<<with starter homes at $300k, i don't see a starter owner affording that>>
It may be difficult, but it sure can be done. With interest rates below 6%, it starts becoming affordable. For example, let's say a couple wants to buy $300K property with 5% down.
That is a $15K downpayment. May take a year or two to save, but very possible. A $285K 30 year loan at 6% is $1708.72 per month. So...
$1709 Mortgage payment
$ 300 Property taxes
$ 70 Property insurance
------
$2079 Total monthly housing payments
To qualify for that amount, a qualifying income of about $5200 is needed, assuming there is no other debt (car payments, credit cards, student loans, alimony, child support, etc.)
For a working couple, making a combined $5200 per month is very possible. As a loan broker, I can do some things to stretch that a little bit.
The key is to have good credit and as little debt as possible.
Of course, when interest rates rise, the monthly payment for that house will go up which will likely drive prices down. |
