[quote=bearishgurl]
So for those who live in areas with many paid-off homes, it should be some consolation to know that your neighbor who paid off their $45K to $150K mortgage years ago likely did so after a lot of blood, sweat and tears. It was no easier for a homeowner to attempt to pay off $97K at 9-14% than it is to attempt to pay off $417K at 3-4% today, especially when factoring in the lower salaries of previous decades.[/quote]
That would be false. From 1980 to about 1995-2000 there was significant salary growth for you average working person. For example median household income went from 17K in 1980 to 33K in 1990 in san diego. So take a 70K mortgage at 10% in 1980 and the payments is 614/mo or about 40% of your income. That’s a lot initially but 10 years later that 600/mon payments was about 22% of you take home salary. Today there isn’t much expectation for real salary growth and if there were to be the case it’s unlikely rates would remain low.
San Diego may continue to become more unaffordable for the working citizens of the city but only if there’s significant migration of wealthier people into the city.