The CAR (California assoc of Realtors) has released it's latest affordability index. This one is as retarded as all the rest of them lately. According to the CAR nearly 80% of IE housholds can afford an entry level house.
According to the chart an income $24,450 can buy the typical entry level home that they say sells for $137,260. That is a price to income ratio of FIVE POINT SIX (5.6). Have they learned nothing from the last few years. They think it's ok to try and put a family in a home that is nearly 6 times their income. Remember the traditional ratio is 2.5.
They somehow figure the monthly payment (including taxes and insurance) will be $820 on that $137k house. That might be true if the buyer has 20% down. But let's face it, how many families making $24k per year have $30k in the bank? eh.... NONE!
Even if they could get a loan they would be spending about 50% of their take home pay on the mortgage. That leaves about $800/mo to live on. $800 for food, utilities, gas, maintenance on the house, car payments etc. It's fairly obvious that they're living in a fantasy world if they think someone making $24k should be buying a $137k home. Someone making $24k is probably living at home with mom and dad.
I was making double that in 1988 when I bought my first house for $110k and I had to watch every penny. There's not way in hell I could have afforded that house on $24k or even $34k. I would have had a hard time of it on $44k. Stupid realtors......