We’re not #1: Millions spend half of income on housing
Millions spend half of income on housing – Yahoo! News
In San Francisco, more than one out of five homeowners with a mortgage spends half or more of their income on housing.
That’s also true in 13 more of the largest 100 metro areas analyzed by the Associated Press. Other places include California metro areas of Stockton, Los Angeles, Riverside, Oxnard-Thousand Oaks, San Francisco, and San Diego. Also in the top 10 are the Fort Myers, Sarasota and Orlando metro areas in Florida, and New York-Northern New Jersey-Long Island.
But the most cost-burdened homeowners in the country live the Miami-Fort Lauderdale-Miami Beach metro area: 58 percent of homeowners spending 30 percent of their income on housing costs, and 29 percent spending half of their income or more on housing.
Sigh. It’s nice that we got an honorable mention – but still I’m dismayed that we’re not in the Top 5.
We can do better. I know we can. Perhaps next year.
September 24th, 2008 at 7:51 am
Well, you’d be amazed at how many people I know who think that paying that percentage of their income on a house is a ‘good’ idea. Traditionally, you shouldn’t spend more than 30% of your take home pay on a mortgage. Most in the BA likely pay more then that. Paying 50% of your take home pay means there’s very little wiggle room for error: If a partner loses a job, or some sort of unforeseen medical emergency occurs, then suddenly the home simply becomes an even bigger risk.
But the bottom line is that paying 50% or more of your income just on the house is completely idiotic.
September 24th, 2008 at 9:05 am
Ok, I am nitpicking here, but they say “PAYING 50 PERCENT”, not “PAYING 50 PERCENT OR MORE”. They don’t seem to mention “or more” at all, that could explain why we are not on the chart: we may be around 60%!
WE ARE #1!!! (Matthew 13:88)
September 24th, 2008 at 9:13 am
We are so #1 that we have people quoting the most insightful Bible verses yet. That one was really apt.
September 24th, 2008 at 2:48 pm
I need to share another on-the-ground real estate report. A friend of a friend is buying a condo in San Francisco, except she can’t buy it because the bank refuses to fund her loan. She is putting down more than 50% and has lots of money in savings.
What’s the problem? No loans until the building is 70% pre-sold (written contracts waiting for loan funding). I bet that’s going to put a giant sucking sound into the real estate market if that’s the new rule for condo loans.
September 25th, 2008 at 4:22 pm
madhaus, on that person you know buying a condo, I was driving by this new Toll brothers development on a busy street in SJ, Willow Glen Place (except it is NOT in Willow Glen, it is only in the WG zipcode which is something entirely different). There was a big red sign out front that said 35% down, I thought, well they’ve finally realized people need an incentive not to walk- but then when I got closer it was actually 3.5%!
Anybody know how Toll Brothers is selling condos for 3.5% down?
September 25th, 2008 at 9:19 pm
> when I got closer it was actually 3.5%
No, it must have been 35% down. As in down since last year, not downpayment
Actually, I heard similar stories about banks asking for ~50% down on condos…
September 25th, 2008 at 9:57 pm
Well to be fair this woman was not asked for 50% down, her down payment was high from another sale. But you would think with those kinds of numbers they would be lining up to loan her money instead of telling her to cool her heels. Meanwhile if the other condos sit unsold then people figure it’s a loser and won’t want to make offers, ensuring the few who did won’t get their funding. The condo building is nowhere near 70% sold.
I don’t know about the Toll Brothers thing, when does the new law take effect that doesn’t allow developers to fund deposits? Does it run out end of this year or was it immediate, as in back in July? Wasn’t that part of the mortage program that also changed the 1031 exchange writeoffs to a percentage of residency rather than just requiring a certain number of years?
September 25th, 2008 at 10:01 pm
“Actually, I heard similar stories about banks asking for ~50% down on condos…”
Hmmm.. I wonder why they are requiring 50% down. Could it have to do with the banks’ assessment that the homes are 50% overvalued?