[QUOTE=AFireInside;2674232]
Quote:
Originally Posted by 1stLand
This mentality is exactly the problem. 3 and 4 x's SHOULD be the benchmark. It's ridiculous to think anything else. There is a REASON that 3 - 4 x the median income was used over the years.
Being willing to go into massive debt to purchase a house isn't a good thing. It's a stupid thing. Yes you will have to go into to debt. But you shouldn't be house poor, and once you surpass the 4X income thats exactly what begins to happen.
That rule is definitely relevant. 30 years ago someone may have made 12 bucks an hour, and they could afford to buy a 75,000 dollar house. Today people are making 30/hr and they are buying houses that are 500,000. Those numbers don't add up.
The sooner people start getting real and using some common sense about how much debt and spending they are doing the better off we will all be.
The median income for a FAMILY in Calgary is roughly 91,000, when you factor in kids etc, there is no way, they should be purchasing a $400,000 property.
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This is where things get deceiving.
Are they purchasing a $400,000 home or are they getting a Mortgage worth $400,000?
If the couple has existing equity to pull out of a condo or two (they might have had separate residences they owned before marriage) or a home, then common sense would dictate they would put that towards a home.
So if $100,000 downpayment was used, $300,000 mortgage would remain and then you would be closer to 3x income.
Dual income = dual savings prior to marriage most likely.
I am not advocating living beyond your means, but people will make sacrifices in other areas of their life to ensure they get a home in an area they and their children can feel safe and comfortable in.