Report: Falling Home Values, Rising Housing Costs
Posted by Keith Wardrip on February 25, 2011
Today, the Center for Housing Policy released Housing Landscape 2011: An Annual Look at the Housing Affordability Challenges of America’s Working Households. The report finds that despite falling home values — the number of working households spending more than half of their income on housing costs — rose to 10.5 million, an increase of 600,000 from 2008 to 2009.
Roughly one in four working households had a severe housing cost burden in 2009, and the rate increased significantly in 25 states.
The report also helps identify why housing affordability has worsened in recent years. Incomes for working households fell by 4 to 5 percent between 2008 and 2009, due in part to under-employment that has prevented even those with jobs to work as many hours as they have in the past. As incomes have fallen, housing costs for working renters actually increased by 2 percent. And even though housing costs fell slightly for the typical working homeowner, household incomes retreated further still.
Far from solving the affordable housing problem, the current economic crisis has only exacerbated it because monthly housing costs for working households have risen relative to monthly incomes. In these tough economic times, governments that cut funding for affordable housing programs in an attempt to balance their budgets will only make it increasingly harder for their residents to balance their own.