Kelly, my oldest, graduated last Spring and has a stimulating, professional job which challenges her while giving her occasional glimpses into career satisfaction. With rents set extremely high for a single occupant, we jointly agreed that she embark on a mission of saving for a down payment on a home.
We started by balancing her "net" against expenses including monthly mortgage, tax escrow, insurance, utility, car, food, entertainment (not much left for that..) and misc. expenses. I then offered the tax advantages she would receive from interest and taxes paid after she survived her first year. Ultimately, we ran these scenarios and put together a range of what she could afford now for housing.
I am shell-shocked! "Affordable" housing?? We ran on-line searches and basically became numb with the realization that housing is truly not affordable for many single wage-earners. A $150,000 home with 10% down would produce a monthly payment of approximately $1,050.00 for principal, interest, and taxes. That's with a fixed 30 year mortgage at 5.875%. Now add the aforementioned expenses and...
We are glad Kelly's home and saving. And while the current mortgage crisis plays out, we are discussing the opportunity this could present for her later this year if timing works out: Reduced home prices/ historically low interest rates/ and the ability to "make an offer" free of the dreaded "Contingent upon sale of my home" clause that has doomed many a recent deal.
But, particularly with a starter home in the $150,000 range - minimum (and many Communities significantly higher than this), even a very good deal will leave her cash-strapped. Realistically, she might very well have to leave the immediate Waukesha area to find affordable, safe housing in this price sector.
With all of the other challenges facing the Waukesha area, I suggest adding "affordable housing" to the "NOW" list before we wake-up one day in the near future and join many Wisconsin Communities in asking - "Where did all the bright young people go?"
