U.S. home prices unaffordable for many workers: study

[Tierra_y_Libertad]

My wife and I are retired, make about $57,000 a year, have no debt other than our mortgage, have health insurance from our previous jobs, no kids, and are living in a somewhat high-end house in a somewhat high-end rural area. We bought the house 14 years ago for $189,000 and it's now valued at $418,000. We consider ourselves "comfortable". What puzzles me is how most workers can even get by today if they have kids. Let alone afford a decent house.

http://news.yahoo.com/s/nm/20070110/ts_nm/housing_affordability_dc_1

CHICAGO (Reuters) - U.S. home prices may have dipped over the past year, but many American workers would still struggle to afford a median-priced home in major cities, a new study said on Wednesday.

"American workers are really not gaining ground and they're so far behind in the first place," said Barbara Lipman, research director for the nonprofit Center for Housing Policy, which conducted the study.

While the median home price in the 202 largest metropolitan areas declined 2 percent from a year ago to $248,000 in the third quarter of 2006, mortgage rates rose enough over the year that homes actually became less affordable as pay did not keep pace.

"The real story is what happened to salaries," Lipman said. "Lower-paid occupations -- such as in retail, or home health workers -- their salaries went up only about 3 percent." The study found an annual income of nearly $85,000 was needed to afford the median-priced U.S. home. In the New York metropolitan area, a $500,000 median-priced home required a $171,000 annual salary. The median-priced home in San Francisco, the most expensive U.S. market, was $759,000, requiring income of $260,000. In less-expensive Chicago, the median-priced home cost $254,000, requiring an $87,000 salary.

In reality, many households expend a much higher percentage of their incomes on mortgage payments, Lipman said. To afford that, consumers cut other expenses such as for health care and transportation, she said, citing research showing unaffordable housing is the major reason families lack health insurance.

[aquart]

1. Gosh, how about a building program for veterans housing?

You know, something that would employ hefty numbers of Americans in building good, affordable housing?

But why would we want to do that?

[Virginia Dare]

2. What are you, a socialist commie pinko?

;-)

[Tierra_y_Libertad]

3. As a matter of fact......

I'm to the left of the socialist, commie pinkos. Though I've have been called both through most of my life.

[Virginia Dare]

4. You don't have to be very far left to be considered a

socialist commie pinko in this country any more. I find that I grow more socialist with age.

[LiberalEsto]

5. No kidding, really?

Why bother doing a study? Just ask the average person.

We couldn't afford to buy own own house today. Practically nobody in our neighborhood could, except the people who just moved here. I can't figure out how they will manage those huge mortgages. I don't know how my kids will ever become homeowners.

Yet they are building pricey McMansions all over our area for $700K and up. Who buys these? Where do they get the money? Do they work as drug smugglers or something?