Fairfax County Poll: Single Income vs Dual Income (credit, loans)
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My husband is 30 and I'm 25, so using your logic we should be able to easily survive on $114k a year. Which is fine, perfect, as long as we're both working. Sure, we could only afford a 2-bdrm place, probably a condo or a townhouse far from where we work (close to the city), which would add commuting expenses and the stress of being away from home for 11+ hours a day. Throw a kid in the mix, and you're supporting 3 people on $114k...another kid and you're SOL. The cost of childcare/food for 2 kids would all but wipe out one of those salaries, so you're essentially paying all your bills (mortgage, car, utilities etc) and entertainment money out of one, $60-$70k salary.
Great way to put it! People think that if you earn $120k that means you are living comfortable, but childcare alone can eat $30k and then once you lop off transportation costs and taxes and mortgage and health insurance, ain't hardly nothing left! People who live in other parts of the country (especially South and Midwest) just have no idea that a six-figure iincome does NOT stretch far on the coasts.
So, we are looking 50/50 between single and dual income. Fairfax County median salary for 2007 was $105,241.00 while Loudoun County was $107,207.00. Does that mean the median salary is a dual or single income?
Arlington County for the same year was $94,876.00.
I'm sure this is the median salary per person, unless it is household median salary. If it is household - than it is a mix of single and dual incomes. But usually median salary is exactly what it sounds like - salary per person. The other number sometimes quoted is median household income.
I agree with several previous posters who say in the end it is the person who took out the mortgage that is responsible. There are definitely a lot of people with low incomes buying $500K+ houses, and it makes no sense how under any kind of realistic projection of their future salary they could afford it. None of these people deserve to be bailed out, but unfortunately probably some of them will be.
Again, it is a different story in the case of someone who had mortgage within their means and lost their job, had health issues, etc.
The ones who took out these adjustable mortgages - should have made sure to understand how much they would possibly adjust upward each year. I don't really have much sympathy for them, even if the lender didn't warn them about the rate adjustments. It had to be in the agreement they signed, or otherwise it wouldn't be legal. The idea that their salary would go up faster than the mortgage would rise, or that they could refinance their way out of it - was not a good one and definitely based on a lot of unrealistic math in today's economy and housing market.
In this area, as some posters said, there is this idea that you have to have a really huge house or fancy car, and that is just silly. It is fine if you really want that but if it is just to try and make it look like you have a lot of money or compete with your neighbor, it is not such a great idea - if it is going to strain your budget to the max. It is things like this that have gotten us into the huge mess we are in. The banks are somewhat at fault - but no one held a gun to anyone's head telling them to go buy that $500K house on a $50K salary.
I wonder if any of these people who believe they were deceived into signing for a mortgage that they were unable to afford will start filing malpractice law suits against their mortgage consultants because they heavily relied upon their expertise and industry insight to make this erroneous decision? If you can sue an accountant, lawyer, doctor, and a host of other professionals for malpractice, then why not mortgage brokers or consultants as well?
Suppose it is possible, and in that case as in many things, the lawyers will be one of the few groups who come out winners in this whole fiasco.
I kinda of think that's a cop out though. Ultimately, it's the buyer that is on the hook for the loan. No matter what someone tells you, it is up to you to verify. There is the news story on CNN where a Bus Driver and a Construction worker bought a house during the bubble for $800k dollars. Now the house is only worth $650k and they want help to restructure their loan. I make more than those two people combined, and I know I can't afford a $800k home. No matter how I run the numbers, it's not going to happen. For someone to actually believe they could have afforded that home on their salaries, is astronomically stupid. The reason of "I didn't know any better" doesn't cut it. There's the saying, "You can lead a horse to water, but you can't make him drink". I think that saying is a different reference, but IMO works in this case too.
Your right though that the only ones really being helped are the banks. This housing bill is going to help some, but out of the ones that do get helped I'm sure a large portion default on their loans anyways. I had read a statistic that more than 50% of the folks that had a loan modification later defaulted on the loan.
I hear ya.
I'm not signing up for one.
I guess I just feel that during the bubble both the buyers and the banks gambled.
Both the banks and the buyers knew that the buyers couldn't afford the loan after the adjustment and were banking on the market to keep skyrocketing so that the buyers could flip the house before the adjustment. The banks felt doubly safe because they could take the house when the buyers defaulted (as they have, it just isn't worth much).
Both parties were really dumb, and both lost a lot of money, but only one is getting big bucks from the gov't.
I don't know, I *hope* that fixes the entire situation, I just don't know if it will.
I'm sure this is the median salary per person, unless it is household median salary. If it is household - than it is a mix of single and dual incomes. But usually median salary is exactly what it sounds like - salary per person. The other number sometimes quoted is median household income.
Actually those numbers are Median Household Salaries for Fairfax, Loudoun and Arlington Counties.
While everyone should live within their means, does it really matter if they don't if you're doing what you're supposed to do? If I want to go nuts at the mall and drive a car I can't afford let me and you do you.
It doesn't matter if you and you alone bear the consequences of your actions - like losing your car and having to take public transportation as a result. If you start asking for public funds (e.g., my tax dollars) to make your car payments or seeking to restructure the car loan you signed (which may result in tougher requirements next time *I* want a car loan), then it matters big time!
With something as major as a mortgage loan, I can't understand someone not fully understanding what they're committing to. Signing it without doing so is not a mistake - it's stupid - and they should bear the full brunt of it. For those who overbought homes (or cars to use your example) on salaries that meant they could never make the payments, there is little room for sympathy. The results are likely to not make them homeless, they'll just be renters (or bus riders) with really bad credit. That woman who bought an $800K home in Arlington on a bus drivers' salary does not deserve any help. Those who depended on having a dozen day laborers living in the basement to make the mortgage do not deserve help either. And those of us who bought within our means and have been making the payments on time do not deserve the burden of paying the debts of the stupid ones! What ever happened to personal responsibility and living within one's means while saving for a dream?
Yes, we're a 2-income family with a household income around $225K. We live in a $500K house only because I had a huge down payment from selling my first home (which I worked 2 jobs to keep after a divorce.) My mortgage amount was $260K despite being told by several lenders that I should buy a much bigger house (or one in a better area) because I qualified for much more. I was also offered options like zero interest loans, ARMS, etc., to get that "better" house. I have a 30 year fixed with a payment I can easily manage and which is less than I would be able to rent a house for in most parts of the area. It p*sses me off when I hear of Johnnie and Connieasking for bail-out money so they can keep living the American dream. (My wife and I worked long and hard to get our graduate degrees, get into 'good' jobs, and delayed starting a family until things were in place. And I'm driving a 7 year old truck and my wife a '97 Honda - both paid for.) Someone who's accomplishments are limited to hanging drywall and making hotel beds... are not objects of charity in my world (that they may live in a grand home), nor should they be. Let the liberals dig into their own pockets and trust funds, rather than the public coffers to help these folks.
Pay for your luxury car and enjoy it. Don't pay for it and ride the bus. Either way is ok by me and while I certainly wish you well, I don't want to hear the if it turns out badly.
Life is hard. It's harder when you're stupid. Mistakes are opportunities to learn and we shouldn't rob the stupid of the rewards of such an experience!
Moderator: Points all taken... but watch the prejudicial comments. Refer to the Terms of Service.
Last edited by FindingZen; 03-13-2009 at 11:03 AM..
Reason: typo
Now that everybody's gotten all riled up, the categories are tied. Interesting!
We live on one income in FFX. It is less than $114K, and we have one child already and another child on the way. It's not that hard, actually. It helps a lot that it's so easy for my husband to get to work via Metro; we get by just fine with one older car, and that keeps our costs down. Otherwise, we just try to be good about sticking to a reasonable budget. We even go out to eat sometimes.
However, everything is a tradeoff. We pretty much HAVE to rent unless we want to move out to PWC. And if we did that, my husband's commuting options would constrict quite a bit. But we refuse to buy a home in FFX that we can't truly afford. We're actually debt-free right now, and we love that.
I'm sometimes annoyed by things, though. It's hard to live in an apartment with kids, for a variety of reasons. (I'm hoping we can rent an actual house when the lease is up this summer, we'll see). My husband and I *really* get screwed on our taxes for not being homeowners - some reward for fiscal responsibility, huh? When I visit my friends who have nice houses and lots of stuff, I do sometimes feel like I'm missing out. It's human nature. I have relatives who took out ARMs they couldn't afford and I go back and forth between hoping they'll get help to stay in their homes (I love these people, I want them to be happy) and thinking, well, I know these folks were smart enough to realize what they were getting into, so they do not deserve a bailout. Again, human nature.
I could go back to work, but the cost of a nanny or daycare for 2 kids would eat a HUGE chunk of my income (I worked for a long time before having kids, but I never brought in a lot money. My last job was as a secretary. We're not one of those DC power couples, LOL.) It's just not worth it. So I'll be staying home for a little while longer. I am definitely looking forward to going back to work on a personal and social level, though!
Anyway. I'm not going to say "any family can live in FFX on one income," because individual situations are complicated and these are not good economic times. But it's silly to just write it off as impossible in all cases, too. Though you definitely do have to make more sacrifices than you would have to in another part of the country.
Last edited by athousandlogins; 03-13-2009 at 07:43 AM..
Actually those numbers are Median Household Salaries for Fairfax, Loudoun and Arlington Counties.
Not to be picky, but I believe they are median household incomes, not just salaries. Incomes would include salaries and also $ from rental properties owned, profits from small businesses, interest and dividends, sales of stocks, retirement payouts, etc.
But the key point people are making is important - that median household incomes (whether from 1, 2, 3 or more people) are lower than what some people believe in this area, though they are clearly higher than the median for the nation. And because costs of living are so high here, it really is a challenge for the typical household, and especially for lower income households (where there is a single early particularly) to have what would be considered a comfortable middle class lifestyle that they would have on the same income in the south or midwest, or in smaller towns elsewhere.
I would like to see the national tax policy take into account, to a greater extent than it currently does, the cost of living in the area whenever a policy to tax "the wealthy" or "higher income" people to a greater extent, or to limit their deductions. If you make $200K in most cities, yes, you are quite comfortable because the cost of living is much lower. But here the same house costs 3 times as much, or more, and everything else is 20% higher (an estimate). Instead of setting one income level as "high" for purposes of federal income taxes, there needs to be an adjustment for what the income level buys in a given area.
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If you can sue an accountant, lawyer, doctor, and a host of other professionals for malpractice, then why not mortgage brokers or consultants as well?
asking for bail-out money so they can keep living the American dream. (My wife and I worked long and hard to get our graduate degrees, get into 'good' jobs, and delayed starting a family until things were in place. And I'm driving a 7 year old truck and my wife a '97 Honda - both paid for.) Someone who's accomplishments are limited to hanging drywall and making hotel beds... are not objects of charity in my world (that they may live in a grand home), nor should they be. Let the liberals dig into their own pockets and trust funds, rather than the public coffers to help these folks.
if it turns out badly.
