New Report: Housing And Transportation Costs Outpace Incomes

Posted by Orb Staff on October 22, 2012 No Comments
Categories : Residential Mortgage

The combined costs of housing and transportation in the nation's largest 25 metro areas have swelled by 44% since 2000 while incomes have only risen by 25%, according to a new report from the National Housing Conference's Center for Housing Policy and the Center for Neighborhood Technology.

The report, titled ‘Losing Ground: The Struggle of Moderate-Income Households to Afford the Rising Costs of Housing and Transportation,’ includes a special focus on moderate-income households, defined as those earning between 50% and 100% of the median household income in their area. In the 25 largest metro areas, the report finds that moderate-income households spend an average of 59% of their income on housing and transportation.

Furthermore, the report finds cost burdens to be highest in the Miami area, where moderate-income households spend 72 percent of their income on housing and transportation. The next highest burdens are in the Riverside-San Bernardino, Calif., area (69%), the Tampa area (66%) and the Los Angeles area (65%).

‘If we really want to understand whether housing is affordable, we need to consider housing and transportation costs together,’ says Jeffrey Lubell, executive director of the Center for Housing Policy. ‘Along with utilities, which we include within housing costs, these are the true 'costs of place,' and our report shows they have grown much faster than incomes since 2000.’

Lubell adds that cost burdens have increased despite reductions in home sale prices caused by the major housing downturn that began in 2006.

‘Increased demand for rental housing combined with insufficient new production has raised rents,’ he says, ‘while households with blemished credit and existing homeowners with underwater mortgages have been unable to take advantage of lower home prices. Add in the higher transportation costs associated with higher gas prices, stagnant or slowly growing wages and the loss of income associated with layoffs and it's easy to see how Americans have lost ground.’

The full 36-page report is available online.

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