>At 11:46 AM 3/23/2005, Jordan Hayes wrote:
>> > Who the fuck is making all the money that they can
>>> afford the $500k and up houses in this area?
>>
>>Affording a $500k house isn't such a big deal. But having the
>>downpayment and credit score typically is. IMHO, the $500k purchases
>>are probably being made by people trading up. A mortgage costs about
>>$500/$100k/month these days, and if you can make that "median income" of
>>$43k, you'll get just about 100% of your Federal (and state, if you live
>>in one of those) Income Tax burden back at the end of the year if you
>>have a $400k mortgage. So a $500k house in that scenario is sorta like
>>a $1400/mo rent. Of course, these days, a straight-up fixed 30yr $400k
>>mortgage is for suckers, so you'd more likely find $250k of a 5/1 and
>>$150k of an interest-only HELC and then you're down around $1k/mo net.
>>
>>/jordan
>
>
>the median income around here is 31k -- around here. In Sonshine's
>school district, however, it's 90k.
Hmm, I thought the old rule of thumb was that you could afford a house priced at 3-4 times your pretax income. Are people spending more money on mortgage debt service than they used to?
Jordan's examples imply 40-50% of pretax (median) income going to housing. That seems pretty damn steep.
Doug