A postwar boom, legal discrimination, and new mortgage loans made suburban housing accessible, and set the stage for today?s challenging market To understand just how unaffordable owning a home can be in American cities today, look at the case of a teacher in San Francisco seeking his or her first house.
Educators in the City by the Bay earn a median salary of $72,340. But, according to a new Trulia report, they can afford less than one percent of the homes currently on the market.
Despite making roughly $18,000 more than their peers in other states, many California teachers?like legions of other public servants, middle-class workers, and medical staff?need to resign themselves to finding roommates or enduring lengthy commutes. Some school districts, facing a brain drain due to rising real estate prices, are even developing affordable teacher housing so they can retain talent. This housing math is brutal. With the average cost of a home in San Francisco hovering at $1.61 million, a typical 30-year mortgage?with a 20 percent down payment at today?s 4.55 percent interest rate?would require a monthly payment of $7,900 (more than double the $3,333 median monthly rent for a one-bedroom apartment last year).
Over the course of a year, that?s $94,800 in mortgage payments alone, clearly impossible on the aforementioned single teacher?s salary, even if you somehow put away enough for a down payment (that would be $322,000, if you?re aiming for 20 percent).
The figures beco...