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Housing affordability has become a national crisis, particularly among renters, according to a report released by the J. Ronald Terwilliger Foundation for Housing America's Families called "The Silent Housing Crisis."
Nearly half of all renters are cost-burdened and spending more than 30 percent of their incomes on housing, and more than one in four are considered "severely burdened," paying more than half of their household income on rent, according to the report. In numbers, the research notes that 21 million households are considered "cost-burdened," which includes 11 million who are "severely burdened." As comparison, in 1960, the share of renters with cost burdens was about half what it is today.
Those with severe housing cost burdens are forced to make trade-offs. For example, those with severe housing cost burdens spend 40 percent less on food; 70 percent less on healthcare; and 49 percent less on retirement savings each month.
"Housing affordability has been steadily worsening for years, but the last decade saw the situation go from bad to worse, leading to today's crisis situation," notes analysts at Harvard Joint Center for Housing Studies' Housing Perspectives Blog in reporting about the foundation's white paper.
The largest deterioration in rental affordability has occurred among those making between $30,000 and $45,000, notably in higher cost markets, according to a soon-to-be released report by JCHS. About three-quarters of households who earn less than $15,000 a year – which would be those who work for the federal minimum wage – face severe cost burdens. At that income level, these households would need to find rentals that are $375 a month or less to stay within affordability guidelines.
"Given the magnitude and extent of the housing affordability crisis and the growing awareness of these issues, what seems to be missing is the political leadership needed to identify the lack of affordable housing as a national challenge and to make a case for action by the public sector," JCHS argues in its blog post.
Yup...stagnant wages throughout the country have helped lead to this. But government won't do anything about it, because broke people can't afford lobbyists and campaign contributions.
I think it's more about the lack of good-paying jobs, or rather the saturation of the market by too many people with lots of high-cost degrees and skills that can't get their money's worth. The young generation that would usually be purchasing homes right now can't afford to do so because most of their income is going towards student loans and they are getting paid so little. Even with the marginal economic recovery there is still a feeling of "You'll get paid nothing and like it" because there are so many unemployed/underemployed with degrees and skills that are available to fill open positions. The opportunity just isn't out there anymore and it's starting to look like a permanent change in the employment landscape. That being said, I know plenty of people (myself included) who are in their 20s and were recently able to purchase gorgeous homes on just one salary. It's about living in a low-cost area.
I think it's more about the lack of good-paying jobs, or rather the saturation of the market by too many people with lots of high-cost degrees and skills that can't get their money's worth. The young generation that would usually be purchasing homes right now can't afford to do so because most of their income is going towards student loans and they are getting paid so little. Even with the marginal economic recovery there is still a feeling of "You'll get paid nothing and like it" because there are so many unemployed/underemployed with degrees and skills that are available to fill open positions. The opportunity just isn't out there anymore and it's starting to look like a permanent change in the employment landscape. That being said, I know plenty of people (myself included) who are in their 20s and were recently able to purchase gorgeous homes on just one salary. It's about living in a low-cost area.
If all people can afford is a tiny home, let them buy tiny homes.
A big part of the affordability issue is that people want to have more home than they can afford. Even if they can only afford a studio apartment, they want a 3 bedroom house with a jacuzzi and they whine about the cost of rent because they can't qualify for the house they want.
There is that entitlement thing where they think they are too good to live in a trailer park or in an inexpensive neighborhood.
A big part of the affordability issue is that people want to have more home than they can afford. Even if they can only afford a studio apartment, they want a 3 bedroom house with a jacuzzi and they whine about the cost of rent because they can't qualify for the house they want.
There is that entitlement thing where they think they are too good to live in a trailer park or in an inexpensive neighborhood.
You hit the nail right on the head.
We saw this in Florida how many years ago. You had families making 35K a yr buying 200K homes. Do the math..they can't afford it. Yet, the banks and brokers pushed them thru with their 'creative financing'; within a few yrs they were in foreclosure. I have a friend who left the residential real estate market because of this. She knew there were clients that couldn't/shouldn't be buying these homes, but her hands were tied..the buyers really thought they could afford these homes. smh
The buyers, brokers and bankers are all to blame. The buyers were greedy and the other two were more than happy to act on their greed.
You have people who can really only afford $800 a month on rent, but want to live in a $1400 unit in a gated community. Really? Why? Because the $800 unit is an unsavory part of town and they don't want to live there.
So the landlord is supposed to a) take pity on them and rent to them anyway b) lower the rent so they can 'afford' it or c) take their sec 8 voucher.
The buyers, brokers and bankers are all to blame. The buyers were greedy and the other two were more than happy to act on their greed.
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Not all of them, Kim. Don't generalize. Don't put all the apples on the garbage can. I cant speak for all the mortgage brokers, bank loan officers, real estate brokers and real estate associate agents and buyers, but I am to speak for myself. As a real estate agent and associated broker I am, I never have closed a real estate transaction where I have the buyer side and buyer was not deeply and professionally pre-qualified for the purchase of the property and the buyer received the key at the closing table. There are real estate agents .....and there are real estate agents.....and there are real estate agents. There is a code of ethics and professionalism, but not all of us are exactly the same, thank God. Each individual is a different universe and each one has a different level of consciousness, and I am absolutely happy with mine.
It is very informative. Just read, that is free. There is no need to be intrusively derogatory to somebody else efforts when trying to bring something informative by only saying "OK ? " . That doesn't become you, and if you don't have anything intelligent to say about like the rest of the participants, then simply don't say anything at all, be cool and leave my thread. Thanks so much.
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My level of conciousness
