Homeownership becoming less affordable for middle class, report says
Published November 1, 2004 | November 2004 issue
Homes are becoming less affordable for many middle-class Americans, according to a recent special report from the Fannie Mae Foundation.
The report, titled Homeownership Affordability in Urban America: Past and Future,gauges home affordability trends for median-income Americans, nationally and in 11 selected metropolitan areas. Findings are based on data and projections covering the period 1990-2008.
On a national level, the report predicts that beginning this year, a median-income first-time homebuyer will no longer qualify for a mortgage on a median-priced home. By 2007, median-income repeat homebuyers will experience affordability challenges when attempting to purchase median-priced homes. Examining trends in the 11 selected metropolitan areas, the report predicts that only in Atlanta, Houston and Philadelphia will median-priced homes continue to be affordable to median-income buyers. Of the other eight selected markets, median-priced homes in four (Chicago, Denver, Seattle and Washington, D.C.) are projected to shift from affordable to unaffordable for median-income families. Median-priced homes in the remaining four markets (Boston, Los Angeles, New York and San Francisco) have been unaffordable for median-income families for some time. In most of the 11 metropolitan areas, the report states that an average-wage schoolteacher, nurse, police officer or firefighter lacks sufficient income to purchase a median-priced home.
To access the full report, visit www.fanniemaefoundation.org/programs/pdf/ 042904_housing_affordability.pdf.