Income to Mortgage Ratios in the new Banking System???

[HLS]

PW:
I have NO concerns about money drying up, where/when did I say that ?? There is no shortage of money for qualified borrowers.

It is and will continue to be harder to qualify than it was 2 yrs ago, but just back to traditional guidelines that were in place for decades before the feds turned the faucet on and broke the handle and didn’t bother calling a plumber for 5 years.

I’m in no denial about what’s going on, trust me.

[DoJC]

Did anyone see the homepage of this site? Seems that the price – income ratio was even higher than I thought. Seems to have topped out at nearly 15:1, and hasn’t been below 6:1 in the entire graph posted here:

This Just In: San Diego Homes are Overpriced

– Doug

[DoJC]

Did anyone see the homepage of this site? Seems that the price – income ratio was even higher than I thought. Seems to have topped out at nearly 15:1, and hasn’t been below 6:1 in the entire graph posted here:

This Just In: San Diego Homes are Overpriced

– Doug

[DoJC]

Did anyone see the homepage of this site? Seems that the price – income ratio was even higher than I thought. Seems to have topped out at nearly 15:1, and hasn’t been below 6:1 in the entire graph posted here:

This Just In: San Diego Homes are Overpriced

– Doug

[DoJC]

Did anyone see the homepage of this site? Seems that the price – income ratio was even higher than I thought. Seems to have topped out at nearly 15:1, and hasn’t been below 6:1 in the entire graph posted here:

This Just In: San Diego Homes are Overpriced

– Doug

[DoJC]

Did anyone see the homepage of this site? Seems that the price – income ratio was even higher than I thought. Seems to have topped out at nearly 15:1, and hasn’t been below 6:1 in the entire graph posted here:

This Just In: San Diego Homes are Overpriced

– Doug

[SDEngineer]

The new article on the front page uses per capita income, which is generally quite a bit lower than household income, which is the income figure usually used in the housing price ratio.

SD’s always been high – 4-5x household income is pretty much the average for the past 30 years (discounting this particular bubble).

IMO, you can thank “stated income” no or low doc loans, combined with option ARMs, low teaser rate ARMs, and IO payment loans for the massive run up in household price ratio – no bank would ever make a 10x income loan, but they were willing to turn a blind eye and give a wink during the run-up as long as the buyer was willing to lie and say they made enough to afford it. The banks drank the kool-aid too, and figured that as long as the borrower could somehow afford to pay the teaser rate IO payments that the house would appreciate, the buyer would refinance (or sell), and everyone would continue to make money hand over fist.

[SDEngineer]

The new article on the front page uses per capita income, which is generally quite a bit lower than household income, which is the income figure usually used in the housing price ratio.

SD’s always been high – 4-5x household income is pretty much the average for the past 30 years (discounting this particular bubble).

IMO, you can thank “stated income” no or low doc loans, combined with option ARMs, low teaser rate ARMs, and IO payment loans for the massive run up in household price ratio – no bank would ever make a 10x income loan, but they were willing to turn a blind eye and give a wink during the run-up as long as the buyer was willing to lie and say they made enough to afford it. The banks drank the kool-aid too, and figured that as long as the borrower could somehow afford to pay the teaser rate IO payments that the house would appreciate, the buyer would refinance (or sell), and everyone would continue to make money hand over fist.

[SDEngineer]

The new article on the front page uses per capita income, which is generally quite a bit lower than household income, which is the income figure usually used in the housing price ratio.

SD’s always been high – 4-5x household income is pretty much the average for the past 30 years (discounting this particular bubble).

IMO, you can thank “stated income” no or low doc loans, combined with option ARMs, low teaser rate ARMs, and IO payment loans for the massive run up in household price ratio – no bank would ever make a 10x income loan, but they were willing to turn a blind eye and give a wink during the run-up as long as the buyer was willing to lie and say they made enough to afford it. The banks drank the kool-aid too, and figured that as long as the borrower could somehow afford to pay the teaser rate IO payments that the house would appreciate, the buyer would refinance (or sell), and everyone would continue to make money hand over fist.

[SDEngineer]

The new article on the front page uses per capita income, which is generally quite a bit lower than household income, which is the income figure usually used in the housing price ratio.

SD’s always been high – 4-5x household income is pretty much the average for the past 30 years (discounting this particular bubble).

IMO, you can thank “stated income” no or low doc loans, combined with option ARMs, low teaser rate ARMs, and IO payment loans for the massive run up in household price ratio – no bank would ever make a 10x income loan, but they were willing to turn a blind eye and give a wink during the run-up as long as the buyer was willing to lie and say they made enough to afford it. The banks drank the kool-aid too, and figured that as long as the borrower could somehow afford to pay the teaser rate IO payments that the house would appreciate, the buyer would refinance (or sell), and everyone would continue to make money hand over fist.

[SDEngineer]

The new article on the front page uses per capita income, which is generally quite a bit lower than household income, which is the income figure usually used in the housing price ratio.

SD’s always been high – 4-5x household income is pretty much the average for the past 30 years (discounting this particular bubble).

IMO, you can thank “stated income” no or low doc loans, combined with option ARMs, low teaser rate ARMs, and IO payment loans for the massive run up in household price ratio – no bank would ever make a 10x income loan, but they were willing to turn a blind eye and give a wink during the run-up as long as the buyer was willing to lie and say they made enough to afford it. The banks drank the kool-aid too, and figured that as long as the borrower could somehow afford to pay the teaser rate IO payments that the house would appreciate, the buyer would refinance (or sell), and everyone would continue to make money hand over fist.

[DWCAP]

Remember median and average incomes are skewed because of households that have really low incomes. College students and Seniors living off SS and such are all households that need to be recorded, but have terribly low incomes. No college student making $8/hr 3 hours a day, 5 days a week in the bookstore + a summer job painting houses is buying a house (atleast not without the bubble) but they are counted as households if they are fileing their own taxes and such. It would be alot more insightful to be able to strip these portions of the population out and see what housebuying (ie 25-60 years old)households median income is. I have a feeling itll be alot closer to 3-4X income. In the bubble ill bet it topped out at 8-9X, and that wasnt sustainable. 15X is congressional level stupidity and the banks deserve to go outa buisness if they were doing that on verified income loans.

On the otherside, the college student and Senior households also give fake numbers on demand for housing. College students tend to pile in to reduce rent costs, meaning that 1-2-3 people may be 1 bedroom, and seniors generally are sellers of housing rather than buyers. So when the stats say their are X households and Y number of houses that doesnt necessary add up to Z demand for houses not being met. Seniors often move into assisted living homes,using far less housing than they use to. In College some Fraternity houses held between 20-60 guys, and if they were all on their own (a lot I knew were) they are all counted. If we all lived that way we could probley fit in a few more million people no problem. Think of all the people we could put just in La Jolla with all those “guest bedrooms” that are never being used. What does a 60 year old couple with no kids need with a 6 bed 4 bath house???? Not much cept to show it off to their friennds who are 58 with one grown kid outa state and only have 5 bedrooms.

[DWCAP]

Remember median and average incomes are skewed because of households that have really low incomes. College students and Seniors living off SS and such are all households that need to be recorded, but have terribly low incomes. No college student making $8/hr 3 hours a day, 5 days a week in the bookstore + a summer job painting houses is buying a house (atleast not without the bubble) but they are counted as households if they are fileing their own taxes and such. It would be alot more insightful to be able to strip these portions of the population out and see what housebuying (ie 25-60 years old)households median income is. I have a feeling itll be alot closer to 3-4X income. In the bubble ill bet it topped out at 8-9X, and that wasnt sustainable. 15X is congressional level stupidity and the banks deserve to go outa buisness if they were doing that on verified income loans.

On the otherside, the college student and Senior households also give fake numbers on demand for housing. College students tend to pile in to reduce rent costs, meaning that 1-2-3 people may be 1 bedroom, and seniors generally are sellers of housing rather than buyers. So when the stats say their are X households and Y number of houses that doesnt necessary add up to Z demand for houses not being met. Seniors often move into assisted living homes,using far less housing than they use to. In College some Fraternity houses held between 20-60 guys, and if they were all on their own (a lot I knew were) they are all counted. If we all lived that way we could probley fit in a few more million people no problem. Think of all the people we could put just in La Jolla with all those “guest bedrooms” that are never being used. What does a 60 year old couple with no kids need with a 6 bed 4 bath house???? Not much cept to show it off to their friennds who are 58 with one grown kid outa state and only have 5 bedrooms.

[DWCAP]

Remember median and average incomes are skewed because of households that have really low incomes. College students and Seniors living off SS and such are all households that need to be recorded, but have terribly low incomes. No college student making $8/hr 3 hours a day, 5 days a week in the bookstore + a summer job painting houses is buying a house (atleast not without the bubble) but they are counted as households if they are fileing their own taxes and such. It would be alot more insightful to be able to strip these portions of the population out and see what housebuying (ie 25-60 years old)households median income is. I have a feeling itll be alot closer to 3-4X income. In the bubble ill bet it topped out at 8-9X, and that wasnt sustainable. 15X is congressional level stupidity and the banks deserve to go outa buisness if they were doing that on verified income loans.

On the otherside, the college student and Senior households also give fake numbers on demand for housing. College students tend to pile in to reduce rent costs, meaning that 1-2-3 people may be 1 bedroom, and seniors generally are sellers of housing rather than buyers. So when the stats say their are X households and Y number of houses that doesnt necessary add up to Z demand for houses not being met. Seniors often move into assisted living homes,using far less housing than they use to. In College some Fraternity houses held between 20-60 guys, and if they were all on their own (a lot I knew were) they are all counted. If we all lived that way we could probley fit in a few more million people no problem. Think of all the people we could put just in La Jolla with all those “guest bedrooms” that are never being used. What does a 60 year old couple with no kids need with a 6 bed 4 bath house???? Not much cept to show it off to their friennds who are 58 with one grown kid outa state and only have 5 bedrooms.

[DWCAP]

Remember median and average incomes are skewed because of households that have really low incomes. College students and Seniors living off SS and such are all households that need to be recorded, but have terribly low incomes. No college student making $8/hr 3 hours a day, 5 days a week in the bookstore + a summer job painting houses is buying a house (atleast not without the bubble) but they are counted as households if they are fileing their own taxes and such. It would be alot more insightful to be able to strip these portions of the population out and see what housebuying (ie 25-60 years old)households median income is. I have a feeling itll be alot closer to 3-4X income. In the bubble ill bet it topped out at 8-9X, and that wasnt sustainable. 15X is congressional level stupidity and the banks deserve to go outa buisness if they were doing that on verified income loans.

On the otherside, the college student and Senior households also give fake numbers on demand for housing. College students tend to pile in to reduce rent costs, meaning that 1-2-3 people may be 1 bedroom, and seniors generally are sellers of housing rather than buyers. So when the stats say their are X households and Y number of houses that doesnt necessary add up to Z demand for houses not being met. Seniors often move into assisted living homes,using far less housing than they use to. In College some Fraternity houses held between 20-60 guys, and if they were all on their own (a lot I knew were) they are all counted. If we all lived that way we could probley fit in a few more million people no problem. Think of all the people we could put just in La Jolla with all those “guest bedrooms” that are never being used. What does a 60 year old couple with no kids need with a 6 bed 4 bath house???? Not much cept to show it off to their friennds who are 58 with one grown kid outa state and only have 5 bedrooms.

[Author]

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