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> ATTOM defined "unaffordable" as someone who must devote more than 28% of their income toward paying for a particular home. Factoring in a mortgage payment, ho

> ATTOM defined "unaffordable" as someone who must devote more than 28% of their income toward paying for a particular home. Factoring in a mortgage payment, homeowners insurance and property taxes, the typical home priced today would require 35% of someone's annual wages, ATTOM said. Uh, not sure where they came up with the 28% number. Given the traditional advice is 1/3 of income, 35% is not that far. Also, they are only looking at single-income purchasers. Given that I don't know many single people buying houses for just themselves, they should really be looking at overall household incomes. I get that home prices suck, but 99% of Americans not being able to afford a home is obviously not a real statistic.

thefurdrake 3y ago
I'm a single person who bought a house for himself. ... definitely a minority situation, though. Did a dig, though: "The latest number is considered unaffordable by common lending standards, which call for a 28 percent debt-to-income ratio." (From the sauce: https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q3-2023-u-s-home-affordability-report/ https://www.attomdata.com/news/market-trends/home-sales-pric...) This is apparently a common metric? First I've ever heard of it, personally.
- agloe_dreams 3y ago
  Yes, common. Additionally, most americans cannot afford a car payment under 10% of their take home monthly income. But most people do not actually follow this advice, which makes the situation worse. The fact of the matter is that the take home pay for someone making $40K is ~2,300. 10% is $230/mo, which you cant even get a lease for anymore...But people need cars, so they are overleveraged.
  - nickthegreek 3y ago
    This is why 84-month auto loans are now a thing that more and more people are signing up for. Which wasn't too much of a concern with low interest rates... but now?
  - sofixa 3y ago
    > But people need cars, so they are overleveraged. Which is a massive issue in itself too. In many parts of the US and Canada a car is necessary for daily life, so everyone is forced to spend non-insignificant amounts of money on one or multiple cars, which is very wasteful.
- legitster 3y ago
  Wow, the actual report is much different than the CBS headline! > Home Affordability Report showing that median-priced single-family homes and condos are less affordable in the third quarter of 2023 compared to historical averages in 99 percent of counties around the nation with enough data to analyze. The actual report is saying that 99% of counties have worse affordability. Not that 99% are unaffordable.
- deleted 3y ago
  [deleted]
tristor 3y ago
> Uh, not sure where they came up with the 28% number. Given the traditional advice is 1/3 of income, 35% is not that far. You're right. They essentially doctored the numbers to get the result they wanted because it makes good news. QED.
- legitster 3y ago
  Keep in mind this is not an advocacy group putting together this report. This is a real estate analyst calling for reducing interest rates.
spankalee 3y ago
"Traditional advice" when I was growing up and my parents bought a house was 25%.
fortran77 3y ago
> I get that home prices suck, but 99% of Americans not being able to afford a home is obviously not a real statistic. That's not even what they said. In 99% of the Nation (really 500 hand-picked counties), the _average_ person can't afford the home. Obviously, half of the people are above average!
Atreiden 3y ago
The 28% rule is a well-known metric in financial planning, they did not come up with this. https://www.forbes.com/advisor/mortgages/mortgage-to-income-ratio/ https://www.forbes.com/advisor/mortgages/mortgage-to-income-... https://www.cnbc.com/select/what-is-the-28-36-rule-for-buying-a-home/ https://www.cnbc.com/select/what-is-the-28-36-rule-for-buyin... https://money.com/what-is-the-28-36-rule/ https://money.com/what-is-the-28-36-rule/ https://www.investopedia.com/terms/t/twenty-eight-thirty-six-rule.asp https://www.investopedia.com/terms/t/twenty-eight-thirty-six... A better study would certainly include multi-income households, but I think it's worth considering that multi-income households present serious opportunity cost. It is not "free" to have both partners work - assuming you have a partner at all. In previous generations, you had the "breadwinner" and "homemaker" - two clearly defined roles that fulfilled real needs. When both partners are working, who is taking care of the kids? Who is cleaning? Who is meal planning, shopping, cooking, and doing laundry? One or both partners need to then take on all of this in addition to their full-time jobs. This is exhausting, and I'm convinced is the mechanism behind the proliferation of managed services in the household. The monetary cost of these, and other necessary services like daycare, are not insignificant. Assuming that people should have dual income to afford a home is an insidious theft of quality of life. If both partners' time needs to be spent working to earn money, there is less time for traditional homemaking and hands-on parenting. What are the consequences of this, not just to the individual but to society?
- alephnerd 3y ago
  To add on to that, the 28% rule is based on the 30% limit from the Wagner-Stegal Act in 1937 during the Great Deal [0] [0] - https://www.govinfo.gov/app/details/COMPS-10348 https://www.govinfo.gov/app/details/COMPS-10348
- legitster 3y ago
  > In previous generations, you had the "breadwinner" and "homemaker" - two clearly defined roles that fulfilled real needs. This is a false nostalgia. For most of human history men and women did equal amounts of labor. A non-working wife was a status symbol of urban society. > When both partners are working, who is taking care of the kids? Who is cleaning? Who is meal planning, shopping, cooking, and doing laundry? If we really want to go back to "previous generations" this was almost entirely done by grandparents or extended family. The idea of a nuclear family household is almost an entirely modern invention. Expectations that a single income was to support an entire household was solely belonged to the post-war baby-boom - before that even children were expected to work! I'm not saying there is not merit to a single-income household or some people shouldn't enjoy it. But I object to any framing of it as "traditional". If anything, part of our problem with our current housing market is that in the last 100 years we have mostly obliterated multi-family/multi-generational households from cultural acceptance.
alephnerd 3y ago
The 28/36 rule was a benchmark based on the Wagner-Stegal Act/National Housing Act of 1937 under the FDR administration. It stated that no more than 30% of income should be devoted to housing expenses. [0] - https://www.govinfo.gov/app/details/COMPS-10348 https://www.govinfo.gov/app/details/COMPS-10348

thefurdrake 3y ago

I'm a single person who bought a house for himself. ... definitely a minority situation, though. Did a dig, though: "The latest number is considered unaffordable by common lending standards, which call for a 28 percent debt-to-income ratio." (From the sauce: https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q3-2023-u-s-home-affordability-report/ https://www.attomdata.com/news/market-trends/home-sales-pric...) This is apparently a common metric? First I've ever heard of it, personally.

agloe_dreams 3y ago
Yes, common. Additionally, most americans cannot afford a car payment under 10% of their take home monthly income. But most people do not actually follow this advice, which makes the situation worse. The fact of the matter is that the take home pay for someone making $40K is ~2,300. 10% is $230/mo, which you cant even get a lease for anymore...But people need cars, so they are overleveraged.
- nickthegreek 3y ago
  This is why 84-month auto loans are now a thing that more and more people are signing up for. Which wasn't too much of a concern with low interest rates... but now?
- sofixa 3y ago
  > But people need cars, so they are overleveraged. Which is a massive issue in itself too. In many parts of the US and Canada a car is necessary for daily life, so everyone is forced to spend non-insignificant amounts of money on one or multiple cars, which is very wasteful.
legitster 3y ago
Wow, the actual report is much different than the CBS headline! > Home Affordability Report showing that median-priced single-family homes and condos are less affordable in the third quarter of 2023 compared to historical averages in 99 percent of counties around the nation with enough data to analyze. The actual report is saying that 99% of counties have worse affordability. Not that 99% are unaffordable.
deleted 3y ago
[deleted]

tristor 3y ago

> Uh, not sure where they came up with the 28% number. Given the traditional advice is 1/3 of income, 35% is not that far. You're right. They essentially doctored the numbers to get the result they wanted because it makes good news. QED.

legitster 3y ago
Keep in mind this is not an advocacy group putting together this report. This is a real estate analyst calling for reducing interest rates.

spankalee 3y ago

"Traditional advice" when I was growing up and my parents bought a house was 25%.

fortran77 3y ago

> I get that home prices suck, but 99% of Americans not being able to afford a home is obviously not a real statistic. That's not even what they said. In 99% of the Nation (really 500 hand-picked counties), the _average_ person can't afford the home. Obviously, half of the people are above average!

Atreiden 3y ago

The 28% rule is a well-known metric in financial planning, they did not come up with this. https://www.forbes.com/advisor/mortgages/mortgage-to-income-ratio/ https://www.forbes.com/advisor/mortgages/mortgage-to-income-... https://www.cnbc.com/select/what-is-the-28-36-rule-for-buying-a-home/ https://www.cnbc.com/select/what-is-the-28-36-rule-for-buyin... https://money.com/what-is-the-28-36-rule/ https://money.com/what-is-the-28-36-rule/ https://www.investopedia.com/terms/t/twenty-eight-thirty-six-rule.asp https://www.investopedia.com/terms/t/twenty-eight-thirty-six... A better study would certainly include multi-income households, but I think it's worth considering that multi-income households present serious opportunity cost. It is not "free" to have both partners work - assuming you have a partner at all. In previous generations, you had the "breadwinner" and "homemaker" - two clearly defined roles that fulfilled real needs. When both partners are working, who is taking care of the kids? Who is cleaning? Who is meal planning, shopping, cooking, and doing laundry? One or both partners need to then take on all of this in addition to their full-time jobs. This is exhausting, and I'm convinced is the mechanism behind the proliferation of managed services in the household. The monetary cost of these, and other necessary services like daycare, are not insignificant. Assuming that people should have dual income to afford a home is an insidious theft of quality of life. If both partners' time needs to be spent working to earn money, there is less time for traditional homemaking and hands-on parenting. What are the consequences of this, not just to the individual but to society?

alephnerd 3y ago
To add on to that, the 28% rule is based on the 30% limit from the Wagner-Stegal Act in 1937 during the Great Deal [0] [0] - https://www.govinfo.gov/app/details/COMPS-10348 https://www.govinfo.gov/app/details/COMPS-10348
legitster 3y ago
> In previous generations, you had the "breadwinner" and "homemaker" - two clearly defined roles that fulfilled real needs. This is a false nostalgia. For most of human history men and women did equal amounts of labor. A non-working wife was a status symbol of urban society. > When both partners are working, who is taking care of the kids? Who is cleaning? Who is meal planning, shopping, cooking, and doing laundry? If we really want to go back to "previous generations" this was almost entirely done by grandparents or extended family. The idea of a nuclear family household is almost an entirely modern invention. Expectations that a single income was to support an entire household was solely belonged to the post-war baby-boom - before that even children were expected to work! I'm not saying there is not merit to a single-income household or some people shouldn't enjoy it. But I object to any framing of it as "traditional". If anything, part of our problem with our current housing market is that in the last 100 years we have mostly obliterated multi-family/multi-generational households from cultural acceptance.

alephnerd 3y ago

The 28/36 rule was a benchmark based on the Wagner-Stegal Act/National Housing Act of 1937 under the FDR administration. It stated that no more than 30% of income should be devoted to housing expenses. [0] - https://www.govinfo.gov/app/details/COMPS-10348 https://www.govinfo.gov/app/details/COMPS-10348