Average home price, average household income, average mortgage repayments (insurance, loans, foreclosure)
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Can anyone tell me what is the average home price in the us, what is the average home income and what is the average mortgage repayments including insurance?
Last edited by Timothylogan3; 08-16-2010 at 03:22 PM..
The reason I am asking these is because I am wondering if is it not possible that the cost of getting home in america is far too high? Is the goal of getting a new home within reach for the average american? And if not, are we not then sitting with an inflated property market, in which case asset price deflation is needed? Does anyone think this maybe a much much bigger problem?
what you are asking for is, "are homes affordable for the average american?"
Here is your answer:
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Quote:
The reason I am asking these is because I am wondering if is it not possible that the cost of getting home in america is far too high? Is the goal of getting a new home within reach for the average american? And if not, are we not then sitting with an inflated property market, in which case asset price deflation is needed? Does anyone think this maybe a much much bigger problem?
It could be a problem. House prices are DIRECTLY related to three things: 1) unemployment rate 2) Mortgage rates 3) liquidity in the lending market.
If unemployment is high or rising, house prices will decline. People can't afford to spend as much on housing.
If mortgages rates are high, you can't borrow as much.
If liquidity in the lending market is low, you can't get a mortgage.
What you need to look at is how people get access to loans since the housing market is heavily leveraged. The whole reason we had the housing boom was because credit was easy to get and mortgage rates were low. Personally I think housing prices have much more to fall. At least until 2012 when most foreclosures are cleared out.
Home prices must be corelated to wages and they were not.
Wages + a credit card enabled people to live in the house they wanted and maintain their desired lifestyle.
Home equity loans was the " parachute" that enabled people to pay off their credit cards and start over.
The big question is........will people now buy a house and forego a level of lifestyle that is lower than before?
Unless home values rapidly increase after they buy, the days of living on wages + credit cards are over.
I see housing prices dropping more as I still don't see many peoples' wages able to support buying a house unless they are willing to adjust to a very frugal lifestyle.
All of this is on Google. It also depends on what you mean by "average". If you want your house to be "better" than 50% of US homes, www.census.gov/const/uspricemon.pdf the average is 250k. A smaller yard, fewer rooms, etc., can dramatically reduce your home price. The average is also skewed by the high prices of some of the mansions.
Average income is around 40k, I believe median income is 20-30k. A payment on a 250K mortgage is probably around 1500 per month.
Can anyone tell me what is the average home price in the us, what is the average home income and what is the average mortgage repayments including insurance?
I think home prices are too high no matter where you live. I moved from one of the most expensive areas to a very cheap area and I think housing is still overpriced. A decent house is about $75,000 unless you buy a fixer up in the area I live now. Mortgage payments for that amount are a lot more then rent.
I think there has been an asset price bubble in this country. The over supply of credit for the better part of the last decade has inflated prices, especially property prices. How bad prices have been inflated I dont know, and no one really knows I think. However I suspect that as government intervention pulls out, which I think may not have helped, the current values will be tested and will definetly fall. I haven't seen the foreclosure numbers, but I am curious to see how they look, and I am very curious to see of the total outstanding mortgages how many have been restructured. Of course if unemployment becomes a problem then that is also not helping. But anyway my worry is if median american earns $40k and repayments on mortgage are $18k and you still have other financial obligations then buying a home or holding on to a home for the average american is going to be hard. This can only be corrected by prices coming down, which is also another problem on its own.
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Asset price bubble
