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I am pretty sure it does. Lets assume an income of 32,000$ (~median US income) and 30% to pay for housing. That gives them 9,300$/year for a mortgage or 775$. w
by autokad 4y ago
I am pretty sure it does. Lets assume an income of 32,000$ (~median US income) and 30% to pay for housing. That gives them 9,300$/year for a mortgage or 775$. with a 7% interest rate, that means the person would not be able to easily afford to buy a new home > 175,000$.
There are lots of levers that determine if a person can afford a home. income, interest rates, % income that goes towards housing, etc. But its obvious cost of building the home plays a factor.
- ethanbond 4y agoIn all high cost of living areas, the cost of land is the much more relevant factor. Even when people say, "oh no it's the cost of goods or the labor," they're talking about land. Go compare the costs of identical pieces of plywood from the Home Depot on West 23rd Street in Manhattan and the Home Depot in Jersey City, directly across the river. Manhattan: $76; Jersey City: $37 Is that the cost of shipping a piece of plywood an additional 3-10 miles? Is it taxes? It's the rent.