Who Can Afford A Home In The USA?

People will tell you unemployment is down in the US, but is that really a strong indicator that we are better off? Sen. Hillary Clinton does not think so. She thinks the average American can't even afford their house payment. One of the hallmarks of her campaign is: "It is about the American dream stupid."

She claims, the good old American Dream of having the ability to have a job and own your own home is fading in this country. The "good old fashion" scenario where dad goes to work and mom takes care of the kids won't even pay for the house they live in anymore.

I decided to take Sen. Clinton up on this and do some investigating. Turns out the average cost of a home in the US was $264,000 in 2005. That amounts to a house payment of $1937.14 a month or $23,245.68 a year.

About that time, the average income being brought into a household by one individual was $23,535. After taxes you cannot pay the above house payment.

Furthermore, in the last five years housing has gone up more quickly than household income, meaning the situation has only gotten worse. Look at the above graph, has average income gone up like that in the last 25 years? I think not. (I will say however, housing may currently be slightly falling.)

All this illustrates is the idea that it is probably true. More people may have jobs, but literally having a job in this country means, on average, you can do no more than afford a house payment.

This changes however if you live in a household with more than one income however. Maybe the future is going to force that to happen whether people like it or not, unless American gets it's act together and realizes there is some truth to: "It's about the American Dream stupid."