Housing “affordability” just took another huge hit.
This is incredible.
Below is from a friend in a family of four with two healthy adults and two healthy, grammar-school aged children.
The adults and children have two separate health insurance policies for financial reasons.
This typical family just received notice of a 40% premium spike, or$587 PER MONTH, for 2018!
BOTTOM LINE: IN TERMS OF MORTGAGE & HOUSING, $587 PER MONTH MEANS THIS FAMILY CAN AFFORD $120,000 LESS OF A MORTGAGE, OR HOUSE PURCHASE NEXT YEAR.
Fortunately, lender’s don’t include sky-rocketing health insurance premiums in a borrower’s qualifying debt-to-income ratio. But, if premiums continue to increase at this pace and take up such a large portion of disposable monthly income, I wouldn’t doubt that’s coming.
Further, just because health insurance cost isn’t factored into mortgage qualifying, doesn’t mean this family will ignore it in their budget when it comes to making a decision on buying a house, or a car.
For those employed by firms that pick up a portion of health insurance costs, annual premium spikes of this extent will ultimately impact the bottom line to such a degree, expect to pay an ever-larger contribution and/or lay-offs. It’s just the math.