Can You Buy A House with a Teacher’s Salary? Here Are Your Possibilities and Options.

91% of Americans want to own at least one house in their life [1]. This is the ultimate American dream. 

However, can teachers ever live this American dream with their famously limited salary? 

According to research, teachers can buy fewer than half of all the houses listed in 76% of major cities [2]

But does that mean your path to becoming a homeowner is sealed shut? 

In this article, we will discuss if teachers can buy housing properties, whether it is a good idea, and if you choose to buy your own property, what options do you have. So, be sure to read till the end. 

Real Estate Prices and Financial Difficulties, Two Factors Narrowing the Housing Market for Many Teachers. 

One study reports that only a small percentage of teachers with 5 years of experience and a Master’s degree can comfortably afford monthly costs associated with home buying [3]

We can imagine how increasingly challenging being a homeowner may be for new or less-experienced teachers. 

The average price for homes in New Jersey sits at $440,000 [4], while the average teacher’s salary in the same state is capped at around $40,000 per year [5]. Add to that the cost of living and other monthly bills, and we might almost see how far fetched the idea might be for teachers to buy their own houses. 

Certain programs offer assistance in the buying process. But some of these programs might require a down payment, which sits at 20% of the price under normal circumstances. And according to another report, it might take an average teacher ten years to save up just for the down payment [6]

These studies and reports paint a grim picture for teachers who wish to buy their own properties. 

However, buying a property, especially when you are in the early years of your profession, may not be such a brilliant idea anyway, and you might be better off renting a housing property. 

In the next section, we discuss why. 

Buying Vs. Renting – Why Buying A Property May Not Always Be the Best Bet

Society has built a standard of good financial standing. And being a homeowner is made critical to hitting that standard. 

However, investing in a property might not be the best idea, especially if you struggle with a low income and are in the early stages of your career. 

Despite home buying often touted as the best investment, the reality is that it can often be more expensive than renting. 

With a mortgage, maintenance and whatnot, housing costs tend to climb steeply and quickly, often leaving homeowners astounded at how expensive home owning can be in reality. 

Many people compare the price of mortgage payments and rent and declare homeownership a winner against renting. 

However, according to Investopedia, owning a home may not always be cheaper than renting one, even if your mortgage is less than your rent [7]

The New York Times backs this claim with a study that reports that median housing costs are lower for renters than homeowners with a mortgage in the largest US metro areas [8].

When you rent a place, you are often free from the responsibilities of maintaining it. The same would not be true when you own a property. 

Owning a property might come with many ancillary charges that may not be listed clearly on the property’s price tag. These may include property taxes, homeowner’s insurance, water and sewer service, etc. 

You are generally free from paying for these things when you rent. 

Additionally, buying a property may tie you to one area. And if you find a better teaching opportunity in another school district, moving might be more difficult. 

Renting may liberate you of this problem and offer better flexibility. 

We are not trying to build a case for renting over home buying. It’s just the facts that tend to make renting a better option for teachers in some cases. 

Of course, renting has its own downsides. 

Your landlord might request you to leave at any time. And the rents may not be all too affordable either. 

Therefore, take a look at your financial situation and assess your goals. Is investing in a house really the best option, or will you be better off renting? 

If you have decided to go ahead and be a homeowner, let’s talk about how you might be able to get your foot in the homeowners’ club next. 

How Can Teachers Buy a House? 

Housing is a critical living requirement. People often have home buying as one of their goals after entering their professional lives. 

But everyone knows how frugally teachers have to live under the current salary situation and how far the possibility of home buying might be for some of them. 

Because of this, people often tend to stay out of the teaching profession and opt for other careers instead that may potentially enable them to live the “American Dream”. 

But we need teachers to survive and grow as a society. Therefore, the government has taken initiatives to help teachers buy properties, primarily to keep people in this profession. 

Apart from the government’s initiatives, there are certain private-sector programs as well that offer to help teachers buy homes. 

Let’s talk about these programs and see if they might be worth your time. 

The Teacher Next Door Program

The Teacher Next Door program is probably one of the most popular programs that help teachers buy properties. 

This program promises to give a $6000 grant to qualified applicants that does not have to be returned [9]. They may offer down payment assistance along with some other services as well. 

However, the catch here is that if you choose to work with them for the $6000 grant or whatever, you will be restricted to taking a loan from their partner lenders [10]

This would strip you of the freedom of choosing lenders yourself and comparing their prices. 

Additionally, the general public opinion about this particular program is not very encouraging as it appears. Some people on public forums claim to have had bad experiences with them. And the only good reviews are primarily their website. 

Therefore, do your research before making a decision. 

Home for Heroes Program

The Home for Heroes program is yet another famous home-buying assistance program, and this enjoys a slightly better reputation than the one listed above. 

This program has two parts. One works as a for-profit program while the other as a not-for-profit program. 

The for-profit one may connect you with realtors and other professionals, so you may potentially benefit from their service at a discounted price. The discount is given in the form of a rebate, so you may have to bear the true expenses upfront [11]

The biggest con about this program is that you may end up with an inexperienced realtor who might waste your time without delivering any real value. 

On the other hand, the not-for-profit program sends grants to deserving individuals (teachers may qualify) to assist them with the home buying process. 

Good Neighbors Next Door Program

The Good Neighbors Next Door Program is a federal program that offers teachers bargain-priced homes. Under this program, individuals from certain professions, like teachers, firefighters, etc., might be able to buy homes at 50% off the list price [12]

However, the most significant drawback of this program is that all the properties offered at a discount are in low-income areas that are often designated as “revitalization areas” by the HUD. 

Additionally, despite being in low-income areas, these properties are very limited, and you may not be able to find any property in your state [13]

Final Word

Buying a home on a teacher’s salary might be difficult but not impossible. There are many programs geared towards helping this cohort with home buying. However, you may have to cross-check the viability of these programs before going for them. 

Additionally, while being the ultimate dream, home buying may not be the best option since it may be more expensive than renting in the long haul. 

Therefore, assess your financial situation, and if you are in a position where home buying may make the simple cost of living unbearable for you, consider revaluating your goals. 

Renting may not be so bad after all. 

And if you need professional financial assistance, talk to us!

At Dayton and Sydney, we have a team of experienced financial professionals who will understand your situation and, based on that, might potentially be able to point you in the right direction regarding home buying. Get your free consultation now. 


This article is provided for informational purposes only and is based on our general understanding of the subject matter.  Equitable Advisors, its affiliates and financial professionals do not provide real estate advice or services.  You should consult with a real estate professional regarding your specific situation if considering investing in real estate.



[1] “NERDWALLET’S 2018 Home Buyer Report”, Elizabeth Renter, Nerdwallet”

[2] “Homeownership Falls Further Out Of Reach For American Teachers”, Aly J. Yale, Forbes, May 14, 2019. 

[3] “What You Should Know About the Teacher Next Door First Time Home Buyer Program”, Coldwell Banker Paradise, April 5, 2018.

[4] “New Jersey Home Values”, Zillow. 

[5] “Public School Teacher Salary in New Jersey”, ZipRecruiter.

[6] “October 2017: Does low pay shut teachers out of the housing market?”, Kency Nittler, National Council on Teacher Quality, Oct 17, 2017. 

[7] “Renting vs. Owning a Home: What’s the Difference?”, Christina Majaski, Investopedia, March 18, 2022. 

[8] “Renting Is Cheaper Than Buying, Almost Everywhere”, Michael Kolomatsky, June 10, 2021. 

[9] “Teacher Next Door and Other Home Buyer Assistance for Educators”, Kate Wood, Nerdwallet, Jun 26, 2020. 

[10] ““Teacher Next Door and Other Home Buyer Assistance for Educators”, Kate Wood, Nerdwallet, Jun 26, 2020. 

[11] “Homes for Heroes: Assistance for Home Buyers and Sellers”,  Kate Wood, Nerdwallet, Jun 22, 2020. 

[12] “Good Neighbor Next Door Program: How It Works”, Barbara Marquand, Nerdwallet, Jan 28, 2022. 

[13] “Good Neighbor Next Door Program: How It Works”, Barbara Marquand, Nerdwallet, Jan 28, 2022.

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