Why Americans Are Becoming House Poor
As a nation, we are becoming house poor.
In every state but one, homeowners are spending a larger percentage of their annual incomes on housing costs. In 1999, housing costs averaged 19-percent of annual income. Last year, the percentage rose to 21-percent. Only in Alaska did the percentage remain the same over those years.
It's a very simple set of data released by the U. S. Census Bureau. It shows that home prices have increased greatly in many states since the start of the decade. In that same period, household incomes have dropped an average of 2.8-percent.
Commenting on this data, Mark Zandi, chief economist at Moody's Economy.com said "Until incomes catch up, the housing market is going to remain flat."
According to the government, housing costs are excessive if they top 30-percent of household income. Nationally, 34.5-percent of homeowners with mortgages paid over 30-percent of their annual income for housing costs in 2005. That's an increase of 7.8-percent of homeowners since 1999. Housing costs are defined as payments for mortgage, taxes, insurance and utilities.
Here in Florida, the cost of homeownership rose at about twice the national rate in the last five years. In the Census Bureau's ranking of states comparing the portion of household income spent on housing expenses, Florida ranked #10. In the last five years, Floridians had a higher rate of growth for housing expenses, rising from #26 to #20 on the ranking of median costs for housing expenses.
Rising home prices. Declining personal income. No wonder Americans are becoming house poor. Doesn't sound too encouraging to me.
For more information about real estate in the Tampa Bay area, visit my website at www.thestpeterealestatesite.com.
In every state but one, homeowners are spending a larger percentage of their annual incomes on housing costs. In 1999, housing costs averaged 19-percent of annual income. Last year, the percentage rose to 21-percent. Only in Alaska did the percentage remain the same over those years.
It's a very simple set of data released by the U. S. Census Bureau. It shows that home prices have increased greatly in many states since the start of the decade. In that same period, household incomes have dropped an average of 2.8-percent.
Commenting on this data, Mark Zandi, chief economist at Moody's Economy.com said "Until incomes catch up, the housing market is going to remain flat."
According to the government, housing costs are excessive if they top 30-percent of household income. Nationally, 34.5-percent of homeowners with mortgages paid over 30-percent of their annual income for housing costs in 2005. That's an increase of 7.8-percent of homeowners since 1999. Housing costs are defined as payments for mortgage, taxes, insurance and utilities.
Here in Florida, the cost of homeownership rose at about twice the national rate in the last five years. In the Census Bureau's ranking of states comparing the portion of household income spent on housing expenses, Florida ranked #10. In the last five years, Floridians had a higher rate of growth for housing expenses, rising from #26 to #20 on the ranking of median costs for housing expenses.
Rising home prices. Declining personal income. No wonder Americans are becoming house poor. Doesn't sound too encouraging to me.
For more information about real estate in the Tampa Bay area, visit my website at www.thestpeterealestatesite.com.
-30-
posted by Terry Ward at 5:00 AM
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