Housing Affordability Worsens

The Center for Housing Policy has released a 12-page summary report on Housing Affordability Trends for Working Households: Affordability Worsens Despite Decline in Home Prices.

By analyzing recently-released American Community Survey data from 2008, the report concludes that “a close look at the data shows that rather than improving, housing affordability actually worsened slightly between 2005 and 2008. The share of U.S. households spending more than half of their monthly income for housing (including utilities) increased from 14 percent in 2005 to 15 percent in 2008. The same pattern held for the working households that are the principal subject of this report; the share of working households spending more than half their income on housing increased from 20 to 21 percent over the three-year period. Part of the blame for worsening housing affordability can be attributed to home utility costs – which rose by nearly 23 percent, or more than double the rate of overall inflation – but broader housing market trends during these three years also influenced owner and renter costs. As used in this report, the term ‘working households’ refers to households working 20 or more hours per week with incomes less than or equal to 120 percent of the area median.

“The increase in severe housing cost burdens for working households is due principally to increases in housing costs among homeowners (rather than renters). The share of working owners spending more than 50 percent of their income on housing costs rose from 18 percent in 2005 to 20 percent in 2008. So while housing prices have declined for those buying homes in the current market, this has not led to lower housing costs for homeowners overall, presumably because most homeowners have stayed put. Other potential explanations for the higher housing costs for owners include the increase in utility costs noted above and increases in monthly payments for households with adjustable-rate mortgages (between 21 and 26 percent of all single-family mortgages being serviced during this period). In sum, while the minority of homeowners who bought a home in the last few years may have benefited from modestly lower prices, the vast majority of U.S. households saw their mortgage payments remain the same or rise between 2005 and 2008, just as gainful employment became harder to find.”

Advertisements
Published in: on December 22, 2009 at 9:20 pm  Leave a Comment  

The URI to TrackBack this entry is: https://haysvillelibrary.wordpress.com/2009/12/22/housing-affordability-worsens/trackback/

RSS feed for comments on this post.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: