple reveal they can't find a home within their budget — they only earn $250,000 a year

America is facing a shortage of homes and this is set to drive up real estate prices further next year. Amidst these headwinds, a millennial couple with two children is struggling to find an affordable home despite their combined income of a quarter-million dollars a year. Laura and Samuel Graves from Portland, Oregon say they have very limited housing options and most of them are out of their reach. While it may seem that their income is enough to buy a property, the couple refuses to become house-poor and has decided to wait it out, according to Business Insider. 

A Long-Term Outlook

Laura and Samuel Graves have chosen to raise their kids in an apartment located in a suburb of the city while they have been looking for a house for the past three years. Laura works as a financial analyst and Samuel is an electrician, and together they made $250,000 last year.

For their ideal home, the couple wants to keep their monthly mortgage payment at about $3,000 to $3,500 which would be about 30% of their monthly take-home income of $11,000. 

This means that the couple is trying to follow the 28% rule, which according to Chase Bank states that people should not spend more than 28% of their income on housing. While this helps Americans manage costs, the rule has become increasingly harder to follow due to the high real estate prices.

This is the case with the Graves family as most of the homes they're interested in command mortgage payments of at least $5,000 per month, which is nearly half of their combined monthly income. As per a Redfin report, due to rising costs, one in five homebuyers are considering purchasing a home in less safe neighborhoods.

Many young adults are also turning to their parents for help to cover the costs of the downpayment on a home. Many are opting to stay with their parents for a longer time as well, to cope with the rising costs and save money to purchase a house.

In the case of the Graves couple, they have decided to pay a $2,700 monthly rent for a two-bedroom apartment and storage unit as they wait for the market to cool down. "We refuse to become 'house-poor' and, like many others, are choosing to sit it out until the housing market is reasonable again," Laura told Business Insider.

Will the Waiting Game Work?

As of October, the average U.S. home value is $359,892, according to real estate listing website, Zillow. This marks a 2.7% increase from last year. However, in Portland, where the Graves are looking for a house, the average home value is a whopping $527,725, which raises questions about their strategy. 

While mortgage rates have backed down from the highs of last year, they are still above 6% on average, as per Bankrate. Experts believe that the descent may continue as the Federal Reserve eases up the repo rates, but it may not have an ideal effect. Falling rates will also increase demand and with a record low inventory, the real estate market may witness a further surge in prices, a Forbes report noted. Thus, it is tough to say if the long-term strategy would work.