What a $2,000 Monthly Housing Budget Gets You in This Market

Sarah Sharkey

July 21, 2022 at 2:00 PM·5 min read

Rising mortgage rates are cutting into what homeowners can afford to spend on a home. The pressure is pushing the previously robust seller’s market towards a buyer’s market.

The combination impacts your housing options. On one side of the equation, rising rates will limit your choices. But the shift towards a buyer’s market opens doors for potential homeowners.

If you have $2,000 a month to spend on a mortgage payment in this market, you might have more options than you think. Find out for sure, and boost your odds of having an offer accepted with a preapproval letter from a trusted lender.

What goes into your $2,000 monthly payment?

More expensive financing options have priced some buyers out of the market. The shift has led to falling home sales every month since the beginning of the year, according to data from the National Association of Realtors.

Sam Royer, national director of Heros First Home Loans, estimates that a $2,000 monthly housing budget would lead to a home purchase price in the range of $250,000 to $300,000. But he warns that you must look at other factors like taxes and insurance, which can vary based on where you live, to get an accurate look.

So, what you can afford varies. A higher interest rate means more of your monthly payment is going towards interest payments. A higher down payment means you can afford a bigger purchase price with the same loan term and a $2,000 monthly payment. Other factors include property taxes, homeowners insurance, and possible homeowner association (HOA) fees.

More:Calculate your monthly mortgage payment

Shopping with a $2,000 monthly housing budget

The purchase price you can afford with a $2,000 monthly housing ranges from $250,000 to $300,000. But the exact number varies based on your location.

We set some basic assumptions to look for options within a $2,000 monthly housing budget. The numbers you’ll find below are based on a 30-year fixed home loan with a 5.3% interest rate. Additionally, we set the down payment at 12%, which was the median down payment in 2021 based on data from the National Association of Realtors.

With Redfin's data, the different taxes, insurance premiums, and homeowners' association fees are built into the options we selected below. A look around the country shows very different choices for potential homeowners with $2,000 to spend each month.

San Diego, California

Mandy Phillips, a mortgage loan originator at Vista Home Loans, ran the numbers with the average property taxes and homeowners’ insurance for California to find that buyers with a $2,000 budget could afford a $301,000 purchase price.

But purchasing power changes a bit when looking at properties that require an HOA fee. For example, San Diego offers limited options for a potential homeowner with a $2,000 monthly housing budget. One of the most affordable options on the market is a condo with a list price of $274,999 that boasts one bedroom and one bathroom.

The HOA fees at $192 per month and private mortgage insurance at $151 per month make a big dent in your housing budget. Plus, $252 of your budget goes towards property taxes. All in, you’ll find a $1,990 mortgage payment for this one-bedroom home.

Miami, Florida

On the opposite coast, sunny South Florida offers a little bit more space for your housing budget. You can score a $265,000 condo with three bedrooms and 1.5 bathrooms.

The HOA fees for this condo are a high $268 per month. And due to the location, you’ll pay quite a bit more for homeowners’ insurance at $243 per month. But the bulk of your $2,000 payment will go towards your principal and interest obligations.

Springfield, Missouri

In general, you’ll get more bang for your buck in a lower cost of living area such as Springfield, Missouri. A $2,000 monthly housing budget leads to ample housing options with spacious floorplans.

For example, your budget could easily fit the $1,927 monthly mortgage payment for this four-bedroom, four-bathroom house listed for $298,000. With no HOA fees and relatively affordable homeowners insurance, you can spread out in this home.

New Orleans, Louisiana

If you are looking for Southern Charm near the French Quarter of this historic city, it’s within reach. You can make an adorable four-bedroom, 2.5-bathroom house your home.

A lack of HOA fees, relatively low property taxes, and a list price of $279,000 lead to a monthly mortgage payment of just $1,785. That means your spacious home leaves some extra room in the budget to enjoy the city.

Hartford, Connecticut

Unique details often come at a premium. But in Hartford, Connecticut, you can snag a Victorian home with five bedrooms and two bathrooms for $275,000.

The relatively high taxes make up for the lack of an HOA fee, bringing your monthly payment to $1,943. Original stained glass windows make this home a gem for anyone seeking a historic home.

Columbus, Ohio

In this capital city, on-budget housing opportunities abound. On the edge of town, a home with four bedrooms and 2.5 bathrooms is listed at $289,000.

The price point combined with minimal HOA fees brings your monthly mortgage payment to $1,996. That includes your monthly property tax bill of $283 and homeowners’ insurance premium of $132 per month.

Honolulu, Hawaii

A leap across the Pacific Ocean brings us to Hawaii. The $2,000 monthly housing budget won’t get you too much space if you want an ocean view. A studio condo listed for $220,000 with a picture-perfect view comes with a $1,825 mortgage payment.

Your principal and interest payments account for just $1,075 each month. But the rest of your budget is eaten up by a $487 monthly HOA fee, $121 in private mortgage insurance, $33 in homeowners’ insurance, and $109 in property taxes.

More from Mortgage Research News:

3 Ways Adjustable Rate Mortgages Can Make Sense

How to Buy a Home With a Low Or No Down Payment

Five Things to Know When Choosing a Mortgage Lender or Broker

Reuters
Gazprom CEO Miller is in Iran as Putin prepares to visit China
Gazprom CEO Alexei Miller is on a working visit to Iran, his company said in a statement on Wednesday, just as President Vladimir Putin prepares to fly to China with a high-level delegation for talks with Xi Jinping. Iran's First Vice President Mohammad Mokhber met Miller, who also met Iranian Oil Minister Javad Owji, Gazprom said.
Yahoo Finance
Housing costs still push inflation higher but rise at slowest annual rate in two years
Shelter costs continued to pressure inflation in April, but a moderation continues and economists expect these pressure to ease in the months ahead.
Associated Press
'The Fly’ has become notorious in France after a brazen escape. What's his criminal history?
A prisoner nicknamed “The Fly” has become notorious in France overnight after a daring and bloody escape from a prison convoy in Normandy that left two guards dead. Mohamed Amra, 30, has a long and violent criminal history that has now culminated in a high-profile search. Known as “La Mouche” (The Fly), Amra has also been referred to by other aliases such as “Yanis,” “Momo,” and “Schtroumpf” (Smurf).
AFP
US drug deaths decline, hinting at progress against opioid crisis
Drug overdose deaths in the United States declined last year for the first time since 2018, provisional data released Wednesday showed, suggesting tentative progress in combating the opioid epidemic even as experts cautioned against premature celebration. "Today's data showing a decrease in drug overdoses over the 12-month period through December 2023 is heartening news for our nation and demonstrates we are making progress to prevent deaths from drug overdoses," said the CDC's chief medical off
AFP
US consumer inflation eases slightly in April, in good news for Biden
US consumer inflation eased slightly last month, according to government data published Wednesday, in a positive sign for President Joe Biden ahead of November's election.In more good news for US consumers, a widely-watched inflation measure excluding volatile food and energy prices also eased last month, rising at an annual rate of 3.6 percent, down from 3.8 percent in March.
CBS News
Asia's deadly heat wave was made 45 times more likely for this reason
Extreme heat is known as a "silent killer," and in some areas across Asia, its intensity would have been impossible without one critical factor, a new study found.
Reuters
UK court system 'crooked', says WikiLeaks editor ahead of crucial Assange hearing
The editor of WikiLeaks denounced the British judicial system as crooked on Wednesday, days before a crucial court hearing which could end the legal battle by the organisation's founder Julian Assange to stop extradition to the United States. Assange, 52, is wanted by U.S. prosecutors on 18 charges, all bar one under the Espionage Act, over WikiLeaks' release of thousands of confidential U.S. military records and secret diplomatic cables. At a hearing on Monday, judges at London's High Court could agree to rubber stamp his extradition, give him permission for a full appeal or even set him free, his wife Stella Assange said.
Associated Press
Robert Fico, Slovakia's populist prime minister, who returned to power on a pro-Russian platform
Slovakian Prime Minister Robert Fico is in life-threatening condition after being wounded in a shooting after a political event Wednesday afternoon, an episode of violence that punctuated his long career spanning decades in politics. Fico, 59, returned to power in Slovakia last year. Having previously served twice as prime minister, from 2006 to 2010 and again from 2012 to 2018, his third term made him the longest-serving head of government in Slovakia's history.
Time
Biden and Trump Agree to Debate Before November Election
The first debate could take place as early as June.
AFP
Dutch parties reach coalition deal: Wilders
Six months after Geert Wilders won a stunning election victory, squabbling politicians finally clinched a deal Wednesday on a coalition government, said the Dutch far-right leader, who will not be prime minister.After romping to a shock election win, Wilders was primed to be the country's first far-right PM but at least one of his coalition partners threatened to torpedo a deal in that case.
Associated Press
When the first warm-blooded dinosaurs roamed Earth
Scientists once thought of dinosaurs as sluggish, cold-blooded creatures. Then research suggested that some could control their body temperature, but when and how that shift came about remained a mystery. Warm-blooded creatures — including birds, who are descended from dinosaurs, and humans — keep their body temperature constant whether the world around them runs cold or hot.
CNN
When she lost weight, the comments about her body didn’t stop
Losing 80 pounds with the help of medication has brought a lot of positives — but Allie Olivares wants others to know it isn’t a magic bullet for life’s problems.
Yahoo News
College students across the U.S. have been arrested and threatened with suspension over pro-Palestinian protests. But what legal rights do they have?
Nearly 3,000 people have been arrested at protests against the war in Gaza at 57 colleges and universities across the U.S. The students involved face academic penalties as well as potential criminal charges.
USA TODAY
NOAA detects another solar flare following sun-produced geometric storm: 'Not done yet'
The sun emitted a powerful solar flare days after separate flares produced a geometric storm that disrupted technology and revealed the northern lights.
USA TODAY
Officials searching for a missing diver in Florida recover another body instead
The St. Lucie County Sheriff's Office reported Virgil Price disappeared on Sunday, but search teams found someone else they have yet to identify.
Reuters
Study reveals history and oceanic voyages of remarkable baobab tree
The baobab tree is a distinctive sight on the landscape. Two baobab lineages went extinct in Madagascar, but not before establishing themselves elsewhere, one in Africa and one in Australia, the study showed.
Time
Is Mommy Brain Real? What Happens After You Become a Mom
Major changes are at play during the transition into motherhood.
Associated Press
A new South Africa health law aims at deep inequality, but critics say they'll challenge it
South African President Cyril Ramaphosa on Wednesday signed into law a bill that aims to overhaul the healthcare system to address deep inequality, but it faces legal challenges from critics. The law introduces what is known as National Health Insurance, which will provide funds for all South Africans to access private healthcare. Currently, 80% of the population relies on strained state-run public health services while about 16% has access to private healthcare through medical aid plans.
CNN
Did dinosaur blood run hot or cold? Both, according to a new study
Dinosaurs were initially cold-blooded, but global warming 180 million years ago may have triggered the evolution of warm-blooded species, a new study found.
Reuters
Uber unveils US shuttle service, expands Costco tie-up to woo price-conscious users
(Reuters) -Uber Technologies is introducing a shuttle service in the U.S. and widening a delivery tie-up with membership-only retailer Costco as part of a series of initiatives unveiled on Wednesday to attract price-conscious consumers amid competition from rival Lyft. The initiatives were unveiled at the company's GO-GET annual event for new products and are meant to maintain growth at the ride-share and delivery giant after a strong 2023 that saw it reporting its first-ever annual profit. The San Francisco, California-based company said it will allow Uber Shuttle users to reserve up to five seats in advance on buses operating in high-traffic areas like airports, concerts, and sports events.