You don't factor in income taxes, car costs, monthly bills, deducted contributions to a retirement plan. Those that work on salary generally see less than 70% of their gross income on their paychecks, less if they are in the highest tax bracket.
Affordability is not a problem for those that bought pre-bubble. For couples making 160K in the Chicago area, a home to suit their lifestyle is probably going to cost 800K (and that's at the very low end of the white collar range). That's about 5000 to 6000K per month mortage/taxes depending on their downpayment (if any).
Ok, you say, don't get a home in a neighborhood with people in your same socio/economic situation. The reality is you end up in the top 5% of earners, and you have to live in a neigborhood where they drink beer in the front yard while working on their jacked up muscle cars, or a drunken fistfight breaks out at the block parties (if this is your lifestyle, cool, sorry).
Conversely, if you are making an average salary, you may have to live in an area where there may very well be gangs, or way out in the cornfields in a townhouse. Now to realtors and those nicely settled into houses at pre-bubble prices this is all very esoteric, and they say let them eat cake, but the problem is out there.
The affordability issue is real, very, very real. |
