The stats are often repeated: The median Irvine household income is $83k/yr etc. etc. Does this equate to the median first time home buyer household income being $83k/yr? Of course not! I’m guessing a lot of these households are homeowners already and have more experienced workforce making more money.
What we should be concentrating is the first time buyer because he/she is what makes or breaks the market. A trade up buyer is chained to the first time buyer.
With the marriage age for high earning professionals these days being very late (mid 30s), i’m guessing our potential first time homeowner in his/her late 20s is more likely than not SINGLE and makes in the $50-75k/yr range. A late 20s/early 30s buyer is also most likely going ZERO DOWN, and interest only or possibly even NegAm. With those creative schemes now out the door and interest rates higher those buyers are all but gone!
The late 20s/early 30s folks these days are spending more than the previous generations did, they should have EVEN LESS to spend on a mortgage meaning lower affordability than historic norms. It also means higher delinquency for those who stretch, as is evidenced by the carnage happening right now. Increased job volatility in this past decade does not help the situation either.
Case in point: A friend of mine is a Business Analyst for a Fortune 500 company, she is a grad from UCI. Her starting salary was $42,000/yr and she is now, 2.5 yrs later at $47,500/yr. People DON’T make as much money as you think!!! We often infer income by looking at spending patterns which is obviously not the right way to guage it.
