‘Affordability Issues Are Real, Major Hurdle’
June 4, 2014
Fifty-two percent of Americans say they’ve had to make at least one major sacrifice in order to cover their rent or mortgage over the last there years, according to the newly released “How Housing Matters Survey,” commissioned by the nonprofit John D. and Catherine T. MacArthur Foundation. The sacrifices may include moves from getting a second job and deferring saving for retirement to cutting back on health care and running up credit card debt.
“Affordability issues are real and a major hurdle,” says Lawrence Yun, chief economist at the National Association of REALTORS®.
In the past two years, home prices have risen 20 percent while wages have mostly stayed stagnant, Yun says.
“Only by adding more new supply, via housing starts, can home prices be tamed,” Yun told The Wall Street Journal.
About 15 percent of home owners report that their monthly mortgage payments on a median-priced home required more than 30 percent of the monthly median household income, which has long been considered the maximum for household payments. In some cities, home owners and renters are paying even more for housing expenses. For example, in Manhattan, mortgage payments can represent 77 percent of the median income and in San Francisco County about 70 percent.
Source: “Half of Americans Can’t Afford Their House,” The Wall Street Journal (June 3, 2014)
Updated: June 20, 2018