Episode summary
How Much House Can a Dentist Afford?
The Dentist Money Show
· · Hosts: Matt Mulcock, Jake
Summary
The hosts argue that housing has become the biggest financial pressure point for many households, and especially for younger buyers, because prices and interest rates rose so fast. They cite a Harvard study showing the annual income needed to afford a median-priced home rose to $126,000 in 2024, up 60% since 2021, while median U.S. household income is only around $80,000. That gap helps explain why housing frustration often outweighs stock-market strength in everyday sentiment.
For dentists, the hosts say the problem is even more nuanced because higher incomes can lead to bigger loans and bigger mistakes. Their main guideline is to think in terms of monthly payment, not sticker price: keep total housing costs at 25% or less of gross income, with 28% as a common textbook benchmark and banks often approving far more. They also emphasize not draining cash for a down payment and not lowering savings just to justify a nicer home.
The episode closes on trade-offs. A more expensive home may mean less flexibility for travel, investments, or reducing work, and the hosts caution against rationalizing lifestyle upgrades as purely financial decisions. They also note that buying a practice can complicate mortgage approval, since lenders often prefer W-2 income for a while after practice purchase.
Key takeaways
- The hosts say a practical target is keeping total housing costs at 25% or less of gross income, even though lenders may approve far more.
- The hosts cite a Harvard study saying $126,000 of annual income was needed in 2024 to afford a median-priced home, up 60% since 2021.
- The hosts warn that putting too much cash into a down payment can be costly, since $100,000 down at about 6% only saves roughly $600 a month.
- The hosts recommend preserving a 3 to 6 month emergency fund and continuing to save 15% to 20% of gross income after buying a home.
- The hosts say homebuying decisions should be weighed against real trade-offs like travel, investing, and the option to cut back work later.
Notable quotes
“I would say to try to keep your monthly mortgage payment at 25% or less of your gross income”
“the annual income needed to afford a median priced home, right? So, like just the average home in America, you would need to make $126,000 in 2024”
“Do not exhaust your entire emergency fund and try to maintain your savings rate”
“the top 10% of households by income in America own 90% of all stocks”
How the episode opens
Consult an adviser or conduct your own due diligence when making financial decisions. General principles discussed during this program do not constitute personal advice. This program is furnished by Dennis Advisers, a registered investment adviser. Welcome back to the Dennis Money Show, where we help dentists make smart financial decisions. I am Matt and I'm here with the one and only Hot Take. Jake, how are you?
What's up? I'm doing great. Yeah. — Yeah. Life's great. — Good. — Excited to be here. — You having any uh any hangovers from our retreat last week? — Uh no. Had a great weekend. This past weekend, I don't know if listeners care about this, but it was the our secondary water finally turned on for sprinklers and getting the yard ready. I did sprinklers and lawn stuff this whole past weekend, which I find Yes. I find energizing and refreshing to do.
I love it. If I Yeah, I could I'm going to have an encore career at some point, as they say. — Uh and it will be something to do with landscaping. I've literally thought at one point doing landscape design in my retired years. So, not for a while, but I love working in the yard. It's my favorite.
Got the sprinklers all rounded up. I went to Lowe's, I think, three different times for different sprinkler heads and whatnot. getting everything ready. That was my last weekend. It was great. — Yeah, there's certain pl I know there's certain places people can't go and like whether it be, you know, I can't like just shopping in general. Like I need to take the Amazon app off my phone or whatever. For me, it's like I can't go anywhere with plants. I was at Costco this weekend and they've got all their plants out and I'm like, "This is a problem.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- housing market
- mortgage payments
- down payments
- debt management
- savings goals
Watch the episode
Watch “How Much House Can a Dentist Afford?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Dentist Money Show, this episode and its artwork belong to Dentist Advisors - Financial Planning and Investment Management. Octagon is not affiliated with the show; this page is an independent summary.
