DC Metro Residential Real Estate Market - MD & VA

Just as I had suspected... high mortgage payments mean you're forced to save, assuming you have a mortgage that includes principal in the payments...

BAY AREA
Study: high home cost limits debt for some

Chronicle staff report

Friday, May 11, 2007

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Lower-income Bay Area residents may benefit a little from living in a market where they can't afford to buy a house, according to an analysis of borrowing across the nation that the Brookings Institution plans to release today.

The think tank found, to its surprise, that poorer people in more expensive housing markets tend to borrow less than poorer people who live in lower-cost cities.

In the market that includes Sunnyvale, Santa Clara and San Jose, for instance, residents on the lowest quarter of the income scale had a median debt of $5,952, including mortgages. The same group used credit the most in Indianapolis, where their median debt was $16,330, including mortgages. The highest non-mortgage debt for poorer people was $9,087, in the Birmingham-Hoover, Ala., market.

Brookings analyzed 14 million individual credit reports from 50 markets across the nation.

The report also found that one-third of poorer borrowers fall behind on their payments, compared to one-fourth of those in the next tier, one-fifth of upper-middle-income borrowers and one-tenth of the highest-income borrowers.

Poor families are the fastest-growing segment in the credit industry, and that growth is concentrated in mortgage lending, according to the report. Find the full report at www.brookings.org.

This article appeared on page B - 3 of the San Francisco Chronicle

posted by Mike Young @ 9:44 AM