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alstry (35.75)

How Much House Can We Afford?

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June 04, 2008 – Comments (1)

Wages between 2000 and today have been about stagnant for many and have even fallen for a number of Americans.  Recently, we have read about hundreds of thousands of layoffs and job reductions from companies going out of business or shutting down.

Let's look at what costs have done.  Gas has tripled.  Food has doubled.  Utilities have doubled or tripled(depending if you use heating oil), Health Insurance has doubled or tripled (depending on employer contribution), Property Taxes have doubled.

Just factoring the above alone, many American families are spending $1000 to $1500 MORE per month not factoring any higher debt payments from additional borrowing due to a larger mortgage, resetting interest rate, or higher credit card balance.

$1500 per month is about the payment on a $250K house.

Here is the question.....Has the rise in non housing related expenses priced most American families out of owning a home completely?

A seperate question is if housing got repriced to what Americans could afford, and property taxes went down accordingly, how many states, counties, and cities would go bankrupt after borrowing Trillions supported by the new higher income stream?

1 Comments – Post Your Own

#1) On June 04, 2008 at 6:34 AM, alstry (35.75) wrote:

HOW TINY WILL AMERICA SHRINK?

Airlines shrinking, Autos shrinking, Banking shrinking, Construction shrinking, Retail shrinking, Restaurants shrinking, Government shrinking......just the above accounted for more than all the job growth in the last seven years.

Now this from Bloomberg this morning:

June 4 (Bloomberg) -- UAL Corp.'s United Airlines, the world's second-largest carrier, will cut its fleet by about 70 planes and shut the low-fare Ted unit to counter record fuel expenses, a person familiar with the plan said.

The reductions will take effect later this year, adding to the 30 aircraft taken out of service and 1,100 job cuts that United announced in April, said the person, who didn't want to be identified because the matter is still private.

The second round of cutbacks in two months at Chicago-based United reflects the strain of jet fuel's 76 percent surge over the past year. The Ted unit, which started in 2004 as a low-fare competitor, will join more than a dozen carriers in the U.S., Asia and Europe that have collapsed in the past six months.

``Some of these capacity cuts are being done with the precision of a chainsaw,'' said Michael Boyd of Evergreen, Colorado-based consulting firm Boyd Group. ``You can't just park planes and cut routes. It has to be the right kinds of planes on the right routes.''

The airline will announce additional cuts among management and salaried workers, the person said, adding that the number of unionized, front-line workers who will lose their jobs hasn't been determined. United has about 52,500 employees.

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