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Thread: Housing Cost Burden

  1. #1
    Cyburbian Budgie's avatar
    Feb 2000
    Sans Souci

    Housing Cost Burden

    Has anyone run across a study that examines housing cost as a percentage of income for all income groups? In addition, is this data compared with the income and housing costs growth at different income levels. Time series data would be excellent. Here's what I'm trying to figure out.

    Have low income households pay a larger percentage of their income to housing overtime, thus incomes have not grown to meet housing costs? Obviously, the relative change in other "cost of living" factors would have some effect.

    Conversely, is the upper middle to upper class (excluding the filthy rich) spending a greater or less portion of their income on housing. If they are spending more, is this a matter of choice or has that market segments housing costs increases at a consistent to different rate than affordable housing? Or are better off households willing to pay more for housing as a matter of choice.

  2. #2

    Oct 2001
    Solano County, California
    The Census Bureau's American Factfinder (from the 2000 Census) does this for metro areas. Not sure that is what you want???

  3. #3
    Cyburbian martini's avatar
    Jun 2003
    You may want to try looking at the Greater Minesota Housing Fund. They mgith have this kind of info available on thier site, through a link, or if you email and ask for something like that. Or I'd look for a similar organization in your state. I bet they could help out too. Let me know if you find anything. I'm doing a paper on affordable housing, and the income gap/housing price equation is an aspect I want to study closer.

  4. #4
    Cyburbian donk's avatar
    Sep 2001
    skating on thin ice
    Statscan tracks this data also. You may have to do your own calculations and assessemtns to draw conclusions but teh raw info is there.

    As always, for good housing info CMHC probably has this study already done.
    Too lazy to beat myself up for being to lazy to beat myself up for being too lazy to... well you get the point....

  5. #5
    Cyburbian H's avatar
    Feb 2003
    Call Fannie Mae and see if they have records of this stat. I know only so much is allowed to qualify for a mortgage (around 28% of income with around 38% over all dept ratio). However you must ask yourself if 38% for a couple without kids making a moderate income is the same (weighted) as 38% for a couple making the same moderate income with 3 or so kids. This fact you probably will not find because kids are not part of the qualifying equation due to equal lending law. So watch for this anomaly.

  6. #6
    Member Wulf9's avatar
    May 2003
    Near the Geysers
    The census is a good place to look for correlations. I am sure you can find you percent spent for housing by income levels. (I haven't done that particular correlation, but I'm sure you can get to it in the census info.)

    When you delve into this, remember that most owners live in below market cost housing because they bought their houses a while ago at a lower cost. The "housing market" describes current transactions, which involve sale of about 5% of the housing stock each year.

    Renters are more likely to pay the market rate for housing. Rents can go up each year, whereas owner costs stay level based on the time of purchase.

    Finally, the reduced interest rates (a federal subsidy for housing) mean that the same monthly payment can pay for a house costing about 30% more than in 2000. So the rise in housing costs is not really a cost factor if the rise is less than the capitalized value of the payments.

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