Tuesday, March 23, 2010

New "Paycheck to Paycheck" Study Finds Homeownership Still Unaffordable for Many Key Community Workers, Despite Low Interest Rates and Home Prices

While recent headlines report both lower interest rates and home prices, purchasing a home remains unaffordable for many key community workers, according to a new study released today by the Center for Housing Policy entitled Paycheck to Paycheck: Wages and the Cost of Housing in America.

Specifically, the study compares and ranks the costs of buying or renting a home in more than 200 U.S. metropolitan areas with salaries for over 60 occupations. Overall, the income needed to purchase a median-priced home dropped in 93 percent of the homeownership markets studied between 2008 and 2009, yet many workers still do not earn enough to own a home. In addition, the typical rent for a two-bedroom home rose in 89 percent of the markets studied. The steady rise in rents and the decline in mortgage costs nationwide may, to some extent, reflect a continued shift in demand from homeownership to rental housing as families exit homeownership due to foreclosure and as renters wait for market stability before buying a home. As the findings indicate, this trend was particularly noteworthy in Florida.

The study also offers a unique glimpse at housing affordability for workers in the emerging “green economy” who help make the nation’s homes and businesses more energy efficient and help to produce clean and sustainable energy, including electrical engineering technicians, environmental engineering technicians, HVAC (heating, ventilating, and air conditioning) mechanics, maintenance and repair workers, and insulation workers. In addition, the study examines affordability for key “traditional” community workers, including police officers, elementary school teachers, licensed practical nurses, retail salespeople and janitors.

“While the green economy holds substantial promise as a source of higher-paying jobs, there are still many housing markets in which green economy workers cannot afford the costs of buying or renting a home," said Center for Housing Policy Chair John K. McIlwain, senior resident fellow and the J. Ronald Terwilliger chair for housing at the Urban Land Institute. “We must develop the common sense, cost-effective policy solutions at the state and local levels that will help ensure long-term affordability for green economy workers and others. Otherwise, our workforce will face longer commutes and higher transportation costs, leading to increased traffic congestion and adverse environmental impacts."

View the Data – U.S. Metropolitan Area Rankings
Fact SheetMost to Least Expensive Homeownership Markets
Fact SheetMost to Least Expensive Rental Markets
Fact SheetChanges in the Qualifying Income Needed to Purchase a Home

Read the Full Release

Housing Solutions Week
Today’s release of Paycheck to Paycheck is part of Housing Solutions Week 2010 – a series of events and announcements being hosted by the Center for Housing Policy and its affiliate, the National Housing Conference, focused on framing the nation’s housing challenges, while at the same time providing some of the solutions necessary in order to meet those challenges.

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