Originally Posted By: SevenBizzos
It's a complicated question but simply - you need to make the income necessary to support the payment. There are not people making $15 an hour entering the housing market around here. I think comfortably you need a 1:1 ratio of income level to price (because of the taxes), but most of the country is closer to 2:1.
I recall reading several months ago in the Washington Post that in 1950 the median price to median income was 2:1. Today (or in 2015, don't remember) it was 5:1. Ouch. When I bought my house I wound up at 2x and that was all I felt I could afford with one car payment and the typical other trappings of life (groceries, utilities, etc). I guess once the kids are out I could go higher (but then I certainly won't need to).
I've always been bitter about "cheap credit" since I realized that cheap credit is what (most likely) drove the run up in housing pricing. Increase demand and of course sellers will raise prices.
It's a complicated question but simply - you need to make the income necessary to support the payment. There are not people making $15 an hour entering the housing market around here. I think comfortably you need a 1:1 ratio of income level to price (because of the taxes), but most of the country is closer to 2:1.
I recall reading several months ago in the Washington Post that in 1950 the median price to median income was 2:1. Today (or in 2015, don't remember) it was 5:1. Ouch. When I bought my house I wound up at 2x and that was all I felt I could afford with one car payment and the typical other trappings of life (groceries, utilities, etc). I guess once the kids are out I could go higher (but then I certainly won't need to).
I've always been bitter about "cheap credit" since I realized that cheap credit is what (most likely) drove the run up in housing pricing. Increase demand and of course sellers will raise prices.
