HLS – I have to agree that affordability is a factor. But that is also why none of this makes sense to me. The median priced home in San Diego, they say now, is $440k. I think it may be off. Whatever. The median income is something like $50k. To be fair, we’ll say the average household is a couple, so that bumps it up, one earning more, so we should say about $85k? But if we say it’s a married couple, chances are they have a kid – maybe two – added expense.
Is the median income net or gross?
Most people don’t have 5% to slap down on a house, plus the 6% realtor commission, plus closing costs, if any. We’re looking at $22k + 26 = $48k+.
Almost 50k needed to get a place.
If a house is $440k and say they were lucky to get a loan today w/zero down @ 5.5%, the payment is 2,498, adding to that prop. tax of 366, plus insurance, I’m not sure, $100 – hoping there is no HOA, we’re at $2,964. Let’s say 3k easy math.
When we add to that utilities (gas, electric, phone – cable if they’re splurging) then add food and clothing, gasoline. Shall we add car payments. Very few people know or want to drive a car into the ground. I’ve done this in my life many times, but most people don’t. Most people want a new car. The lowest car payment I’ve seen for a new car is about $150 a month. Shall we times 2 for the couple.
We’ve got to be at around $2,500 by now, thereabouts, being very conservative.
What if they have a student loan or credit card payments?
This leaves very little room at the end of the month for much else.
So how the hell are these people doing it?
Consumer spending amounts to 2/3 of our economy.
How or what incentive is there to save when interest rate keeps going down.
This whole economy is not making sense. If you do the right thing, and save and don’t go in over your head, you’re screwed and never get ahead. Catch-22.
