I’m curious to where you found a house for $100,000 that is in a “I live in a great neighborhood, low crime, 3 bedrooms, big fenced yard, near great universities, a big city, and excellent nationally ranked hospitals.”

I live in one of the better real estate markets for big cities right now and you are looking at at least $130-150K for all of that (and then you’re talking 30-40 minutes out of the city).

I’m guessing either your opinion of the superlatives you used differ from most or you are just flat out making some of it up (or, most likely, what you consider a “big city” isn’t what most would consider a “big city”).

So do YOU have a college education? Because looking at your “family mother,” it would seem that if she were to quit her job and stay home with the kids, the net family income would decrease (by 40% of her salary, which I’m guessing is not insignificant since she works for a “big company”). You may want her to stay home because it conforms to your “values,” but the math isn’t exactly in your favor.

Based on the calculation, I am spending about $60 per month above the range of affordability. It’s not the mortgage payment that’s the killer, it’s the property taxes – nearly $7K per year.

Of course, this all works out provided I remain debt-free aside from the mortgage. Taking on a car payment would blast me out of the water, so I save money every month toward a new(ish) car, just in case.

Even sadder is the perpetuated myth that you need a $300,000 or $600,000 or higher house to live in. Someone above mentioned that a reasonably affluent person or couple cannot afford to buy a house. True, but only in some parts of the country. If you insist on living in those parts of the country and doing something crazy or exotic with a mortgage just to get into a house, you have other, more pressing character issues.

Someone else mentioned “2-3 times annual salary” as a good “rule” for figuring out how much house to buy. I think that’s crazy. I’m single, make almost six figures, and my house didn’t cost much more than I make in a year. I live in a great neighborhood, low crime, 3 bedrooms, big fenced yard, near great universities, a big city, and excellent nationally ranked hospitals.

People have to adjust their expectations. If they refuse to do that, they have to stop complaining. For example, if you have a 60 mile commute one way every day for work, either find a new job or move. If you can’t (or won’t) do either, you can’t complain…you’ve made your choice.

A family member was complaining to me about the high cost of daycare. I asked why she needed daycare. She said she needed daycare so that she could work. I asked her how much of her salary (her husband works as well) was devoted to paying daycare expenses. It was well over 60% of her annual salary. So she needs daycare so she can work, but she works so she can pay for daycare. This is a woman with a college degree and a job in a big company, and she doesn’t get it. A shame!

If those rules were adhered to, your 250K house in the southwest would cost $120K simply because there would be no (or too few) buyers at $250K that could afford it.

It’s the same as the dual income trap that has occurred in this country. Once you had a majority of couples both working, prices rose accordingly for housing etc. and so now we need to work twice as hard (two people vs. one) to buy the same goods.

In short, if you throw extra liquidity in the form of funky mortgage terms at the housing market, prices simply rise to reflect the increase in demand such that the end result is we pay more for the same thing. It’s pure and simple supply and demand economics. A few speculators and lucky homeowners benefit in the short term, but over the long-run honest ‘affluent earners’ get screwed.

The only way for this to ever improve and return to more sane practices is to keep this easy money out of the market and not prop it up with phony government bailout programs. Prices will necessarily adjust, eventually to levels that ‘affluent earners’ can afford.

Owning a home is not a ‘right’ as many politicians lead us to believe in hopes of getting themselves elected.