Home ownership too costly for many Americans: study

[ckramer]

Source: Reuters

Home ownership will remain out of reach for millions of Americans, despite slumping house prices, unless low-income wages grow faster, according to a national housing study released Monday.

A record 37.3 million households, or one in three, were paying a "moderate cost burden" of 30 percent of their income toward housing in 2005, according to The State of the Nation's Housing 2007. The study said the number of households with that cost burden had risen roughly 20 percent since 2001, when interest rate cuts helped spark a U.S. house price boom.

Improving housing affordability would require an increase in low-income family wages, looser home building regulations and more spending from the federal government, the report said.



Read more: http://news.yahoo.com/s/nm/20070611/us_nm/usa_housing_outlook_dc

[Hugin]

1. "looser home building regulations"

Since, after all, there'll only be po' folks living in them. :sarcasm:

[napi21]

8. I know here where we live the builders say they can't make any $$ on any homes that would sell for

less than $200M because the current regulations set minimum lot size, minimum sq ft of the structure etc. We are in north Ga. and in the County not the city, and I really don't know why the regs have been set to what they are, but I was surprised to hear about them.

[Hugin]

10. Well, the minimum lot size makes sense based on environmental concerns...

*IF* that's what is being taken into consideration. Big, if there.

and the minimum sq ft requirement is to prevent home builders from selling 'doll houses'.

Most regulations are based on some sort of concern.

The problem seems to be the claim the builders can't make any money building homes for less
than $200K... I'd like to see some empirical proof for that claim.

[napi21]

15. I understand the dollhouse restriction, but 2,000 sq.ft is a bit

much, don't ya think? I had a nick big house like that once and it was GREAT, but it's NOT necessary.

[Gormy Cuss]

12. Actually, what they mean is changing zoning to allow higher density construction.

I read that line about loosening regulations and it sounded off for Retsinas, someone that I know professionally from his days at HUD.
Demand is high for more units closer to metro core areas but in many cases higher density home construction is limited either by generous lot minimum sizes or prohibitions against attached homes (condos or townhouses.) The latter category, as entry level housing for many, is where the change in regulations could benefit lower income families the most.

The 2005 equivalent of this report is available on the net:
http://www.jchs.harvard.edu/publications/markets/son2005/son2005_executive_summary.pdf

[mainegreen]

2. It's tough when housing starts at 200 grand. n/t

[soothsayer]

4. The $200k house I rent now sells for $500k. I didn't feel like I could afford

it back when it was in the 2's, nor did I think it was worth it. Now it's just too ridiculous to even consider.

[ixion]

16. yep, that's the same story with the place I live, too

it's nearly doubled in price... I think it's 975K now, and it was 473K when I moved in...I would really love to buy it someday, but I'll have to become a millionaire first. :-(

[slackmaster]

3. The housing market is cyclical - Now is a very bad time to be starting out

Home ownership has seemed an impossible dream for me for most of my life. I have been working more or less steadily since 1981, but was unable to afford to buy until 1994 when I was 36 years old. If it's not one thing, it's another. In the early 1980s prices didn't seem unreasonable but my wages were modest, jobs were unstable, and interest rates were sky-high. Affordability indices were every bit as low then as they are now.

For young people caught behind the curve now, please don't give up hope. Market forces and your own increasing earning power will eventually put you in position to own your own home.

[soothsayer]

5. That's hopeful sounding at least!

[kenfrequed]

14. Perhaps a bit too optimistic

We will see how the boomers retire. That will determine much about the market. The market is still rather inflated and the good news that has thus far been touted has been merely a reduction in the rate of inflation on property values. Barring certain individual or micro-regional influences, the average value of property is rarely ever reduced.

The more reasonable and less traumatic 'correction' that could occur would be an increase in real wages to match this trend. This of course is extremely unlikely.

I find it interesting that education and property, both of which would be bridges to economic stability, seem to have been increasing well beyond the standard rate of inflation.

[EnviroBat]

20. This is true...

It's taken me up to age 40 to "settle down" as they say. But my income and the market are right for me now. The question now is can I avoid a crappy mortgage with a "fair" beacon score? We will see.

[EVDebs]

6. Cobb Hill (Vermont) co-housing development gives me hope

Uses the Phoenix Composting Toilet and many other 'green' building techniques along with an intentional community organizing principle that looks to me like ray of sunshine in a gloomy day

[Hugin]

7. Sounds like a good start...

:thumbsup:

[Chemical Bill]

9. Is this LBN, or is it "NO SHIT"? n/t

[XemaSab]

11. 30% of their income towarsd housing???

:rofl:

















































:rofl:

[Doctor_J]

13. The Ownership Society that Rove has been flogging seems to be a pipe dream

of course, no one ever asked him or * to explain what it means.

[cliss]

17. oh, if you think that's bad...

wait till you see some of the dumps in our neighbourhood.

One in particular.... a little cracker box, weird green paint, the roof was flat & it slanted.

It was really a bulldozer project.....but it sold...for $334,000!

Best of luck to Ya new home owner...you're going to need it.

[demigoddess]

18. another thing to consider is that so much of their income goes to paying the

mortgage and so many people work long hours etc. that they have no time to keep up their houses. Homeownership means you have to mow the lawn, make repairs around the house. Some people are just too ignorant to know this and they just run a house down and when its bad they move on to another. That wastes their money and is wasteful, so that we all pay more for our houses. Especially when a certain percentage insists their house be move-in perfect so they don't have to do any work on it. The sellers will lean toward providing that, raising the house prices for all of us.

I lived in a development that was geared toward lower end people getting into homes. The homes were not finished in the basement area to keep down costs. They were built to keep costs down and that would not be accepted by buyers today. Has little to do with regulations.

[David__77]

19. In Sacramento, CA, that percentage is much higher.

This is a regional phenonmenon in some respects. I would also argue that, overall, housing prices are not "slumping." They are very, very much higher than prices have been historically when adjusted for inflation. The latest credit bubble is a tremendous anomaly.