Study Reveals Least Affordable Cities
Every year, a team from New Zealand conducts a comprehensive, global survey of housing affordability.
The survey includes dozens of U.
S.
cities, and takes into account an area's average household income and average housing costs (both rental and purchase prices).
The results are released in a report called Demographia.
The main difference between this and other assessments is that the Demographia report uses a very simple equation - average house price divided by average income.
Most other assessment tools use an equation that includes mortgage affordability, which varies widely based on interest rates.
By keep the equation simple, the Demographia report offers a more realistic view of how home prices and incomes have changed relative to each other.
The team of Wendell Cox and Hugh Pavletich compiled information from hundreds of cities, including 131 in the United States.
Of those, 117 were considered affordable, with housing costs being at or below 30 percent of the area median income, which is how the U.
S.
Department of Housing and Urban Development (HUD) defines "affordable.
" The study found that, in the most expensive markets, housing costs were several times higher than the affordable threshold set by HUD.
A total of 14 U.
S.
housing markets were deemed "severely unaffordable," including: Boston, MA; New York, NY; Boulder, CO; and several cities in California.
These results surprised few people, especially those living in and around the severely unaffordable cities.
Income in many of these cities has either stagnated or fallen, while housing has become increasingly scarce, causing prices to go up.
The result is that, even in the current economic climate where housing prices in general have fallen sharply, affordable housing remains out of reach for many Americans.
According to the study, the most affordable markets are in the industrial heartland and include several cities in Michigan and Ohio.
This was expected by the study's authors, who acknowledge that home prices fell significantly in these areas while unemployment rose as a result of the financial crisis and economic recession.
The Demographia study reflects a persistent need for affordable housing all across the United States.
Not only does it serve as an important wake up call to those who say we no longer need to invest in affordable housing, but information from the study can help affordable housing developers make a strong case for their projects, especially in the areas where low- and moderate-income housing is most needed.
The survey includes dozens of U.
S.
cities, and takes into account an area's average household income and average housing costs (both rental and purchase prices).
The results are released in a report called Demographia.
The main difference between this and other assessments is that the Demographia report uses a very simple equation - average house price divided by average income.
Most other assessment tools use an equation that includes mortgage affordability, which varies widely based on interest rates.
By keep the equation simple, the Demographia report offers a more realistic view of how home prices and incomes have changed relative to each other.
The team of Wendell Cox and Hugh Pavletich compiled information from hundreds of cities, including 131 in the United States.
Of those, 117 were considered affordable, with housing costs being at or below 30 percent of the area median income, which is how the U.
S.
Department of Housing and Urban Development (HUD) defines "affordable.
" The study found that, in the most expensive markets, housing costs were several times higher than the affordable threshold set by HUD.
A total of 14 U.
S.
housing markets were deemed "severely unaffordable," including: Boston, MA; New York, NY; Boulder, CO; and several cities in California.
These results surprised few people, especially those living in and around the severely unaffordable cities.
Income in many of these cities has either stagnated or fallen, while housing has become increasingly scarce, causing prices to go up.
The result is that, even in the current economic climate where housing prices in general have fallen sharply, affordable housing remains out of reach for many Americans.
According to the study, the most affordable markets are in the industrial heartland and include several cities in Michigan and Ohio.
This was expected by the study's authors, who acknowledge that home prices fell significantly in these areas while unemployment rose as a result of the financial crisis and economic recession.
The Demographia study reflects a persistent need for affordable housing all across the United States.
Not only does it serve as an important wake up call to those who say we no longer need to invest in affordable housing, but information from the study can help affordable housing developers make a strong case for their projects, especially in the areas where low- and moderate-income housing is most needed.
Source...