It’s been a long, long time since our country try to make homeownership more affordable for most folks. The last real effort was back in the 30s and 40s, when the FHA & VA mortgages and other subsidies many possible for millions of white middle-class Americans to buy a home. In the last decade, prices in most big cities and suburbs have been going up and up. All the government did about it was to let Wall Street turn housing into a high-stakes casino with insanity such as interest-only mortgages. Now that the housing bubble has popped, even though it’s brought terrible pain to thousands of families forced to default on their mortgage, at least it’s made homeownership more affordable again, right? Not so, says a new study, Paycheck to Paycheck: Wages and the Cost of Housing in America.
According to their press release,
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…police officers cannot afford to purchase the median-priced home in 86, elementary school teachers in 83, and licensed practical nurses in 146 of the 208 homeownership markets studied. Janitors cannot afford to purchase a home in 202, and retail salespeople in 207 of the markets studied.
And renting hasn’t gotten much easier either:
in the vast majority of metropolitan markets, fair market rents have held steady or increased – occasionally surpassing monthly mortgage payments for a median-priced home. Specifically, retail salespeople continue to be priced out of renting a two-bedroom apartment in every market studied. Janitors fare almost the same, being able to afford a two-bedroom apartment in only one of the 210 rental markets studied. Licensed practical nurses are unable to rent a two-bedroom apartment in 55, police officers in 12, and elementary school teachers in 11 of the markets studied.
In short, we are in a lose-lose situation — housing prices have dropped enough to cause widespread pain for folks who own a home, but not far enough to help most folks who don’t. And getting out of this mess is going to be really hard.
