A recurring issue, complaint or concern among Wonk commenters is the state of local home prices compared with local incomes. Do typical folks have the money to pay the typical prices? Would they have any money left over if so? And how much higher is the price vs. income ratio now than it was in the good ol' pre-bubble days?

All good questions. So, without further ado: a chart!


Above you see the median home sales price in the Baltimore metro area divided by the median household income. In 2000, the price ($128,000) was 2.4 times income (just under $53,000).

By the end of 2008, the price was $247,000 and the income (for '07, the most recent figure) was about $68,000 -- or 3.6. That's a lot higher than 2000, but significantly lower than 2006, which was 4.1.

I've often heard the rule of thumb that you shouldn't buy a house more than three times your income. The last time the median household could buy the median house and stick by that rule, it was 2003.

But wait, you say, that doesn't account for the impact of interest rates. Rates are awfully low now, after all. OK, have another chart -- this one showing the monthly mortgage payment for the median-priced home based on interest rates at the time:

Baltimore area home prices vs. incomes

The 2008 figure -- about $1,300 -- is below 2005 payments. But it's still far above what the median householder would have been paying in '03. (EDIT: Completely forgot to note that these mortgage payments are calculated for people managing a 10 percent down payment. Thanks, Jelena!)

So what's the affordable amount? That's ultimately up to homebuyers -- though I'm sure you all have opinions, whether you're in the market or not.

(Data sources for the wonks: Interest rates from Freddie Mac, income from the Maryland State Data Center and home prices from MRIS.)