Tuesday, Apr 28, 2009
Housing in California is affordable IF you have 20% deposit and record low interest rates
Carpe Diem (blog): Housing Affordability in California Reaches Record High
"43% of California households can afford to purchase the median priced home with a 20% down payment and financing at the national effective average mortgage rate." ----- [But nobody has 20% down payment; interest rates aren't guaranteed to stay low forever; and you need a secure job too. There's nothing cheap about a 1% mortgage if your salary is falling by 10% a year. Also massive regional variations - 65% affordability in the suburban sprawl, but only 17% affordable in San Francisco which more closely resembles London.]
Posted by drewster @ 01:48 AM (391 views) Add Comment
2 Comments
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1. lenny said...
I doubt very much if there are any 1% mortgages in the USA anyway, the vast majority of buyers go with 15 or 30 year fixed rate mortgages, the 30 year loans are now a shade under 5% with good credit history.
The Adjustable rate mortgages with the cheapest initial rates back 4 or more years ago were the ones that got people into trouble when the lovely introductory rate expired and their mortgage payments tripled or even quadrupled.
Going back 18 months ago when I was first looking at buying a house in California or Nevada, I looked at housingdoom.com and there were articles there showing that you could rent a house for a year for just 2% of the value of the property. Just that yield figure shows how much overvalued the houses were over there and put me off buying.
2. str 2007 said...
Re: affordability and repayments.
Was with someone the other day who has a £450k mortgage (UK) and was lucky enough to have picked a tracker. They are paying interest only at £456 per month.
Now tell me how bailing them out to that extent is fair ?