Interesting study on American bankruptcy

[chequita guevara]

Go here. You'll have to sit through an ad, but the article is worth it.

Interesting findings.
Despite modern homes having 75% more income than their parents generation (because of two income earners), the average family has less left over after paying their bills than their parents generation.

The cost of a mortgage payment has increased 70 times faster than an average man's wages.

"In 75 percent of the metropolitan areas across America, a police officer cannot buy a house on one income. The same is true for a teacher or a firefighter."

Families today are more at risk of bankruptcy than divorce. This is because today's family's are dependent on two incomes, which means there are twice as vulnerable to losing a job, having their income diminished, and not being able to meet their bills.

Yikes!

[SlowwHand]

I've said many times personal bankruptcy is at an all-time high.
Startling.

[chequita guevara]

Originally posted by SlowwHand
I've said many times personal bankruptcy is at an all-time high.
Startling.

Well, Sloww, that's not the new part. I think I put up a thread two years ago about how the credit industry was trying to gut bankruptcy. Most people think, including me, that people who go bankrupt by and large had a problem controling their spending, bought too many lattes and toys, etc.

What this study is saying is that is largely not the case. What is happening is that home costs have increased massively. In the early 70s, the average home had 5.7 rooms. Today it's 6.1, so it's not like people are buying huge homes. The average home being purchased is 25 years old.

The problem is the cost of housing in general, and the cost of housing in districts with good school's specifically.

[Zkribbler]

According to the teaser, much of the problem comes from buying homes in areas with good schools.

It's sad. When I was growing up, all [white] schools were good. Then for the last 30 years, the California public school system slipped from being No. 1 in the nation to being No. 47. Grey Davis took office took us back up to No. 33 or 27 (depending on who you believe). But he was thrown out of office for increasing spending.

[Lefty Scaevola]

Home prices have gone up much faster than wages, partly because of extra mandates, regulation, and other costs being heeped on land developement and building, but for part of that you get better homes. Lenders and byiers cost increased esponetially after the S & L and banking disaters of the eighties. After all thoses new regulation and underwriting requirment came in, it cost me 12 times as much in fees and cost ro rollover a project loan, with the same lender, for less risk with more equity and value in the collateral, than it did to get the initial loan. One example: the initial apraissal was 25 pages, the apprasial to roll it over was 200 something pages.

[Dis]

that is misleading Che

One reason Mortgage payments are so high is because banks no longer require 20% of the total cost of the home.

This is why you see more foreclosures

But a benefit to that is some poor (including minorities) families who would never be able to afford to put up 20% of the house cost 50 years ago, now can afford to live in a home. Some of them don't make it, but many do.

Look at the positive sides of things

[Dis]

again you are wrong Che

Americans are buying much, much, much larger homes than 50 years ago. Though outdoor space has decreased. But much of the cost is in the home.

[:) Smiley]

Since US population is increasing land prices are also going up. Still US ppos got it good, in many other countries owning a house is unrealistic for most of the population.

[Al B. Sure!]

taxes have also increased...

question...

Today it's 6.1

define room... because the typical two story rowhome in philly got 6-8 rooms depending on how old the house is (older ones in north philly have more rooms than the post-WW2 ones in Frankford)

so 6.1 seems tiny compared to these ghetto rowhomes that cost less than 50K to buy.

[pchang]

supply and demand

the supply of land has not increased. the number of people seeking housing has increased. it is only natural that housing prices have risen faster than inflation. it is logical that this will continue until the number of people seeking housing stabilizes or decreases.

[Al B. Sure!]

we have hundreds of abandoned houses in philly... some real big Victorian ones too. delapidated but massive. Could easily fit 8 families in these former mansions if you got rid of the dealers, homeless squators, and fixed the houses up.

[MrFun]

Originally posted by Smiley
Since US population is increasing land prices are also going up. Still US ppos got it good, in many other countries owning a house is unrealistic for most of the population.

Last I read, the population increase was almost exclusively from immigration, since our birth and death rate are nearly equalling each other out at this time.

[pchang]

Why doesn't matter

It doesn't matter why the population is growing. What matters is that the population is growing. Unless of course, you are advocating shutting off all immigration?

[MrFun]

I know -- I just wanted to make sure everyone was not assuming the wrong factor in our country's population growth.

call it nit-picking, I guess

[Urban Ranger]

The thing is, how fast has population been increasing as compared to the price of real estate?


che,

I think a better comparison is total indoor areas, not number of rooms, since rooms can vary a lot in size.