Assuming 20% down you end up with a $330K mortgage (on a $410K home) and a monthly payment (including taxes and insurance) of about $2,500 (at 6.375%). A couple earning $82,000/year is going to pay about $17,000 in taxes, including SS, medicare, etc. (using my handy California tax calculator, and including the mortgage interest deduction), which leaves about $5,400/month in net after-tax income. So that $2,500 payment is 46% of the couple’s monthly after-tax income. And this is considered “affordable”? There was a time, not so long ago (like prior to 2000…) when it was frowned upon when a mortgage (etc.) payment was going to be greater than 35% of take home pay. My how far we’ve come…
(At current interest rates, a median price of about $300K yields a mortgage payment equal to 35% of after-tax income – at $82K pre-tax – assuming a 20% down payment and the current 30-year mortgage rate of 6.375%.)
