THE AMERICAN DREAM

For this project, you’re going to go house hunting! You’ll pick 4 cities—one of them being somewhere in the
New York City area (or at least commutable to the city)—and explore how much homes cost and how much
house you can afford on your expected annual salary.
You should only select cities/metropolitan areas in which you actually could see yourself living. If you plan on
going away to college, selecting that city might be a smart move; lots of graduates get a job in the city in which
they attended college.

INTRODUCTORY QUESTIONS

1. Your four cities/metropolitan areas:
2. Your expected career:
3. Your expected annual salary 5 years after you graduate (You can use the median salary for your field as
found on salary.com. If you want to use different salaries for different cities/regions, feel free):
4. Correct to the nearest dollar, how much house can you afford on your expected annual salary? You can
assume that you will take a 30-year mortgage at a fixed APR of 7.33%. Show work.

FOLLOW-UP QUESTIONS

These should be thoughtful, detailed responses. I’m not going to tell you how long your answers should be,
other than to say that a few words or one sentence doesn’t show any thought.
1. If you had to pick one of your four cities/metropolitan areas to live in, which would you choose and why?
2. Comment on the amount of house you can afford on your salary in each city; did anything surprise you? How
do you feel about your career/salary now?
3. Comment on the amount of house you can get for $1 million in each city; did anything surprise you? What do
these houses tell you about the cities in which they are located?


CITY #1

CITY/METROPOLITAN AREA NAME: _____________________________________________
1. Find and show at least one screen capture of a listing from Zillow.com or Trulia.com for a home that is for
sale in this metropolitan area that is affordable to you based on your salary. This is to show you what you can
afford in this area.

2. Find and show at least one screen capture of a listing from Zillow.com or Trulia.com for a home in this
metropolitan area that costs approximately $1 million. This will give you a measure of what wealth can buy you
in this area.

3. Find and show at least one screen capture of a listing from Zillow.com or Trulia.com for a home that meets
your requirements for a dream home. In other words, THIS is the house you would love to call home if price
was not an issue; this house can cost any amount of money.

4. Use the AFFORDABLE house (question #1) to answer the questions that follow. Show all work.
a. What is the monthly mortgage payment on this house, given an APR of 7.33% on a 30-year
mortgage? (You make the necessary down payment to avoid PMI)

b. How much interest do you repay in your first mortgage payment?

c. How much interest will you repay over the life of this mortgage?

d. How much equity will you have built into this home after 9 years? Round to the nearest dollar.

e. Take your monthly PMT from part a) and round it up to the next multiple of $500. If you pay this
much toward your mortgage (instead of just making the PMT you have to make) how many months will
it take before your mortgage is paid in full?

f. What is the amount of your final payment (using the information from part f)?

CITY #2

CITY/METROPOLITAN AREA NAME: _____________________________________________
1. Find and show at least one screen capture of a listing from Zillow.com or Trulia.com for a home that is for
sale in this metropolitan area that is affordable to you based on your salary. This is to show you what you can
afford in this area.

2. Find and show at least one screen capture of a listing from Zillow.com or Trulia.com for a home in this
metropolitan area that costs approximately $1 million. This will give you a measure of what wealth can buy you
in this area.

3. Find and show at least one screen capture of a listing from Zillow.com or Trulia.com for a home that meets
your requirements for a dream home. In other words, THIS is the house you would love to call home if price
was not an issue; this house can cost any amount of money.