Single Family Homes are Too Expensive for Most Americans

How many first-time home buyers make $75k? That’s a starting salary for an engineering graduate from a good university.

According to this PennyMac Home-Buying Guide:

If you’re in the market for a home, the first thing you should do is figure out how much you can afford.
Here are two down-and-dirty formulas you can use to get a quick ballpark number:

1) Multiply your annual salary by 2.5. For instance, a family with a household income of $75,000 could afford to purchase a home for up to approximately $187,500. Of course, this figure will vary based on factors that include how much money you can put down and your current debt.

2) Multiply your monthly gross income by 31%. If you make $7,000 a month ($84,000 annual salary),then your total maximum monthly payment would be $2,170*. This includes mortgage principle, interest, taxes, and insurance.

Will Americans Continue to Accept Lower Standards of Living?

Excellent quote:

People get born into the world as it exists so the new ones don’t know how it used to be so to them tight living standards are normal. They don’t know that it used to be a much higher standard of living. And so it is entirely possible the entire population will accept this if it is gradual over time. If it is quick or sudden, they may revolt. We just don’t know how it will play out. — Paul Craig Roberts. Jump to 15:39