With a combined income of $92,000, he and his wife could qualify for a $500,000 mortgage. But Atkinson said the minimum $25,000 down payment is too rich for him and his young family.Banks are approving at a 5.16x multiplier of salary in a country where there is no such thing as a 30 year fixed mortgage? And people claim there is no subprime.
"We'd have to save up for at least five, six years just to get a decent down payment…and that's really frustrating," he said.I have bad news for you. If you can't save up for a down payment, then you certainly can't save up for the emergency fund you need to keep a house operating. Houses can ding you for 25k with no warning. If you aren't that liquid, you need the security of the kind of predictable monthly expenditure that one can only get through renting.
A recent study from the UBC Early Learning Partnership found that young families are bringing in roughly the same income as those before them did nearly 30 years ago, even though most families are now duel-income.THIS is the real issue for this generation. Relative to their parents, where does all the wealth this couple generates working end up? Is it going into more expensive advanced health care? Is it going into supporting the now larger generation before? Is it being distributed upward to a greater degree? Or, most likely, a mix of all of the above?
Kershaw said while household incomes have flat lined, housing prices have not -- rising 76 per cent in the same period since the 1970s.
The wealth shifted away from the pocketbooks of the middle class, but for some crazy reason, house prices continued to mount. That is the essence of the problem. Debt has been substituted for wages and excessive credit issuance is reflected clearly in the rise in price of the most widely leveraged asset: the family home.
"Squeezed" doesn't quite cover it.