Let’s remove the kid from your equation, and let’s have the couple actually put in a little tough love on their lifestyle. After all – home ownership should take a little sacrafice to start off.
(modifying your numbers)
Let’s do some math. A young couple with no child because they waited until they were financially stable before expanding their family, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (1br apartment in a decent area) $1100*12 = $13200
– Utilities $100*12 = $1200 (SDGE, High Cable)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200 (We’ll leave this, although they could get something cheaper or older used)
– Car insurance for both cars = $2,000 (Your number was incredibly high)
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and no child, say $500*12 = $6000
There you go – that couple now has a whole lot more money to save each year for a down payment, with plenty extra money for a vacation or two and a decent social life. There’s even room left in there for student loans, etc.
Let’s say they saved $20k/year and spent the rest having fun. That’s only 3 years to save up for a 20% in MM. Sure, add some unexpected expenses and let’s ay it takes them 5 years.
