The obvious (and often unrealistic) answer is to buy a much, much cheaper home and save much more. Other than that, "low debt" isn't well-defined and all debt isn't created equal. If you get a mortgage whose payments give you a lot of wiggle room based on your income and expected future income, most people wouldn't have trouble including that situation among "low debt".
Gotcha. That's the boat I've been in. I want to avoid debt as much as possible, but unless I'm willing to live in a really rough neighborhood, I will need to buy a home that is roughly 3.5x my gross yearly pay (before taxes). That's a lot of debt.
The payments however, are manageable. So I suppose it is helpful to frame "low debt" in that way.
At some level, it's a pretty reasonable definition: having all your liquidity tied up in a single asset doesn't make a lot of sense, so having a house with a mortgage secured on it is just a way of getting somewhere between renting and buying outright without having to swing to the other extreme. The main risk you're faced with is a drastic drop in value right after you buy it, but that shouldn't affect your day-to-day if your payments were affordable in the first place.
3.5x your gross yearly pay sounds fairly typical. You should really only care about your monthly mortgage payments. If you have student loan debt then you should try to roll that into your mortgage if it has a much lower rate.
Not typical everywhere... The median wage / house price in sydney & melbourne are 13x and 10x respectively. And you pretty much have to live in one of those two cities if you want a decent job in Australia.
The country’s in for a lot of pain if there’s a big recession.
Through the new school student loan consolidation firms, you may be able to get better interest rate on your student loan debt than your mortgage. This was the case for me. I used Common Bond.
Buy the home in cash is how. Might seem ridiculous and impossible where you are at the moment. But if tech crashes, where will you be? In my home town in the land of unimportance you can own a home for just $26K. And it isn't bad. Compared to homelessness and unpredictable future rent costs.
Marion Ohio, USA. My brother even knew an dying fellow that wanted to sell his house for 10 grand. The house is kind of a relic from the 50s. When soliders came home many of them bought these little 800 sq foot homes. Marion Ohio is more than 45% senior. No tech in the town besides the broadcasters, and ordinary sys admin type stuff. But there is a little bit of tech (tiny) in Delaware Ohio, Lewis Center, and all of Columbus has tech jobs that pay anywhere from $60-100k. If you can put up with a 50 minute commute you could save up a nice pile of cash in no time. Thrift!
Having capital saved up is tough. I've tried to save as much as possible but, year after year, it's amazing that I haven't managed to save more.
As for moving to a cheaper area... We all know what that means. I'm certainly looking in the "cheaper" neighborhood, but it's not the "cheapest". We all have our limits to what we consider a safe and healthy neighborhood, I suppose.