At 33% of gross income, a $606,000 home (median among the sales) requires a household income of $153,818, just over double the median incomes in most communities in San Diego County. That’s at a 6% mortgage interest rate, and the 33% underwriting programs would already include consideration of the tax benefits.

At a 7% interest rate the income necessary to buy that median priced home is $168,000/year.

Bear in mind, 33% is the agressive underwriting figure and it requires a borrower with considerable discipline to be able to live on the remaining 67% of their income. At 28% of gross income, a 6% loan requires over $180,000 annual household income and a 7% loan requires just under $200,000/year. That’s pretty steep for a 15-year old tract home of average quality, which is what $600k buys in SD County.

Maybe that’s why less than 10% of the county’s residents make enough money to buy the median priced home at the fixed rate. By my count, 10% of the local population is a looong ways away from the 69% of households in the US who “own” their own homes.