How do people where the median income is $94k manage to get mortgages when med. homes prices are $410k?
I just don’t understand how that math works out for places like California where the price of homes is SOO much higher than other places? How do people get mortgages? Are they 50 year mortgages or something to make the monthly payment manageable?? I just don’t get it, and when considering jobs in places like that…or DC….I just don’t see how people do it….??
Tags: $410k, $94k, homes, Income, manage, med., median, Mortgages, People, Prices
Two-income families.
And don’t forget, California has a lot of people who work in the entertainment industry, where salaries are ridiculously high.
You may live in an area where people are buying their second or third homes, using the equity in prior homes as down payment. They probably have large down payments, so their mortgage payment will be lower than yours.
I agree with two-income families.
But in California you are either: mega wealthy, very wealthy, bought a house before the increase, middle income renter, low income renter, low income housing, or homeless.
But the median income does not mean most people make that. It means that many people make WAY more than that and buy a home, and most people make WAY less than that, and rent.
But if you think about it, a person who makes 94 k / yr makes over 7,000 per month. A mortgage for $410,000 at 7.5% for 30 years gives payments of less than $3000. That leaves $4000 a month for other expenses. That sounds very doable. The people making this much probably already have medical insurance from their job. Their kids’ education is paid for through taxes. Really all they need is utilities, taxes, transportation, and food. $4000 would more than cover that. If taxes were taken out, maybe there would only be $3000 left, but that is still a lot. And the interest on the mortgage lowers the income taxes a little bit.
Luckily for people in CA who still have income (but unlucky for those trying to sell), housing prices have dropped drastically in most places. I looked at a house this week that sold in 2005 for over $400,000. Their asking price now? $120,000.
I completely agree with CNG.
You have to keep in mind that the home prices in most parts of California are dropping every day…my husband and I are currently looking to buy, practically every house we’ve come across was sold for over $400,000 back in 2005 and now they’re going for 130,000-180,000.