[quote=njtosd][quote=moneymaker]Maybe those are maximum amounts, I’ve always heard 5 times income. If it was 5 times take home then I would agree, but I for one don’t feel comfortable spending 5 times gross income on a house. Not sure how many people first starting out realistically have the 20% down.[/quote]
When I was young the multiplier was three. The house that I grew up in was worth less than my dad made in a year. It just wasn’t such a big deal – and nobody knew the square footage of each others homes.[/quote]
Same here. My parents were in real estate for decades, and the norm was always 3 times gross income. Anything more than that starts to become risky, IMHO. Not only that, but people back then tended to have more stable jobs with DB pensions. You can afford far less if your job is insecure and you don’t have a DB pension.
Too many people have thrown caution to the wind over the past ~2 decades. The world of never-ending asset price/credit bubbles has taken its toll. I don’t think this is going to end well.
