For the country [ofAmerica] as a whole…homebuyers have paid no more than the old-fashioned standard of 25% of their incomes for housing in any year since 1985. Renters have in recent years paid a somewhat higher percentage of their smaller incomes but not more than 30% in any year over the past several decades.
Neither by comparison with the recent past nor by comparison with other countries today is most housing in the United States unaffordable. The median-priced home in the United States as a whole is 3.6 times the median income of Americans. For Great Britain, the median-priced home is 5.5 times the median income and, in Australia and New Zealand, the ratio of home prices to income is 6.3.
Acknowledging this reality would cause a widely accepted vision, and the national crusades and policies built upon it, to collapse like a house of cards. Instead, facts that would undermine this vision and this political crusade have been largely ignored.
It is advisable that before you start going to open houses and planning interior decor, you’re going to have to take the first step: getting pre-approved for a mortgage. [url=http://personalmoneystore.com/moneyblog/2009/12/03/preapproved-home-mortgage/]Mortgage pre-approval[/url] has a number of benefits. First, the pre-approval process may uncover errors on your credit report that you hadn’t noticed before, errors that may be hindering your ability to qualify for credit. Also, mortgage pre-approval can show how much house you can afford, so you don’t set yourself up for disappointment over a house you can’t afford.