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When I first started out working, my monthly pre-tax income was ~4500. My rent plus electric/heat was ~1800/mo. Not 50%, but damn close. Looking back, I shouldn't have rented where I did. However, after I was in there, the cost of breaking the lease and moving was too high to move to a lower cost place. Best I could find was $300 cheaper per month, but did not include electric/heat in that. So, it was a wash.
The neo-progs should be glad. In Europe, there are more people living together as groups. Even many families live in the same house. We can become more like them!
Good point. I keep getting lecture about $8/gallon gas in Europe. They tell me I have it good only paying $4.
When I bought a house in 2006 I was paying way more than 50% of my income in mortgage, property taxes, and insurance so waht is your point? I am well above the median income level. Housing is expensive. That's not news. House prices were so high in 2006 that by 2007-2008 owners were renting them out at a great loss just to have some income coming in. Housing prices have dropped by more than 50% since then. In comparison to those times I think house prices are very cheap.
Any homeowner paying more than 50% of income in mortgage, property taxes, and insurance...is very unusual.
The thing about mortgages is, lenders won't give you one if your housing costs are anywhere near 50% of income. (They like to see numbers like 28%, 33%, maybe 40%, or lower.)
Last I looked - and this was a few years ago - the average homeowner with a mortgage was paying less than 20% of income on the mortgage payment.
Yes, housing is expensive. Homeowner median income is more than 2x renter median income.
Houses prices are cheap today but rents are high and they're headed higher.
Any homeowner paying more than 50% of income in mortgage, property taxes, and insurance...is very unusual.
The thing about mortgages is, lenders won't give you one if your housing costs are anywhere near 50% of income. (They like to see numbers like 28%, 33%, maybe 40%, or lower.)
Last I looked - and this was a few years ago - the average homeowner with a mortgage was paying less than 20% of income on the mortgage payment.
Yes, housing is expensive. Homeowner median income is more than 2x renter median income.
Houses prices are cheap today but rents are high and they're headed higher.
At one point folks were qualifying for homes 6-10X their annual salary.
These were ARMS of course. And then HELOCS entered the picture.
And as home values rose so did the debt these folks took out.
The true housing costs were way above 50% of their salaries but low interest ARMs for the first couple of years hid that.
That's what blew up the housing market..costs hit reality.
Earning $50K and living in a $500K home ??
Those were the stories coming out of CA when the bubble burst.
Any homeowner paying more than 50% of income in mortgage, property taxes, and insurance...is very unusual.
The thing about mortgages is, lenders won't give you one if your housing costs are anywhere near 50% of income. (They like to see numbers like 28%, 33%, maybe 40%, or lower.)
Last I looked - and this was a few years ago - the average homeowner with a mortgage was paying less than 20% of income on the mortgage payment.
Yes, housing is expensive. Homeowner median income is more than 2x renter median income.
Houses prices are cheap today but rents are high and they're headed higher.
That may be true now but during the boom in Miami where house prices tripled in a few years it was very common for house prices to be as much as 6x the income level. $450k was typical for a house in a new development and only 1/2 a mile from a bad neighborhood. I suppose that time was an anomoly. I for one will be happy if we never see those times again.
26% of (US) renters are paying more than half their pre-tax income for housing (rent plus utilities). This is the highest in over 50 years.
Ok. Now what percent of homeowners are doing the same thing?
Rental market is unique in that no one has to pay more rent than what the going rate is. And the going rate is affected by supply and demand.
Not only that, I know several renters who prefer to rent simply because they can actually get more house/apartment that way without having to invest in the property.
Any homeowner paying more than 50% of income in mortgage, property taxes, and insurance...is very unusual.
Really? To qualify for a $400,000 mortgage, you don't have to make more than $125,000/year.
Mortgage (2,100 - that is at a rate of 4.8%) + property tax (1100 - that is at a rate of 2.17%) + homeowner's insurance (200 a month) + utilities (1000 a month conservatively for gas/electric/water/sewer/tv/yard/pool)...that's 4400 dollars a month. Not including repairs, updates, furnishings, etc.
These are all figures from my own house, so I know they are real.
So if you buy what you qualify for, you could easily be up around or more than 50% for all your housing expenses.
The guy in the Lexus wants the Porsche. The guy in the Porsche wants the Bentley. The guy in the Bentley wants the Ferrari. Of course prices will come down. What planet are you on Planet Reagan? Trickle down Trickle down
A lot depends on where you live... Where I am everyone is used to paying ridiculous rents and getting paid low wages. I lived in a 4 bedroom house with 6 other people and was still paying $600 a month (before utilities) for a single bedroom. With utilities, it was usually around $750. Add onto that needing to cover rent when people would disappear, or when they couldn't afford it and it becomes very expensive to rent. I would rather spend the extra money and live on my own than to ever live with roommates again.
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sure they would
